Last week’s front page: ‘Solicitors face road traffic fees cut’, ‘Final nail in the coffin of legal aid firms’, ‘Compensation fund levy could hit £875 in 2010’ (see  Gazette, 11 June, 1). Open the cage and let me in! Peter Gildener, Gildener Brett, Penzance
Industrious action: City firm Taylor Wessing advised Jersey-based investment vehicle Max Property Group on acquiring the Industrious property portfolio from the receivers of the collapsed Dunedin Group for £232m. Magic circle firm Clifford Chance advised the receivers Ernst & Young, while funders EuroHypo were advised by City firm Olswang. Sports deal: City firm Herbert Smith advised sports retailer JJB Sports on a £100m share placing and the amendment of its debt facility with Royal Bank of Scotland. Financial adviser Lazard and stockbrokers Numis and Panmure Gordon were advised by City firm Ashurst, while City firm Lovells advised RBS. Media refinancing: Freshfields advised Royal Bank of Scotland, Alcentra, Bank of Ireland and Allied Irish Bank on a £530m debt restructuring for Incisive Media Group, the business magazine publisher. Debt was reduced from £230m to £110m, with the banks taking majority ownership of Incisive in a debt-for-equity swap. Magic circle firm Allen & Overy advised Incisive. Next move: National firm Eversheds advised Next on opening its German flagship store in Dresden, marking the fashion retailer’s first foray into Germany. Next has around 500 stores in the UK and Ireland and a further 170 worldwide. Taking off: Freshfields, alongside City firm Herbert Smith, advised airport operator BAA on its £1.5bn sale of Gatwick Airport to infrastructure asset investment fund Global Infrastructure Partners. Magic circle firm Slaughter and May advised Global Infrastructure Partners, while magic circle firm Allen & Overy advised a consortium of banks on financing the deal. Large beer: Clifford Chance advised brewer Anheuser-Busch InBev on the $2.23bn (£1.36bn) sale of its central European operations to private equity firm CVC Capital Partners. CVC was advised by Freshfields.
Companies have failed to invest in anti-corruption schemes ahead of legislation that will punish domestic and foreign bribery, research has shown. More than three-quarters of companies have not invested any money in anti-corruption strategies, and only 12% have spent more than £500 on preparing for the Bribery Act, according to research by business and financial advisers Grant Thornton. Some 42% of companies had not conducted a thorough assessment of their exposure to corruption risk, or established a clear plan to revise their existing policies, the research found. The act will introduce a corporate offence of failing to prevent bribery, but companies will have a defence under the act if they can show that they had adequate procedures in place to prevent it. Company executives face personal criminal liability if they connived or consented to offering or receiving a bribe to or from a public official or company representative. Grant Thornton forensic partner Sterl Greenhalgh said: ‘It is clear that these findings are not exactly good news for the Serious Fraud Office, [which has] undertaken an extensive outreach programme promoting the importance of the new act and the penalties that will come into force. ‘This report shows that there is still confusion, uncertainty and a certain level of complacency about the Bribery Act among corporates.’ Some 90% of the senior executives surveyed said that the government should be doing more to promote anti-corruption measures to foreign governments. Two-fifths said they were concerned that, once the act comes into force, they will lose out to foreign competitors. However, 80% said that the legislation marked a positive move for the UK. Grant Thornton surveyed 166 senior executives at leading UK companies.
