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The Times

Tuesday, January 24 2017

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


  • Sentencing Council boosts speeding fines by a third
  • King & Wood Mallesons crash will cost Barclays £25m
  • Plea for MPs to protect European practice rights for lawyers
  • Online courts ‘will exclude vulnerable employment claimants’
  • Quality warning over housing possession tendering
  • Comment: US business crime model will be unpopular here
  • The Churn: Joyce carries on in management top slot at Addleshaw
  • Blue Bag diary: Is Law Society leaking to point of sinking?
  • More Blue Bag: Lawyers rock the charity world

Tweet us @TimesLaw with your views.

Story of the Day

Sentencing Council boosts speeding fines by a third

Drivers who commit the most serious speeding offences face far tougher penalties to reflect the greater harm they can cause, under revised guidelines to magistrates issued yesterday.

However, TV licence evaders may escape with a conditional discharge in the least serious cases, such as where someone has only been without a licence for a short time.

The changes are set out in new sentencing guidelines for magistrates’ courts in England and Wales.

Fines for motorists caught going well above the speed limit will start from 150 per cent of their weekly income rather than the existing level of 100 per cent. For instance, a motorist who is sentenced for driving at 101mph or faster in a 70mph zone will now be dealt with in a more severe bracket and could face a fine that is one third higher than the current penalty.

The minimum fine for speeding is £100 and three penalty points. However, at the upper end speeding drivers can face a fine of £2,500 with costs.

The Sentencing Council said the move aims to ensure there is a “clear increase in penalty as the seriousness of offending increases”. The guidelines will be used to sentence adult offenders in all magistrates’ courts in England and Wales from April 24.

News Round Up
King & Wood Mallesons crash will cost Barclays £25m

The demise of a prominent City of London law firm will cost Barclays Bank up to £25 million, it was revealed yesterday, as details of the King & Wood Mallesons administration emerged.

If the British bank takes what it anticipated to be up to a 70 per cent haircut on its loan to the firm, it will be potentially the biggest loss incurred by a corporate lender in the wake of a law firm crash.

KWM’s London arm – formerly the City stalwart SJ Berwin – instructed administrators last week after several months of failed attempts to negotiate a bailout with the firm’s Sino-Australian overall management team.

It is understood the London office – which was responsible for the firm’s European and Middle Eastern operations – had bank debts of up to £35 million when it went into administration.

Partners in London appointed Quantuma, a specialist in law firm administration, which dealt with Challinors, a large firm in the West Midlands, when it collapsed owing more than £11 million about three years ago. A year later Quantuma also oversaw the administration and sale of Davenport Lyons, a well-known media law firm in London’s West End.

According to a report in The Lawyer magazine, Barclays will be forced to write off between £15 million and £25 million of the KWM London office debt. Barclays refused to comment on the loan or the possible write-off. However, City sources confirmed to The Times that the estimated figures are correct.

Meanwhile, the Legal Week website reported that KWM has paid £1.2 million to AlixPartners, the insolvency consultancy, even though the business ditched the law firm before it went into administration.

London partners and Barclays had instructed AlixPartners, initially proposing it as the administrator. However, AlixPartners withdrew amid reported concerns over funding. The £1.2m paid to AlixPartners covered some six months' of consultancy, with sources suggesting the figure could rise.

Plea for MPs to protect European practice rights for lawyers

Cross-border legal issues will be vital to the success of UK business once the country leaves the EU, meaning that maintaining lawyer practice rights in Europe will be crucial, MPs will hear later today.

As the 11 justices of the Supreme Court prepare to hand down their ruling on whether the government or parliament should have the final say on triggering the Article 50 procedure for Brexit, solicitor chiefs will give evidence to the House of Commons international trade select committee.

“We want … solicitors to continue to support the interests of British and international businesses wherever they trade post-Brexit,” said Robert Bourns, president of the Law Society, the organisation that represents solicitors in England and Wales.

“We urge the government to prioritise maintaining practice rights for UK lawyers and law firms in EU member states post-Brexit,” said Bourns in advance of the committee hearing. “This would ensure the UK remains attractive to non-EU businesses and law firms – both currently look to the UK to gain access to the EU market – supporting the growth of global Britain post-Brexit.”

The society said that it will encourage ministers to seek trade agreements that “facilitate liberalisation of legal markets beyond the EU at the same time as it negotiates the new relationship with the EU”.

The Supreme Court justices are scheduled to produce their eagerly anticipated ruling at 9.30 this morning in London.

Online courts ‘will exclude vulnerable employment claimants’

Plans to extend online courts to employment cases run the risk of excluding swathes of workers from the existing tribunal system, lawyers warned ministers yesterday.

The government was also told that Whitehall proposals to delegate some judicial functions to caseworkers are likely to have the unintended consequence of triggering a rise in expensive appeals.

In a response to the government’s planned reform of the employment tribunal system, specialists highlighted concerns around internet access that would potentially deny access to justice to a range of claimants.

