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| Friday October 13 2017 |
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By Frances Gibb and Jonathan Ames
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This morning’s must-read of all things legal, including news, comment and gossip. For more in-depth coverage, read ...
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Today
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CLIENT DATA RISK OVER LAX MOBILE SECURITY
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State-funded indemnity scheme for GP legal costs
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Ministers in crackdown on bogus holiday sickness claims
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Duke of Grosvenor’s £8bn fortune escapes inheritance tax
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Royal Mail wins injunction to stop strike
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Judge allows bankers’ wife to pursue millions in divorce top-up
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Court bars media from revealing Brady funeral details
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Blue Bag diary: Bar shuts out the kids
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Analysis: City’s new fraud court must be given teeth
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Arts & culture: Novelist combined literary and literal inheritance
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Analysis: Don’t worry -- AI isn’t coming for your job just yet
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| Tweet us @timeslaw with your views. |
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Special report
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Premium
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Lawyers stare artificial intelligence in the eye
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Ground-breaking research from The Times and Brief Premium has found that many law firms are already embracing revolutionary machine-learning techniques. We analyse the tools that will keep practices at the cutting edge
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Story of the Day
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Lax mobile device security means law firms risk client data
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Large law firms routinely risk losing their client’s confidential information to fraudsters because they are careless with mobile device security, cyber experts warned yesterday.
Research based on the monitoring of 10,000 mobile devices at law firms in the UK and US found that for every 100-devices in a legal practice malware was downloaded once every two weeks. In addition, lawyers and other staff at their firms click on phishing websites on average twice a day.
The monitoring revealed that at law firms with at least 100 mobile devices, applications that transmit data insecurely and are therefore vulnerable to hacking were accessed on average 48 times daily.
Law firms in the City of London and on Wall Street are viewed by cybersecurity specialists as soft targets for fraudsters and hackers who are attempting to steal data from their corporate business clients. Individual lawyers and their firms give the impression of being less security aware and literate, therefore presenting an easier route to sensitive and confidential client information.
Among those law firms surveyed, about 30 per cent of mobile devices used outdated operating systems that were likely to have inferior security, while 8 per cent of devices did not even have a basic screen locking system. A small percentage of devices were described by the security experts as “jail broken” and “semi-jail broken”, which means they were no longer functioning in the way that the manufacturer intended.
The researchers from Wandera, a cybersecurity consultancy, claim that more than a quarter of UK and US law firms have reported recent security breaches.
Over the last year, it is understood that two of the five elite “magic circle” law firms in the City were among 48 leading legal practices hit by attackers targeting information on their clients’ merger and acquisition deals. In June, the transatlantic law firm DLA Piper suffered a significant ransomware attack that brought down the firm’s global telephone and computer network for at least 24 hours.
“With the sensitive data that lawyers carry around on their mobile devices, law firms are a prime target for attack,” said Eldar Tuvey, the chief executive of Wandera. “There are still an alarming number [of law firms] that have been slow to adapt their defences to the latest threats.”
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Arts & culture
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Premium
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Novelist combined literary and literal inheritance
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James Morton's series of profiles of lawyer-writers turns to Louis Auchincloss, a Wall Street probate specialist who examined the influence of money and family on the upper classes
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News round-up
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State-funded scheme to shield GPs from legal costs
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A state-backed indemnity scheme that would protect GPs from the costs of defending clinical negligence claims is to get the blessing of ministers.
Jeremy Hunt (pictured), the health secretary, said yesterday that the government wanted “to provide a more stable and affordable system for GPs”. In a written statement to parliament, Hunt said the “rising cost of indemnity is a great source of concern for general practitioners”. He predicted that a state-backed scheme would provide cover for future claims.
Hunt said that the scheme would be designed to provide “financially sustainable cover” for claims arising from the delivery of NHS services.
