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The Times

Friday, December 23 2016

Frances Gibb and Jonathan Ames bring this morning’s must-read of all things legal, including news, comment and gossip.

This is the last Brief of 2016 as the team has a mid-winter break. We will welcome you back on Monday, January 9, 2017, when daily publication resumes. In the meantime, a happy Christmas and new year to all our readers.


  • King & Wood Mallesons steps towards administration
  • Scotch-makers take pricing fight to Supreme Court
  • Ruling boosts British property-owners in Spain
  • Brexit countdown: Will conditions improve for stock market listings?
  • Comment: Brexit, the judges and 2017
  • Blue Bag diary: Truss and the law – a family affair

Plus, see our plans for Brief Premium and archive of articles so far.

Tweet us @TimesLaw with your views.

Story of the Day

King & Wood Mallesons takes next step towards administration

The City of London branch of King & Wood Mallesons, formerly SJ Berwin, has filed a court notice of its intention to appoint administrators.

Yesterday’s move is the latest step in what appears to be the rapidly approaching demise of the Sino-Australian firm’s European operations. Over the past few weeks the London office has been haemorrhaging individual partners and teams of lawyers to competitors amid reports of failed takeover talks.

In a statement yesterday the firm said that the court notice was “designed to protect the firm from its creditors and allows it to maintain client service as it continues to explore all available options”.

The London office of AlixPartners, the New York-based consultancy, confirmed to The Brief that if the London office of KWM was not able to find a rescue package within ten working days it would then be appointed as administrator.

It went on to say that the firm's management team and financial advisers “continue to work to ensure the best possible outcome for clients and staff”. It is understood that non-lawyer staff will be put on a weekly pay regime from the new year.

A spokeswoman for the firm refused to provide further details regarding a timetable for administration or the name of an administrator.

The firm, which took over SJ Berwin in October 2013, is currently ranked 34th in the Legal Business world rankings of law firms by revenue. It has an estimated worldwide annual turnover of about £815 million.

The Lawyer magazine reported that the latest high-profile departure was Stephen Kon, the firm’s former senior partner for Europe, who has bailed out to Macfarlanes as a consultant.

News Round Up
Scotch whisky-makers take pricing fight to Supreme Court

Whisky distillers will head to the Supreme Court next year to challenge minimum pricing for alcohol north of the border after being given the go-ahead by Scotland’s highest civil court.

In an early Christmas gift to the Scotch Whisky Association, the Court of Session in Edinburgh granted permission for the organisation to take its fight against the Scottish government’s pricing plans.

It is the latest step in an extended legal wrangle over the proposals, which has delayed implementation of a policy aimed at tackling Scotland’s drink problem. According to a Press Association report, the whisky association aims to stop Scottish ministers from pressing ahead with the minimum pricing plan, arguing that it is incompatible with EU law.

After getting the green light from the Edinburgh court, Julie Hesketh-Laird, the association’s acting chief executive, said: “We now hope the appeal can be heard quickly by the Supreme Court, with a final ruling next year.”

She has previously insisted that the association’s intention to continue the legal challenge was not taken lightly and followed wide consultation. She has described the proposed measure as likely to be “ineffective”.

A spokeswoman for the Supreme Court predicted that if the judges approved an application from the association for the hearing to be expedited, “then I would envisage that the court would hear the appeal in the first half of 2017”.

Ruling boosts British property-owners in Spain

Up to half a million British property-owners in Spain are likely to be reimbursed thousands of pounds each in mortgage payments after Europe’s top court ruled that local banks had imposed unfair terms.

Spanish banks will have to pay back an estimated €4 billion as the Court of Justice of the EU found that Spanish mortgage buyers did not profit fully from record-low interest rates available over recent years.

The judges ruled that so-called floor clauses used by Spanish banks imposed a minimum interest rate on floating-rate mortgages by setting a limit on how far mortgage rates could fall in tandem with the benchmark rate.

Under EU law, said the court, “the finding that floor clauses are unfair must allow the restitution of advantages wrongly obtained by the seller or supplier to the consumer’s detriment”.

The European court overturned several domestic Spanish court rulings that the banks did not have to pay back the excess money they received. Lawyers described the court’s decision as creating an unwanted blip in the gradual recovering of the Spanish banking sector, which was badly hit during the global financial crisis.

There are about half a million British property-owners in Spain. Analysts forecast that those with local mortgages could qualify for substantial refund of overpaid interest.

“This ruling provides additional legal and stronger financial security for British owners in Spain as well as for all Britons thinking about Spain as a destination,” said León Fernando Del Canto, a partner at Del Canto Chambers, a Madrid law firm with offices in London.

Brexit countdown – legal update as leave approaches

Will conditions improve for stock market listings?

Powerful evidence from Baker McKenzie, the international law firm, of the impact on stock market listings of the UK’s vote to leave the EU, reports Edward Fennell.

While all types of IPOs listed on the firm’s annual index were down globally in 2016, the drop in the UK market was notably vertiginous – a decline of 85 per cent in value and 38 per cent in volume for cross-border listings. Meanwhile, domestic UK stock market floats dropped 58 per cent by value and 26 per cent by volume.

“The EU referendum played a starring role in the year when nothing seemingly went right for initial public offerings,” says Edward Bibko, head of capital markets for Europe, the Middle East and Africa at Baker McKenzie. “After a flurry of deals at the start of the year, anticipation of the Brexit vote depressed activity through June, and volatility after the vote resulted in many IPOs being pulled.”

