Latest legal and regulatory news: 25th February

Latest legal and regulatory news: 25th February

In this issue:



Risk & Compliance



Info law and TMT






Virtual networking and forum events

There’s no need to feel isolated if you’re working from home—join one of our virtual networking or forum events. Even if you aren’t working from home, take some time to network with your peers, find out what challenges they’re facing and how they are meeting those challenges.



3 March 2021
Junior lawyers virtual lunch— How to network remotely
Register now to attend


Have you noticed that your strong ties have become stronger in a more remote working environment, but your weaker ties have become weaker?

This workshop gives practical tips to develop and nurture your peripheral network. Join us for quizzes, networking and a keynote talk.


24 March 2021
The commercial benefit of effective panel management
Register now to attend


An opportunity to share experiences and helpful insights with your peers under Chatham House rules. This month we focus on effective panel management. Discover how legal teams take a strategic approach to law firm management to demonstrate commercial value to their organisations.


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

Data protection

The European Commission has concluded that the UK ensures an essentially equivalent level of protection to the one guaranteed under the EU GDPR, Regulation (EU) 2016/679 and under Directive 2016/680/EU, the Law Enforcement Directive. The publication of the draft decisions is the beginning of a process towards their adoption. Next steps include the Commission obtaining a non-binding opinion of the European Data Protection Board and, after taking that into account, requesting approval from Member States’ representatives in the so-called 'comitology procedure'. Following that, the Commission may adopt the final adequacy decisions for the UK. See: LNB News 19/02/2021 66.

MLex: UK businesses may be premature in raising a cheer at the European Commission’s data adequacy proposal. With a legal challenge over the process almost inevitably looming at the Court of Justice, companies might be better off taking a more cautious approach and using what could be borrowed time to press ahead with contingency measures. See News Analysis: Comment—do not count on UK data adequacy; legal challenges appear inevitable.

The ICO has published the monetary penalty notice that it issued to Just Hype Ltd. The £60,000 penalty is for Just Hype Ltd having instigated the sending of 1,746,632 direct marketing messages between 1 June 2019 and 12 June 2020 to customers that had not provided adequate consent in relation to the content of the marketing material. See: LNB News 18/02/2021 57.






Financial crime prevention

Germany’s soon-to-be-adopted Corporate Sanctions Act carries a presumption of mandatory prosecution but also a defence in cases where reasonable precautions fail to prevent non-managers from committing crimes, so companies should start putting such compliance programmes into place now, say lawyers at Arnold & Porter. See News Analysis: Start preparing for Germany’s Corporate Sanctions Act.

UK Finance has updated its UK Sanctions Statutory Instruments Review, adding a review of the Misappropriation (Sanctions) (EU Exit) Regulations 2020 (at p 278) and updating the legislation table (at p 551). See: LNB News 19/02/2021 72.






Gender pay gap reporting

The Equality and Human Rights Commission (EHRC) has announced that enforcement action against employers that fail to report their gender pay gap will start on 5 October 2021, six months later than previously decided. The change has been made due to the continuing effects of the coronavirus (COVID-19) pandemic. The Government Equalities Office has published guidance for employers on these changes. The EHRC encourages employers to submit their data for 2020–2021 before the deadline if possible. See: LNB News 24/02/2021 10.




Additional Risk & Compliance updates this week

UK Finance has responded to HM Treasury’s phase-II consultation on the UK financial services future regulatory framework review. The response supports the broad thrust of the Treasury’s proposals for regulators with enhanced powers, subject to effective scrutiny and accountability, and adds suggestions as to how the future regulatory framework can benefit consumers, firms, society and the UK as a whole. See: LNB News 19/02/2021 71.

The US Securities and Exchange Commission (SEC) has announced an award of over $US 9.2m to a whistleblower who provided information which led to successful related actions by the US Department of Justice. The whistleblower provided ‘significant’ information concerning ongoing fraud, enabling the return of ‘a large amount of money’ to investors. The award is the first of its kind since amendments to the SEC’s whistleblower programme rules became effective on 7 December 2020. See: LNB News 24/02/2021 84.




The Prime Minister’s Office has updated its document collection for the EU-UK Trade and Cooperation Agreement (TCA), and associated agreements reached between the EU and UK at the end of the Brexit transition period. The newly added documents include an exchange of correspondence confirming the UK’s agreement to the EU’s proposed two-month extension to the provisional application of the TCA, pending ratification in the European Parliament. As interim co-chair of the Partnership Council under the TCA, Michael Gove signalled the UK’s agreement to the draft decision proposed by the European Commission, extending provisional application from 28 February to 30 April 2021. However, his response also noted the government’s expectation that there would be no further extensions beyond 30 April 2021, particularly in light of the ‘uncertainty’ that continued provisional application would create. See: LNB News 23/02/2021 123.

