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Bribery Bill: reaction

The final version of the UK Bribery Bill was published today. Justice Minister Jack Straw said the legislation will “further cement the UK’s reputation as one of the least corrupt countries in the world”. But what do business lawyers helping clients adapt to the new law think?

Michael Roberts, a lawyer in the bribery and corruption task force at Lovells:

There appears to be something of a compromise at play. The Government has accepted the recommendation of the Parliamentary Committee to "toughen" the corporate offence by removing the requirement for the prosecution to prove negligence on the part of the corporate itself.

As such, where wrongdoing is uncovered the corporate will automatically be guilty of an offence, subject to showing that it had in place "adequate procedures" to prevent bribery. The Bill still does not define what those "adequate procedures" are.

Linklaters half-year turnover down 9.5 per cent

Turnover at Linklaters is down 9.5 per cent at the half-year stage, with the firm billing  £591 million compared with £653m during the same period last year.

Billing levels fell slightly more than magic circle rival Allen & Overy, which posted a 7 per cent fall for the first six months of the year.

Simon Davies, Linklaters’ managing partner (right), said: “Our results are in line with our expectations and reflect the continuing challenging environment for our clients and, in particular, the subdued level of global M&A activity.
 
“While we do not expect a rapid recovery in the market, we have seen an upturn in our activity levels on the second half of last year particularly in the BRIC and the Middle East markets where we have very strong capability.
 
Linklaters recently overtook Clifford Chance to become the UK’s largest firm by turnover after billing £1.3bn in the 2008 – 2009 financial year.

Richard Harvey, QC, appointed to represent Karadzic

Richard Harvey, QC, the joint head of Garden Court Chambers, has been appointed to represent Radovan Karadzic if the former Bosnian Serb leader continues to boycott his trial when it resumes in March.

Harvey has experience at the International Criminal Court in The Hague having defended the former head of the Kosovo Liberation Army on war crimes charges and a former Tanzanian mayor accused of genocide in relation to Rwanda.
 
In the UK Harvey is best-known for his role in the Bloody Sunday inquiry where he represented the family of James Wray, who was killed by the British army.

Harvey’s appointment appears unlikely to break the stalemate that led to the adjournment of Karadzic’s trial just days after it began last month when the defendant refused to show up in court, saying he needed months more to prepare his defense.

One of Karadzic’s advisers told reporters the former Bosnian Serb leader will not cooperate with Harvey.

Childs tries for second term as Clifford Chance global chief

David Childs, Clifford Chance's current global managing partner, is to stand uncontested for a second term in the post.

Partners will vote to confirm his re-election with an announcement scheduled for mid-December. The new term will run from May 1, 2010 for four years.

Childs has was elected global managing partner in 2006 after serving as head of corporate and firm chief operating officer since 2003.

Confirmation that Childs is seeking a second term follows a recent management shakeup at Clifford Chance that saw contested elections for the roles of London managing partner and global head of litigation.

Capital markets partner David Bickerton was elected to lead the firm's London office with former London managing partner Jeremy Sandelson elected as global litigation chief.

Weird cases: don't mess with the bears

Gary Slapper

The punishment for someone who unlawfully enters an enclosure with a dangerous animal is usually delivered without the involvement of the legal system. But when a 21-year-old man recently entered the grizzly bear pit at San Francisco zoo, state prosecutors took a different approach.

The bear pit is protected by high walls, a barricade, an electrified fence and a 14-foot deep moat, but Kenneth Herron overcame those obstacles and leapt into the pit one afternoon in September. One of two very large bears approached him and gave him a sniff; Herron narrowly escaped being mauled to death. Zoo staff averted disaster by firing a warning shot and the bears retreated. Herron was then snatched from the pit.

Morning roundup: four firms win UK Government work

Today's legal news . . .

* Four City law firms have been chosen by the Government to handle the sale of its stake in big banks. Allen & Overy, Herbert Smith and Simmons & Simmons were selected alongside Slaughter and May (The Times).

* A warning about the surrender of secret offshore account details to Revenue & Customs has been sent to 27,000 bank customers, in a last minute push by the tax authority to draw attention to its “last chance” amnesty for evaders (Financial Times).

* Russian authorities have refused to release the body of Sergei Magnitsky, the lawyer campaigning against fraud and corruption who died in a Moscow jail this week, for an independent autopsy (The Daily Telegraph).

* The Government yesterday published details of its draft banking reform Bill which will give the UK's financial watchdog powers to claw back bankers' bonuses, and rip up their employment contracts, if they are deemed to endanger the financial system by encouraging excessive risk-taking (The Independent).

* A woman has won a legal battle over the care of her three-year-old grandson after the Supreme Court reversed rulings that he should live with his father (The Times).

