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In house lawyers forumMarch 2016, Nottingham & Birmingham
Introduction
Richard Nicholas
Employment law updateModern Slavery ActJames Tait
Modern Slavery Act 2015Modern slavery - slavery, servitude, forced/compulsory labour and human trafficking
World’s fastest growing organised crime worth USD 38-50 billion a year
ILO estimate: 21 M men, women and children work in modern slavery conditions today
Modern Slavery Act 2015Slavery and Human Trafficking statementAny organisation who:• is a body corporate or partnership• supply goods or services in the UK, and• has a total annual turnover of more than £36 millionmust prepare a slavery & human trafficking statement for each financial yearTurnover includes any subsidiary and excludes trade discounts, VAT and some other taxes.
Modern Slavery Act 2015So who does that apply to?• Local authorities – probably• Charities and universities if they fulfil the
relevant criteria• Organisations with a global turnover of £36m
or moreAnd even if an organisation does fall within the s54 threshold it may be required to assist customers and suppliers with their supply chain analysis
Modern Slavery Act 2015What does your organisation have to do?• Publish a slavery and human trafficking
statement on its website - with a prominent link to the statement on the website’s home page.
What should the statement include?No mandatory requirements, but may include:
• its structure, business model and supply chains • its policies relating to slavery and human
trafficking• the parts of its business and supply chains• where there is a risk of slavery and human
trafficking taking place, and the steps it has taken to assess and manage that risk
What should the statement include? (cont.)• its effectiveness in ensuring that slavery
and human trafficking is not taking place in its business or supply chains, measured against appropriate key performance indicators
• its due diligence processes in relation to slavery and human trafficking in its business and supply chains
• the training about slavery and human trafficking available to its staff.
Modern Slavery and Human Trafficking StatementThe statement needs approval at a senior level:• In the case of a company, the statement must
be approved by the board of directors and signed by a director
• LLPs – the LLP members must approve the statement and it must be signed by a designated member
• Other types of partnership – A partner must sign the statement
Modern Slavery and Human Trafficking StatementWhen?• If your organisation’s financial year ends
on/after 31 March 2016 the first statement must be made in respect of financial years ending on or after 31 March 2016.
• If your organisation’s financial year ends before 31 March 2016 it does not have to make a statement regarding the current financial year (but will for next year).
Modern Slavery and Human Trafficking StatementWhat if we don’t bother?• The Secretary of State may enforce the duty
by way of injunction• Reputational risk
Monitoring EmailsBarbulescu v Romania [2016]• ECtHR decision• Dismissed for personal internet use at work• Employer accessed private messages sent to
the employee’s friends and family relating to personal matters
• Dismissal upheld – proportionate interference with Article 8 rights
Monitoring EmailsBut beware:• Unusual for policy not to tolerate at least
some personal use• Data Protection Act still applies• Limited application
Our Modern Slavery product• Board minutes - for consideration and, if agreed, approval of the
organisation’s modern slavery and human trafficking statement - once prepared.
• Anti-slavery policy - for an organisation to detail its own specific approach and publish within the organisation.
• Slavery and human trafficking statement - for an organisation to detail its own approach and publish via its website as required by Section 54.
To help you get started tailoring these templates to your organisation we have included one hour of phone or email time to enable you to discuss development of these templates with one of our specialists, as part of this Modern Slavery Act product. The product is a fixed price of £750+VAT.
Any questions?
Are you a senior manager?The extension of the FCA’s Senior Managers Regime to in-house lawyers
Catriona Lothian
Senior Management Functions• FCA and PRA have specified SMFs
• BUT the list is not exhaustive
• ‘Also important to identify any other individuals who have overall responsibility for an
activity, function or area’ - FCA
What about the legal function?‘We now recognise that some confusion
exists in this area’ - FCA
• ‘Providing legal advice to the Board would not automatically bring a General Counsel within scope’
• ‘Rather we should focus on individuals having overall responsibility for a firm’s legal function’
Impact on privilege?• is a lawyer participating in a decision or
simply ancillary to a decision?• perception that a lawyer might be pressured
by regulators to disclose privileged information
• implications for legal professional privilege if a lawyer is treated as part of senior management?