The House of Commons Library has published a briefing on new customs rules for trade with the EU, which provides an overview of the changes in trade rules between the UK and EU, as well as information and sources of advice regarding customs, imports and exports. See: LNB News 19/02/2021 30.


Law360, London: The Central Bank of Ireland has warned insurers that it will scrutinise how they deal with business interruption payouts linked to coronavirus after policyholders were successful in their claim against FBD Insurance for cover for business interruption claims arising out of the coronavirus lockdown. See News Analysis: Coronavirus (COVID-19)—Central Bank of Ireland warns insurers over BI claims.


In Nirro Holdings SA v Patrick O’Brien the court considered whether the term of a personal guarantee for the debts of a company, provided by its director, were enforceable in circumstances where the directorship had been terminated as a consequence of the company’s liquidation. Written by Graeme Kirk, barrister, at Lamb Chambers. See News Analysis: Guarantees—interpretation of contractual terms—commercial—evidence (Nirro Holdings SA v Patrick O’Brien).



Consumer protection

The European Council has announced that it has adopted conclusions arising from a communication from the European Commission on a ‘New Consumer Agenda: Strengthening consumer resilience for sustainable recovery’. The conclusions emphasise the importance of increasing consumer confidence in the context of coronavirus, as the Council believes that stimulating economic recovery is an absolute priority. See: LNB News 22/02/2021 38.

The European Consumer Organisation (BEUC) has responded to the European Commission’s publication of its trade policy review, which sets out the EU’s new trade strategy. BEUC outlines various ‘positive outcomes’ of the review, including ‘the ambition to use trade deals as a tool to spur co-operation between those public authorities all over the world’ and ‘to make the EU’s internal and external policies more coherent’, as well as what BEUC believes requires further clarification or extra work. See: LNB News 19/02/2021 7.


The Cabinet Office has issued Procurement Policy Note 02/21 (PPN 02/21), highlighting key requirements for public procurements and public contracts subject to the World Trade Organization Government Procurement Agreement (WTO GPA) and EU-UK TCA. PPN 02/21 applies with immediate effect and sets out the relevant ongoing requirements for in-scope procurements in accordance with the UK’s international obligations under the WTO GPA and TCA, which came into effect from 1 January 2021. While the domestic public procurement regulations are already broadly in line with the UK’s obligations under the WTO GPA, they do not (yet) fully reflect the UK’s obligations under the TCA. Contracting authorities therefore need to read certain obligations under the TCA into the existing rules in order to ensure compliance pending any substantive update to the domestic public procurement regime. See: LNB News 19/02/2021 79.


International trade

The Cabinet Office has published new promotional material for stakeholders on moving goods between GB and France. Subjects covered in the February 2021 Technical webinar include the exchange of views on logistics, customs, and SPS, as well as views for the future, views on planning for 1 April and 1 July, and industry views on what is most urgent to cover in future engagement. See: LNB News 24/02/2021 48.

The Foreign, Commonwealth & Development Office has published the Partnership, Trade and Cooperation Agreement between Albania and the UK, which was presented to Parliament in February 2021. According to Article 12 of the agreement, it will enter into force ‘on the later of the date on which the EU-Albania Agreement ceases to apply to the UK or the date of the later of the Parties’ notifications, by which the UK and Albania notify each other that they have completed their internal procedures’. See: LNB News 22/02/2021 79.

The Centre for European Reform (CER) has published a report which explores the future of the UK services trade following the end of the Brexit transition period. The report acknowledges the UK’s position as what it labels a ‘services superpower’, but questions what the future holds as 56% of annual services exports are from foreign-owned business. Several suggestions are made as to how the UK could create new opportunities and increase investment in the services market. These range from prioritising policy stability after years of uncertainty surrounding Brexit, to ensuring the free flow of data so that companies are not discouraged from moving personal and commercial data in and out of the UK. See: LNB News 22/02/2021 56.

The European Commission has unveiled its future trade strategy. Intended to be ‘open, sustainable and assertive’, it centres around the concept of ‘open strategic autonomy’. World Trade Organization (WTO) reform has been recognised as a ‘priority’, alongside key objectives to contribute to the EU’s post-coronavirus economic recovery and encourage the ‘transformation of its economy to a climate neutral one’. Meanwhile, the EU will adopt a ‘tougher, more assertive’ approach towards the implementation and enforcement of its trade agreements to ensure they ‘deliver the negotiated benefits’. See: LNB News 19/02/2021 29.

