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In this issue:
Risk & Compliance
Commercial
Corporate
Information Law & TMT
Employment
Brexit
LexTalk®In-house: a Lexis®PSL community
Coronavirus (COVID-19)
Law360, London: More than 2,000 consumers have lost over £4.6m to fraudsters seeking to exploit fears over the coronavirus (COVID-19) pandemic, figures published on Friday 29 May 2020 reveal. See News Analysis: Fraudsters exploiting coronavirus (COVID-19) cheat consumers out of £4.6m.
Risk & Compliance monthly highlights
This month’s edition of Risk and Compliance highlights includes: (1) crime prevention; (2) AML & CTF; (3) GDPR and data protection; (4) a selection of other news and updates; and (5) all the latest new and updated content. See: Risk & Compliance monthly highlights—May 2020.
Crime prevention
Law360, London: The European Commission is considering tightening the rules for recovering the €110bn (US$123bn) proceeds of criminal activity per year after finding that just 1% of illicit assets are confiscated by EU authorities. See News Analysis: EU weighs tightening criminal asset rules as seizures lag.
Data protection
MLex: On 22 May 2020 Twitter saw a major data-breach probe by Ireland’s data protection supervisory authority move forward as fellow enforcers across the EU are invited to weigh in on the fairness of its provisional decision and fine against the social media giant. It is the first time that a cross-border probe into a US tech giant under the EU’s strict General Data Protection Regulation (the GDPR), Regulation (EU) 2016/679 has reached this stage of the law’s ‘one-stop shop’ mechanism for national regulators to co-ordinate on decisions and penalties for breaches that affect more than one Member State. See News Analysis: Twitter sees Irish GDPR breach decision forwarded to EU supervisory authorities for feedback.
Law 360: More than 6,000 EasyJet customers are gearing up to test data protection rules in a group lawsuit seeking damages from the airline after a cyberattack left their personal details exposed to hackers, lawyers representing the claimants said. See News Analysis: EasyJet hit with £18bn group claim.
Privilege
Law360, London: A London judge ordered Barclays to hand over more than 1,500 documents detailing legal advice it received during its dealings with Qatar at the height of the financial crisis, ruling on 1 June 2020 as the trial approaches that the materials are no longer privileged. See News Analysis: Barclays forced to give up PE firm legal docs in fraud suit.
Cybersecurity
The Department for Digital, Culture, Media & Sport (DCMS) has published a response to its consultation on proposed changes to the Cyber Security Breaches Survey. Following the feedback received, DCMS has decided to keep the Cyber Security Breaches Survey in its current format. See: LNB News 28/05/2020 50.
Coronavirus
The British Institute of International and Comparative Law has published a second concept note (Concept Note 2) on the effects of the coronavirus pandemic on commercial contracts, which sets out in detail the steps that might be taken to minimise the risk of a deluge of disputes and to increase the prospect of constructive outcomes. See: LNB News 02/06/2020 39.
The World Trade Organization has released a report on the impact of coronavirus on the services trade. The report highlights the importance of services to enhance economic activity and the impact that coronavirus has had on social and economic inclusiveness. It is suggested in the report that the services trade will ‘be key to economic recovery globally’ and services like telecommunications are essential for online supply whereas services such as transport and logistics are vital to support economic growth. The report concludes that ‘the crisis has led to greater reliance on online services in a number of sectors as consumers develop new habits to cope with social distancing measures imposed to combat the pandemic’. See: LNB News 01/06/2020 7.
The Ministry of Housing, Communities and Local Government has announced that the government is currently collaborating with high street businesses, landlords and trade associations to publish a code of practice designed to support said businesses through the coronavirus pandemic. The code’s objective is to facilitate a speedy recovery and to protect viable businesses, and comes as UK Finance reveals that lenders have been showing commercial borrowers the required flexibility to get through the crisis. Clarity and reassurance regarding rent payments will also be provided by the code, including rent arrears payments and treatment of sub-letter and supplies. The government has stated that the implementation of the code will be temporary, however, it has not ruled out making it mandatory should this become a necessity. See: LNB News 29/05/2020 89.
Elizabeth Williams, Stuart Doxford & Tom Bowen of Simmons & Simmons consider the resilience of the English and Welsh courts during two key external forces being the coronavirus pandemic and the UK leaving the EU. See News Analysis: COVID-19, Brexit and the Resilience of the English & Welsh Courts.
Confidential information
An application to continue an interim injunction to protect confidential information relating to a monthly discount used by the claimant companies as part of a formula for pricing sales of iron ore has been dismissed. The media defendants argued that there was an important public interest in reporting the information since the claimant companies had a very strong position in a hugely important and opaque market, and the information supported market transparency about the price of a globally important commodity. The court held that the discount information was confidential, but that it was in the public interest to enable reporting, and dismissed the injunction application. Written in partnership with Imran Benson, barrister, at Hailsham Chambers. See News Analysis: Publication of confidential pricing information (Fortescue Metals v Argue Media).