• potential effect on the way firms structure businesses and decision-making processes
Consultation plans• FCA consultation paper ‘in due course’
seeking views on pros and cons of capturing those with overall responsibility for legal function
• What would be the impact on you and your firm? Have your say – contact us to be part of the concerted response.
In the meantime…Good faith• ‘firms that have sought to make decisions in
good faith about whether or not approval is needed, on the basis of our published rules and other communications, should not need to change their approach in the interim.’ - FCA
Any questions?
Persons of significant control and influence – are you ready?Emma Grant
A new company register - PSC• Who? All UK companies (non-listed) and LLPs• What? New register to identify and record PSCs
(stipulated information)• When? 6 April 2016 (internal) and 30 June 2016 (file
at Companies House)• Why? Transparency, trust, terrorist funding, tax
evasion• How? Small Business, Enterprise and Employment Act
2015 (SBEEA) plus statutory instruments and guidance
What do companies need to do?• Internal register – 6 April 2016• Reasonable steps to identify PSCs (plus
notices)• Enter required information on register &
update• Available for inspection (free) or copies (£12)• File at Companies House – 30 June 2016• Must have a PSC register – never be blank• Criminal offence if fail to comply
Who is a PSC?“Significant control conditions”• Holds, directly or indirectly, more than 25% of shares• Holds, directly or indirectly, more than 25% of voting
rights• Has the right, directly or indirectly, to appoint or
remove a majority of the board of directors• Has the right to exercise, or actually exercises,
significant influence or control (see guidance – nb minority protections)
• Exercises, or has the right to exercise, significant influence or control over a trust or firm, which itself meets any of above conditions
Indirect ownership / RLEs• Rights might be held indirectly (i.e. corporate groups)• When legal entity holds shares/rights and someone has
majority stake in that entity• Don’t need to enter that person on register unless legal
entity they held interest through is not an RLE• Majority stake: majority voting rights, appoint/remove
majority of board, right to exercise or actually exercise dominant influence
• RLE: meets one or more of four control conditions and keeps own PSC register/DTR5/listed on relevant overseas exchange
• Registrable RLE: only if first RLE in ownership chain
Examples 1. Simple 3. More complex 4. Very complex
2.
50% 50%
UK Company A
20% 20% 20% 20% 20%
P1 P2
UK Company B
PSCs = P1 + P2
100%
P1
UK Company Z
UK Company Y
UK Company X
Company Z PSC register = P1
Company Y PSC register = Company Z
30%
Company X PSC register = Company Y
70%
P1 P2
Overseas Company B (unlisted)
Overseas Company C (unlisted)
No PSC register
UK Company A
No PSC register
Company A PSC register = P2 only (majority stake)“Look through non-
RLE’s”Still need a PSC register stating no PSCs
No PSCs (unless arrangements)
100%
100%
100%
100%
What else will the SBEEA change?• Private co registers may be held at
Companies House (June 2016)• End of annual return – replaced by annual
confirmation (June 2016)• Prohibition on corporate directors (currently
October 2016 – already delayed by 12 months)
Any questions?
Coffee break
Commercial law update
Richard Nicholas
Commercial law update
• Penalty Clauses/ Service Credits
• Indemnity
• In the 5 mins before signature
Quick advert…In house lawyer “checker” Product
- Free second opinion/expert view/check a point– Approx 20 minutes on the telephone- Equivalent to seeing a specialist at their desk- Exclusively for in-house lawyers
Terms and conditions apply ☺
From last time..Parkingeye v Bevis (2015) 2015 SC- £85 for overstaying free parking time –
penalty?
- Genuine pre-estimate of loss?- Deterrent?- Unfair?- Extravagant and unconscionable?- Commercial Justification?
