Latest legal and regulatory news: 11th February

In this issue:

In-house

Risk & Compliance

Commercial

Corporate

Information Law & TMT

Employment

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In-house

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Risk & Compliance

Data protection

Member States have agreed on a negotiating mandate for revised ePrivacy rules—rules on the protection of privacy and confidentiality in the use of electronic communications services. The updated rules will be used in cases in which service providers may process electronic communications data or have access to data stored on end-users’ devices. The agreement allows the Council to start talks with the European Parliament on the final text of the regulation. See: LNB News 10/02/2021 78 and News Analysis: Comment—ePrivacy rules near agreement among EU governments after four years of deadlock.

MLex: EU lawmakers have said the UK ‘does not currently meet the conditions’ to allow the continued free flow of personal and law-enforcement data, and expressed ‘strong doubts’ about an interim six-month agreement that allows those flows as part of a post-Brexit trade deal. The non-binding opinion from the European Parliament’s civil liberties committee (LIBE), adopted on 4 February 2021, comes just weeks before the EU’s data protection authorities are set to scrutinise the European Commission’s draft decision on adequacy, which is crucial for continued economic and security cooperation between the EU and the UK. See News Analysis: UK ‘does not meet conditions’ for data adequacy, EU parliamentary committee says.

The government has announced the launch of a new UK Cyber Security Council, funded by the Department for Digital, Culture, Media & Sport. The new independent body will set standards and define career and learning paths for the cybersecurity sector. The Council will help boost skilled job prospects around the UK by providing ‘budding and existing workers’ with clear guidance for building a career in cybersecurity. It will also focus on increasing the number and diversity of individuals entering the cybersecurity profession. The Council will formally launch on 31 March 2021. See: LNB News 09/02/2021 89.

Financial crime prevention

The Office of Financial Sanctions Implementation (OFSI) has introduced Giles Thomson as a new director. Thomson hopes to utilise his ‘expanding role to build stronger links between sanctions and broader economic crime work, exploiting the large overlap in threats, issues and stakeholders’. Additionally, Thomson aims to enhance OFSI’s compliance work by developing relationships further with law enforcement agencies, regulators and private sector bodies to improve understandings of compliance risks and trends. See: LNB News 01/01/0001 2691.

Law360, London: HMRC recently imposed a record fine on MT Global over AML violations, highlighting several AML enforcement and supervision considerations for money services businesses and their advisers, says Jessica Parker at Corker Binning. See News Analysis: Four lessons from record money services business AML fine.

In 2018, the Divisional Court’s decision in R (KBR) v Serious Fraud Office (SFO) found that the SFO’s powers to compel data under section 2 of the Criminal Justice Act 1987 ( CJA 1987) extended to data of a non-UK company held abroad, provided there was a ‘sufficient connection’ between that company and the UK. The Supreme Court has now allowed KBR Inc’s appeal of that decision. The decision places important limits on the SFO’s ability to use CJA 1987, s 2 notices to obtain material in the hands of foreign companies. See News Analysis: Section 2 notices against non-UK companies—what is within the SFO’s direct reach? (R (KBR) v Director of the SFO) and LNB News 05/02/2021 104.

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Commercial

Brexit

The European Commission has published a proposed Council Decision on the position to be taken on behalf of the EU in the Partnership Council established by the Trade and Cooperation Agreement (TCA) regarding an extension to the provisional application of the TCA. The TCA was initially signed, published and applied on a provisional basis without the full legal-linguistic revision. Under the current terms, provisional application of the TCA is due to expire on 28 February 2021 (unless extended). Taking into account the amount of time required for the EU to complete the legal-linguistic revision and authentication of the agreement in all languages of the EU, the proposal would allow the EU representatives to agree an extension to the provisional application until 30 April 2021 within the Partnership Council. Once adopted, the decision of the Partnership Council will be published in the Official Journal of the European Union. See: LNB News 10/02/2021 92.

Coronavirus (COVID-19)

The Welsh Government has urged firms that have not yet registered with their local authorities since October 2020 to do so in order to benefit from the £650m support package available to aid businesses suffering as a result of the coronavirus restrictions. It is estimated that there are ‘thousands of eligible businesses’ which have not yet registered. Eligible businesses with rates value of less than £12,000 will be able to receive £6,000, while firms with rateable value below £150,000 may be entitled to £10,000 for the period from December 2020 to March 2021. See: LNB News 04/02/2021 105.