E-commerce
The European Registry for Internet Domains (EURid) and the Ecommerce Foundation have made their partnership official by announcing that they will work together to improve the trust of online consumers, retailers and brand owners in .eu online stores. EURid already performs daily checks on .eu domains by using tools such as the abuse prevention and early warning system, which is an acclaimed artificial intelligence solution, used to identify online stores likely to be selling counterfeit products. However, EURid’s new partnership with the Ecommerce Foundation will strengthen the fight against online abuse by adding abusive .eu domain names into the Ecommerce Foundation’s Scamadviser.com database. General Manager of the Ecommerce Foundation, Jorij Abraham, explained that ‘by combining intelligence and the tools developed at both sides, we are now better able to inform consumers and businesses about legit and possibly fraudulent online stores’. See: LNB News 28/05/2020 18.
The Department for Business, Energy & Industrial Strategy has published ten factsheets on the Corporate Insolvency and Governance Bill 2020. The factsheets explain each of the measures in the Bill, which will introduce new corporate restructuring tools to maximise companies’ chances of survival, temporarily suspend parts of insolvency law and amend legislation to temporarily relax company filing and annual general meeting requirements. See: LNB News 02/06/2020 11.
Corporate governance
The Chartered Governance Institute (CGI) (previously known as ICSA: The Governance Institute) has published an updated guidance note which outlines the terms of reference for the risk committee of a company that wishes to fully comply with the UK Corporate Governance Code and the FRC Guidance on Risk Management, Internal Controls and Related Financial and Business Reporting. The note ‘draws on the experience of company secretaries and is based on best practice as carried out in some of the UK’s largest listed companies’ and will be of particular relevance to banks and insurance firms that are required to have a separate board risk committee under the rules of the Prudential Regulation Authority and the Financial Conduct Authority. See: LNB News 01/06/2020 17.
Restructuring & insolvency
In Re ASA Resource Group plc (in administration) (No. 02167843) Dearing v Skelton and another (joint administrators of ASA Resource Group plc) [2020] All ER (D) 05 (Jun), the case concerned the powers of directors of a company in administration to appoint additional directors, open a bank account, rectify the share register and manage the company’s assets to the extent that the administrators are unable or unwilling to do so. The applicant (who was a member, creditor and director of the relevant company in administration) made an application under para 74(1) of Sch B1 to the Insolvency Act 1986 for proposals in order to secure the successful return of a company from the administrators. This application would be dismissed, with the Chancery Division finding that the administrators had addressed all the relevant issues raised by the applicant and had not acted unfairly. The judgment is available at: [2020] EWHC 1370 (Ch).
Share incentives
Share Incentives analysis: We have partnered with ProShare to provide a monthly news piece providing industry insight from the ‘voice of employee ownership’. This month Zoe Denny-Thomas, head of member services at ProShare, considers share incentive plans (SIPs). See: ProShare industry insight—the Share Incentive plan—an opportunity for all employees?
Joinup, a collaborative platform created by the European Commission, has considered the impacts that the coronavirus pandemic has had on the EU’s Digital Strategy, ‘Shaping Europe’s Digital Future’. The Digital Strategy set out ambitious goals, hoping to put Europe in ‘a position to be the trendsetter in the global debate around digital transformation.’ While the strategy has successfully anticipated most of the issues raised by coronavirus, the Commission suggested many areas including digital sovereignty, interoperability and supporting digital transformation of the private sector that could still be better reinforced. See: LNB News 03/06/2020 83.
Leader of the House of Commons, Jacob Rees-Mogg, has written to the Chair of the Joint Committee on Human Rights, Harriet Harman, stating that he has declined to adopt the Committee’s Private Members’ Bill following a reply to Harman from the Secretary of State for Health, Matt Hancock, in which he explained that new legislation to govern contract tracing during the coronavirus pandemic is not necessary. According to the Committee, their Bill would provide additional protections for data gathered under the Test Trace Isolate programme. Following Rees-Mogg’s letter, Harman has written back to Hancock to express that the Committee’s concerns regarding data protection still persist, and that his assurances in relation to this protection ‘are not met in the current legal framework’. See: LNB News 01/06/2020 41.
The European Commission has put forward its proposal for a recovery plan following the coronavirus crisis and an emergency temporary recovery instrument, Next Generation EU. The Commission has also unveiled its adjusted Work Programme for 2020, which has the scope of prioritising the actions needed to propel Europe's recovery and resilience. Among other things, the programmes include strengthening industrial and technological presence in strategic sectors, including artificial intelligence, cybersecurity, supercomputing and cloud, building a real data economy as a motor for innovation and job creation and increased cyberresilience. See: LNB News 29/05/2020 41.
The European Data Protection Board (EDPB) has published its opinion on the draft Standard Contractual Clauses (SCCs) for controller-processor contracts submitted to the EDPB by the Slovenian supervisory authority. That opinion was recently adopted at the EDPB’s 28th Plenary. See: LNB News 29/05/2020 86.