The Department for International Trade (DIT) has issued an update on the third round of negotiations for a UK-New Zealand Free Trade Agreement (FTA) that took place between 25 January 2021 and 9 February 2021. The fourth round of talks is scheduled to take place in April 2021. See: LNB News 18/02/2021 42.





Corporate analysis: This News Analysis summarises the latest guidance from the Corporate Governance Institute relating to the holding of company general meetings and AGMs during 2021 in the context of ongoing pandemic restrictions and concerns. See News Analysis: Company general meetings and AGMs in 2021 and LNB News 24/02/2021 81.




Directors’ duties

Corporate analysis: In Fairford Water Ski Club v Cohoon & another [2021] EWCA Civ 143, [2021] All ER (D) 49 (Feb), the Court of Appeal held that there had been no breach of section 317 of the Companies Act 1985 (CA 1985) (now section 177 of the Companies Act 2006) (CA 2006) by Mr Cohoon. The nature of Mr Cohoon’s interest in Craig Cohoon Watersports (Watersports) had been sufficiently disclosed to Fairford Water Ski Club’s directors before it entered into a management agreement with Watersports for the period 2007 to 2017. The Court of Appeal’s judgment provides helpful guidance on the proper interpretation of CA 1985, s 317 as well as its successor, CA 2006, s 177. The central question was whether the other directors were ‘fully informed of the real state of things’ at a point before the contract was finalised. The court’s judgment also gave an indication of the potential application of CA 2006, s 1157 to claims of this nature. Written by Hugh Sims QC and Katie Gibb, barristers, and Charlotte Mallin-Martin, pupil barrister, Guildhall Chambers. See: Directors’ duties to disclose conflicts of interest (Fairford v Cohoon).


In Langer v McKeown and another [2020] EWHC 3485 (Ch), [2020] All ER (D) 125 (Dec), the High Court found that the actions of a company’s largest shareholder (the respondent) had unfairly prejudiced a minority shareholder (the petitioner) in a number of ways. This included causing the company and its subsidiaries to pay an unjustified or excessive salary to various of the respondent’s family and friends, selling one of the company’s subsidiaries at an undervalue to a company controlled by the respondent, and diverting a business opportunity to himself. Taken together, the instances of unfair prejudice had caused material financial damage to the petitioner and she was entitled to a remedy for them. It was appropriate that the respondent should purchase her shares at a price to be determined.


Corporate governance

The fifth and final report from the Hampton-Alexander Review has been published. The review was designed to report on and increase the representation of women in senior leadership positions and on boards of FTSE 350 companies, from 2016 to 2020. The review was an independent, voluntary and business-led initiative, which has been supported by the government. The report notes that ‘enormous’ progress has been made over the last ten years, although this is principally in non-executive director roles. See: LNB News 24/02/2021 60.

The Investment Association (IA) has outlined its expectations of companies on issues including climate change, diversity and executive pay, ahead of the 2021 AGM season. According to the IA, investment managers will be ‘turning up the pressure’ on companies to improve ethnic diversity on their board and to report on climate-related risks. See: LNB News 24/02/2021 30.

Glass Lewis has published its Public Company Engagement Review for 2020 (the Review). The Review analyses Glass Lewis’ engagement levels with public companies and their shareholders in an effort to increase transparency. It also provides an insight into Glass Lewis’ public company engagement initiatives. See: LNB News 15/02/2021 84.





The Financial Reporting Council (FRC) has made some changes to its principles for operational separation of the audit practices of the ‘Big Four’ audit firms (PwC, Deloitte, EY and KPMG) originally published in July 2020. The changes follow the FRC’s review of the Big Four firms’ implementation plans for the principles and discussion of the plans with the firm. It is now content for the firms to move to the next stage of implementation. See: LNB News 23/02/2021 116.




Info law and TMT

Data protection

The Department for Digital, Culture, Media & Sport (DCMS) has published an update from the government on its progress relating to the call for views and evidence on the operation of the ‘representative’ action provisions of the DPA 2018. The government has decided not to introduce new legislation as ‘there is no strong evidence’ suggesting the ICO ‘cannot or will not investigate serious, singular breaches of the legislation or systemic failings’. See: LNB News 24/02/2021 79.


The DCMS has published its annual report on the UK’s cybersecurity sector. The report found that the ‘growing’ cybersecurity industry attracted record investment in 2020, despite the coronavirus pandemic, with businesses raising over £821m—more than twice the amount raised in 2019. This year’s survey also suggests that around 54% of firms are now based outside of London and the South East, showing flourishing cybersecurity clusters in Scotland, Northern Ireland and North West England. See: LNB News 18/02/2021 14.

