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Archive for October, 2014

Friday 24 October 2014

MH Update Autumn 2014

Welcome

Welcome to the Autumn MH Update. There are a number of very topical subjects covered in these articles.

Since our last publication the domestic market has seemed more lively and each of our practice groups is seeing higher levels of activity than for the same time last year. I hope this is reflected in your own business.

Recent activity, for the first time in a while, has included M&A, private equity, property and public markets all being active at the same time. We have gained British Land as a client, floated The Fulham Shore PLC on AIM and Katherine de Souza and Wayne Cadogan chalked up a notable employment tribunal success for the Brazilian Embassy including, crucially, arranging for live video evidence to be given to the tribunal in London from a link in Saudi Arabia.

I am delighted to report that, since the last MH Update, David Bettis has qualified as a solicitor and is now working in the Corporate Department.  We also have a new trainee Sive Ozer who started with us on 1st September and Lindsey Armstrong will be joining, also as a trainee, on 1st November.   

Sadly, however, we will be losing Peter Curnock who retires in March after approximately 10,000 days at Marriott Harrison. We will miss his practical advice (and his practical  jokes).                                                                                                                                                                                                                             

Other highlights for us have been a good smattering of international work and increasing involvement in Primerus which is the international network of which we are a member and which now includes correspondents in 39 jurisdictions. The members are generally firms with boutique practices like Marriott Harrison but, like us they have lawyers with big firm backgrounds who can operate at a senior level. Most recently David Bennett has been working with the Primerus firm in Poland and Peter Curnock was contacted by the Malta firm for assistance on a litigation case. If you have needs overseas then we would be happy to assist in finding the right firm to help.

I hope you enjoy reading our Update. If there are questions arising from the articles then please contact the relevant author.

As well as that, your feedback on us, on the work we do for you and on what more we could do for you, is extremely important. Please feel free to discuss any aspect of this with your contact at the firm or with me.

Jonathan Pearce

Friday 24 October 2014

MH Corporate

Court of Appeal Decision on De Facto and Shadow Directors

The recent Court of Appeal decision in Smithton Ltd (formerly Hobart Capital Markets Ltd) v Naggar and others [2014] EWCA Civ 939 is a reminder about the points of general practical importance for identifying de facto and shadow directors.

The definitions of de facto director and shadow director have been determined by statute and case law. Without ever having been formally appointed as a director, a person may become a de facto director if they have performed the functions of a director, or become a shadow director if they are able to persuade the directors of a company to act in a certain way. The question which arose in this case, and which often arises in practice given the substantial duties (and potential liabilities) imposed on a company director, is whether a director of the holding company of a group of companies has become a director of its subsidiaries.

The Importance of Being Clear

In the recent case of Heritage Oil and Gas Ltd & Anor v Tullow Uganda Ltd [2014] EWCA Civ 1048, the Court of Appeal reinforced the importance of using clear language when drafting a provision that is intended to operate as a condition precedent.

The appellant, Heritage, argued that Tullow could not bring a claim under an indemnity because, amongst other things, it had failed to comply with the notice provisions requiring it to give Heritage 20 business days’ notice of any tax claim.

Why It’s Not Always Good To Get A Promotion

We are often asked by companies wishing to raise money how they may do so lawfully. They may have entered into an agreement with a third party which agrees to procure finance for them. This is a heavily regulated area, with significant consequences for breaching the law. It is commonly referred to as the Financial Promotion Regime. Below, I summarise some of the key points which arise out of the regime and their consequences in an equity fund raising scenario. I do not address here any potentially overlapping issues arising from the Markets in Financial Instruments Directive.

The Bearer of Bad News?

The Small Business, Enterprise and Employment Bill (the “Bill”) had its second reading in the House of Commons on 16 July 2014, and shall soon be timetabled to continue its march towards royal assent.

The rationale underpinning the Bill is the frequently resurrected (although seemingly never-ending) goal of cutting bureaucracy to stimulate enterprise, or, as it is more windily described in Research Paper 14/39, “[to] reduce regulatory burdens and facilitate the inception, financing and growth of business”.

The Bill’s scope includes addressing the transparency of company ownership, which has led to proposals for the abolition of the type of security known as ‘bearer shares’. As it is not easy to identify the owner of a bearer share, their existence has long been demonised as a dark corner of the UK’s otherwise bright and open regime of company ownership.

 

Friday 24 October 2014

MH Media, Technology & IP

The chilling effect of the “right to be forgotten”

The ECJ’s recent judgment in the case of Google Spain SL and Google Inc v AEPD and Mario Costeja González raises serious concerns over the potentially censorial effect of the “right to be forgotten” on search engines.

The applicant, Mr. Gonzaléz, lodged a complaint against Google Spain and Google Inc. in relation to the appearance of an auction notice for his repossessed home among search results based on his name. The case eventually made its way to the ECJ, and in May 2014, the court delivered its ruling.

New Information in a Digital Age

The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (“Regulations”) came into force on 13 June 2014 and replace the Distance Selling Regulations and the Doorstep Selling Regulations for consumer contracts made on or after that date. The Regulations implement the Consumer Rights Directive aimed at harmonising consumer protection rules across the EU increasing the information that consumers should receive from traders and the rights that consumers have as part of a consumer transaction. The Regulations also introduce the concept of digital content in consumer law.

Friday 24 October 2014

MH Dispute Resolution

You only get what you paid for

The recent case of Comau UK Limited v Lotus Lightweight Structures Limited [2014] EWHC 2122 (Comm) is an interesting decision from the Commercial Court in which the Court found against Comau UK Limited (“C“) which was seeking summary judgment of its claim for an award for loss of profit from a repudiatory breach of contract by Lotus Lightweight Structures Limited (“L“). The Court instead found that L had a real prospect of successfully defending the claim. The Court held that while C was entitled to seek damages for amounts due under a contract, where that contract permitted L to perform its obligations in different ways, the least onerous way would be applied and C would not therefore be able to get a better deal than it had bargained for.

Let’s get friendly

The recent case of Emirates Trading Agency LLC v Prime Mineral Exports Private Limited [2014] EWHC 2104 (Comm) demonstrates the approach of the Court to dispute resolution clauses which require the parties to enter into good faith discussions to resolve their disputes.

Emirates Trading Agency LLC (“E”) had agreed to purchase iron ore from Prime Mineral Exports Private Limited (“P”) under the terms of a Long Term Contract dated 20 October 2007 (“LTC”). In the event, E failed to lift all of the iron ore expected to be taken up and P sought liquidated damages from E pursuant to the terms of the LTC. The next year E failed to lift any iron ore and, on 1 December 2009, P served notice of termination of the LTC and claimed $45,472,800 in respect of liquidated damages. P stated that if the claim was not paid within 14 days they reserved the right to refer the claim to arbitration in accordance with clause 11.2 of the LTC.

 

Friday 24 October 2014

MH Employment

Shared Parental Leave

The Government is introducing a new concept of statutory shared parental leave and pay into the existing statutory maternity and paternity leave and pay regime. It is intended to inject more flexibility into how parents choose to structure initial childcare arrangements and to assist in shifting any entrenched view of the mother as the primary carer.

The new right will be introduced on 1 December 2014 and will apply to children expected to be born or adopted on or after 5 April 2015.

Currently eligible mothers are entitled to 52 weeks’ statutory maternity leave, of which 39 weeks are paid. Eligible fathers can take up to 2 weeks’ paid statutory paternity leave. There is also a right for fathers to take additional statutory paternity leave in certain circumstances but this right will be replaced by the shared parental leave right.

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