Legal News

New Risk & Compliance forecast as at 15 October 2024 Our latest Risk and Compliance forecast dated 15 October 2024 charts proposed regulatory developments relevant to risk and compliance, enabling you to prepare for any forthcoming changes that could affect your organisation. Please read it carefully and in full; however, we have set out a few highlights that ought to be on your radar below. New items we’re tracking this month Anonymisation, pseudonymisation and encryption—the Information Commissioner’s Office ( ICO) anticipates publishing new and updated guidance on encryption in winter 2024, and on anonymisation and pseudonymisation in spring 2025. See: Data protection, AI and cyber security Cloud computing—the ICO announced it would update guidance on cloud computing in winter 2025......

The High Court has held that Standard Chartered’s suggested substitute for Libor, derived from the secured overnight financing rate ( SOFR), amounts to a “reasonable alternative rate”, in one of the earliest matters to reach the English courts concerning the move away from the Libor benchmark. Judges Julian Flaux and David Foxton concluded that the bank’s proposed metric rests on “a well-established rate used across the financial markets in a variety of financial instruments” and has the backing of financial regulators in both the UK and the US. Having failed to reach agreement with its investors—including hedge funds managed by DE Shaw and Bracebridge—on the rate to be applied to US$750m of preference shares issued in 2006, Standard Chartered asked the court to determine the dividend rate it should pay......

Al Hamed v Al Hamed [2024] EWHC 2448 ( Comm) What are the practical implications of this case? The Court expressed marked dissatisfaction with how the defendants’ team advanced their application. Their application notice was said to be unhelpfully bare: it merely indicated that the Court would be invited to decline to exercise jurisdiction by reference to a witness statement, yet it set out no grounds and attached no draft order. Although a witness statement from Mr Farani did articulate certain bases of challenge, the alleged failures of material disclosure or fair presentation were not spelled out with sufficient clarity or particularity. The Court, meanwhile, granted permission for expert evidence concerning the ADCC Judgment. The claimants place reliance on two reports prepared by Nasser Al Osaiba. The defendants wish to depend on a report authored by Khalid Atiq Al‑ Marri. However, Mr Al‑ Marri’s report omits an...

BTR Core Fund JPUT v HMRC [2024] UKFTT 885 ( TC) The taxpayer purchased the leasehold property in Manchester, comprising 350 build-to-rent flats and vacant commercial premises at ground-floor level. In its SDLT return it claimed multiple dwellings relief ( MDR), leading to a liability of about £4.3m. The tax was computed in line with HMRC’s guidance then in force, which stated that MDR calculations should use the higher residential rates. After HMRC updated its guidance, it became evident that this was wrong and that the standard rates could instead be applied. As the taxpayer was by then out of time to amend the return, it submitted an overpayment claim under FA 2003, Sch 10, para 34 for approximately £3m. HMRC accepted that the SDLT return included a mistake and that......

The FCA is imposing the additional requirements of the Consumer Duty on compulsory reimbursement for APP fraud, a field in which the PSR, with a narrower remit, is setting and steering the rules in practice. The Duty obliges financial firms to secure good outcomes for customers. APP fraud, where criminals trick people into sending funds to accounts they control, reached £460m in the twelve months to December 2023, according to UK Finance, the industry body for the sector. ‘ This could be among the first examples of the FCA deploying the Consumer Duty to articulate expectations in the absence of specific rules in a given area, or lacking explicit powers in that area,’ said Paul Harris, a partner at Osborne Clarke LLP. On 7 October 2024 the FCA sent a ‘ Dear CEO’ letter to leaders of payment companies,...

Hala Kamel Zabal v Arya Trading Ltd and others, O. M. P. ( COMM) 252/2016 What are the practical implications of this case? When a set-aside petition questions the constitution of the arbitral tribunal, the court gives primacy to the parties’ arbitration agreement over the provisions of the A& C Act. So long as the arbitrator’s appointment conforms to that agreement, any departure from the A& C Act is treated as immaterial. Contracting parties should be mindful that an award can be impugned only where both of the following conditions are satisfied: the appointment of the arbitrator was not made in accordance with the arbitration agreement; and the arbitration agreement itself is at odds with a non-derogable provision of the A& C Act. Accordingly, parties ought to ensure their arbitration agreement does not clash with any non-derogable provisions of the A& C Act, thereby...

