Legal News

Illumina v Commission; Grail v Commission — Joined cases C-611/22 P and C-625/22 P What are the practical implications of this case? The Court of Justice has unequivocally dismissed the expansive reading of Article 22 that had permitted the Commission to examine transactions that were not notifiable at EU or Member State level. Transactions that do not satisfy the relevant jurisdictional thresholds can no longer be referred. Nevertheless, M& A parties should note that the Commission has reiterated its wish for legal instruments to intervene in ‘those few cases where a deal would have an impact in Europe but does not otherwise meet the EU notification thresholds’ ( Executive Vice- President, Margrethe Vestager). This remains in line with the Commission’s conclusions in its ‘2021 Evaluation on the procedural aspects of EU merger control’. The Commission is also still prepared to entertain Article 22...

HMRC v Peter Gould [2024] UKUT 285 ( TCC). Peter Gould ( PG) and Nicholas Gould ( NG) were the principal shareholders of Regis Group ( Holdings) Ltd ( Regis). On 31 March 2016, the board, which included PG and NG, approved an interim dividend of £40m. NG received his distribution in the 2015-16 tax year. PG’s amount, relating to the same share class, was paid in 2016-17, when he was not UK resident. HMRC contended that, for income tax purposes, PG should be regarded as having received his interim dividend at the same time as NG, that is, when he was still UK resident. A dividend is taxable in the tax year in which it becomes a debt that is due and payable......

The retirement savings company On 2 October 2024, the retirement savings firm predicted that Rachel Reeves would use her inaugural Budget as chancellor, scheduled for 30 October 2024, to build on current proposals to steer pension money towards UK-based companies and enterprises. ‘ With so much effort already poured into this evolving programme, it appears very probable the chancellor will set out the next steps and provide further detail in the forthcoming Budget,’ said Becky O’ Connor, Pension Bee’s director of public affairs. In September 2024, the government opened a consultation as the initial phase of its retirement savings review, asking for views on a suite of pensions reforms, including measures to encourage greater investment in the UK and how best to stimulate it......

Finanzamt T v S Case C‑184/23 What are the practical implications of the case? In earlier CJEU rulings, it had been implied that intra‑group supplies of services within a VAT group might attract VAT. This judgment clarifies that approach is mistaken, as members of a VAT group are treated as a single taxable person for VAT purposes. Consequently, VAT‑chargeable services cannot be made to participants within the same VAT group. Accordingly, internal charges within the group fall outside the scope of VAT. The CJEU’s clarification dispels the ambiguity created by its prior case law on this specific point. The ruling is expected to serve as a significant line of argument for tax administrations and impacted businesses across EU Member States. It should also be observed that the Court of Justice’s conclusion aligns with the recent Opinion of A‑ G...

Considered a pioneering ruling, on 27 September 2024 the Court held that Laion — a non-profit assembling datasets for AI training, also for commercial ends — may invoke the text- and data-mining exception in Germany’s implementation of Directive ( EU) 2019/790 (the EU Copyright Directive) when scraping images protected by copyright. The central question between the parties was whether Laion, as defendant, could lawfully download and copy photographer Robert Kneschke’s protected image to build an AI training dataset. Laion releases a dataset for third parties to train their systems on, while it does not train any AI itself. It offers approximately 5.85 billion image-to-text pairs to AI image generators, a resource used for commercial activity. The proceedings were closely watched by developers of generative AI, as this is regarded as the first EU case to address the lawfulness of image scraping and later use...

Isabel dos Santos v Unitel SA [2024] EWCA Civ 1109 What are the practical implications of this case? When applying for, or seeking to oppose or set aside, freezing orders, practitioners should keep the following practical points in mind: There is no longer any requirement to prepare to satisfy both versions of the ‘good arguable case’ test for freezing orders; a single test now applies. The ‘good arguable case’ threshold is to be treated as equivalent to the ‘serious issue to be tried’ test used for other forms of interim injunction applications (following American Cyanamid v Ethicon [1975] 1 All ER 504) and it does not impose a higher burden. ......

European Parliament hearings with Commissioners-designate to start on 4 November 2024 On 2 October 2024, the Conference of Presidents ( EP President and leaders of political groups) endorsed the timetable for the forthcoming hearings of the Commissioners-designate. Hearings begin on 4 November 2024 and will run through to 12 November 2024 inclusive. The Conference of Presidents also settled how committees will share responsibilities for the confirmation hearings between them. The detailed timetable indicating when each Commissioner-designate will be questioned will be formally set by the Conference of Presidents at its next meeting then. Parliament calls on Commissioners-designate to attend the relevant committees for hearings, so members can scrutinise thoroughly their suitability for the roles to which they have been allocated accordingly......