The National Cyber Security Centre (NCSC) has published its third annual report to provide transparency on the efforts and achievements of the Active Cyber Defence (ACD) programme, as well as evidence of its effectiveness. ACD’s progress includes maintaining the Takedown Service, which reduces ‘badness’ on the internet, acquiring a better understanding of how to instruct organisations through adoption, keeping track of email security standards and developing a ‘prototype capability to detect subdomain hijack vulnerability at scale’. See: LNB News 19/02/2021 75.



The European Data Protection Supervisor (EDPS), Wojciech Wiewiórowski, has published an Opinion on the TCA and an agreement on the security procedures for exchanging and protecting classified information agreed between the EU and UK (currently applied on a provisional basis). While the EDPS welcomes the two agreements, the Opinion expresses regret that: (a) the protection of personal data has been negotiated in a trade agreement (the TCA) rather than using the established mechanisms provided in EU data protection legislation; and (b) that certain safeguards are missing from the TCA. See: LNB News 23/02/2021 27.




New technologies

The Department for Digital, Culture, Media & Sport has published its response to the House of Lords Select Committee on Artificial Intelligence’s December 2020 report, ‘AI in the UK: No Room for Complacency’. Responding to the Committee, the government ‘fully recognises the critical importance’ of establishing public trust in artificial intelligence (AI) and data technologies. Further, following the Committee’s comments on the jobs, ie that ‘[t]here is no clear sense of the impact AI will have on jobs’, the government provides that ensuring the public is equipped for the future’s labour market is also ‘critically important’, citing the ‘Future of Work’ as a key policy area across governmental departments. See: LNB News 23/02/2021 78.





The Cabinet Office has published its roadmap out of the current coronavirus lockdown in England. The roadmap contains four main steps to easing restrictions. Before it is possible to proceed to the next step, an assessment of the previous step will be undertaken using four tests. Because of a lag between making changes and seeing this reflected in the data, this assessment will occur after a minimum of five weeks from the date the last step was taken. At all four steps, the guidance will still be that people should continue to work from home where they can. See: LNB News 22/02/2021 95.

The Scottish Government has also updated its Strategic Framework, setting out the phased and careful approach to easing coronavirus lockdown restrictions. The phased return of education will be prioritised, followed by the increased limit on outdoor mixing between households to four people from two households. The next phase will see the stay at home restriction lifted and essential retail reopened, while the final phase will involve the reopening of non-essential retail, hospitality and services like gyms and hairdressers. There is likely to be at least a three-week gap between each phase of easing to assess the impact of changes. Ongoing financial support will continue to be available to businesses. See: LNB News 24/02/2021 14.


In Uber BV and others v Aslam and others [2021] UKSC 5 the Supreme Court held that whether a contract is a ‘worker’s contract’ is a matter of statutory interpretation, not contractual interpretation. That involves taking a purposive approach which, in the employment context, is to protect those who are vulnerable as a result of their subordination to, and dependence upon, another person in relation to their work. In the case of Uber, the employment tribunal’s findings on the relative degree of control exercised by Uber and drivers respectively over the service provided to passengers justified its conclusion that the drivers were workers. Other gig economy businesses that are in a position of control and dictate the way in which a service is provided are also likely to find that their staff have rights as ‘workers’ and are therefore entitled to the national minimum wage and holiday pay. See News Analysis: Supreme Court confirms that Uber drivers are workers (Uber BV and others v Aslam and others), LNB News 19/02/2021 67 and Case Digest: [2021] All ER (D) 89 (Feb).


In Parris v (1) Ajayi (2) SHC Clemsfold Group (3) SHC Rapkyns Group [2021] EWHC 285 (QB) the High Court held that where a claimant seeks damages in a defamation action on account of things said or written by the employer in the lead-up to a dismissal, then such losses may not be pursued if they in fact arise as a result of the happening of the dismissal, since they are covered by the Johnson exclusion principle and hence the sole remedy lies instead in bringing an unfair dismissal claim in the employment tribunal. See News Analysis: Defamation losses not claimable where Johnson exclusion principle applies (Parris v (1) Ajayi (2) SHC Clemsfold Group (3) SHC Rapkyns Group). .


HMRC has published the latest version of its employer guides for benefits in kind (CWG5) and PAYE and National Insurance contributions (CWG2) to be used from 6 April 2021. See: LNB News 23/02/2021 39.


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