In Counsel – Winter 2017/18

29 / 01 / 2018

Welcome to the first edition of our In Counsel publication in 2018.

Since our Autumn 2017 update there has been a flurry of legal developments affecting your business. We have picked the most interesting and relevant for you. In the corporate world, among others, we comment on the Financial Reporting Council’s proposals for refreshing the UK Corporate Governance Code; report on the interesting case of The Panel on Takeovers and Mergers v David Cunningham King where the Takeover Panel for the first time applied to court to enforce one of its rulings; and look at ways to resolve shareholder disputes.

In the world of compliance, in order to support you in preparing for the imminent arrival of the General Data Protection Regulation in May of this year, James Castro Edwards, head of our specialist Data Protection team, and Blair Adams, partner in our Employment team, have prepared a checklist of questions for European HR teams to address in the context of employee data; and Rosalyn Breedy, partner in our Financial Services team, analyses the functions and benefits of Legal Entity Identifiers.

Our Employment team looks at what you can expect in 2018 and provides guidance for employers regarding sexual harassment in the workplace, and our Pensions & Employee Benefits team provides insights into the BT and the GKN pension deficit sagas. Our IP & Commercial team reports on a recent High Court case highlighting the key points of English law to consider regarding joint authorship; and our Property team outlines ways to unlock development sites that are subject to restrictive covenants.

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

Wedlake Bell News

We welcome Adam Lynch as a partner in our Corporate & Financial Services Team. Adam joins the firm from Maclay Murray & Spens LLP (now Dentons). His extensive practice spans all aspects of corporate law, from M&A and public company work, through to joint ventures and private equity investments (on both buy-side and sell-side transactions). His client base includes public companies as well as private companies and entrepreneurs. Although Adam advises clients operating within all sectors, he has a specialist focus on the hospitality and leisure and corporate real estate sectors, in which Wedlake Bell has leading expertise and which he will help to develop even further.

CONTENTS

Corporate

The New UK Corporate Governance Code – The Financial Reporting Council is the custodian of the UK Corporate Governance Code.  The FRC needed to refresh the UK Code, and it is now well on the way to doing this. The new UK Code will be shorter and more focussed than before, which is very welcome. Read full article.

Should I stay or should I go now?” – dealing with the clash in shareholder disputes – You have sweated blood and tears to build a business from nothing. You have made huge financial and emotional sacrifices to get the business to where it is now. The business is your baby. And then the divisions start to appear. You want the business to go in different directions. You question your business partner’s judgment and morals. You argue. You fall out. The trust is gone. – This is a common scenario. We are looking at ways to resolve the issues. Read full article.

Court enforces Takeover Panel ruling – In the recent Court of Session case of The Panel on Takeovers and Mergers v David Cunningham King, the Takeover Panel for the first time applied to court under section 955 of the Companies Act 2006 to enforce one of its rulings. Read full article.

Changes to the Takeover Code – Following the consultations in July and September of last year, the Takeover Panel published its response statements on 11 December 2017 along with the changes to the Takeover Code. For the most part, the changes are as originally proposed but with minor amendments following responses received during the consultation process.  Read full article.

EU support for SMEs seeking to grow on the capital markets – Notwithstanding the stated intention of the UK government to take back control, it remains important to keep abreast of legislative and other initiatives emanating from Brussels. This is because, in a rather strange twist of fate, the current state of sclerosis within the UK legislature and the likelihood of some form of transitional arrangement with the European Union renders it likely that most new UK legislative measures over the next few years will be as a result of EU legislative initiatives, even after Brexit finally takes effect. Read full article.

LSE’s review of the AIM rules – Feedback statement -As reported in our Autumn 2017 In Counsel, in a call for evidence published on 11 July 2017, the London Stock Exchange sought feedback on certain key areas of the AIM Rules for Companies and the AIM Rules for Nominated Advisers. On 11 December 2017, the LSE published a feedback statement setting out an overview of the responses received and where amendments are proposed. Read full article.

