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In association with Iain Larkins from Radius Law, we discuss:
Age-appropriate design: a code of practice for online services
We focus on the commercial aspects and look at the practical steps for you to consider.
On the 31st January the UK left the European Union. The transitional period however means that nothing will really change until 31st December.
There is still scant detail on what will happen after the 31st December, but the Government has published its policy statement for a new points-based immigration system, which is expected to take effect from 1 January 2021. Employers that engage EU workers will need a sponsor licence – so we recommend applying now, as bottlenecks will be inevitable. Also, note that engaging low skilled EU nationals will be particularly difficult - so businesses that have relied on cheap labour from the EU are advised to make contingency plans now.
See LNB News: Government sets out plans for a new, points-based immigration system and News Analysis: The UK’s plans for a ‘points-based system’ from 1 January 2021
Corporate & Commercial
Last year we reported on the Bates v Post Office case which stated that good faith is likely to be implied into ‘relational contracts’ and listed the characteristics of such contracts e.g. the contract being mutually intended for the long term. Two recent court decisions however seem to have restricted the scope for good faith to be implied. In Russel v Cartright a joint venture partner claimed that his fellow partners had breached an implied duty of good faith by not disclosing a new project to him during negotiations about his exit. The court however refused to imply a duty of good faith stating that it would only be implied when it was obvious to a reasonable reader of the contract, or essential for the contract to work properly. A similar decision was reached in another case when an operator of an oil field claimed a breach of a duty of good faith when it was terminated. We recommend that parties expressly state in the contract whether they will or won’t agree to act in good faith.
For further information, see Practice Note: Good faith in commercial agreements
The Court of Appeal has overturned the High Court decision that compelled Sports Direct to hand over legally privileged documents to the Financial Reporting Council. Sports Direct was however told to hand over non privileged documents that were attached privileged emails. Both parties have said that they will appeal.
See News Analysis: Court of Appeal confirms legal privilege applies to regulatory disclosure request (Sports Direct International Plc v The Financial Reporting Council)
Restrictive covenants on shareholders
Whilst Courts are often quick to strike out unreasonable restrictions on former employees, a recent Court of Appeal decision has shown that the Courts are less likely to interfere with restrictions in a shareholder agreement, particularly when there are agreed between experienced commercial parties. In this case the Court of Appeal rebuked an employee-shareholder’s claim that a 12-month restriction after the disposal of shares was unenforceable even if there could be a considerable delay between the termination of employment and the disposal of his shares.
See News Analysis: Non-compete restrictions in shareholders' agreement upheld by Court of Appeal
Who are the parties to a contract?
It is often assumed that only the named parties to a contract can enforce it, but this may not be the case. A recent court decision has shown that, unless specifically stated otherwise, if it’s known that one of the named parties is acting on the instructions of another party then that party is likely to have rights to enforce the terms of the contract. Even in cases where such a relationship is not obvious the unnamed party may still have contractual rights. To avoid this risk, we recommend including ‘no agency’ and/or no ‘undisclosed principal’ provisions in the contract.
See News Analysis: Contractual rights of disclosed principals (Filatona Trading Ltd v Navigator Equities Ltd)
The recent case of Athena v Superdrug is a good reminder of how parties can inadvertently commit to a contract. In this case a two-email exchange—culminating with ‘Please go ahead with the below…’ Superdrug had committed to a binding a contract despite arguments that the employee who sent the email had not followed contracting procedures, had not intended to commit to a contract and did not have the authority to commit to a contract.
See News Analysis: A lesson in substance over form—commercial contracting by email (Athena Brands Ltd v Superdrug Stores Plc)
The UK Data Regulator (ICO) has finalised its code of practice for on-line services that are likely to be accessed by children. The code makes specific recommendations such as avoiding ‘nudge techniques’ – techniques to encourage children to disclose unnecessary personal data or to weaken privacy controls. The code has been criticised for defining a child as anyone under 18 which departs from other marketing laws including the GDPR which opt for a younger age. It also fails to provide a specific definition of ‘likely to be accessed by children’.
