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The Times

Friday, March 10 2017

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


  • Tax avoidance lawyers face massive fines
  • Three Janner complainants drop claims
  • Scam artists bombard high street law firms
  • Truss encourages judges to speak out publicly
  • South Africa ‘likely to withdraw permanently’ from ICC
  • Brexit countdown: A date with data destiny
  • Comment: March of the robots needs regulating
  • Blue Bag diary: A ducking and diving woman

Plus, see our plans for Brief Premium and archive of articles so far. Tweet us @TimesLaw with your views.

Story of the Day

Tax avoidance lawyers face massive fines

Lawyers who “enable” aggressive tax avoidance schemes will be charged 100 per cent of their fees under tough new penalties, reports Alexi Mostrous, as the professions continued to sift through the embers of Philip Hammond’s first budget.

Professional advisers had been shielded in the past if their clients’ schemes were found to break tax law. But from this year, those involved in designing, managing or marketing aggressive tax schemes will be charged a fixed penalty if the schemes are defeated by Revenue & Customs.

The rules form part of a £820 million clampdown on tax avoidance. The chancellor said on Wednesday that the government had recovered £140 billion in additional tax revenue through avoidance clampdowns since 2010, helping the UK to “achieve one of the lowest tax gaps in the world”.

Trade bodies responded to the initial proposals last year with concern that professionals could be fined for advising on genuine commercial arrangements. The government promised such groups that they had “nothing to fear”.

‘Everyone loses’

In the wake of the budget, the Law Society, which represents solicitors in England and Wales, said it “understands the government’s desire to prevent people abusing the tax system through tax evasion and aggressive tax avoidance”.

However, the organisation’s president, Robert Bourns, warned: “Everyone loses if these measures stop taxpayers receiving proper legal advice on their tax obligations. Our experts have had a productive and ongoing dialogue with HMRC, and we will continue to advocate for a final law that ensures access to legal advice is properly protected.”

Hammond had only just settled back on the front bench before one City law firm predicted that his reforms to national insurance contributions for the self-employed would translate to an average increase of £700 on the tax bill of UK law firm partners.

Barrister woes

Barristers took to social media yesterday to point out that they too would be hit by the controversial move. Rachel Law, an eight-year call criminal practitioner at Goldsmith Chambers in the Temple, tweeted ironically: “Tax increase for the self-employed? No worries for junior crim bar – we can just pay it from long overdue fees increase in AGFS [advocates’ graduated fee scheme]. Oh …”

A Bar Council spokesman said: “The long-term impact any national insurance increases have on the self-employed Bar must be considered in light of the many challenges the Bar and other self-employed professionals face, such as the costs associated with maternity and paternity leave, pensions and overhead costs to name a few, not to mention the large costs associated with qualifying to become a barrister.”

News Round Up
Three Janner complainants drop claims

A third of the first tranche of child abuse compensation claims against the former MP Greville Janner was abandoned in the High Court yesterday, reports Sean O’Neill.

Three claimants – two men and a woman – who allege Janner abused them in childhood dropped their claims against his estate because of a failure to serve documents in the time allotted by the court.

The three were clients of Affinity Law, a law firm in Leicester, which said they would continue to seek damages from Leicestershire county council.

Six other claimants, represented by the law firm Slater & Gordon, are continuing their action against the £1.7 million estate of the former Labour MP for Leicester West who died in December 2015 before a criminal trial of the allegations could take place.

The Independent Inquiry into Child Sexual Abuse is conducting an investigation into the allegations against Janner and has been told that 33 people have claimed that they were sexually abused by him.

Daniel Janner, QC, of N8 Chambers in Birmingham, said his family rejected all the allegations against his late father and would fight to clear his name. “We welcome the fact that three of the nine claimants have thrown in the towel and we await to see what will happen with the others,” he said.

In addition to proceedings before court and the inquiry, Leicestershire police and the Independent Police Complaints Commission are conducting separate criminal inquiries arising from the Janner case.

Scam artists bombard high street law firms

Fraudsters have contacted up to 500 solicitors’ firms in an attempt to infiltrate technology systems and steal client details, the profession’s watchdog warned yesterday.

They have sent a rash of emails to firms saying their services are required. After the firms respond, the fraudsters send attachments or links to websites that contain malware, which allows the scammers to control or undermine IT systems. According to a warning from the Solicitors Regulation Authority, some of the emails relate to the sale of a property or the purchase of a business.

The authority is especially concerned that high street law firms are being targeted with emails that purport to come from “Margaret” and “Mary Smollins”, from the email address “”.

“While genuine potential clients might indeed send information in this way,” the authority said, “law firms should be wary of the risks of malware infecting their IT systems, and take action appropriate to their business.”