Supreme Court- Heard alongside Cavendish v Makdessi (2015)
SC- Dunlop “test” too rigid – so….
(Several tests, depending on Judgement) “Legitimate Interest”
+“not exorbitant or unconscionable”
[“secondary, not primary obligation”]
So What?- “Genuine Pre-estimate of loss” – not needed.
Instead: - legitimate interest?
“parties have agreed, in order to…..”
- not extortionate “no more than…” “represents…..”
So What?“secondary obligation”
Avoid breach of contract entirely, so: “If Supplier completes by [a] then charges are [£y]”“If Supplier completes by [b] then charges are [£yyyy]”
Deposits – a secondary obligation?- Use “legitimate interest/not extortionate” wording
Service creditsSole remedy for breach?
Scottish Power v BP (HC) 2015- BP required to deliver quantity of gas from a site- Sole remedy for “underdelivery” based upon
default gas price. Replacement gas was more expensive.
- Deliberate action rather than “force majeure”
So What?• When setting service credits consider – what
should happen if there is no delivery (at all).
• “…without prejudice to any other remedies the parties might have”
• Avoid “Genuine pre-estimate of loss” (limiting what is “in the contemplation of the parties”)
Indemnities Capita v RFIB Group (2015) CA
- Sale of company by R to C
- R indemnified C for “services, goods or advice” provided by the company “prior to
the Transfer Date”
- Effect of bad advice – damages accrued daily
Indemnities 2000 - Employee of R gave (wrong) advice 2004 - Sale of Company (+ indemnity)2004 - Same employee notified of mistake (ignored advice) 2005 - Misrepresentation –rectified 2008 - C sought to claim under indemnity
So what?- Consider ongoing indemnities and their scope
- If the intention is to have a clear break pre/post sale then this will need to be clear, otherwise the first cause of loss will continue until any new one intervenes.
In the 5 mins prior to signature• Gordon Ramsey v Love (2015) HC
- Signature applied to a guarantee
- Statute of Frauds (1677)- in writing - signed
Lessons• Liquidated damages clauses/ Service credits
– Save “penalty” clause by following the drafting – legitimate interest, because, unrelated to breach
– Consider your total loss (& whether they’re enough)
• Indemnity– Bear in mind the possibility of continually
accruing damages
Lessons• A signature may not mean someone signed –
check the person had authority
• If you’re looking for quick, free answers to legal questions over the phone…ask about “Checker” today.
Thank you
Questions
Consumer Law UpdatePractical Application of the CRA 2015Alex Watt
Background• “The Consumer Rights Act is the biggest
shake-up in consumer law in a generation. It's aim is to simplify, strengthen and modernise the law, giving people clearer shopping rights” Which
• “The changes are relevant to all consumers and every business which sells directly to them.UK consumers spend £90 billion a month. Transparent rights will help them to make better choices when they buy and save them time and money” Citizens Advice
Higher Profile• “Revealed: 13 major stores' web return rights are
WRONG• Thankfully after we reported the issues to them,
13 of the 17 firms have agreed to review their sites – some have already made changes …. But the following haven't and we've reported them to Trading Standards” MoneySavingExpert
Higher Profile• Citizens Advice Campaign
– “Its estimated a quarter of UK consumers spend more than four hours trying to sort out problems, one in ten having to take time off work to do so”
– “[The CRA] ..should make life easier for shoppers who encountered more than 18 million problems with consumer goods and services over a 12 month period”
• Social media
1. Implementation of the Consumer Rights Directive
The Consumer Rights (Payment Surcharges) Regs 2012 – banning excessive payment surcharges. Payment surcharges must reflect the actual cost of processing the payment
1. Implementation of the Consumer Rights Directive
The Consumer Contracts (Information, Cancellation and Additional Charges) Regs 2013 (“CCR”) • Contracts entered into after 13 June 2014• All consumer contracts with some exceptions (usually
where other legislation applies e.g financial services, package travel)
• Rules for on premises contracts as well as off premises and distance sales contracts
• provision of information to consumers • additional rights for distance sales
The CCR…• In particular:-
– Express prior consent required before additional payments are taken; pre-ticked boxes are not permitted
– Unless the consumer agrees otherwise, goods must be delivered within 30 calendar days of purchase
– No premium rate telephone line for complaints, after sales services etc
2. Unfair Commercial PracticesConsumer Protection from Unfair Trading Regulations 2014 (“CPUT”)• Prohibit traders from engaging in unfair
commercial practices in dealings with consumers