A number of record companies, among them Warner, Sony Music and Atlantic Records, have brought actions against Suno and Udio, issuing two lawsuits that accuse generative AI of producing ‘convincing imitations’ of existing tracks. Pre-action correspondence indicates that, as with other US disputes over generative AI, the companies’ core defence will rest on the claim that any copying amounted to fair use. How Suno and Udio allegedly hit the wrong note The claims assert that Suno (which has a deal to feature within Microsoft’s Copilot AI chatbot) and Udio ingest vast numbers of recordings, then refine and standardise them for use as training data, before extracting parameters from that dataset to build their AI models. When a user supplies a text prompt (for example, make a jazz song about New York), the service outputs one or more...

Summary The DPO dismissed a grievance concerning a pension transfer. The move occurred within the six‑month statutory window and there were no undue delays. The scheme undertook checks required by HMRC on the receiving arrangement, with those verifications in place to protect members’ interests. The complainant declined an option to proceed without the checks. This determination serves as a reminder that scheme members should avoid causing unjustified delay to a transfer at any stage... What were the facts? Mr E was a member of the HSBC Bank ( UK) Pension Scheme (the Scheme), administered by Willis Towers Watson ( WTW). Mr E wished to transfer his Scheme benefits to a personal pension arrangement......

What are the practical implications of this case? The BGH’s ruling carries notable consequences for the validity of arbitral awards regarding formalities such as signatures. It emphasised that courts must, of their own motion, confirm compliance with all procedural conditions in Section 1059 of ZPO, even where the parties do not raise them. This includes verifying that the arbitrators have signed the award, or that there is a legitimate explanation for any missing signature. A refusal to sign, or a determination that obtaining a signature should be avoided, constitutes a proper reason under Section 1054 (1) sentence 2 of ZPO. An instrument that fails to satisfy these formalities is not an award within the meaning of Section 1059 of ZPO at all, and therefore cannot be the subject of an application to set aside. Consequently, German courts should not demand elaborate...

Original news Mr L ( CAS-77913– X7V0) –30 May 2024 Summary The Deputy Pensions Ombudsman ( DPO) has dismissed a formal grievance about inadequate customer service. The complainant had initially been given incorrect details about his lump sum and encountered delays in receiving information. He sustained no loss because the mistake was corrected promptly shortly afterwards. While there were delays, the information sought was accessible from the website or other channels. The PO’s decision serves as a reminder that not every instance of poor customer service results in financial loss. What were the facts? Mr L was a member of the Standard Life Group Personal Pension Plan (the Scheme) which was operated by Standard Life ( SL)......

Jassal v Shah [2024] EWHC 2214 ( Ch) What are the practical implications of this case? With practitioners still waiting for the Supreme Court’s decision on whether success fees can be recovered under the Inheritance ( Provision for Family and Dependants) Act 1975 ( I( PFD) A 1975), the High Court has resolved a different, perhaps unexpected, issue that strikes at the core of costs. May an I( PFD) A 1975 claimant receive an allowance for their legal costs within the substantive award? The court’s response is an emphatic ‘no’: costs fall to be determined later, via a distinct process. Yet James Pickering KC, acting as a Deputy High Court Judge, plainly recognised the troubling ramifications of that conclusion. More than ten years have passed since Mr Justice Briggs (as he then was) voiced a ‘real sense of unease’ in Lilleyman v...

Mergers The CMA has released the complete text of its decision to accept undertakings in place of referring the completed acquisition by Barratt Development plc of Redrow plc for a phase 2 inquiry—see further, decision NOTE— For all current merger before the CMA, see further, UK mergers—ongoing cases tracker Upcoming dates For dates of forthcoming UK competition developments, see further, UK Competition calendar......

A courtroom dispute about who should foot the bill for Boeing and Airbus jets left in Russia after its invasion of Ukraine calls on Judge Andrew Butcher to rule on insurers’ liability and the relevant categories of cover. Jonathan Gaisman KC of 7 King's Bench Walk, speaking for a cohort of all-risk insurers, said that once the West imposed sanctions on Russia it became apparent the state intended to retain the aircraft in-country by one method or another. The planes, he argued, had to remain in Russia for practical reasons and as a matter of geopolitical prestige. His case is that the Russian state appropriated the airframes as a political measure, engaging the war-risk policy, rather than any indemnity under the wider all-risks wording for loss of or damage to aircraft. An alternative position advanced by certain lessors is that the airlines...