Court of Appeal clarifies scope of Cross-Border Mergers Regulations – In the recent case of Easynet Global Services Ltd v Secretary of State for Business, Energy & Industrial Strategy, one of its first decisions of this year, the Court of Appeal overturned the High Court decision, holding that the proposed merger of several UK companies and one non-UK EEA company into a UK company qualifies as a cross-border merger. Read full article.

Charitable Incorporated Organisations – A charitable incorporated organisation, being a registered charity, is an alternative legal structure for charities.  With effect from 1 January 2018 charitable companies are able to convert to a CIO with a phased implementation time table lasting until August 2018. This article provides an overview of the key statutory instruments relating to CIOs which came into force on 1 January 2018. Read full article.

Data Protection

20 GDPR questions for European HR teams – In many organisations across Europe, HR teams will be integral to GDPR compliance as much of the data affected by the new law will relate to employees. Time is running out to start the process of ensuring compliance for May 2018, so in this article we provide a simple checklist of questions to address in the context of employee data. Read full article.

Employment

Employment law – hot topics for 2018 – 2017 saw a number of major themes in employment law: the cancellation of Tribunal fees; the push back against the treatment of individuals engaged in the gig economy; and the fight against sexual harassment. So, what does 2018 have in store? Read full article.

Sexual harassment – issues for employers – Sexual harassment has dominated the headlines and social media over past weeks. Now, a new survey by the BBC has confirmed that the issue is not limited to Hollywood: more than half of the women polled stated that they had experienced sexual harassment in the workplace, and one in five men. This follows on from a TUC survey last October, which showed broadly similar results. Read full article.

Financial Services

LEIs – The new global licence plate? – “By failing to prepare, you are preparing to fail” – Benjamin Franklin (1709 to 1790) European banks and brokers may have breathed a sigh of relief over ESMA’s Legal Entity Identifier eleventh hour festive season reprieve a little too early. Read full article.

IP & Commercial

IPEC rules on the skills creatives need to demonstrate to claim joint authorship – Authors, designers or other creatives working together on a project is common-place in many industries. However at what point do these contributions give rise to claims from individuals that, along with the primary author, their contributions make them joint authors of a piece of work? Read full article.

Pensions & Employee Benefits

BT set to “hang-up” on its DB pension scheme – Towards the end of last year BT kicked off a statutory 60 consultation period as part of its proposal to manage its staggering £14bn pension deficit. A consultation document was sent to members of the group’s defined benefit pension scheme in November 2017. Read full article.

GKN offer and the response from companies schemes’ trustees – Final salary funding deficits are all around us and they cause headaches for a number of people, not least pension scheme members who worry about the security of their retirement income; employers who have to direct hard earned cash towards schemes to plug significant funding deficits; trustees who are responsible for managing poorly funded schemes; and investors keen on acquiring companies which happen to be straddled with significant pension scheme liabilities. Read full article.

Real Estate

Restricting development – It is possible for a landowner to agree to restrict the way in which their land is used (a restrictive covenant), in a manner which lasts for hundreds of years, if it is done properly. Leicester Square remains an open space today because of words drafted in 1808. Sometimes these restrictions are superseded by changes in the neighbourhood: no-one would burn lime or tan leather in central London now. Read full article.

Structurally sound? Would a corporate structure be better for your property deal? – An alternative to acquiring the direct title to a piece of real estate can be to acquire the corporate vehicle that owns the property. In its simplest terms, this may be done by way of the acquisition of the share capital of an English private limited company, an offshore company or a holding company whose subsidiary owns the real estate in question. By purchasing the shares of the target, the ownership of the real estate does not change. This can be advantageous when the real estate in question is leasehold property because (unless there are change of control provisions in the relevant lease) landlord’s consent will not be required. Read full article.

View In Counsel – Winter 2018 as a PDF here.