The expert group tasked with advising the European Commission on EU-wide changes to contract law should have more input from English law practitioners, the Law Society said this week. Society chief executive Desmond Hudson expressed concern that the panel is currently made up primarily of academics and practitioners from civil law systems, and called for the inclusion of lawyers from common law jurisdictions. He said: ‘The profession [in England and Wales] has great experience working with other jurisdictions and on cross-border contracts and could offer valuable expertise. The Society is concerned that the expert group is mainly comprised of academics and some practitioners from civil law systems, and would welcome the direct involvement of common law practitioners in the drafting process.’ The commission is in the early stages of drafting a non-binding legal ‘toolbox’ to harmonise contract law across Europe, and has issued a green paper on the topic. Chancery Lane said it remains ‘deeply concerned’ that the benefits of the proposal ‘have not been demonstrated’ and there is an ‘urgent need for an impact assessment of the key options in the green paper’. The Society responded to a Ministry of Justice consultation on the commission’s plans in December, after consulting widely with the profession. Chancery Lane said it is examining ‘alternative solutions’ to improving cross-border trade, noting that the use of English contract law provides ‘substantial benefits’ to UK Plc. The commission argues that action is needed to reduce the divergence of contract laws, and has suggested creating a ‘common frame of reference’, bringing together legal concepts, definitions and principles based on the laws of all member states.
The last week has doubtless been a tiring one for legal aid minister Jonathan Djanogly (pictured), as he prepares to wade his way through the hefty 5,000 responses the Ministry of Justice received to its legal aid consultation. This must surely be the only explanation for the minister’s two recent parliamentary blunders. The first came in the House of Commons last week, when Djanogly was asked what progress had been made on recouping the whopping £1.3bn in court fines that remains uncollected. Djanogly’s response was impressively defiant and detailed, but unfortunately it was all about legal aid, and nothing to do with unpaid court fines. This prompted shouts from the chamber and a call for order before the Speaker cuttingly alerted Djanogly to his error: ‘The minister delivered his answer with admirable force and self-confidence, but I think it suffered from being the wrong answer,’ he sniped. The next day, Djanogly found himself before the House of Commons’ Justice Committee, where he faced some pretty feeble questioning from MPs. His performance was faltering and characterised by an unwillingness to deal with any specifics. But there was one accidental moment of candour. Labour MP for Islwyn, Chris Evans, asked if Djanogly agreed with the Legal Action Group’s assertion that the cuts would mean legal aid ceased to be a viable national service. ‘Absolutely’, was the minister’s confident reply. Again, Djanogly did not register his error, and it was left to the committee chair, Sir Alan Beith, to suggest that the minister’s answer ought to have been ‘absolutely not’. Obiter hopes the legal aid minister will get his act together in time to prepare an error-free response to his consultation; otherwise, as Beith pointed out, he could end up being judicially reviewed by people funded by legal aid.
A Manchester firm has launched a new division to tap into the customer base of major retail, insurance and financial services companies. Pannone is negotiating with several potential partners to join its ‘white label’ legal services division, known as Affinity Solutions, with one unnamed business already signed up and talks ongoing with a number of others. The firm will offer services including employment advice, consumer disputes, conveyancing, remortgaging and fast-track accident and injury claims. Pannone is the latest firm to announce its intentions ahead of the Legal Services Act coming fully into force in October, when companies can look for external investment and non-law firms can offer legal services for the first time. Andrew Morton, leading the Affinity Solutions division of Pannone, predicted the industry has nothing to fear from new entrants, despite cynics warning of a doomsday scenario and claiming they will take business away from law firms. He said: ‘A number of these new entrants to the marketplace know how to provide excellent service to their existing customers while arguably many in the legal sector do not. ‘So an organisation that places as much emphasis on good service as well as providing excellent legal advice has to be of benefit to the consumer.’ Last week national firm Irwin Mitchell announced its intention to seek external investment as it became one of the first to make public its plans for the LSA.
A network of worldwide Islamic finance lawyers is to launch next week. Luxembourg-based Islamic Finance Lawyers (ISFIN) said it is looking to recruit more lawyers to provide Sharia-compliant investment advice worldwide. The network aims to bring together specialist lawyers from member law firms to advise Islamic banks, sovereign funds, and private and public investors from asset-rich Islamic countries such as Saudi Arabia, Kuwait, Qatar, UAE, Oman and Bahrain. The lawyers will advise on investments in developing nations, including India, China and Brazil, and also on tax structuring in offshore territories, such as Jersey, Guernsey, British Virgin Islands and elsewhere. ISFIN chief executive Laurent Marliere said: ‘We are seeking and cherry-picking the best Islamic finance legal teams in the market. ‘High energy prices and the fact that Islamic banks have been protected from the credit crunch due to their (Sharia) ethical approach has provided Islamic investors with huge liquidities of around £55bn. This capital now needs to be invested.’ ISFIN’s initial meeting will take place on 12 May at the Islamic Finance Service Board summit in Luxembourg. Membership is restricted to one firm per jurisdiction. The network aims to have 50 members in time for the ISFIN meeting at the International Bar Association conference in Dubai in November.