Normally IPOs thrive in periods of certainty and stability, points out the firm. And there is a natural rhythm to the IPO calendar. However, volatility is inevitably a dampener because of the difficulty of pricing a deal when markets are seesawing.

“Investors were never likely to place their bets on IPOs until after the EU referendum,” says Bibko. “So the plan for most potential issuers was to prepare to price deals in the rally that was almost sure to follow the Remain result.

“When things turned out differently, many announced and unannounced deals were pulled. After a restorative summer, a dark sense of déjà vu settled over the year's second half with investors warily eyeing the US elections and, ultimately, another surprise result.”

Looking ahead, the prospects appear marginally better for 2017. “Although there are plenty of things to worry about,” reckons Bibko, the 2017 diary does not include the obvious bear traps that marked 2016, or even 2015 – think back to the Greek elections and the Scottish referendum. “The market may have adjusted to a new normal level of uncertainty," says Bibko with fingers crossed.

Nonetheless, as Germany and France prepare for general elections and with uncertainty about Italian banks rumbling, the political landscape still has some pitfalls that could delay a much hoped for upswing in IPOs.

In Brief

Horseracing authority appoints former senior judge Brian Barker to head disciplinary panel – The Racing Post

Law students claim new evidence shows Rosenbergs were innocent in infamous spy case – Fox News

Israel and Palestinian lawyer reach agreement to free hunger strikers – The Jerusalem Post


Brexit, the law, 2017 and all that ... Jonathan Ames

Brexit means Brexit may have been the mantra of 2016 – but from a legal profession perspective, it was more accurate to say Brexit means judges.

The year ahead will kick off in the same spirit. Within days of the burst balloons and champagne-soaked party poppers being swept away, the Supreme Court will hand down its ruling on whether MPs should be allowed a vote on the Article 50 trigger for the UK leaving the EU.

Most punters still back a result that sees the government’s arguments shot down by a significant majority of the 11-strong bench. But you can find some daredevils prepared to back a closer margin – or even a victory for Team May as fronted by the attorney-general.

Regardless, there is a harsh reality for legal profession Article 50 obsessives on social media. In this category, special mention goes to David Allen Green, the solicitor at London law firm Preiskel & Co, and Jolyon Maugham, QC, of Devereux Chambers in London. How either of them finds time to do a day job is a mystery considering the volume of Brexit-related tweets both churn out daily.

But back to the reality, which is this: Brexit is going to be far more about politics than about law. Of course legal issues and processes will be important, but ultimately Brexit is a political battle.

Even if the government is defeated in the Supreme Court, ministers have in their back pocket a short little bill that will smooth the way for an Article 50 notification. And regardless of how many MPs are staunch Remainers, voting against last June’s referendum result will be a step too far for most.

Pro-Remain peers may fancy themselves as being more bloody-minded, but will they really relish a bust-up with the elected chamber and a potential dose of the Parliament Act?

Away from Brexit, but remaining within the Westminster bubble, what does early 2017 hold for the justice secretary and lord chancellor?

Liz Truss has not had a happy time in the post so far. Half the legal profession reckons she was never up to the job in the first place (not least because she is a layperson), and the other half is convinced that she failed to execute that role properly by not defending the High Court judges who caught so much media flack after the first Brexit ruling.

Some have speculated that it may suit the prime minister to have a fairly wet and inexperienced lord chancellor as opposed to a bolshie lawyer who really goes in to bat for the rule of law.

But ultimately it may be the prison side of the justice secretary’s brief that does for Truss. Any more Birminghams with prisons bursting at their seams and May might have no option but to reshuffle Truss.

As for the practice of law as the new year dawns, it will be interesting to see if the taste for merger among global firms abates as the ashes of the King & Wood Mallesons crash are picked over.

For lawyers, 2017 should be no less of a rollercoaster than this year.

Jonathan Ames is co-editor of The Brief

Tweet of the Day

2017 will be the year media declares open season on the judiciary, holding judges personally responsible for rulings.

Robert Verkaik @robertverkaik1

Blue Bag

Truss and the law – a family affair

Liz Truss took a lot of heat for being a layperson when she was appointed as justice secretary and lord chancellor last July. All rather odd, considering the only characteristic that differentiated Truss from her two predecessors was her gender.

Nonetheless she was pilloried by some for not having the right experience. But it now emerges that Truss’s connections to the legal profession are far more solid than those critics might have known.

The most recent list of ministers’ interests published this month by the Cabinet Office shows that of all those at the Ministry of Justice, the guvnor, while not a lawyer, has the most family connections to the law.

Truss’s father-in-law is listed as a “criminal barrister”, although sadly no more detail is provided. She also has a sister-in-law (again unnamed) who “works for Clifford Chance”, the international “magic circle” firm headquartered in the City of London. Of course, “works for” does not necessarily mean “practises law for” but yet again the list is not clear on that point.

Not only that, the justice secretary’s brother-in-law is beavering away at somewhere the Cabinet Office describes as Aaron Solicitors, although again this begs a few questions. Official Law Society records list an Aaron & Partners in Manchester, Chester and Shrewsbury. There is also an Addison Aaron in Birmingham and a Nathan Aaron Solicitors in southeast London.

In contrast, Sir Oliver Heald, QC, one of the three ministers of state at the MoJ, has a far less complicated relationship with the legal profession as far as the Cabinet Office is concerned. His only interest is listed as being a bencher of Middle Temple.

Quote of the Day

“I got out of a violent relationship but the court threw me back into harm’s way.”