“We urge the government to ensure that digitally-excluded persons and other vulnerable groups are afforded adequate protection as part of the reforms,” the Employment Lawyers Association said.

In its response to the Ministry of Justice, the association went on to say that “an online system must not be compulsory for all employment tribunal claims. Making an online system available but not compulsory can still achieve savings without excluding potential users of the tribunal system.”

The association’s response also warned against plans to pass increasing amounts of work to caseworkers. The need for “detailed legal and procedural knowledge” was crucial if unwanted and expensive appeals were to be avoided, the association said.

Lawyers pointed out that since employment tribunal fees were introduced in 2013, the system had been swamped with litigants in person. “Decision-making by the judiciary, at all stages of the process,” the association said, “has the confidence of litigants in person, and so the perception of these users needs to be considered carefully to ensure that this is not lost.”

Quality warning over housing possession tendering

Imposing price competitive tendering for the duty solicitor scheme in housing possession cases will trigger a “race to the bottom” and seriously damage standards, law chiefs warned yesterday.

Ministers aim to bring in reforms that will see price tendering added to the system of one duty contract being issued for each court in England and Wales.

But the Law Society, which represents the solicitors bidding for the contracts, has warned the Ministry of Justice that if adopted, price competitive tendering will force law firms to cut corners.

"The cheapest offering will not necessarily be the best,” said Robert Bourns, the society’s president. He predicted that the MoJ plan – which is being consulted on until March 17 – “could result in a race to the bottom which may impact on professional standards. A price war will not improve services and could negatively impact on clients.”

Bourns called on the Legal Aid Agency to put forward proposals for mitigating that risk. “It should also keep in mind that cuts in payment only compound years of cuts for the solicitors that look after the interests of our most vulnerable citizens,” he said. “It may mean that contracts which are already at best only marginally economically viable for firms become unsustainable.”

In Brief

Lib Dem lawyers to fight Brexit ‘coup d’etat’ – Law Gazette

UK’s ‘last anti-gay law’ to be scrapped – Metro

Woman gives chocolates to judge who ordered tumour removal – The Irish Times


US business crime model will be unpopular here Marcus Thompson

Extending criminal liability for British companies is overdue – the only question is how far to go in light of extensions that have already been made in recent years.

And now, after several false starts, the government has just announced a “call for evidence” on five options to broaden the scope of corporate liability for economic crime and make it easier to bring prosecutions against companies.

Prosecutors at the Serious Fraud Office have been saying for some time that compared with, for example, their US counterparts, it is more difficult for them to bring criminal cases against companies. They argue that this is the result of the current law on corporate criminal liability, which requires prosecutors to prove guilt against the “controlling mind” of the business – usually the board – to secure a conviction against the company.

British prosecutors continue to envy investigation and enforcement powers in the US where a combination of different laws on corporate criminal liability, admissibility of evidence from intercepted communications and tougher penalties for offenders put much greater pressure on companies to co-operate with government investigations.

We have already borrowed and adapted from the US in this area. Deferred prosecution agreements with corporate offenders have been used as an enforcement tool in the US for years and we now have them. But the UK chose to modify the US approach to DPAs by adding a number of additional protections and safeguards designed to prevent deals being agreed between a prosecutor and a company without comprehensive judicial oversight.

One of the options outlined in the call for evidence published recently is to borrow again from the US and adopt the vicarious liability approach to corporate criminal liability. This would be an extreme shift from the current law and it is unlikely to be welcomed by companies.

Another option, the section 7 Bribery Act model, is likely to be the most effective and proportionate response to the concerns expressed by prosecutors. The advantage of this approach is that it is focused on conduct over which a company exercises some control – the adoption and implementation of effective internal compliance programmes – rather than automatically fixing liability onto a company for conduct over which it often has no control, such as a rogue employee who commits fraud.

There is no doubt that a change in the law along these lines would add significantly to the compliance burden for British companies and there would also be some overlap in certain areas of economic crime, such as money laundering, where there are already legal requirements for regulated companies to adopt and maintain comprehensive internal compliance programmes.

Changes to corporate criminal liability in the UK are already happening and the current call for evidence suggests that further change is coming. Amid the clamour for more powers to prosecute companies, the recently announced Rolls-Royce settlement – which resulted in a £497 million penalty in the UK alone – demonstrates that even under the current law, the SFO is not entirely powerless.

Marcus Thompson is a partner at the London office of Ropes & Gray, a US law firm based in Boston.

Tweet of the Day

In the UK too many laws are complex , unenforceable and unenforced. And a weak prosecution system starved of funds.…

(((Nick Gould))) @GouldsBlog

Blue Bag

Is Law Society leaking to point of sinking?

Council members at the Law Society appear to be in the process of eating themselves over the embarrassing resignation of the quasi-trade union’s chief executive.

Catherine Dixon announced a fortnight ago that she was off. Fed up with trying to reform the society’s antiquated and elephantine governance structures, she decided life would be better as the boss of an agricultural college in the north of England.

