In Counsel Update – Summer 2017

15 / 08 / 2017

Welcome to the latest edition of our In Counsel publication.

After a General Election that left the Conservative Party with less than a majority in Parliament, the Queen’s Speech on 21 June 2017 was unsurprisingly very Brexit focused with the European Union (Withdrawal) Bill (previously referred to as the Great Repeal Bill), as the key piece of legislation over the next two-year period. Other Government legislative initiatives such as the proposals for greater transparency through introduction of a new register of beneficial owners of overseas entities owning UK property have – at least for now – apparently been dropped.

In this update we outline other recent legal developments affecting your business, in particular, a Commercial Court case which emphasises the risks of excluding liability for “consequential loss” under a contract; and the new Prospectus Regulation which will partly apply from 20 July 2017. We also look at the critical issues facing family businesses, examining how family owners can ensure their businesses remain successful, and analyse the restrictive approach the High Court has taken in a recent decision on both litigation privilege and legal advice privilege. Sexual harassment in the workplace is in the spotlight after widespread publicity of claims by a former employee at technology firm Uber and our Employment team outlines a number of measures an employer can take to prevent workplace harassment.

We further provide, among others, an overview of the proposed extension of the Senior Managers, Certification and Conduct Rules regime the Financial Conduct Authority is currently consulting on; examine the state of the law governing colour trademarks; and report on the restructuring proposal by Hoover Limited in relation to its largest defined benefit pension scheme. Our Property team highlights key points in the process of transferring leased premises obligations to another company, and our Private Client team reports on the Government’s plans to reform the taxation of non-domiciliaries.

If you would like to know more about any of the topics covered in this update please get in touch.

Janice Wall, Head of Corporate

Marlies Braun, Editor

CONTENTS

Contract

Consequential loss – a new approach? – The recent Commercial Court case of Star Polaris v HHIC-Phil has emphasised the risks of excluding liability for “consequential loss” under a contract. The case has cast doubt over the long established principle that excluding consequential loss is interpreted by reference to losses falling under the second limb of Hadley v Baxendale, namely losses that result from special circumstances which are known by the other party. Read full article.

Corporate

New Prospectus Regulation  – On 30 June 2017, the new EU Prospectus Regulation was published in the Official Journal. It will enter into force on 20 July 2017 and the majority of its provisions will apply directly in Member States from 21 July 2019, after the UK is scheduled to leave the EU on 29 March 2019. Read full article.

Governing and professionalising your family business to success – The critical issues facing family businesses and how family owners can ensure their businesses remain successful were on the agenda of a seminar last month hosted by Kim Lalli, senior partner of Wedlake Bell and founder of the firm’s India practice and Sonu Bhasin, founder of Families and Business. Rosalyn Breedy, corporate and financial services partner at Wedlake Bell, reports. Read full article.

Board consent to exercise of option – absolute veto or subject to implied duty of reasonableness? – In the interesting case of Watson and others v Watchfinder. co. uk Limited, the High Court analysed whether the discretion given the board of directors in deciding whether to approve the exercise of an option under a share option agreement amounted to an unconditional right of veto or was subject to a qualification that it must not be exercised capriciously, arbitrarily or unreasonably. Read full article.

Review of AIM Rules – The London Stock Exchange is currently conducting a review of the AIM Rules for Companies and the AIM Rules for Nominated Advisers. Read full article.

Dispute Resolution

Legal professional privilege: Does it exist when there are criminal investigations? – There are two types of legal professional privilege: Legal advice privilege and litigation privilege. The potentially grey area of litigation privilege and/or legal advice privilege in relation to confidential legal communications generated during an internal investigation, triggered by the possibility of a company being charged with criminal offences, was dealt with by the High Court in the case of SFO v Eurasian Natural Resources Corporation LtdRead full article.

Employment

Sexual harassment in the workplace: Uber media outcry alerts employers to cut the risk – Sexual harassment in the workplace is in the spotlight after widespread publicity of claims by a former employee at technology firm Uber. The development is a warning for employers to take action. Read full article.

Issuing UK employment contracts to employees based overseas – do you know what you are signing up for? – The recent case of Green v SIG Trading Limited provides a useful reminder to employers about the dangers of using standard UK terms and conditions for overseas hires, including lack of clarity as to what terms truly govern the relationship and creating the potential for employees to cherry pick which jurisdiction to bring claims in.Read full article.

Financial Services

Senior Managers Regime and other regulatory changes – The Financial Conduct Authority is currently consulting on the extension of the Senior Managers, Certification and Conduct Rules regime to all authorised firms operating in the financial services sector. Read full article.

IP & Commercial

Colour trade marks and branding – The struggle continues – It is often said that a picture conveys more than a thousand words. In the world of brands, the same can be said of colours. This article briefly examines the current state of the law in this area and looks at whether or not it is likely to change when amended trade mark legislation comes into force later in the year. Read full article.

Pensions & Employee Benefits

Pensions Regulator cleans up Hoover’s pension mess – A restructuring proposal by Hoover Limited in relation to its largest defined benefit pension scheme, The Hoover (1987) Pension Scheme, was approved by the Pensions Regulator earlier this month. The proposal will see the 1987 Scheme enter the Pension Protection Fund and according to the Pensions Regulator “will achieve the best possible outcome for members in challenging circumstances, and help safeguard jobs at the company’s UK sites.” Read full article.

Section 75 debts: DWP consults on yet another possible relaxation – Help is at hand for employers which accidently cease to have active members, or is it? Read full article.

DB Transfers – According to data provided in a Freedom of Information request to Salisbury House Wealth by the Pensions Regulator, 80,000 workers transferred out of their employer’s defined benefit (also known as “final salary”) scheme in the year ending 31 March 2017. We expect virtually all of these transfers will have been into defined contribution (also known as “money purchase”) schemes. Read full article.

Property & Construction

Offloading premises – This article is the last in our series of property-focused pieces. It highlights key points for HR and legal professionals as well as management who find themselves involved in the process of offloading premises to another company. Read full article.

Tax

NEWSFLASH – Government confirms reform of taxation of non-domiciliaries – On 13 July 2017, the Government confirmed that it will introduce a second Finance Bill 2017 soon after the Parliamentary summer recess to implement those policies withdrawn from the Finance Act 2017 in light of the General Election. Included will be the major reforms to the taxation of non-domiciliaries, originally announced in the summer 2015 Budget but subject to consultation and much debate since then. The reforms will be backdated to 6 April 2017 (the original date for implementation), once enacted. Read full article.

 

 

 

Click here to read the In Counsel Update, Summer 2017