The Immigration Advisory Service (IAS) has asked clients not to attempt to visit its offices and has blamed government legal aid cuts for going into administration. IAS, the UK’s largest provider of publicly funded immigration and asylum legal advice, went into administration over the weekend. A statement now published on its website tells clients not to visit any IAS office in person, even if they have an appointment booked, because all offices are now closed for such purposes. It advises clients to seek new representatives as soon as possible, and to make their application or appeal as soon as possible. The statement says that the government’s decision to remove immigration, which accounts for 60% of IAS’s income, from the scope of legal aid has made the IAS no longer financially viable. It said a 10% cut in legal aid fees for refugees seeking asylum had also impacted badly on its revenue. The statement continues that the IAS has been in discussion with the Legal Services Commission (LSC) in an attempt to gain support for a solvent restructure of its operations. It adds that IAS has also tried to reach an agreement with the LSC for an extended period to repay monies that, ‘in common with many other firms’, had been claimed in error – partly, in IAS’s view, due to the complex funding rules in place. IAS said no agreement could be reached, and its trustees decided that they had no alternative but to place the organisation into administration. The statement says that IAS administrators will be working closely with the LSC over the next few days to ensure that appropriate arrangements are made for all of its clients. Clients are advised to monitor IAS’s website, where updates on arrangements will be posted. The statement adds that the IAS has written to all tribunals and courts asking them to deal sympathetically with applications for extensions of time in which to lodge appeals or comply with court or tribunal direction until clients find new representatives. The charity, which has been in existence for 35 years and employed 300 staff at 14 locations across England and Scotland, is known for the important legal precedent cases it has taken through the Court of Justice of the European Union, the European Court of Human Rights and other courts. IAS trustees chairman John Scampion said: ‘It is a very sad day for us all, and I would like to pay tribute to the staff who have worked diligently and professionally through what has been very difficult and trying circumstances, and to reassure IAS’s clients that everything possible is being done to protect their interests during this very difficult time.’ An LSC spokesman said: ‘The IAS’s decision to go into administration is theirs alone. ‘During recent stewardship activities LSC raised concerns around financial management and claims irregularities which prompted IAS trustees to conclude that the organisation was no longer financially viable. ‘Our priority now is to work closely with IAS and the administrators to ensure clients of IAS continue to get the help they need, whilst safeguarding public money. We are now identifying alternative advice provision in the areas affected and arrangements for case transfer will follow as soon as possible. ‘Anyone who needs immigration advice should contact the Community Legal Advice helpline on 0845 345 4 345.’ Stephen Cork and Joanne Milner of Cork Gully LLP were appointed as joint administrators to the IAS Friday 8th July.