MLex: Binding corporate rules (BCR), a favoured personal data-transfer framework for multinational corporations, are getting bogged down in the EU’s approvals process. Companies wanting to join the likes of BMW and Cisco in creating BCRs face a process of several years. With standard contractual clauses (SCCs)—, the most common transfer framework, facing possible annulment at the EU’s top court, companies wanting to transfer EU citizens’ personal data have no good options. See News Analysis: Comment—multinationals lack options for EU data transfers with BCRs bogged down.
The Department for Digital, Culture, Media & Sport (DCMS) has published a review in which it assessed how effective the Network and Information Systems Regulations 2018 (NIS Regulations), SI 2018/506, which have been in place for two years, have been, and how the regulations have been implemented as well as the costs and benefits incurred. The evidence gathered for the review suggests that, while it is too early to judge the long term impact of the NIS Regulations, organisations are taking measures to ensure the security of their networks and information systems as a result of the NIS Regulations being in place. Taking account of the evidence as set out in the report, DCMS recommends retaining the NIS Regulations, but making amendments in order to address a number of areas for improvement. See: LNB News 29/05/2020 45.
The Chancellor of the Exchequer, Rishi Sunak, has announced changes to the Coronavirus Job Retention Scheme (CJRS), with HMRC contributions to furloughed employee wages tapering progressively from 1 August until the scheme closes on 31 October, and flexible furloughing being possible from 1 July, as well as an extension of the Self-Employment Income Support Scheme (SEISS) to allow a second three-month grant in August 2020. See News Analysis: Chancellor details changes to Coronavirus Job Retention Scheme (CJRS) and Self-Employment Income Support Scheme (SEISS).
There are no plans at this time to commence the provisions on emergency volunteering leave in the Coronavirus Act 2020 according to a report by the Department of Health and Social Care (DHSC) dated 29 May 2020. Sections 8 and 9 and Schedule 7 to the Coronavirus Act 2020 provide for a temporary new form of statutory unpaid leave for employees and workers who wish to volunteer in the health and social care sectors during the outbreak of coronavirus. These provisions were intended to come into force should the delivery of health services be at risk as a result of the pandemic. The DHSC report confirms that to date there has not been a significant risk to health services and a surge in trained volunteers has not been required so these provisions have not been introduced. See: LNB News 01/06/2020 12.
The Health and Safety Executive (HSE) has said it will look closely at concerns about social distancing and coronavirus (COVID-19) to secure compliance with the law, and has made clear that duty holders have a responsibility to protect workers and others against the risk of coronavirus infection in the workplace. In this article concerning coronavirus and the application of the Health and Safety at Work etc Act 1974 (HSWA 1974), Paul Rogers of Outer Temple Chambers considers what the HSE has said about enforcement, and what guidance there is to assist employers to make decisions about protective measures, and raises some questions about the difficulty of proving a material risk of transmission in relation to the so-called ‘two metre rule’. See News Analysis: Coronavirus (COVID-19)—HSE guidance, enforcement and social distancing at work.
The Home Office has updated its guidance webpage ‘Coronavirus (COVID-19): advice for Tier 2, 4 and 5 sponsors’ on 3 June 2020 with a new heading, ‘Scanned documents’, which confirms that both prospective and current sponsors may submit scanned copies of supporting documents due to the coronavirus pandemic. The same heading also states that on-site compliance visits have been suspended. These arrangements will apply until 30 June 2020, when they will be subject to further review. See: LNB News 03/06/2020 53.
IR35
David Smith, partner at DLA Piper and responsible for the Leeds corporate tax practice, and Richard Johnson, senior associate in the Leeds DLA Piper tax team, consider the latest version of the legislation that will extend the off-payroll IR35 regime to medium and large private sector entities from April 2021. See News Analysis: Off-payroll IR35 regime—Finance Bill 2020 amendments.
UK-EU negotiations
The Lords European Union Committee questioned Chancellor of the Duchy of Lancaster, Michael Gove, and UK Chief Negotiator, David Frost, on progress in negotiations on the future UK-EU relationship on 28 May 2020. This session followed a similar line of questioning to the evidence session with the Commons Future Relationship with the European Union Committee on 27 May 2020, expanding on some subjects in a little more detail. In evidence, Frost was questioned on timing for the High Level Conference due to take place in June 2020 and whether it was considered a watershed moment given that the UK and EU are far from the broad outline agreement the UK hoped to reach by that point. The date is yet to be confirmed, but Frost indicated that it might possibly go ahead in the last week of June 2020, and he hoped that it might provide new impetus for further negotiating rounds in June/July 2020. Beyond that point, it was noted that the UK will need to balance the need to continue talks for as long as it is constructive against the need to provide certainty and prioritise domestic readiness for the end of the transition period on 31 December 2020. See: LNB News 01/01/0001 2615.
Trade deal
MLex: The UK and EU will struggle and likely fail to reach a full Free Trade Agreement by the end of this year, former Chancellor Philip Hammond has said, adding his voice to a growing list of political onlookers expecting no deal. He called on negotiators to opt instead for an interim trade framework achievable by the end of 2020 and that co
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