He revealed that his department had been working with the four medical defence organisations that currently provide indemnity cover to family doctors. Officials have also consulted with GPs on the practicalities of a state-backed scheme.
According to the department, the scheme will take at least 12 to 18 months to establish. Hunt emphasised that in the meantime GPs “should continue to ensure they have appropriate indemnity cover in line with General Medical Council requirements to enable them to practise”.
See tweet of the day below
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Ministers crack down on bogus holiday sickness claims
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Travel industry chiefs are being urged to supply evidence to a drive by ministers against bogus holiday sickness claims that is expected to lead to curbs on legal costs.
It is the latest stage of the government’s crackdown on a problem that is damaging Britain’s reputation overseas and that could drive up holiday costs for families.
The upsurge in holiday sickness claims in the UK – partly fuelled by claims management touts operating in European resorts – could be as high as 500 per cent since 2013 to 35,000 claims in 2016, according to travel industry estimates. This has not been seen in other European countries and has raised questions over the scale of bogus claims.
The industry has also found that while the average value of a gastric illness claim is about £2,100, the average cost of defending a claim is almost £3,800. That means a total cost of claims to the industry, including damages paid, of more than £240 million.
Ministers are asking the industry and others to submit a wide range of information from the volumes of claims to the amount of damages awarded. This will be used to help ministers identify next steps to tackle false claims.
Dominic Raab, the justice minister, said: “Bogus claims against tour operators risk driving up the price of summer holidays abroad for hard-working families who have earned a break. We’re taking action to deter these claims, and protect holidaymakers from being ripped off.”
The call for evidence, which will remain open for four weeks, comes after government action over the summer intended to reduce cash incentives to bring spurious claims against package holiday tour operators.
Responding to the MoJ’s move, Christina Blacklaws, the vice-president of the Law Society, the body that represents solicitors in England and Wales, said “cold calling should be banned and claims companies which seek to profit from bogus or exaggerated claims must be brought to task”.
Blacklaws called on insurers to play a more active role. “They should not pay out on claims which are either fraudulent or which lack legal merit,” she said. “If tour operators or hotels have a concern a claim is fraudulent or exaggerated, it is essential the claim is investigated.”
The Law Society argued that claims were sometimes settled when they were fraudulent and defendable. “We are concerned that this may actually encourage more fraudulent claims and will increase the cost of holidays,” said Blacklaws. “If a claim lacks merit it should be defended.”
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Duke of Westminster’s £8bn fortune escapes inheritance tax
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No inheritance tax has been paid on the bulk of the Duke of Westminster’s £8.3 billion family fortune after his death last year, it was revealed yesterday (Will Humphries writes).
Probate records disclose that Gerald Cavendish Grosvenor, who died aged 64 in August 2016, left a personal estate of £616,418,184 after payment of debts and liabilities. The rest of his wealth was in family trusts which are believed to have been largely passed on to his only son Hugh, 26, without incurring inheritance tax. His son also inherited his title, becoming the seventh Duke of Westminster.
The sixth duke was a close friend of the Royal family and was said to have been worth £9.5 billion by the Sunday Times Rich List. Most of his personal estate was left in trust, with the income going to his widow Natalia, 58, but his trustees were also given the power to transfer all or any of the capital to her.
The UK’s inheritance tax of 40 per cent of any assets worth more than £325,000 is not payable on anything in an estate that is left to a spouse or charity.
John Christensen, director of the Tax Justice Network, the advocacy group, called for an overhaul of the inheritance tax rules. “The big issue here is the way very, very wealthy families have for generations used trusts to pass assets on outside the sphere of inheritance tax,” he said. “It is a glaring loophole. It’s a political choice to have it and it means dynastic wealth is passed down the generations intact, leading to a much greater concentration of wealth.”