• New civil right of redress for consumers against traders
• Offences carry criminal sanctions ranging from a fine to imprisonment for up to two years
Unfair Commercial Practices..• utility companies demanding payment from non-
customers;• private car-clamping companies;• agents acting for retailers demanding payment
for "civil recovery" from alleged shoplifters• Law Society Guidance - solicitor acting on a sale
or letting of property to a person for personal use or private investment
3. Empowering Consumers• Various (non-statutory) initiatives to give
consumers more rights and powers • Midata
– voluntary scheme to give consumers more access to their transaction and consumption data, to encourage consumers to compare and switch suppliers
– Currently suppliers in 3 key sectors (energy, current accounts and credit cards, and mobile phones), but..
4. Reform of Consumer Law Enforcement Institutions• Abolition of the OFT• Trading Standards - primary enforcer of key
consumer protection legislation• Citizens Advice/Citizens Advice Scotland -
consumer advice, education and consumer advocacy
• The Competition and Markets Authority (CMA) -leadership role in relation to unfair terms enforcement
5. Consumer Rights Act 2015• Came into force on 1 Oct 2015• Consumer - an individual acting for purposes
which are wholly or mainly outside that individual's trade, business, craft or profession.
• Directive “trade purpose is so limited as not to be predominant in the overall context of the contract”
• Trader has burden of proving customer is not a consumer
CRA - Key Terminology• Trader - a person acting for purposes relating
to that person's trade, business, craft or profession, whether acting personally or through another person acting in the trader's name or on the trader's behalf
• Includes the activities of any government department or local or public authority
• Includes activities leading up to or otherwise related to the contract
CRA - Key Terminology• Goods
– Any tangible moveable items including water, gas and electricity supplied in limited volume /quantity, e.g. a bottle of water, a gas cylinder or a battery.
• Digital Content– New category of product treated similarly
to goods – ‘data which are produced and supplied in
digital form’
CRA - Digital Content• Includes computer programs, apps, games, music,
videos and texts, whether accessed through downloading or streaming, from a tangible medium or through any other means
• Includes digital content stored and processed remotely e.g. software supplied via cloud computing.
• Includes digital content supplied as the result of a service e.g. a website design service.
CRA - Supply of Goods• 3 key conditions - goods must be: -
– of satisfactory quality; – fit for purpose; and– as described (if a customer has seen a
sample or model, goods must match the sample or model)
• Installed goods: if installation is part of the contract, the goods will not be considered to conform to the contract if the installation is carried out incorrectly
CRA - Supply of Goods• Goods with digital content: where there is
a mix of goods, the goods will not be deemed to conform to the contract if the digital content does not conform
• Excluded contracts:-– supply of coins or notes for use as currency– goods sold by execution or authority of law– Contracts operating as a mortgage, pledge,
charge or other security
CRA - Supply of Goods – Key Changes• Goods must match a model seen or examined• New short-term right to reject – 30 days• Only one attempt to repair or replace• New limits on deduction for use• BUT consumer has no remedy for non-
conformities in goods which are caused by materials he has supplied or to descriptions not supplied
CRA - Supply of Services• Effect of the Supply of Goods and Services Act
1982 (“SGSA”) continues. Services must be:-– carried out with reasonable skill and care;– within a reasonable time;– for a reasonable price
• contracts of employment/apprenticeship excluded and the Secretary of State may make orders excluding other contracts
CRA - Supply of Services – Key Changes Pre-contract information • information required to be given by a trader
under the Consumer Contracts Regulations in relation to the services, will form part of the contract
Information provided voluntarily• information given voluntarily about trader or
services, orally or in writing, relied on by the consumer when deciding will form part of the contract
CRA - Supply of Services – Key Changes New remedies:
– Services not performed with reasonable skill and care /trader does not comply with information it has provided about the service: right to repeat performance, or, if this is impossible or not done properly, a price reduction
– Services not performed within a reasonable time/not in line with information provided about the trader, the consumer has the right to a price reduction.