Whether it is liaising with clients, preparing marketing copy, polishing documents, and more, AI enables legal professionals to work faster and more efficiently. Relying on AI can deliver valuable knock-on benefits for firms. Notably, research indicates lawyer burnout is increasing. Offloading mundane and nonspecialised tasks to AI is one way to ease lawyers’ mounting pressures. Yet AI is no replacement for lawyers, and using it in a profession that demands precision and careful attention brings notable risks. For instance, AI can hallucinate, generating incorrect and misleading content that appears convincing. We have already seen lawyers face legal consequences for citing fabricated cases in briefs after leaning on Chat GPT for research. Client confidentiality is another issue. Many AI tools are not fully secure, as they may share submitted data with third parties or use it to train future versions of the system. This...

London's High Court directed the firm to reveal which consultancy supplied a report tied to a transaction between Deripaska and his erstwhile partner, Vladimir Chernukhin, concluding that a 'legally recognised wrong' had been done to the oligarch by its deployment. Mr Justice Neil Calver explained that the document, later exposed as a fake, was deployed to deliberately mislead the court in their dispute over the deal. He found that the involvement of Quinn Emanuel Urquhart & Sullivan LLP, which transmitted the report for litigation purposes, lent the paper a veneer of credibility and an appearance of reliability. Calver J stated he was satisfied there was a properly arguable case that a legally recognised wrong had been committed against the Deripaska parties, namely the use of the report in an attempt to pervert the course of justice, with Quinn Emanuel becoming...

The Trustees of the Panico Panayi Accumulation and Maintenance Settlements Numbers to 4 and Redevco Properties UK1 Ltd v HMRC [2024] UKUT 319 ( TCC) In relation to the trustee appellant, the majority of the trustees of the relevant settlement ceased to be UK resident, instead becoming resident in Cyprus, in August 2004. The company appellant transferred its place of effective management to the Netherlands in January 2008. HMRC served closure notices on the appellants, including assessments under the exit charge provisions in the Taxation of Chargeable Gains Act 1992, ss 80 and 185 respectively. In the trustees’ case, the FTT sought a preliminary ruling from the Court of Justice of the European Union, which led to a CJEU judgment in September 2017 confirming that a trust could benefit from the four EU law freedoms and that imposing an immediate tax charge at the exit date was a...

Mergers CMA conditionally clears Lindab/ HAS- Vent merger after phase 2; CMA requires divestiture of two sites The CMA has released its final report from its phase 2 review into the completed purchase of HAS- Vent Holdings Limited ( HAS- Vent) by Lindab International AB ( Lindab), granting conditional clearance and requiring the divestiture of two sites. Lindab is a ventilation specialist headquartered in Sweden and quoted on the Nasdaq Stockholm. In the UK, Lindab’s presence is largely through subsidiaries that make and supply ventilation system products, including circular ducts and fittings: Lindab Limited Ductmann Limited HAS- Vent is a UK business with its head office in Wombourn......

Mergers The Commission approved: a joint venture between TAV Havalimanlari Holding AS and Fraport AG ( M.11730) following a Phase I review—see further, Midday Express the acquisition of joint control of Meroil Tank by Trafigura ( M.11704) after a Phase I review—see further, Midday Express The Commission received the notification in TPG/ New Mountain/ HB ( M.11761) (simplified merger procedure) NOTE— For all live merger investigations before the Commission, see further, EU mergers—ongoing cases......

On 11 October 2024, the extra custodial term imposed on Elie Taktouk was triggered and brought into effect after he failed to satisfy a court order issued in November 2023, a statement released on 12 October 2024 by solicitors conducting the private prosecution confirmed and reiterated. According to that statement, Taktouk had been found guilty over a collapsed £7.7m property transaction in London that ultimately culminated in the property being repossessed. At Southwark Crown Court, Judge Alexander Milne KC directed Taktouk to repay the sum—among it £3.2m in compensation—to the fraud’s victims within three months. Milne J had already handed him a seven-year sentence of imprisonment. The businessman—whose family is prominent within Lebanese and Nigerian circles—told the court at an August 2023 hearing that his late father, Youssef Taktouk, held approximately £187m in total assets overall. The case itself traces back to...

Mergers The Commission has received a notification concerning Vanden Avenne/ Alcogroup/ IGPC ( M.11758) under the simplified merger procedure. The Commission has cleared: Proman AG’s acquisition of sole control of Valenz Holding AG ( M.11698) following a phase I investigation—see Midday Express for more. Clayton, Dubilier & Rice and CVC Capital Partners’ acquisition of joint control of Epicor Inc. ( M.11728) following a phase I investigation—see Midday Express for more. Note— For details of all ongoing merger investigations before the Commission, see the EU mergers—ongoing cases tracker. Upcoming dates For the schedule of forthcoming EU competition developments, see the EU Competition calendar......