A spokesman for the Grosvenor Estate said the trust paid inheritance tax of six per cent on the wealth of the trust every 10 years to HMRC. He said: “The actual amount paid to HMRC over the life of the trust is pretty much equivalent to a single payment on the death of the beneficiary of the trust. The business assets of the Grosvenor Estate are held in trusts to maintain continuity of ownership between generations and not to avoid inheritance tax.”
Avoidance ain’t what it used to be …
Tax avoidance used to be big business for the wealthy and famous but increasingly HM Revenue & Customs are closing the loopholes.
More than 100 BBC stars, sports celebrities and others regularly used what they believed to be legitimate ways to avoid tax through investment schemes and by listing themselves as self-employed.
However, the taxman won a ruling in August last year that one such scheme backing investment in films and that qualified for tax breaks was illegal. A corporate criminal offence came into force last month (september) under the Criminal Finances Act 2017 of failing to prevent the facilitating of illegal tax evasion.
See Brief Premium – It’s now a law firm’s duty to prevent tax evasion
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Royal Mail wins injunction to stop strike
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A High Court judge has blocked a planned strike at the Royal Mail, telling union officials yesterday that they must follow contractual dispute resolution procedures.
Mr Justice Supperstone granted mail bosses an injunction so that the proposed 48-hour strike planned for next week cannot go ahead.
Lawyers for the company had argued that the strike was unlawful because the Communication Workers Union had not followed dispute resolution processes. In a statement, the Royal Mail said the High Court ruled that legally-binding contractual procedures “must be followed before industrial action can take place”. According to company, the court’s injunction means that any strike action before the dispute resolution procedures have been followed would be unlawful.
At a protest outside the Royal Courts of Justice in London, where the injunction was granted, the union’s deputy general secretary, Terry Pullinger, described the application as Royal Mail’s “last throw of the dice”.
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Media banned from revealing Brady funeral details
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The media has been barred from revealing details of the funeral arrangements of Ian Brady, the Moors murderer.
In a case brought by councils covering Saddleworth Moor, where the serial killer buried his victims, the judge made a court order barring any reporting of the detail. The injunction was secured on Monday and the case was brought against Brady’s solicitor, Robin Makin, and a second party who, under the terms of the order, cannot be identified. Details of the hearing have just emerged.
Makin, of the Liverpool firm E Rex Makin & Co, has consistently refused to reveal the killer’s funeral wishes, saying they would emerge “in due course”.
Brady and his accomplice Myra Hindley were jailed for life for torturing and murdering three children in the 1960s – John Kilbride, 12, Lesley Ann Downey, 10, and Edward Evans, 17. They later admitted to the murders of Pauline Reade, 16, and Keith Bennett, 12.
The order, which refers to the killer under his preferred name of Ian Stewart-Brady, prevents the media from releasing details of his funeral until a week after it has taken place, at which point an announcement will be made.
The hearing was held in public at the Chancery Division of the High Court, in front of Sir Geoffrey Vos. Judgment is scheduled to be released today. Any breach of the order could result in a prison sentence for contempt of court.
After Brady’s death at the maximum security Ashworth Hospital in May at the age of 79, the coroner Christopher Sumner refused to release the killer’s body unless he was given assurance that his ashes would not be scattered on the Moors.
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Banker’s wife allowed to pursue millions in divorce top-up
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A banker’s wife who won a £2 million divorce pay-out has been granted the right to seek several million pounds more so that she does not depend on her husband or “remarkably wealthy” father.
Judges in the Court of Appeal ruled that Hayat Alireza, 38, had been left in a “straitjacket” and was still beholden to her former husband, Hossam Radwan, 46. She had almost nothing of her own and no account was taken of her right to “personal autonomy” or of her caring role for their three children, Lady Justice Gloster said.
Radwan, her ex-husband, is a former Goldman Sachs financier worth up to £17 million, earning £350,000 a year in the City. But the mother’s contribution to their 14-year marriage, and her caring role for their three children, the youngest of whom is aged six, had simply not been recognised, the judge said.