CRA - Supply of Services – Key Changes• Ban on excluding liability• Ban on limiting liability to below the
contract price• The services provisions apply regardless of
whether a price is paid for the services (although in Scotland they do not apply where a service is provided for free).
CRA - Unfair Contract Terms
• Fairness Test – significant imbalance to detriment of the consumer
• Written terms must be “transparent”– Exemption for price and subject matter: if clear– Grey List Terms…
• An unfair contract term is not binding and is liable to potential enforcement action by Trading Standards or the CMA, but consumer can choose to rely on unfair terms
CRA - Unfair Contract Terms• Grey List Terms (Schd 2 Pt 1) - examples:
– limiting liability for death or personal injury– limiting the legal rights of the consumer – overly high compensation for non performance– allowing trader to dissolve on a discretionary
basis – binding terms without opportunity to know them– trader decides subject matter after the terms are
binding– terms giving the trader the discretion to decide
the price – terms limiting the trader’s commitments
undertaken– limiting a consumer right to take legal action
REMEDIES - GOODS : Tier 1 First 30 days - short-term right to reject • Applies during the expected life of the
product– Faulty products: right to reject i.e. return the
product, treat the contract as at an end and receive a refund
– BUT if the customer agrees to repair/replacement, the 30 day period is suspended for repair or replacement and is extended until the later of:-
7 days after the waiting period ends; until the 30 day period + the waiting period
ends.
REMEDIES - GOODS: Tier 2 First 6 months - repair, replace, final right to reject• Faulty products - after 30 day period has
passed, but before 6 months from the date of sale, the CRA assumes that the product was faulty at the date of sale – Trader has to prove that the product was not
defective at the date of sale.– one opportunity to :-
replace; or repair
REMEDIES - GOODS: Tier 2 First 6 months - repair, replace, final right to reject• If repair/replacement within the 30 day
period, the trader will have used up its one opportunity
• If the customer elects for a repair or replacement, but the new or repaired product is faulty or repair/replacement not carried out within a reasonable time, the customer has the right to:-– an “appropriate” price reduction; or– a final right to reject.
Remedies - GoodsBUT:• A trader can no longer refuse to repair or replace
goods on the basis that it would represent a disproportionate remedy compared to a reduction in the purchase price or termination of the contract.
• A consumer is no longer required to allow the trader a reasonable time to repair or replace goods before seeking the alternate remedy, or exercising the short-term right to reject, if to do so would cause the consumer significant inconvenience
Remedies - Services• Right to Repeat Performance
Where the Services are NOT:– performed with skill and care; or,– performed in accordance with information
provided concerning the service• If exercised, the trader must:
– provide it within a reasonable time, without inconvenience to the consumer; and
– bear the costs incurred (inc any labour or materials)
Remedies - Services• Right to a reduction in price
– If repeat performance not possible, not carried out within a reasonable time without inconvenience, not in accordance with information provided about the trader
– “appropriate” reduction takes into account the benefit the consumer has already derived. Normally = the difference in value between the service paid for and the value of the service as provided
Practical Steps• On-premises contracts – review all store
notices, till receipts and other documentation in the light of information and fairness requirements. Avoid “your statutory rights are not affected”
• Off-premises contracts – ensure you have terms and conditions for off-premises and telephone sales. Many traders do not!