FSA warns on corruption push

The Financial Services Authority will pay more attention to bribery and corruption issues, its head of enforcement told the British Bankers Association (BBA) today.

Margaret Cole, FSA head of enforcement, said FSA supervisors would ask regulated firms whether their geographic reach, customer base or sales channels “make it vulnerable to the risk that staff pay or receive bribes”.

“Firms that use go-betweens to generate business in jurisdictions associated with systemic levels of corruption may receive particular attention,” she said.

Ms Cole said the move comes after the FSA fined UK insurer Aon £5.25 million for having weak controls to prevent bribery and corruption earlier this year.

She told the BBA financial firms are expected to “actively implement measures to mitigate the threat” but reminded the audience that the FSA was concerned with prevention and not prosecution in this area.

OFT looking to beef up enforcement teams

The OFT is hiring. The competition watchdog is looking to recruit three lawyers to work on Competition Act investigations and cartel cases, according to an ad in today's Times Law section.

It's looking for a senior team leader for a new unit dedicated to Competition Act investigations (salary up to £66,000) and another lawyer to work under them (up to £54,000). The OFT will also recruit an assistant director for cartels, which promises a salary of up to £66,000.

Lawyer of the week: Paul Michel

Paul Michel, of Cloisters Chambers, acted for Sharon Coleman, the carer of her disabled son, in the landmark case in which the Employment Appeal Tribunal ruled that all carers are now protected by anti-discrimination legislation in the workplace.

What were the main challenges in this case and the possible implications?

The greatest challenge was getting to grips with the background to all the relevant European Community law. The decision extends rights to millions of people in the EU who would otherwise not be protected from discrimination in the context of disability in the work place. In most member states, a person who is discriminated against on the basis of, say, their partner’s sex, race or religion, or their child’s sexuality, is given protection. It must be right that the same protection should be given in the context of disability.

Edward Fennell: In the City

Having a blast

It was mid-afternoon last Friday in a very wet Russell Square in London when suddenly the fireworks started. I hadn’t realised just how incendiary meetings of the Motor Accidents Solicitors Society could be. But suddenly a session on the dodgy-sounding topic of “Third Party Capture” erupted into an exchange of vicious allegations and recriminations between insurers and solicitors. The effect can only be described as a conference-style version of The Jerry Springer Show.

So what had seemed initially to be a mild spat degenerated into mutual mud-slinging as the two groups inveighed against each other around the notion of who was allegedly fleecing the client more viciously.

Morning roundup: six MPs face fraud charges over expenses

Today's legal news. . .

* Six MPs and peers are facing criminal charges of fraud following investigations by Scotland Yard into the abuse of the parliamentary expenses system, The Daily Telegraph reports.

* The billionaire Tchenguiz brothers have been ordered to pay their brother-in-law an additional £100,000 towards his legal costs after failing to meet a previous court order (The Times).

* Britain’s security services should be able to withold evidence from claimants in civil court cases, the High Court ruled yesterday. In a decision which could have far-reaching legal implications, Mr Justice Silber ruled that agencies such as MI5 and MI6 could rely on secret evidence in their defence, if disclosing the evidence would compromise national security (The Independent).

* The economic downturn has led to a surge in crime by middle-manager “cappucino fraudsters” who have resorted to stealing from their employers (The Times).

* Hundreds of years of tradition may be ditched today when the ban on barristers joining in partnership with other professionals is lifted (The Times).

The Archers wins critical acclaim from ex High Court judge

Good to know that the judiciary keep up with radio soaps.  Sir David Latham, a former High Court judge who is currently chairman of the Parole Board, let slip earlier this week that he is a fan of The Archers.
He described to a group of bemused journalists that when property developer Matt Crawford was sentenced to fraud, the judge in the radio programme had made clear that Crawford would spend 18 months in prison followed by 18 months on licence.
Sir David was clearly delighted that the scriptwriters had accurately reflected how real judges now hand out sentences. Many of the journalists looked perplexed until it was explained to them that he was talking about a character in The Archers.

Bribery Bill - first reactions

Will companies be automatically liable under the new Bribery Bill mentioned in the Queen's Speech yesterday? Or will they have to be shown to have been negligent? This is the crunch question, according to lawyers yesterday as they await the detail of the bill on Friday.

Jeremy Cole, partner in the Bribery and Corruption Task Force at law firm Lovells LLP (who appeared before the Joint Committee on the Draft Bribery Bill in June) says:"The key issue for businesses is whether the new corporate offence will still require negligence on the part of the company, or whether the company will be automatically liable for acts of bribery committed on its behalf unless it can demonstrate that it had "adequate procedures" in place to prevent bribery.  
 
That was the recommendation of the Parliamentary Committee, but it's a tough step as it effectively reverses the burden of proof. The corporate would need to show it had adequate procedures in place to prevent bribery; the onus would not be on the regulator to prove that the procedures were lacking."