The Extradition Act under which British subject and Asperger’s syndrome sufferer Gary McKinnon faces being sent for trial in the US for computer hacking is not biased against British citizens, a landmark review has concluded. The review, published today by parliament’s human rights joint committee and conducted by retired Court of Appeal judge Sir Scott Baker, concludes that the act is ‘completely balanced and works fairly’. There is no need for the secretary of state to take an increased role in the ’surrender of persons to non-EU countries’, the review states. However, the review suggests that in relation to the UK-US extradition treaty, the government should look to raise the level of proof required when extraditing a person to the US to the same level required when extraditing a person from the US to the UK. That would be sufficient evidence to establish probable cause, the review states. The committee also ruled against the introduction of a so-called ‘appropriate forum bar’, which would mean a suspect would normally be tried in the country where the bulk of their crimes were committed. In McKinnon’s case, that would be the UK, because he searched NASA computers for evidence of ‘little green men’ from his North London home. However, the review’s author rejected this option, saying: ‘We have no evidence that any injustice is being caused by the present arrangements.’ Human rights group Liberty angrily rejected the review’s findings, pointing out that both coalition party leaders strongly criticised extradition laws in opposition. In 2009, the now deputy prime minister Nick Clegg said that the extradition of Gary McKinnon would amount to ‘a travesty of justice’. As leader of the opposition David Cameron said that the possibility that McKinnon could be extradited raised ‘serious questions about the workings of the Extradition Act’. Shami Chakrabarti, director of Liberty, said: ‘We don’t just disagree with this review but are completely baffled by it. This is not a court judgment merely policy advice and government cannot abdicate its responsibility to honour the promises of both coalition parties in opposition. ‘Britain’s rotten extradition system stinks of human rights abuse and rank hypocrisy. It’s time we stopped parcelling people off around the world like excess baggage and remembered the duty of all governments to protect their people and treat them fairly.’
The House of Lords debate which took place on 30 January revealed divided opinion on key issues in the proposed legislation in Part 2 of the Legal Aid, Sentencing and Punishment of Offenders Bill. We now know the changes will be delayed. And emphasis was placed on the fact that the reforms are not actually ‘pure Jackson’ but only embody selected parts of Lord Justice Jackson’s report. For example, consider the replacement of after-the-event legal expenses insurance by ‘qualified one-way costs shifting’ (QOCS). Liberal Democrat Lord Thomas of Gresford made a damning attack on exclusion of QOCS from the bill in favour of its introduction via the Civil Procedure Rules. He said ‘…The Civil Procedure Rules will come out of the air from somewhere and will not have any proper parliamentary scrutiny. They will have been drawn up as a result of discussion between the Executive and the Civil Procedure Rule Committee, which is entirely made up of judges and lawyers. I would have thought that there would be a constitutional position. It is more serious than anything else in the bill.’ Crossbench peer Baroness Butler-Sloss agreed, saying: ‘Perhaps the minister will not mind if I add a very few words. I had not intended to intervene but, as a former chairman of a rules committee, I have to say that I have considerable faith in the good sense of the way in which it does its work. But the points that have been made are extremely relevant. It is not really the business of a rules committee to change something so dramatic.’ Lord Beecham pointedly said to Lord Wallace of Tankerness, who was representing the government: ‘Perhaps, as he develops his reply, he would deal with the point of restricting this significant change to personal injury cases when Lord Justice Jackson advocated it across the piece.’ This raises clear professional conduct issues for the lawyer members of the Civil Procedure Rule Committee. If the Ministry of Justice provides notice under the Civil Procedure Act 1997 that rules be put in place, then the committee is required to do so. On the other hand, if there is a risk that it is being asked to breach constitutional law by exceeding its legal powers, then it has an impossible conflict of interest. Clearly there is little likelihood that any civil procedure rules will be drafted until this issue has been decisively resolved. The Civil Justice Council confirmed to me by email on 31 January: ‘The Council was asked by the Ministry to come up with practical proposals on implementing QOCS (Part 36 and Proportionality). A working party was set up chaired by Alistair Kinley to look at these issues. The subsequent report was handed over to the Department in October; a workshop was convened to discuss the report attended by Departmental officials. The Council has had not been asked to carry out any further work since then’. Lord Prescott meanwhile, the former deputy prime minister, focused on the role and impact of the press and media in bringing about the reforms. He said: ‘A survey has just come out – I do not know whether members have seen it – of 16 press organisations. It was conducted by the MoJ. Question one was: “Do you agree that CFA success fees should not longer be recoverable from the losing party in any case?”