But as The Times has reported, before she went, Dixon fired off a letter to the council in which she set out some frank home truths. And not only did she send it to all 100 council members, for good measure Dixon CC’d the entire 400-plus staff at Chancery Lane.

You don’t have to be a PR spin doctor at the top of your game to anticipate that with such a wide distribution, the letter was likely to find its way into the hands of one of Her Majesty’s press corps. And so it came to pass.

However, for some senior figures at the body that represents 130,000 practising solicitors in England and Wales, the public airing of this stained laundry was as surprising as it was a shocking outrage.

Nick Fluck, who was the society’s president in 2013-14, has called for a leak inquiry to discover just how the Dixon letter found its way into the media’s grubby mitts. And predictably, Fluck’s confidential letter to his council colleagues calling for that investigation has … er … been leaked.

The Legal Voice website disclosed that in his letter to Dixon, Fluck exonerates the chief executive of being guilty of the original leak, but demands: “… what steps are being taken to identify the source of the leak of confidential information … ?”

Fluck goes on to argue that “if a council member leaked that information, clearly provided by you in strict confidence, then their appointment should be terminated and their lack of probity reported to the SRA [Solicitors Regulation Authority] for consideration of their professional conduct.”

With the society being the sieve that it is, if Fluck gets his way, the regulator is going to be swamped.

Whose Supreme Court is that?

The Law Society hierarchy may be imploding, but foot soldiers at the organisation are valiantly still struggling on with their day jobs.

They have just produced a YouTube video called “Article 50 in 50 Seconds”, or an idiot’s guide to today’s Supreme Court ruling on what has hitherto been billed as the Gordian knot that is the law around who gets to pull the trigger on the UK leaving the EU.

The society’s video – narrated by a chap who sounds not long out of short trousers – neatly boils down the issues. “And people say that constitutional law is difficult,” is the jaunty sign-off.

To be fair, the video is rather handy for those who have been asleep for the last six months – even if its graphic depiction of the Supreme Court bears more of a resemblance to a building in Washington DC than one in London.

Lawyers rock the charity world

Lawyers are not usually viewed as rock ’n’ rollers – rather than trashing hotel rooms they more often pick up the pieces afterwards, having to sort out liabilities when the telly has been chucked into the swimming pool and the minibars of several suites have been emptied without payment.

But – and who would have guessed it – eight years ago something called Law Rocks was born in London and has since spread to Los Angeles, San Francisco, New York, Philadelphia and Washington DC.

The idea was that a load of buttoned up lawyers with a hankering for a bit of glamour and the ability to strum a few chords and shout some lyrics could play at being rockers. Embarrassing, but it is done in the name of charity – and now the event itself has secured charitable status.

Howard Kennedy, those leather-clad head-bangers perched above London Bridge, proudly revealed yesterday that they had advised the Law Rocks organisers in a successful application to the Charities Commission.

Law Rocks was founded by Nick Child – a former senior clerk at Keating Chambers in London and now the managing director at a multinational business consultancy – and Damian Hickman, chief executive of the International Dispute Resolution Centre.

It aims “to promote music education for underprivileged young people and to raise funds for not-for-profit organisations by combining the power of music and the generosity of the global legal community”.

The charity claims to raise up to £40,000 annually in the UK and as much as $2 million around the world.

The Churn

A run down of the big partner and team moves this week

Joyce carries on in management top slot at Addleshaw

John Joyce has been re-elected to another stint as managing partner of Addleshaw Goddard.

The firm announced yesterday that Joyce would start a four-year term from the beginning of May after an uncontested election. Joyce was first appointed to the role in 2014.

Last year the firm – which is based in the City of London with offices in Asia and the Middle East – increased its turnover by 5 per cent to £202 million with a reported increase in profit of more than 30 per cent.

Meanwhile, the national firm Weightmans and northern practice Ward Hadaway were reported to be eyeing up each other for a possible merger. The Lawyer magazine predicted that if a deal was done it would create a firm with an annual turnover of £130 million. That level of revenue would take it near the UK top 30.

Weightmans would be the dominant partner. Last year it reported turnover of £95 million with the average drawings for senior equity partners pegged at £248,000. While Ward Hadaway’s turnover was significantly less, its profit figures were much better. Last year, average senior equity partner earnings were £352,000.

Closing Statement

A different type of stakeholder …

In the days of 1960s miniskirts, writes James Morton, I prosecuted on behalf of a small chain of long defunct – or subsumed – supermarkets. It was easy work: turn up, give the facts, ask for compensation for the damaged goods and a few pounds costs.

On one occasion, the evidence was that a lady had taken a piece of steak from the cool meat counter, tucked it between her thighs and waddled off like a penguin. The manager followed her into the street, tapped her shoulder and she dropped the meat onto the pavement.

In the papers there was no request for compensation. “Why not?” I asked. “Oh, we rinsed it down and put it back on the counter,” was the disarming reply.

James Morton is a former criminal law solicitor and now author