Latest legal and regulatory news – 21st January 2022

Latest legal and regulatory news – 21st January 2022

In this issue:

In-house resources, events and networking

Risk & Compliance




Information Law

In-house resources, events and networking

Networking and forum events

26 January 2022

The effective leader—how to lead amid disruption and complexity

Register now to attend

This free-to-join forum brings together in-house lawyers working solo, or in smaller teams, to network and learn from one another. It is a chance to connect, debate topical issues and stay ahead of the latest regulatory and legal commercial updates for legal teams. Held in partnership with Flex Legal, Radius Law and Crafty Counsel.

23 February 2022

Creating a pipeline of talent

Register now to attend

At this session you will hear how other in-house teams have built and secured their pipeline of junior talent and Barbri (global leaders in legal education) will share how teams are using the new SQE route to qualification to help them do so. Mary Bonsor, CEO of Flex Legal, will share insights from the market on the increasing demand from junior lawyers for more flexible working and look at how you can help increase social mobility at the junior end of the market.

30 March 2022

Commercial law update

Register now to attend

Radius Law’s Iain Larkins and Sandra Martins will give a ‘whistle stop’ tour of the big commercial and employment law developments in the last six months and their impact on business.

Various dates

LexisNexis® Aspire Forum for Junior In-house Lawyers

To register your interest in joining the events, sign up as an Aspire member today

Aspire is a professional development and networking forum for junior in-house counsel. We have several events planned for the new year to continue supporting you through these uncertain times and provide a platform for you to connect with your peers. Events take place at the same time each month, from 5pm to 6.30pm.


Risk & Compliance

Risk & Compliance forecast as at 18 January 2022

Our new Risk & Compliance forecast (as at 18 January 2022) is now live. This month, we report on: (1) a new economic crime bill may address a proposed register of overseas owners of British properties and failure to prevent offences; (2) materials to address the new UK Sanctions List; (3) a consultation on disability workforce reporting; and (4) adopted guidelines from the European Data Protection Board (EDPB) on Examples regarding Data Breach Notification. You can rest assured we're tracking forthcoming regulatory changes so you can plan ahead.

See Practice Note: Risk & Compliance forecast as at 18 January 2022.

UK GDPR—proposed reform concerning AI likely to be watered down, official says

MLex: A controversial proposal to cut protections for users affected by machine-made decisions as part of the UK’s data reform agenda is unlikely to go ahead, a UK government official has said. A consultation paper proposed removing a provision on automated decision-making from the UK General Data Protection Regulation, Retained Regulation (EU) 2016/679 (UK GDPR), but the government has changed tack, the official said.

See News Analysis: UK GDPR—proposed reform concerning AI likely to be watered down, official says.

EDPB announces outcome of January 2022 plenary

The EDPB has announced its adoption of the Guidelines on the Right of Access following the January 2022 plenary session. The guidelines were drafted following a stakeholder event and aim to analyse the various aspects of the right of access and provide ‘more precise guidance on how the right of access has to be implemented in different situations’. This includes clarifying the scope of the right of access, the information the controller has to provide to the data subject, the format of the access request, the main modalities for providing access, and the notion of ‘manifestly unfounded or excessive requests’. The guidelines will be subject to public consultation for a period of six weeks.

See: LNB News 19/01/2022 76.

FATF updates consolidated assessment ratings

The Financial Action Task Force (FATF) has updated their consolidated assessment ratings as of 14 January 2022.

See: LNB News 17/01/2022 90.

UK financial regulator has 54 money-laundering probes ongoing, minister says

MLex: The Financial Conduct Authority (FCA) currently has 54 cases of suspected money-laundering breaches under investigation, a government minister has told lawmakers, an apparent dramatic jump from figures released two years ago. Minister of State for the Cabinet Office, Theodore Agnew, also said long-delayed legislation to lead to a register of overseas owners of British properties could appear in ‘months’.

See News Analysis: UK financial regulator has 54 money-laundering probes ongoing, minister says.

Bankers' group warns of scams targeting remote workers

Law360, London: Small and medium-sized businesses should be on the alert for fraudsters who impersonate company bosses and target firms with remote working setups, a trade group for banks warned on 12 January 2022.

See News Analysis: Bankers' group warns of scams targeting remote workers.

Don't get caught out by the Whistleblower Directive—how companies operating in the EU can prepare

Every business operating in the EU with 50 or more workers will have to take a hard look at its whistleblower policy and assimilate changes required by the new EU Whistleblower Directive (the Directive). It is also something companies with connections to EU companies need to think about. Jonathan Pickworth, partner, Adina Ezekiel, practice innovation knowledge attorney, and Harry Fathers, trainee solicitor, at Paul Hastings LLP provide a reminder of the implications of some of the key provisions of the Directive and an update on transposition across the EU.