The Economic Crime and Corporate Transparency Act 2023 ( ECCTA 2023) Enacted a year ago, ECCTA 2023 contains a clause requiring large companies to put in place ‘reasonable procedures’ to protect against prosecution for failing to prevent fraud. This aligns with the UK’s Bribery Act, under which organisations can face action for failing to prevent bribery. The provision has not yet taken effect, as the UK is awaiting the publication of guidance explaining the changes. The regime will commence no earlier than six months after that guidance is released. That guidance was originally due to be published in June 2024......

NSI Act 2021 The Cabinet Office issued a final order concerning the purchase by Trina Solar UK Investments Limited of a 50% stake in AGR Trina BF Holdco Limited......

South Lakeland Action on Climate Change— Towards Transition v Secretary of State for Levelling Up, Housing and Communities [2024] EWHC 2349 ( Admin) What are the practical implications of this case? The judgment brings welcome clarity to the steps required when conducting EIAs and provides an important steer on how the courts will treat applications that depend on ‘substitution’ reasoning. The central message is straightforward: developers and planning authorities must ensure the EIA includes an appraisal of downstream emissions arising from the proposal. It will not suffice to maintain that such emissions need not be assessed simply because they will be counterbalanced or ‘offset’ by some other factor. While the ruling leaves scope for promoters to argue that their scheme has a neutral environmental effect by advancing a substitution case, any material relied upon must be scrutinised under the 2011 regulations, enabling public...

AZ v BY [2024] EWHC 1847 ( Comm) What are the practical implications of this case? This ruling is important as it confirms the finality of a tribunal’s award under the EAA 1996. Flowing from the court’s findings, it is the dispositive portion of the award that generates a res judicata effect. All remedies, including orders, that the tribunal intends to grant must expressly appear in the dispositive section of the award in order to benefit from enforcement proceedings before the English courts. Any order omitted from the dispositive and found only in the reasoning, however clearly expressed, will not be treated as part of the dispositive and will, accordingly, remain unenforceable. It is, therefore, of primary importance for parties to ensure that their statement of relief, which usually provides the basis for the dispositive section of the award, is clearly...

Mergers The Commission approved: the move to acquire joint control over Fraport TAV Antalya Terminal Isletmeciligi by TAV Airports and Fraport AG ( M.11729), following a phase I review—see further, Midday Express the move to acquire joint control over NTS Middle East by ADRILL, ADH and Tubacex ( M.11718), following a phase I review—see further, Midday Express NOTE— For details of all current merger investigations before the Commission, see further, EU mergers—ongoing cases tracker Russia’s war against Ukraine The Commission, under the Temporary Crisis and Transition Framework, approved two Luxembourgish schemes (worth €520m) to help manufacturers decarbonise their production processes and to back investment in strategic sectors that advance the shift to a net-zero economy—see further, Midday Express NOTE— For all Commission decisions adopted under the Temporary Crisis Framework, and the Temporary Crisis and Transition Framework, in the context of Russia’s war against Ukraine, see...

TVIS Ltd v Howserv Services Ltd and other companies [2024] EWCA Civ 1103 What are the practical implications of this case? While the Court of Appeal seldom overturns trade mark infringement decisions, the outcome here is hardly surprising; it is unusual for a claimant to marshal so many instances of at least arguable actual confusion, and aspects of the judge’s conclusions were difficult to reconcile. More notable for practitioners, however, are Arnold LJ’s narrow stance on descriptiveness (considered further below) and his account of why the principle in Reed Executive Plc v Reed Business Information Ltd [2004] EWCA Civ 159 did not apply. The frequently invoked Reed v Reed principle indicates that, where a mark is largely descriptive, relatively small distinctions may suffice to dispel confusion. This follows because the average consumer anticipates that others will also use descriptive signs and,...

Haide Building Materials Co Ltd v Ship Recycling Investments Inc [2024] SGHC 222 What are the practical implications of this case? Courts are increasingly intolerant of applicants who swamp proceedings with numerous grounds in an effort to make up for weak substance. Historically, courts felt compelled to address every ground, offering only gentle reproach and noting how such tactics were counterproductive. The mood has shifted: volume is no longer being indulged where it masks a lack of merit... Justice Mc Hugh of the Australian High Court observed in an address that when an appeal notice carries too many grounds, the strongest arguments become lost amid a clutter of inferior points ( Michael Mc Hugh AO QC, The Essence of Appellate Advocacy ( Opening Address, Australian Bar Association 2012 Appellate Advocacy Course)). Similar sentiments recur in judgments ( Xia Zhengyan v Geng Changqing [2015] 3 SLR 732, para 100) and in...