The Court of Appeal confirmed that the FCA has authority, under the Financial Services and Markets Act 2000, to require a redress scheme from a single firm. The regulator is additionally seeking to impose a fine of nearly £41m on Blue Crest for failing to take steps to avert what it characterised as a conflict of interest. Justice Andrew Popplewell, who headed the three-judge panel, found that the Upper Tribunal ( UT) was wrong to conclude there was no ‘reasonable prospect of success that loss could be made out’. He explained that the UT’s conclusion rested on an assumption he considered mistaken: that the loss had to be of a kind recoverable in the courts. He further stated that the position is even more compelling if, as he would hold, the FCA is entitled, in an appropriate case, to order redress for a form of loss...

The new offence does not target individuals: Individuals are not the direct focus of the new offence; they can already face proceedings under statutes such as the Bribery Act 2020 or the Fraud Act 2006. Where a company commits a crime with the demonstrated 'consent or connivance' of a senior member of staff, that person can, in some cases, be culpable as well. Lawyers caution that corporates likely to be charged with the 'failure to prevent fraud' offence may try to strike arrangements with prosecutors to avert a trial—a deferred prosecution agreement ( DPA). A common term of a DPA is that the business assists in the prosecution of individuals. Once the 'failure to prevent fraud' offence takes effect, we should expect an uptick in formal fraud investigations by the Serious Fraud Office, said Daren Allen, a partner at Shoosmiths LLP. He also...

X and YCo v ZCo [2024] HKCFI 695 What are the practical implications of this case? The tribunal is not obliged to trawl through all documents and materials to locate the issues; it is for the parties to identify the key questions put to the tribunal for decision. The Hong Kong Courts will give short shrift to parties attempting to overturn awards on matters not addressed in opening and closing submissions for the hearing. Where a list of issues is agreed, parties must ensure every critical point is included, as it is the court’s ‘useful starting point’ when determining what issues were before the tribunal. What was the background? The plaintiffs entered into a Share Subscription and Purchase Agreement ( SPA) under which ZCo purchased shares in the company from the second plaintiff ( YCo). Upon completion of the SPA, ZCo held 65% of the...

In this issue Q& As Useful information Weekly highlights from other practice areas Q& As New Q& A When setting up growth shares in a subsidiary where value is expected to be realised through a sale to the parent under a put option, must the put’s terms appear in the issuer’s articles, or can they sit in the subscription agreements instead? This Q& A examines a scenario where the growth shareholder benefits from a put allowing them to require a purchase at a defined time for a price that disregards any minority discount. It considers whether those put terms need to be embedded in the issuing company’s articles of association, drafted so they advantage any hypothetical buyer or holder of the shares, to manage the risk of an income tax charge under the...

UK developments FCA issues update on CP24/8: Extending the SDR regime to Portfolio Management The Financial Conduct Authority ( FCA) has refreshed its webpage for consultation paper CP24/8: Extending the SDR regime to Portfolio Management, noting it is reviewing feedback carefully to ensure the framework safeguards consumers while also acknowledging and accommodating practical challenges firms may face. The regulator recognises that some asset managers are taking longer than anticipated to meet the sustainability disclosure requirements ( SDR) and labelling rules, and that this could have implications for portfolio managers. These points have been emphasised to the FCA through consultation responses and wider industry engagement. The FCA plans to publish a policy statement, along with further detail on implementation, in Q2 2025. See: LNB News 27/09/2024 27. Source: CP24/8: Extending the SDR regime to Portfolio Management [ September 2024 update]. For more...

In this issue: Sustainable finance and ESG round-up Banking and Finance case round-up Retained EU Law ( Revocation and Reform) Act 2023 LIBOR and benchmarks Security Aviation finance Sustainable finance Debt capital markets Technology in banking & finance transactions Cryptoassets Regulation for banking lawyers Daily and weekly news alerts New and updated content Useful information Sustainable finance and ESG round-up For a digest of this week’s Sustainable finance and ESG developments, see: Sustainable finance and ESG weekly round–up—3 October 2024. Banking and Finance case round-up For an overview of the Banking & Finance matters we flagged between July and September 2024, see News Analysis: Banking & Finance— July to September 2024 case round-up. Retained EU Law ( Revocation and Reform) Act 2023 Assimilated law procedures halted as part of UK- EU...