See News Analysis: Don't get caught out by the Whistleblower Directive—how companies operating in the EU can prepare.


CMA commences review of environmental claims made in fashion retail sector

The Competition and Markets Authority (CMA) has launched a review of environmental claims following the publication of its guidance for making environmental claims on goods and services. The CMA is conducting the review as it has estimated that £54bn is spent by UK consumers annually on clothing and footwear, and fashion has been estimated to be responsible for between 2–8% of global carbon emissions, which has led to more fashion businesses making environmental claims such as being sustainable and better for the environment. The aim is to review environmental claims made across the sector in the UK to determine whether businesses are complying with consumer protection law, and to identify which businesses are greenwashing so the CMA can take appropriate action.

See: LNB News 17/01/2022 73.

Russian Supreme Court says international sanctions are sufficient to ignore dispute resolution clause (JSC Uraltransmash v PESA) 

Is the introduction of international sanctions against a person sufficient to justify a move of the agreed dispute resolution forum to Russia? This has been a hot topic for discussion since June 2020. In JSC Uraltransmash v PESA, the Russian Supreme Court has put an end to this debate. Ivan Teselkin, partner, Maria Dolotova, of counsel, Sergei Eremin, senior associate, Alexander Gridasov, senior associate, and Olga Dementyeva, associate, of Herbert Smith Freehills discuss the decision.

See News Analysis: Russian Supreme Court says international sanctions are sufficient to ignore dispute resolution clause (JSC Uraltransmash v PESA).

Keeping your options open: construction and rectification of the termination provisions in a property option (Retirement Villages Developments Ltd v Punch Partnership (PTL) Ltd)

The court construed the provisions of an option to acquire a valuable site in Elstree, Hertfordshire. The option had been granted in 2013 for an initial 30-month period, subject to extension, and the issue was whether that extension applied. The court held it did, notwithstanding the owner’s arguments that this was commercially absurd, in a decision which reinforces the primary importance of textual analysis in contractual construction. A claim by the owner for rectification was also dismissed. Written by James McCreath, barrister at Wilberforce Chambers, counsel for the developer.

See News Analysis: Keeping your options open: construction and rectification of the termination provisions in a property option (Retirement Villages Developments Ltd v Punch Partnership (PTL) Ltd).

Claim for payment fails where claimants carried out works at their own risk ()

The Technology and Construction Court (TCC) dismissed the claimants’ claim for payment in respect of construction works, on the basis that they had never entered any contract with the defendants—rather, they had undertaken the works at their own risk. Further, the claimants’ action was time-barred: any right to payment would have accrued, at the latest, on completion of the works, which was more than six years before the action was raised.

See News Analysis: Claim for payment fails where claimants carried out works at their own risk (Hirst v Dunbar).

DCMS publishes analysis of AI activity in UK businesses

The Department for Digital, Culture, Media & Sport (DCMS) has commissioned Capital Economics to model and report the present and future use of artificial intelligence (AI) within UK businesses. The analysis covers five technology categories—machine learning, natural language processing and generation, computer vision and image processing/generation, data management and analysis, and hardware.

See: LNB News 13/01/2022 56.

Morality clauses in the era of social media scandals—what brands should know

The morality clause, a contractual provision requiring a party to comply with certain standards of behaviour, has long been a feature of spokesperson and endorsement agreements. Yet in the current age of cancel culture, #MeToo, and influencer marketing, these provisions have become a primary focus for businesses when onboarding an individual to be the public face of their brand. Sébastien Gardère, partner, Julia Kappler, associate, and Kathryn Chadwick, associate, at Gowling WLG in Canada, discuss what brands should consider when drafting morality clauses. While this article applies to Canadian law, many of the points raised are also helpful to UK practitioners advising in this area.

See News Analysis: Morality clauses in the era of social media scandals—what brands should know.

[2022] EWHC 88 (Comm)

The Commercial Court allowed the claimant organisation’s claim against the defendant aircraft broking and consultancy company, for breach of the parties’ ‘aircraft lease to purchase’ agreement. The court held that the claimant had been in breach by failing to settle a disputed invoice, but that breach had not been repudiatory. Accordingly, the defendant had not been entitled to terminate the agreement, nor to suspend the claimant’s use of the aircraft. Therefore, the claimant was entitled to damages for the defendant’s breaches, and the defendant was entitled to the outstanding amount of the disputed invoice. The court refused to rule on the appropriate percentage in relation to the claimant’s claim for a share of profits.

See: LNB News 19/01/2022 28 and [2022] EWHC 88 (Comm).

Weekly roundup of HMRC post-Brexit import, export and customs guidance—17 January 2022

HMRC has updated its import, export and customs guidance to reflect the post-Brexit regime. The update covers the period from 10 January 2022 to 17 January 2022.