See News Analysis: ICO publishes Age-Appropriate Design Code of Practice for online services
Draft direct marketing code of practice and Adtech
See News Analysis: ICO draft Code of Practice on Direct Marketing
Accessing employee emails
For further information, see Practice Note: Monitoring staff, IT and communications systems in the workplace
Advertising & Marketing
Registering designs and trademarks - caution needed
A recent registered design case has proven that too much detail in a registered design may limit its scope. In this case a registered design for a baby bath was submitted as a CAD drawing which was a grey-blue colour to highlight contrast and shape of the design, but the Judge decided that the registration was therefore limited to blue baths and said that if the applicant had wanted to register the shape of the bath it should have provided a line drawing or rendered it in monochrome shades of grey.
See News Analysis: IPEC rules on baby bath design dispute (Shnuggle v Munchkin)
Meanwhile in a trademark case, the red Babybel cheese shape mark has been invalidated because it was insufficiently represented, particularly as it did not specify the tone of red that it sought protection. The decision reflects a current trend to impose stricter registration requirements on ‘non-conventional’ trademarks’ (such as shape marks).
See News Analysis: High Court dismisses Babybel trade mark appeal (Fromageries Bel v J Sainsbury)
6th April changes
The following changes will apply from the 6th April 2020:
See LNB News: Employer Bulletin - February 2020
A welcome but belated announcement from the HMRC in February stated that the new off-payroll rules apply only to work completed on or after 6 April – so, effectively, a one-month postponement. The new rules make medium and large-sized end users (rather than individuals) responsible for determining whether PAYE and NICs should be paid for relevant contractors. New guidance has been published on the Government website.
See News Analysis: Examining the off-payroll IR35 rules’ draft PAYE debt transfer provisions
ACAS has published new guidance on the use of non-disclosure agreements. The guidance confirms NDAs cannot be used to stop anyone whistleblowing or reporting a crime to the police and recommends that they should not be used:
For further information, see Practice Note: Non-disclosure agreements (NDAs) and confidentiality provisions in employment
Disclosing salary details
The Employment Appeal Tribunal10 has ruled that the dismissal of an employee who disclosed salary details of a senior employee that he had accidently found on a photocopier was unfair. This decision is a reminder that salary details will not be treated as confidential information unless there is clear wording in the employee's contract to this effect.
See News Analysis: Information about a fellow employee’s salary is not always confidential (Jagex Ltd v McCambridge)
The Government and ACAS have published guidance about managing Coronavirus issues in the workplace on their websites. Useful information including videos are also available on the World Health Organisation’s website.
Nothing in this Bulletin, or on the associated website, is legal advice. We have taken all reasonable care in the preparation of this Bulletin, but neither we nor the individual authors accept liability for any loss or damage (other than for liability that cannot be excluded at law).
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Louisa leads marketing for the in-house legal community at LexisNexis. She joined the dedicated in-house team at LexisNexis four years ago and has a passion for driving and facilitating initiatives which are customer-focused at their heart. Her vision
is to support in-house counsel succeed in their fast-evolving role based on deep insight, data analysis and best practice gathered across the in-house community.
Prior to her in-house focused role, Louisa led the marketing for the bar and mid-market private practice sectors as well as product marketing lead for LexisPSL - LexisNexis' cloud based, practical guidance and legal research software solution.
She brings 20 years' marketing experience both client and agency side, specialising in B2B marketing in the Legal, TMT (Telco, Media and Technology) and Financial Services industries. In both South Africa, Europe and the UK.
Louisa is also an active member on the LexisNexis Gender Equality Matters (GEM) steering committee and is involved with the Families at LexisNexis Group which brings together, supports and lobbies for change those with an interest in balancing the challenges
of work and family.
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