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It is a happy new year, so far. Clients have welcomed more positive news from the markets. Many banks have gained a temporary reprieve from tighter capital rules, implementation of new requirements being postponed until 2019. And the Funding for Lending Scheme seems to have had an impact – we have seen this in pricing and in availability of debt for clients.
The tone from our market contacts has been of a further improvement in sentiment and cautious near-term optimism. We have seen this reflected in a year of improving opportunities for clients and deals being done.
If there is one theme for us, for the year ahead, it is to focus on collaborative working and efficiencies for clients. We have clear client feedback that their expectation for suppliers is to continue to provide best advice but at the same time to
help them in mitigating costs. We are exploring with other panel firms of clients the opportunities and solutions which can be best achieved in working together.
Clients are responding well to this approach, and support a proactive rather than reactive approach. As a law firm focussed on Scotland, with a reputation for the highest standards, practical experience and solution driven advice, we believe we are an attractive partner for this work.
A word on next year’s Scottish independence referendum. Are your clients uncertain, or just uninformed, about the possible implications of a “yes” vote? Please get in touch if clients are thinking of investing in Scotland and are looking for clarity. Our team is closest to the action and can answer their questions.
Bruce StephenPartner, Head of Banking0131 656 [email protected]
Focus on... procurement challenges2012 was a busy year for the Scottish Ministers in fighting off challenges to the making of schemes and orders and the award of public contracts in the transport sector.
Most publicised was the attempt to have the Aberdeen Western Peripheral Route project declared invalid through asserted failures to comply with environmental directives, which reached the UK Supreme Court in July (Walton v The Scottish Ministers). Whilst defending in principle the right of an individual to object to such schemes, the Court dismissed the action. So, after more than seven years of planning, this major roads project can proceed.
In retendering the ferry services contracts for the Northern Isles routes, Ministers' preferred bidder selection was challenged,on the grounds that the winning bid did not deliver the specified services requirement. Ministers were successful in lifting a prohibition on completing the appointment, which the court decided on the balance of convenience as this was a lifeline service which needed to be maintained and would be threatened by any delay to await further litigation (Shetland Line (1984) Limited v The Scottish Ministers).
In Amey LG v The Scottish Ministers, a losing bidder in a tender for trunk roads maintenance contracts had submitted by far the lowest bid. This bravely was judged by Ministers to carry significant unacceptable risks, to be neither economically viable nor sustainable, and not to be genuine. The loser’s complaint was defeated, but with some concern evident about the comment that it was not a genuine bid. This may be the first case of a losing but lowest bidder being the challenger.
In the Shetland Line and Amey LG cases, Christine O’Neill, our Head of Public Law, acted as Solicitor Advocate for the Scottish Ministers. Click on each case above to see the judgments.
Your regular Scottish Banking & Financial Services bulletin from Brodies LLP
Hadrian’s Wall
Seminars held in Edinburgh towards the end of 2012 by Scottish Financial Enterprise (SFE) and the David Hume Institute began to get into the meat of the implications of independence for Scottish financial services. SFE, as a trade body, is taking a neutral stance presently, in contrast to the CBI, which is opposed until the case for independence is proven.
The SFE event highlighted five areas of focus for its financial services members,
namely EU membership; the currency and the central bank; the single market for financial services; financial regulation and the transition period. To read a briefing note of the discussions click here.
The David Hume event involved the presentation of a series of papers. The Institute for Fiscal Studies looked at the fiscal context; Gavin McCrone considered the scope for economic policy after independence; Owen Kelly of SFE covered the financial services industry perspective, re-working the discussions from the SFE event; Brian Quinn, a former
Deputy Governor of the Bank of England and also previously Chairman of Celtic FC, addressed economic and financial policy including currency, debt management, regulation and resolution; and Cesar Colino, Associate Professor, Universidad Nacional de Educación, spoke on devolution-max a la basque as a model for a Scotland within the UK.
Serious debate is beginning. To look at any of the five presentations given at David Hume click on the names above.
CREDO Jan
13
Christine O’NeillPartner0131 656 [email protected]
Did you know?
Brodies was ranked 16th in the Guardian’s ‘UK Chambers Top 20’, prompting the newspaper's legal editor to comment: ‘Brodies do as well, if not better, in the rankings than law firms traditionally regarded as the most prestigious in the UK.’