See: LNB News 17/01/2022 58.

Brexit Bulletin—EAC publishes 'One year on—Trade in goods between GB and EU' report

The European Affairs Committee (EAC) has published its report ‘One year on—Trade in goods between Great Britain and the European Union’. The report considers the economic context of UK-EU trade flows, the impact of the coronavirus (COVID-19) pandemic, the EU-UK Trade and Cooperation Agreement (TCA) and the impact of end of the transition period, delays to import controls, preparedness for the introduction of import controls from January and July 2022 and longer term questions.

See: LNB News 14/01/2022 89.


FCA consults on proposals to strengthen financial promotion regime

The Financial Conduct Authority (FCA) has launched a consultation on proposals to strengthen its financial promotion rules for high-risk investments, and for authorised firms which approve and communicate financial promotions. The deadline for responses to consultation paper CP22/2 is 23 March 2022.

See: LNB News 19/01/2022 37.

FCA reminds TPR firms that they must meet regulatory standards to continue operating

The FCA has issued a reminder that European firms wishing to remain in the temporary permissions regime (TPR) need to meet the regulator’s standards to continue operating in the UK. The TPR was designed by the FCA to ensure that European firms operating in the UK when the Brexit transition period ended could continue operating temporarily while they sought full authorisation in the UK. The FCA notes that it has already cancelled the temporary permissions of four firms, who, despite multiple opportunities, did not respond to mandatory information requests.

See: LNB News 18/01/2022 56.

Companies (Strategic Report) (Climate-related Financial Disclosure) Regulations 2022

SI 2022/31: Amendments are made to the Companies Act 2006 (CA 2006) to make changes to reporting requirements by certain companies to produce additional disclosures in line with the recommendations of the Taskforce on Climate-related Financial Disclosures (TCFD) which were published in 2017. The Regulations come into force  on 6 April 2022.

See: LNB News 19/01/2022 46.

Limited Liability Partnerships (Climate-related Financial Disclosure) Regulations 2022

SI 2022/46: Provisions are made to amend the Limited Liability Partnerships (Accounts and Audit) (Application of Companies Act 2006) Regulations 2008, SI 2008/1911, to make changes to reporting requirements on certain limited liability partnerships, requiring them to produce additional disclosures in line with the TCFD recommendations. The Regulations come into force on 6 April 2022.

See: LNB News 19/01/2022 6.

UK launches consultation on domestic implementation of global minimum tax for large multinational groups

HM Revenue & Customs (HMRC) has launched a consultation seeking views on domestic implementation of the OECD Pillar Two rules for a worldwide 15% minimum corporation tax rate for large multinational groups.

See: LNB News 17/01/2022 13.


Updated guidance on reintroduced Coronavirus Statutory Sick Pay Rebate Scheme

HMRC has updated its guidance to confirm that the Coronavirus Statutory Sick Pay Rebate Scheme has been reintroduced. The rebate scheme allows small and medium-sized businesses to reclaim Statutory Sick Pay (SSP) for employees who were off work due to coronavirus on or after 21 December 2021.

See: LNB News 20/01/2022 1.

DHSC updates its coronavirus (COVID-19) advice for pregnant employees

The Department of Health and Social Care (DHSC) has updated its advice for pregnant employees in light of the coronavirus pandemic. The update includes a strong recommendation that pregnant women get vaccinated, the Joint Committee on Vaccination and Immunisation announcement that pregnant women be moved into the priority group six, and a new differentiation between those who are less than 26 weeks pregnant and those who are more.

See: LNB News 17/01/2022 98.

Vicarious liability for, and risk assessing against, employee’s horseplay?

Though it has been said that vicarious liability is ‘on the move’, Chell v Tarmac Cement [2022] EWCA Civ 7, marks the common law drawing a further line against imposing vicarious liability for so-called horseplay cases in the workplace. That employment provides the occasion for such actions is not of itself enough. The Court of Appeal also held that generally direct liability should not be imposed for lack of a risk assessment against such ill-judged acts. The threshold for determining that one should have been taken will involve a high degree of reasonable foreseeability of risk. Written by Patrick Limb QC, Ropewalk Chambers, Nottingham.

See News Analysis: Vicarious liability for, and risks assessing against, employee’s horseplay? (Chell v Tarmac Cement) and Case Digest: [2022] All ER (D) 21 (Jan).

Average waiting times for a first hearing in employment tribunal claims

In the period from 1 April 2020 to 31 March 2021 the average waiting time, from receipt of a claim to the first hearing in an employment tribunal, was 335 days for single claims and 388 days for multiple claims. This is the most recent available data because the employment tribunals have moved to a new case management system and HM Courts & Tribunals Service (HMCTS) is currently working to incorporate the new IT system alongside longer-established data sources to provide a more complete and consistent data set for this jurisdiction, according to the response by James Cartlidge, Parliamentary Under Secretary (Ministry of Justice) to a written question as published in Hansard. He also clarified that the Ministry of Justice aims to upload employment tribunal judgments to the public register within ten working days of promulgation.