Lady Justice Gloster said Ms Alireza’s £2m divorce pay-out “sits uncomfortably with contemporary mores and significantly impacts upon her personal autonomy”.
Radwan’s lawyers said that although he was “very wealthy”, he was “much, much poorer” than his former father-in-law and that ought to be taken into account. But the judge said that if the £2m ran out before she inherited Alireza would be “left with no capital of her own for many years to come”. Although she had been allowed to stay on in the couple’s £5 million Kensington home she would have to move out if her father died or she remarried.
Last year a divorce judge accepted that Alireza’s inheritance prospects from her father should be taken into account. However, her barrister, Robert Peel, QC, of 29 Bedford Row chambers in London, told the Court of Appeal: “In practice, the judge is placing on the wife’s father an obligation to ensure that the wife is provided for. There is no principle of law that a wife should become the responsibility of her birth family upon divorce.”
Agreeing, Lady Justice Gloster ruled that her father bore “no duty” to support his adult daughter when her ex-husband was also worth millions.
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In Brief
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- Conclude legal aid review quickly, MPs urge government – Law Gazette
- European Court of Justice ‘can veto Brexit deal’ – The Times
- PwC launches on-demand flexible lawyering service for clients – Legal Week
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Analysis
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City’s new fraud court must be given teeth
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Premium
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The proposed cybercrime ‘super court’ will be powerless if out-of-date laws are not improved, Stephen Ross warns
A new City of London-based “super court” to prosecute fraud and cybercrime offences is to be welcomed, but without adequate funding and expertise it is destined to become a toothless tiger.
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Read the full story
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Comment
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Premium
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Don’t worry: AI isn’t coming for your job just yet
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Lord Clement-Jones is convinced that robots will not take over from lawyers any time soon
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Tweet of the day
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| Met GP #RCGPAC17 who spends 1/3 of income on indemnity. A state-backed scheme could make the difference as to whether she remains a GP |
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@rvautrey
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Blue Bag
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Bar shuts out the kids
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Barrister mothers have got it pretty tough these days. Not only does the government want to extend court sitting hours so that they will have to appear in court until about mid-night, now they will not have anywhere to park their children during those late-night sittings.
The Bar Council confirmed yesterday that a nursery scheme in London is no longer able to take additional barrister progeny because it is over-subscribed. Since 2013, the Bar has organised a deal for barrister parents with a nursery near the Smithfield meat market in the City of London. It offered special rates to barristers with children aged two months to five years.
However, the nursery is full up. A similar deal for barrister parents in Leeds is still running, but that is a bit of a long run for barristers practising in the capital.
A spokesman said the Bar Council was “exploring other ways to support barristers with childcare responsibilities”.
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Rumpo of the Old Bailey
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Further to our titbit yesterday on plans to stop forcing prospective barristers to go through the gauntlet of inns of court dining before being called to the Bar, The Brief’s colleagues on the TMS diary highlighted that Middle Temple is renowned for imposing the “toughest dining test”.
It is understood that the powers that be at the inn would lock the doors on the dining hall until after the second grace. Bad news for barristers and pupils with weak bladders.
Some would discreetly fill a wine bottle but a more civilised approach was to pass a note to the top table which read in Latin: “Domine, rumpo.” Translation: “Master, I’m bursting.”
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Closing Statement
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Not so diverse
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Never let it be said that over the years lord chancellors have not had equality and diversity at the forefront of their minds when appointing judges, writes James Morton.
Shortly after he had been given the nod to become chief stipendiary magistrate in 1967 Frank Milton (St John’s College, Oxford; the Garrick Club), who looked like Pickwick, was asked how he came to be appointed. “Well”, he drawled, “what they really wanted was a woman, preferably black. And I was the nearest they could find.”
Another era, indeed. Nonetheless, if you were a defendant with even a glimmer of light in your case you could not have hoped for a fairer tribunal.
James Morton is a former criminal law solicitor and now author
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