. ‘The answer was: “Yes, for the reasons set out in the response enclosed. UK law also needs to be amended to comply with Article 10 of the European Convention on Human Rights” – and that is quite apart from being shattered from our people claiming the human rights when they are spending most of the time trying to defeat it. But the point is that there are 16 identical replies – every one of the replies from television, radio, the Guardian, the Mail, Sky, BBC, was exactly the same, to all 60 questions. All of a sudden, when they are usually divided about many issues, when it comes down to money, all 60 answers are that they should keep their position. Even the good old liberal Guardian sided with Dacre, for God’s sake – that takes a bit of thinking about. ‘They are now agreed that they should be able to keep more of their money, even though they are the ones that transgressed in this situation. ‘For those 16 to get together-some lawyer has written the answer to every one of them. If a trade union did that, we would be in trouble. It would be all over the front pages: “60 identical replies, it must be a conspiracy”. Of course it is a damn conspiracy. That they have come together in this survey to give exactly the same answers is perhaps not a crime, but it is near to it. They have the power for to do it.’ He went on to say: ‘Believe me, this press is not going to go away; it is still going to be committing the same offences. We have a Press Complaints Commission that is particularly useless and will continue to be unless we make fundamental changes. Anyone listening to the Leveson inquiry must hear that the press has not changed its mind; it is still going to go ahead and do the same things because that is how it sells newspapers.’ In what seemed to be a significant Conservative ‘about-turn’ Lord McNally replied: ‘We have to await the outcome of the Leveson inquiry.’ Alluding to the encouragement of ‘professional rogues’, Lord Bach observed: ‘It is only common sense that we should not seek to legislate for a system of litigation that allows professional people to prey on their impecunious and weak clients. The Committee today is full of professional people of one sort or another and the House is even more full of them when it is sitting. ‘As we all know, being in a profession is a privilege. When a professional takes on contractual fiduciary and moral duties to do their best to help their clients, they take on an important responsibility. We have professions in our society because we need experts who specialise, whether it is expertise in finance, in my example, the law, engineering or medicine. ‘They should know that society takes seriously if and when they act negligently, with malice, or breach their duty of care. Should we make it so difficult for the individual to take action and claim back their damages in full? Would that not have a corrosive impact on trust in the professions and their regulation, which is something that professions and the professionals themselves should not and do not welcome. ‘We think that the answer to this dilemma is to listen to what Lord Justice Jackson said and extend one-way costs shifting to all litigation, not just keep it to personal injury.’ He continued: ‘Should we fail to do this, and leave the bill unamended, the perpetrators of the Payment Protection Insurance mis-selling scandal – the mortgage mis-selling scandal of the 1980s and 1990s which noble Lords will remember – and thousands of other instances when rogue professionals have abused their position of trust, will go unpunished and unheard. ‘Their victims will multiply in a system where those who have been wronged are dissuaded from taking action against rogues, knowing that parliament will have legislated to substantially limit their rights to redress. It would be something of a rogues’ charter. ‘I end what I have to say about this amendment by citing the views of the president of the Professional Negligence Lawyers Association, who said that many litigants face the dilemma of having had their trust betrayed by one professional adviser and that their only redress by way of litigation is to risk remaining assets and perhaps insolvency by trusting another – meaning another professional adviser – to win their case. That is not a satisfactory position and we ask the government to think again.’ The government has already conceded that personal injury claims including claims against medical professionals will have the benefit of qualified one way costs shifting. However, the justification to sweep away recoverable success fees and ATE premiums from every other category of civil litigation without even providing ‘qualified one way costs shifting’ in their place is becoming harder and harder to understand. The legal aid cuts in Part I were all justified by the government’s need to cut the costs to the tax payer. The inability of the Conservatives to justify Part 2 (as seen above there is a clear difference in the Liberal Democrat position in the Lords) by reference to any savings to the taxpayer leaves open to speculation the question of they wish to bring about these reforms at all. Lord Prescott is the only one who seems to have an explanation. If he is right, then these reforms are being implemented for reasons of political expediency for which ordinary people – like us – are expected to sacrifice our ability to enforce our civil rights. It is perhaps mischievous to suggest that if the Conservatives would go this far – would they go one step further and reintroduce slavery? Katy Manley, is president of the Professional Negligence Lawyers Association