Market ReportsLegal Directories The latest directory editions were published towards the end of 2012. Brodies maintained the clear blue water separating us from other firms in the Scottish market. We were ranked first in Chambers & Partners in terms of Band 1 and Band 2 rankings, our total of 33 showing our comprehensive full service offering across Scotland. The next four Scottish firms had scores of 27, 23, 19 and 18 respectively. We achieved 35 Tier 1 and 2 rankings in Legal 500.
Historic First for Scotland The new Land and Building Transactions Tax (Scotland) Bill has been introduced into the Scottish Parliament. For the first time the Parliament will be able to both set and collect a proportion of its own revenue. From April 2015 the LBTT will replace UK Stamp Duty Land Tax in Scotland.
Click here to read a brief news release from the Scottish Government, and if you would like any further information please conatct our Director of Corporate Tax, Isobel d'Inverno, who has been closely involved in the preparatory work, on [email protected]
Top of the Deals Tables In the independently prepared deals tables published by Scottish Business Insider Magazine for the first three quarters we are currently in first place with 104 deals – with a disclosed deal value of £881million. The aggregate disclosed and undisclosed value of our deals so far this year in fact exceeds £10billion!
Highlights of our reported deals include advising Drum Property Group in Aberdeen on the largest property finance transaction in Scotland in 2012, and then advising Resolution Property Group on the financing of the acquisition of the Ocean Terminal Shopping Complex in Edinburgh, where the former Royal Yacht Britannia is moored.
SnapshotJohn Stephen,
Banking Trainee0131 656 0230
John joined our Edinburgh banking team as a trainee in July 2011 and will qualify later this year. He has just returned from a secondment to The Co-operative Bank’s Renewable Energy and Asset Finance team based in Manchester, which focused on financing wind, hydro and biomass projects. At Brodies he has been involved in a wide range of transactions, including loan portfolio sales, property and corporate finance.
If you weren't a lawyer, what would you be?
I’d take my chances that 'The Thick of It' isn’t true to life and have a career in politics.
What is the best advice you have received in your legal career to date?
Think carefully about how to present advice to clients and your client’s position to the other side. To achieve the best results for clients you need to appreciate the commercial context and their key drivers for the transaction and communicate with these in mind. From day one at Brodies it was made clear that how you put a point across is often as important as the substance of the issue you’re trying to resolve.
If you were given a wild card entry for the Glasgow Commonwealth Games 2014 which event would it be for and why?
One of the distance races, the 5k or 10k. The training would keep me fit and after a respectable start I’d hopefully go unnoticed as a distant last across the finish line
Kilting CornerThe ancient Scots law obligation of warrandice is a warranty against defects in the seller’s title to heritable property. The obligation is one of indemnity, with the granter (usually a seller or a chargor) being obliged to indemnify the grantee/purchaser/ chargee in respect of any loss which he may suffer.
The UK Supreme Court, in Morris v Rae, looked recently at a situation which had not previously been encountered in relation to warrandice. Warrandice historically was characterised as a contingent obligation, arising only upon eviction from the property. The court proceeded on the basis that a threat of eviction would be sufficient to justify a claim, and considered the requirements that must be satisfied if a claim on that basis was to succeed. In doing so it appeared to introduce an element of flexibility in the approach to assessing the character of long established Scots remedies, making them relevant to modern times whilst respecting the old authorities.
It was almost too much for the English judge, Lord Walker, who commented, “To one still largely unfamiliar with the intricacies of Scottish conveyancing and Scottish civil procedure, it is surprising that the soundness of the appellant’s claim for damages for breach of warrandice should depend, not on the assumed truth of the elaborate pleading which is before the Court, but on the assumed truth of a different pleading which has not been formulated even in draft… these difficulties cannot however amount to grounds for a principled dissent.”
Click here to see a copy of the judgment which includes a full explanation of the obligation of warrandice.
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Credo is the Latin root of credit and trust which emphasises the underlying credibility of the borrower's promise to repay; the foundation stone of our financial system. If you have any comments or questions on the content of Credo please email [email protected] or your regular Brodies contact. To unsubscribe please click here.
Christine O’NeillPartner0131 656 [email protected]