Another issue, of course, is even with cross party support, whether the Government will get the measure through before the general election, he added.

Morning roundup: T-Mobile under fire over sale of customer records

Today's legal news. . .

* The private details of millions of mobile phone customers, including their numbers and addresses, have been sold illegally. Staff at T-Mobile passed the information to brokers who then sold it to rival phone companies (The Times).

* Most of the 4,450 rich people whose UBS bank accounts are to be handed over to US authorities are suspected of fraud rather than simple tax evasion, Swiss authorities revealed (The Independent).

* A lawyer representing Hermitage Capital Management, the fund manager, has died in jail amid a dispute between the fund's co-founder Bill Browder and Russian authorities. The death of Sergei Magnitsky, a 37-year old father of two, is set to reignite concerns about investing and doing business in Russia says The Daily Telegraph.

* A group of multinationals won a High Court victory yes-terday in a case concerning a breach of European Union treaty rules that could cost the Treasury hundreds of millions of pounds (Financial Times).
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* The Financial Services Authority is to be handed powers to demand information from hedge funds and other firms it does not directly regulate in a package of measures being outlined by the government (The Guardian).

* STV, Scotland's ITV licensee, has launched a new legal claim against national network ITV claiming it is owed up to £12 million in a dispute over video-on-demand rights (The Daily Telegraph).

John Fingleton's reign as OFT chief extended

John Fingleton will keep his post as chief executive of the consumer watchdog until 2015 after he was reappointed by the Government, FTAdviser reports. Story here.

Victory for EU companies on 'thin cap' tax litigation

More pain for HM Revenue as Volvo, Lafarge and Siemens win a test case on whether they were avoiding tax by making “artificial” loans to their UK subsidiaries.

In what became known as the "thin cap litigation", the High Court said the loans were genuine commercial transactions and so the companies should have received tax relief on the interest paid.

The UK arms of Volvo, Lafarge and Siemens are therefore entitled to a rebate for the tax they overpaid as a result of being refused tax relief by the Revenue at the time.

Two other businesses, Pepsi and Standard Bank of South Africa made the same claims but these were dismissed after Mr Justice Henderson said that only businesses whose parent is based in the EU are liable for the relief.

Revealed: the best and worst for corruption

 

New Zealand, Denmark, Singapore, Sweden and Switzerland are the world's least corrupt countries, according to Transparency International.

The UK ranked 17th, just ahead of the US, according to the anti-corruption watchdog's latest international corruption index, which tracks 180 countries. Click here for the press release and here for the full table.

The worst places to do business: Somalia, Afghanistan, Myanmar, Sudan and Iraq.

Meet the Boss: Howard Cohen

The managing partner of Salans' London office says firms that are flexible in meeting clients’ needs and efficient in delivering legal services can still enjoy healthy profits

Are you happy with the firm’s financial performance over the last year?

Revenue increased 28.5 per cent in the 2008 calendar year and I am pleased to say that a significant factor contributing to this growth was the ongoing “globalisation” of our practice areas and sector groups. 

Although currency fluctuations played some role in our performance, these results took us in to the UK top 20 for the first time, so on that score, I’m happy. 

Morning roundup: FSA hits Regal with record £600,000 fine

Today's legal news. . .

* City regulators have fined Regal Petroleum a record £600,000 after a damning report covering two years when the oil explorer was controlled by Frank Timis, the controversial businessman, The Times reports.

* Banks will face having chunks of their future profits seized by the state if they do not fund a deposit insurance scheme, the Bank of England's deputy governor has warned. In a veiled threat, Paul Tucker, the man in charge of the Bank's financial stability function, said that the state had a legal right to extract cash off the banking sector if one of their number collapses and its depositors' savings protected (The Daily Telegraph).

* Bankers who are not prepared to forgo controversial contracts that flout new rules on bonuses should get out of the mainstream industry, Lord Myners has declared (The Times).

* Attorneys representing the estate of Lehman Brothers filed a lawsuit yesterday against Barclays Capital, seeking to claw back as much as $10bn that it claims was transferred to the UK bank last year in the frenzied days following Lehman's bankruptcy (Financial Times).

New firm to be called Hogan Lovells

Merger talks between Lovells and US firm Hogan & Hartson are progressing with a decision on the crucial issues of what to call the new firm and who to call boss within it.
 
The merged entity will be called Hogan Lovells. Not very imaginative but definetely diplomatic.

All very gentlemanly on the executive side as well with Lovells managing partner David Harris (r) and Hogan chairman Warren Gorrell to be joint chief executives.

Similarly, Lovells senior partner John Young will serve as joint chairman of the new firm alongside a Hogan-nominated partner.

Crucially, the firms’ partnerships still need to approve the deal with votes expected in early December.