Truss encourages judges to speak out publicly

Britain’s judges should engage the public directly and speak out about their roles, the lord chancellor has argued in part of her fightback against critics who argued that she had neglected her constitutional role of defending the judiciary.

Liz Truss said it was “a myth” that serving judges were prohibited from speaking to the media about their functions and responsibilities. She encouraged judges at all levels of the bench to speak out as doing so was one way of “ensuring we have an independent judiciary”.

The justice secretary was speaking at Middle Temple Hall as part of legal profession commemorations of International Women’s Day. She acknowledged that judges were prohibited from speaking about cases in which they were directly involved. But she said judges should “speak in public about their jobs – about what they do and why their roles are so important”.

Truss stopped short of maintaining that the constitutional role of the lord chancellor as defender of the judiciary was antiquated and should be dropped. She was criticised last November when she was viewed as being slow to defend the three High Court judges after they were criticised in the media for their ruling against the government in the first Brexit court hearing.

The justice secretary told the Middle Temple Hall audience that she was “absolutely committed to defending the independence of the judiciary and the rule of law”.

See Blue Bag below

South Africa ‘likely to withdraw permanently’ from ICC

Human rights campaigners predicted that South Africa’s move to revoke its withdrawal from the International Criminal Court would be short lived and that ministers would seek parliamentary approval for a permanent departure.

South African officials announced earlier this week that it had cancelled its exit from the Hague-based court after its domestic high court ruled that doing so breached the country’s constitution. Ministers advised the UN of their decision on Tuesday.

Mark Ellis, director of the International Bar Association, which is based in London, said that the move to cancel withdrawal was “a welcome reversal of its initial ill-advised and illegal pronouncement”. He cautioned that it was likely that the South African government would “seek the necessary parliamentary approval to permanently withdraw from the ICC”.

However, he went on to say: “There is now hope that members of parliament will rebuff that request and alternatively stand firm in support of the ICC and, subsequently, accountability for those who commit the most horrific atrocity crimes.

“South Africa should maintain its position in the international community as a country that strives for justice and the rule of law.”

Brexit countdown – legal update as leave approaches

A date with data destiny

The updated General Data Protection Regulation (GDPR) – one of those irritating bits of bureaucracy that Brexiteers complain about – is scheduled to come into force in May next year, writes Edward Fennell.

“The UK was one of the dissenting voices in negotiations about the regulations,” says Pulina Whitaker, a partner at the City of London office of US law firm Morgan Lewis. She reminds us that British officials were “particularly vocal about the onerous impact on UK businesses” that the measures were viewed as imposing.

Nonetheless the regulation will be firmly in place by the time the UK bids farewell to the EU possibly in the spring/summer of 2019.

That single market again

So once the UK has brushed the European dust from its shoes, will this regulation be cast into the celebratory bonfire of the regulations? Probably not. Despite quitting the EU, says Whitaker, “it seems unlikely that the UK will reduce the extent of data protection obligations on UK businesses”.

Why? The UK’s data protection authority, the Information Commissioner’s Office, has already advised that UK data protection standards will need to be equivalent to those in the EU regulations if the country wishes to trade with the European single market after leaving the bloc.

“The UK is unlikely to want to be seen as being out of step with the rest of Europe which will … remain a significant trading partner,” surmises Whitaker.

“UK organisations with European offices or which offer goods or services to European consumers will continue to be subject to the [the regulations] post-Brexit as regards those European operations. [Hence] the government will need to enact domestic data privacy legislation to replace the GDPR when the UK exits the EU.”

Data transfer

A failure to retain EU standards would be likely to reduce the current level of data privacy protections afforded to individuals. It could be argued that it is in everyone's interests to keep them as most UK businesses are likely to need to transfer personal data to Europe and also to other countries outside the EU such as the US.

While the UK remains part of the EU, there are restrictions against transferring personal data without consent from the individual, other than to certain “adequate” countries such as Canada or Switzerland, or unless the business has in place a legally permissible mechanism, such as model clauses or binding corporate rules.

British ministers will need to decide if the UK is to retain the same restrictions for cross-border transfers or adopt an alternative. In particular, after Brexit, we know that the EU-US privacy shield will no longer apply to the UK and neither will protections for EU citizens under the umbrella agreement or the Judicial Redress Act to enforce privacy breaches in the US courts.

Feeling inadequate

The UK will need to decide on whether it will adopt a similar model to the privacy shield for data transfers from the UK to the US. The UK is also likely to apply to the European Commission for a decision of “adequacy”, which will allow EU countries to transfer personal data to the UK without restrictions.

“Obtaining an adequacy decision,” says Whitaker, “depends on whether the government has passed laws which are materially similar to the GDPR.”

