In Counsel Update – Spring 2017

10 / 05 / 2017

Brexit continues to dominate not only the political but also the legal world in the UK. Since our last update, the Government has triggered the countdown for the UK to leave the European Union by handing the Article 50 letter to Donald Tusk, the President of the European Council, on March 29th. We look at the details of Mr Tusk’s swift response to this letter on 31 March. We also analyse two recent cases, one regarding reverse cross-border mergers, the other the recovery of withholding tax on manufactured overseas dividends, which show the impact Brexit is already having on the legal landscape.

Our Spring edition is packed with many other noteworthy legal developments. To name but a few, our corporate team analyses, among others, the changes that will come into force this summer to the UK’s transparency registers initiative and what is being proposed next; James Castro Edwards, head of our data protection specialist team, provides an overview of the EU General Data Protection Regulation; and our Employment team looks at how companies can reduce the risk of discrimination claims when introducing a dress code at work. Furthermore, we update you on a Court of Appeal decision on the effectiveness of variation clauses in contracts as well as important recent UK and EU judgements on trade mark use, and provide guidance on some of the pitfalls of overseas pension transfers. Finally, we look at how to successfully exercise a break clause in a lease.

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

Brexit

May, 29 March: We leave the EU! Tusk’s response, 31 March Mr Tusk, like the Fleetwood Mac album that bears his name, may have been born for a particular time and place – following “rumours” of a separation, we had the referendum that led to the Article 50 trigger being pulled and thus, potentially, the falling apart of the EU. Again, like the album, Mr Tusk, in his response to Mrs May, recognises that the UK and EU will “Walk A Thin Line” (Lindsey Buckingham, song 18, on “Tusk” by Fleetwood Mac). Read full article.

Contract

No Variation clauses – are they cast iron? The Court of Appeal decision of Globe Motors and others v TRW Lucas and others considered the effectiveness of no variation clauses which we so often see in contracts. These boilerplate clauses are not as “nailed on” as they appear. Read full article.

Corporate

Transparency registers: The next set of changes The summer of 2017 will bring about three notable changes to the UK Government’s transparency registers initiative: (1) UK implementation of the Fourth EU Anti-Money Laundering Directive; (2) other changes to the PSC registers regime; and (3) a legislative proposal for PSC for property. Read full article.

First EU reverse cross-border merger In a recent decision, the High Court for the first time approved a reverse cross-border merger under the Companies (Cross-border Mergers) Regulations 2007. Read full article.

Contractual interpretation of indemnities In the recent case of Wood v Capita Insurance Services Limited, the UK Supreme Court decided on an appeal relating to the interpretation of an indemnity clause in a share purchase agreement entered into in April 2010 in connection with the purchase by Capita Insurance Services Limited of the entire issued share capital of Sureterm Direct Limited. Read full article.

Data Protection

EU General Data Protection Regulation In October 2016, telecoms provider TalkTalk was fined £400,000 by the UK Information Commissioner’s Office for failing to protect customers’ personal data, breaching the Data Protection Act 1998.  This is the largest fine issued by the ICO, yet Information Commissioner Elizabeth Denham has publicly stated that the £500,000 maximum fine for breaches of the DPA is insufficient. Read full article.

Wearables and data collection: Insurers should think twice before tracking private data from wearables Wearable technology is increasingly recognised as a means to deliver a wide range of benefits to businesses. Recently, insurance providers have recognised ways of using data generated from wearable technology to balance risk, by identifying safe driving behaviour, as well as dangerous practices such as using a mobile phone while at the wheel. Read full article.

Employment 

Dress codes: do you run the risk of a discrimination claim? This issue was considered by the European Court of Justice in the Belgian case of Achbita and another v G4S Secure Solutions NV. Read full article.

Notice to terminate: Do you know when a notice period starts to run if sent by e-mail or post? In the recent case of Newcastle upon Tyne NHS Foundation Trust v Haywood, the Court of Appeal set out guidance on when exactly the notice period starts to run after it has been sent it to an employee by e-mail and post. Read full article.

Insolvency & Restructuring

Agent Provocateur and Mike Ashley – a risqué business? The luxury lingerie business Agent Provocateur was recently sold for around £30m by its private equity owners 3i, in a controversial pre-pack administration to Mike Ashley, the billionaire behind Sports Direct. Read full article.

IP & Commercial

A WILD USE CHASE: Recent UK and EU judgements on trade mark use A stream of recent rulings from both UK and EU courts has demonstrated how crucial evidence of trade mark use – or lack of such evidence – can be to determining brand disputes.  We shall briefly review a selection of these rulings and their implications, and see what lessons can be learned from them. Read full article.

Pensions & Employee Benefits

Overseas pension transfers: The pitfalls It is no secret that Brexit could have an impact on the City. In the coming months banks and other financial institutions will be making tough decisions on whether to implement contingency plans to ensure they retain access to the remaining 27 EU member states by moving business out of the UK. Inevitably this could mean jobs moving away from not just London, but the UK as a whole – published data shows that financial and professional services firms employ more than 2.2 million people across the UK. Read full article.

Employer stuck with RPI in Thales The index used for the purposes of determining revaluation of deferred benefits and increases to pensions in payment is a topic which many trustee boards and employers alike are watching keenly. Read full article.

Property & Construction

Breaking up The Winter 2017 In Counsel featured the first article in our three part series on the issues surrounding surplus premises. It looked at moving on and ending the lease relationship. Read full article.

JCT subcontracts: Court of Appeal calls time on extensions of time A TCC case involving Carillion concerning the issue of delayed work and entitlement to an extension of time has potentially significant implications for contractors. Read full article.

Tax

References to the European Court and Brexit Before a UK court makes a reference to the Court of Justice of the European Communities for guidance it will usually hear the substantive case beforehand. Read full article.