E-commerce

The Competition and Markets Authority (CMA) has published a ‘refreshed’ digital markets strategy. The refreshed strategy outlines CMA’s aims and main priorities across its digital markets work and an update on the work completed since its June 2019 digital markets strategy. CMA reiterates that its overarching goal is to create and develop the new Digital Markets Unit within the CMA. See: LNB News 09/02/2021 77.

Procurement

On 4 February 2021, the Cabinet Office issued Procurement Policy Note 01/21: Procurement in an Emergency (PPN 01/20). Building on guidance published in March 2020 in response to the coronavirus outbreak, PPN 01/21 reminds contracting authorities of the options available when undertaking procurement exercises in circumstances of extreme urgency and includes further guidance on the commercial risks, particularly when making direct awards. PPN 01/21 applies to all contracting authorities in the public sector with immediate effect. See: LNB News 04/02/2021 113.

Corporate

Corporate governance

The Financial Reporting Council has published an article by Sir James Wates, the Chairman of the Coalition group which introduced the Wates Corporate Governance Principles for Large Private Companies (Wates Principles). The article provides insight and commentary on companies’ reporting against the Wates Principles to date. See: LNB News 05/02/2021 25.

ClientEarth, the environmental charity, has published a report on climate change-related reporting by top listed companies in the UK. The report, which examined the most recent annual reports for the all FTSE 100 companies and the largest 150 companies on the FTSE 250, concludes that the majority of companies are ‘woefully inadequate’ at disclosing how climate change will affect their business, and that many may be potentially breaching the law. Among some of the charity’s recommendations are ensuring law reform levels the playing field and meets investor expectations, strong enforcement to eliminate ‘greenwash’ and investors playing a role in driving accountability. See: LNB News 05/02/2021 51.

The Confederation of British Industry (CBI) has published an update on the Change the Race Ratio campaign, intended to ‘increase racial and ethnic participation in British businesses’. The published update reports that a further 22 signatories have joined the campaign so that, as of 5 February 2021, it has reached 75 signatures since its launch on 1 October 2020. Businesses signed up will collaborate with the 15 founders of the campaign to ensure that progress ‘towards achieving the campaign’s commitments’ is maintained. See: LNB News 05/02/2021 23.

Equity capital markets

The Financial Conduct Authority (FCA) has announced that its new major shareholdings notification portal will be live on 22 March 2021. From that date, all TR-1 notifications in relation to shares in a UK issuer admitted to trading on a regulated market should be submitted to the FCA via the major shareholdings notification portal via the FCA’s Electronic Submission System. See: LNB News 10/02/2021 111.

Information Law & TMT

Data protection

MLex: The law firm spearheading a UK class-action damages suit against British Airways (BA) over a 2018 personal data breach has secured an extra ten weeks to sign up more claimants. See News Analysis: BA data damages claim ‘largest ever’ as UK court extends deadline to gather more claimants.

MLex: Facebook is now being targeted by two competing class actions in the UK over abuses by a third-party app accused of scraping personal data from users’ profiles, with a second claim announced. See News Analysis: Facebook now targeted by competing class actions over data-harvesting app.

ePrivacy

The Centre for Data Ethics and Innovation (CDEI) has published a blog exploring how privacy enhancing technologies (PETs) can facilitate private, secure and trustworthy use of data. CDEI focused on emerging PETs, such as differentially private algorithms, homomorphic encryption and secure multi-party computation. The CDEI is calling for evidence from stakeholders in the public sector, academia and industry to answer a number of research questions that CDEI wants to address. See: LNB News 10/02/2021 91.

Employment

Coronavirus (COVID-19)

The Department of Health and Social Care has announced that it has widened the criteria for workplace testing for asymptomatic individuals in sectors open during lockdown. Businesses with more than 50 employees (reduced from 250), will now be able to make use of workplace testing. See: LNB News 08/02/2021 97.

Equality

Under section 109(4) of the Equality Act 2010 an employer can defend a claim resulting from the otherwise unlawful discriminatory actions of an employee if it can demonstrate that it took all reasonable steps to prevent those actions (or actions of that kind). In Allay (UK) Limited v Gehlen (UKEAT/0031/20/AT) the EAT held that in determining whether the employer has established that defence, it is legitimate to consider how effective the steps taken were likely to be when they were taken and, in appropriate circumstances, how effective they have proved to be in practice. For example, a tribunal may find that the defence is not made out where the behaviour of employees shows that the training has become stale and requires refreshing. Employers may wish to review policies and training materials to look at whether they expressly and effectively cover all relevant issues. They may also want to assess whether the training was, and continues to remain, effective and/or whether refresher training should be carried out. See News Analysis: Employer’s defence failed where equality training was stale and required refreshing (Allay (UK) Ltd v Gehlen).

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