• Distance contracts – review your website and terms & conditions
Practical Steps• Train your staff – they are in the “front line”• Provide scripts or cheat sheets for
consumer-facing staff• Offer a helpline for consumer-facing staff • External and internal escalation procedure
for complaints• ADR – tell all customers about ADR options.
Will you submit to ADR?
Watch this space….• BIS consultations:-
– draft directives relating to the sale of digital content and the online sale of goods to consumers
– on how T&Cs can be made more user-friendly and on proposals to introduce fines for unfair terms
• Common European Sales Law?• the government is considering making ADR
mandatory across all consumer goods and services in the UK …
Questions
General Data Protection Regulation
Are you prepared?
Helena Wootton
Agenda• Key issues from the GDPR• To do list• Brexit
Introduction• The General Data Protection Regulations
received informal political approval • The Regulation has set a 2 year
implementation period• The Regulation is likely to come into force in
spring 2018
Scope and new concepts
In brief…
• Scope: EU based data controllers and processors in the context of its activities in the EU.
• Where no EU presence, the GDPR will still apply whenever an EU resident’s personal data is processed in connection with goods/services offered to them or the behaviour of individuals within the EU is “monitored”.
• The GDPR allows Member States to legislate in many areas.
• The data protection principles are revised but are broadly similar: fairness, lawfulness and transparency; purpose limitation; data minimisation; data quality; security, integrity and confidentiality.
• A new accountability principle
Children’s data
In brief…• Under 16
• Children are “vulnerable individuals” and deserve “specific protection”
• Additional rules for online services provided to children under 16.
Grounds for processing personal data – do you have any?
• Similar to current rules, except for consent
• Restrictions and clarifications around the ability to rely on “legitimate interests”
• Consent subject to additional conditions
• Effective prohibition on “bundled” consents and offering of services contingent on consent.
• Consent must be separable from other written agreements, clearly presented and as easily revoked as given.
• Further restrictions may be imposed by codes of conduct.
“Special categories of personal data”
In brief… • Genetic data and biometric data • Sensitive personal data • New conditions regarding the processing of genetic,
biometric or health data
Transparency In brief…
• Controllers must provide information notices to ensure transparency of processing
• Specified information must be provided• There is also a general transparency obligation• Much of the additional information will not be
difficult to supply – although it may be hard for organisations to provide retention periods
• There is an emphasis on clear, concise notices
Rights for individuals In brief…
• Rights to object• Subject access rights• Data portability• Right to erasure and right to restriction of
processing
Demonstrate data governance In brief…• Implement measures to reduce the breach
risk• Take governance seriously• Privacy Impact Assessments, audits, policy
reviews, activity records and appointing a Data Protection Officer
Breach notificationIn brief…
• Notification regime applies to data controllers and data processors
• Data controllers must maintain an internal breach register
• Additional breach notification requirements under PECR still apply
Transfers of Personal DataIn brief…
• Transfers outside the EEA continue to be regulated and restricted
• Remains a significant issue• Non-compliance proceedings can be brought
against controllers and/or processors• Safe Harbor and Privacy Shield
Remedies and liabilities for breachIn brief…• Higher of €20,000,000 or, in the case of
undertakings, 4% of global turnover• Compensation claims
Impact of a Brexit• UK would be outside EEA• Would need to offer “adequate level of protection”• Commission views UK as inadequate due to
defective implementation of 1995 Directive• Commission’s infraction proceedings against UK are
still live• If UK doesn’t meet 1995 Directive it will not meet
GDPR• UK would need to implement “essentially
equivalent” measures or non-UK businesses would need to rely on derogations/exemptions
Thank you
Speak to us…
Emma Grant| 0115 934 2043 [email protected]
Catriona Lothian| 0115 976 6182 [email protected]
James Tait| 0121 237 [email protected]
Speak to us…
Helena Wootton| 0115 976 [email protected]
Alex Watt| 020 7337 [email protected]
Richard Nicholas| 0121 237 [email protected]