Another change implemented by the GDPR is an obligation to notify a data protection authority within 72 hours of becoming aware of a breach – and in certain circumstances the individuals affected by the breach.

“The government will need to decide if it will pass a data breach notification law, either similar to the strict GDPR requirement or one adapted to our approach of pro-business legal requirements,” says Whitaker.

In Brief

Regulators to pilot lawyer fees transparency scheme – Legal Futures

Three US law firms settle overbilling claims for $2M – The American Lawyer

Florida lawyer’s trousers erupt in flames during arson trial – Miami Herald


March of the robots needs regulating Bertrand Liard

Europe’s MPs want to grant robots legal personhood, so lawyers need to get to grips quickly with the implications of artificial intelligence.

The definition of the term “robot” will be called into question, and while regulators and legislators are trying to make sure victims of robots gone wrong will be compensated, there will be debate over liability.

The issue is multifaceted as we try to apply existing law to evolving circumstances – something that does not always work. For example, in the case of pets, a dog owner could be prosecuted if the animal bites and harms another individual. This is because the animal does not have a legal personality.

Currently, the same can be said of artificial intelligence robots as they are not considered to have legal personhood. Instead, they require legal persons – humans or organisations – to take responsibility for their actions, whether that is the manufacturer, owner, user or programmer.

Increasingly, AI robots can make decisions that cannot be foreseen by anyone and therefore there will be some circumstances when only a robot can be responsible. The protection of the victim requires that someone – human or legal entity – can be held responsible even in such cases.

Another factor to consider is the issue of whether artificial intelligence has the ability to own assets or money. If it is decided that AI can have legal personhood, then robots will need to be able to own. A consequence of this is that AI’s liability will then be rendered effective, because there will be assets against which claims can be ascertained.

The European parliament is rightfully concerned about protecting consumers and victims. In the same report, MEPs recommended a compulsory insurance scheme for robots, as is similarly the case with cars.

While companies are quick to claim ownership of data and discoveries made by robots, and secure revenues from services provided by AI, they will undoubtedly want to limit their liability in the event of something going wrong.

This will be all the more crucial when the development of the technology has moved from “soft AI” (non-sentient artificial intelligence that is focused on one narrow task) to “hard AI” (artificial general intelligence with consciousness, sentience and mind).

No one can predict what will happen in the future. We may well get to a point where robots are as intelligent as humans and request independence and the same rights as humans.

That situation still lies some distance in the future. But where we cannot apply existing law to new situations, new law needs to be created. We need to create a legal status for AI and ensure that this status is shared around the world so that we have a unanimous answer.

There might then be a need for adding a fourth prong to Asimov’s Laws of Robotics: Robots have legal personality and are responsible for their actions.

Bertrand Liard is a partner in the Paris office of US law firm White & Case

Tweet of the Day

Magic mushroom enthusiast outside Highbury Corner Magistrates' today

CourtNewsUK @CourtNewsUK

Blue Bag

Truss, judges and Greenham Common

“I am a woman; I’ll admit to that.” Just in case there were any suspicions that Liz Truss’s appointment as the first female lord chancellor was some sort of elaborate spin doctor smoke and mirrors trick – and that she was really one of the old boys in disguise – the justice secretary produced that firm statement on Wednesday evening.

If clear about gender, Truss faced some tough questions on other topics while speaking at an event organised by the group Women in Law London to commemorate International Women’s Day. She was very keen to see judges take the initiative to engage directly with the public; it was “a myth”, she said, that the judiciary was barred from speaking publicly about their roles.

Did that mean judges could look after themselves when the media spotlight fell on them? Well … Not really. Truss still supported the lord chancellor’s constitutional role as guardian of the judiciary, but not with a huge amount of obvious enthusiasm.

The justice secretary also had to deal with the explosive issue of whether the Ministry of Justice’s legal aid rate reforms will undermine the government’s commitment to improve the lot of victims of crime, most notably sex offences.

Criminal defence lawyers argue that the cuts mean that in many cases the advocacy rates will be so poor in relation to appearing for the accused that lawyers will refuse to take the instructions. That will mean that defendants will themselves cross-examine witnesses and alleged victims of sex attacks, something the government purports to be adamantly against.

Child of the common

Truss may have been tossed a few political hot potatoes, but for the most part her performance on the night charmed the audience of young women lawyers at Middle Temple Hall. The justice secretary helped her cause by wheeling out one of her old standby self-effacing stories about her background, illustrating that she is an interesting sort of Tory.

“I came from a very left-wing family," she said, relating that her “first political experience was to be dragged on a CND march at Greenham Common” by her parents.

Quote of the Day

“Judges in a representational democracy are not … ciphers or agents of past history or of the current legislature. Even in states like the UK without a written constitution, they have a significant role in defining the practical impact of what the legislator decides.”