See News Analysis: Average waiting times for a first hearing in employment tribunal claims.

Home Office updates right to work checks guidance

​The Home Office has updated its employer right to work checks guidance as of 17 January 2022. A new Annex F has been inserted containing guidance for employers carrying out right to work checks on British and Irish citizens from 6 April 2022 using identity document validation technology (IDVT). It has also set out guidance for identity service providers carrying out verification checks on behalf of employers.

See: LNB News 17/01/2022 115, LNB News 18/01/2022 71 and LNB News 19/01/2022 78.

Information Law

Questions of compensation for ‘non-material' EU GDPR damage land at Court of Justice

MLex: The conditions for awarding compensation for ‘non-material damage’ for violations of the EU General Data Protection Regulation, Regulation (EU) 2016/679 (EU GDPR) have come before EU judges following separate disputes in Germany over data breaches at an electronics store and a health insurance fund. The cases come on top of several years of debate over what claimants must prove to receive compensation for EU GDPR infringements.

See News Analysis: Questions of compensation for ‘non-material' EU GDPR damage land at Court of Justice.

French CNIL issues guidance on re-use of personal data by sub-contractors and processors

France’s data protection authority, the CNIL, recently issued guidance on the re-use of personal data by a sub-contractor for its own purposes. The guidance addresses scenarios such as where a sub-contractor wishes to re-use personal data entrusted to it by an original controller, for example with the aim of improving the sub-contractor’s services or products or designing new services and products. The guidance outlines that re-use for the sub-contractor’s own purposes only possible if several conditions are met, including (among others) a specific written authorisation from the original controller and that the re-use must be compatible with the initial processing. The CNIL’s guidance also explains that the sub-contractor would be a controller in respect of the further processing for the sub-contractor’s own purposes.

See: LNB News 17/01/2022 69.

French CNIL launches consultation on framework for ‘intelligent’ video devices

The CNIL has launched a consultation on the proposed legal framework that will apply to ‘intelligent’ or ‘augmented’ video devices installed in places open to the public. The devices use automated image processing software, integrated within the device cameras, that can be used to identify individuals. Considering this, the CNIL highlighted that the protection of the fundamental rights and freedoms of the people filmed and analysed, and in particular the protection of their personal data, must remain a priority. The deadline for feedback is 11 March 2022.

See: LNB News 17/01/2022 74.

Austrian data protection authority decides use of Google Analytics violates EU GDPR

The campaign group noyb has reported on the Austrian data protection authority’s decision on a model case by noyb, that the use of Google Analytics violates the EU GDPR in the wake of the Schrems II case. According to noyb, ‘similar decisions are expected in other EU member states, as regulators have cooperated on these cases in an EDPB “task force”’. The Austrian data protection authority has not yet announced a penalty. This is because the issue is seen as a ‘public’ enforcement procedure, where the complainant is not heard.

See: LNB News 13/01/2022 85.

DCMS publishes 2022 cyber security incentives and regulation review and launches consultations

The DCMS has published its 2022 cyber security incentives and regulation review. This review reports the progress made in recent years and why further action needs to be taken. The government is continuing to improve the cyber resilience of businesses in the UK and to further understand the current position the government has launched two consultations. DCMS has also launched two consultations on proposals for legislative changes to drive up levels of cyber resilience and on embedding standards and pathways across the cyber profession by 2025.

See: LNB News 19/01/2022 88, LNB News 19/01/2022 79 and LNB News 20/01/2022 9.

Direct marketing rules applicable to inbox advertising (StWL v eprimo)

TMT analysis: StWL Städtische Werke Lauf a.d. Pegnitz GmbH (StWL), a German electricity company, made a claim against eprimo GmbH (eprimo) for anti-competitive behaviour following eprimo’s hire of an advertising agency to conduct direct email marketing to T-Online’s free email users. Users received advertising messages in a form similar to emails, which appeared in their private email inbox and were listed in the same section as real incoming emails (inbox advertising). The Court of Justice concluded that the inbox advertising contravened Article 13(1) of Directive 2002/58/EC, the ePrivacy Directive, as it represented a form of unsolicited direct marketing to which users had not consented. Written by Hamish Corner, partner and Shruti Goel, senior associate at Shoosmiths LLP.

See News Analysis: Direct marketing rules applicable to inbox advertising (StWL v eprimo).

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About the author:
Allison is a former partner of Shoosmiths, with extensive experience of legal management and practice compliance.