LexisNexis In-house News Bulletin ... technology such as video to make privacy notices easier to use. It warns .... so t
LexisNexis In-house News Bulletin
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Keeping you abreast of the big commercial legal stories that could affect your business.
November 2016 Corporate & Commercial >
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Corporate & Commercial Changes to the PSC Register Although the PSC regime was only introduced earlier this year it is now set to change again. The regime, which requires companies to maintain a register of people with significant control and provide the register to Companies House annually does not meet the requirements of the Fourth Anti-Money Laundering Directive (4MLD). 4MLD, which is due to take affect from 26th June 2017 will require the information to be held at Companies House on a real-time basis rather than being updated annually. It also widens the scope of entities caught by the disclosure requirement. More alarmingly, there is discussion about bringing forward the implementation of 4MLD to January 2017.
A professional’s duty to warn The recent case of Barker v Baxendale-Walker Solicitors [2016] has given some helpful explanation on the limits of a professional’s duty to advise. In this case, Baxendale-Walker, an acknowledged tax expert, provided guidance on a complex tax avoidance scheme to his client, Mr Barker. Unfortunately, the HMRC challenged the scheme and presented Mr Barker with an £11m tax bill. Mr Barker then issued a negligence claim against Mr Baxendale-Walker. The court determined that a lawyer is only likely to be expected to warn a client that their advice might be wrong if there are very strong factors suggesting an alternative construction of the law. This criteria was not met in this case as there was nothing to strongly suggest the advice was wrong until the HMRC challenged it.
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The court did, however, state that Mr Baxendale-Walker should have given a more general warning. This was a tax avoidance scheme so it was always likely to be subject to a challenge and that should have been made clear to his client.
Waiver and anti-variation clauses We have previously reported on cases such as MWB Business Exchange Centres v Rock Advertising [2016] where, despite express anti-variation clauses, the contracts have been varied by conduct or verbally. The recent case of ZVI Construction v The University of Notre Dame follows this trend. In this case, the parties used an expert dispute resolution process. Whilst no one objected at the time, the losing party subsequently challenged the decision on the basis that the process was not permitted by the terms of the contract and that deviations were only allowed if they had been agreed in writing. The Court held that the contract had been varied by the parties conduct and that the Courts will not restrict contracting parties, regardless of anti-variation clauses, where it is clear that they intend to vary the terms of a contract.
Data Security ICO’s Privacy Notices Code The Information Commissioner’s Office (ICO) has issued a new code of practice for privacy notices. The Code is designed to help businesses comply with existing Data Protection laws and the General Data Protection Regulation that will be law from 25th May 2018. The Code recommends the use of innovative
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technology such as video to make privacy notices easier to use. It warns against the use of pre-ticked boxes for direct marketing and advises that consumers should be given the choice for their preferred communication method.
Advertising & Marketing ASA Guidance on bad taste in adverts The ASA has published guidance on the issues of offence and bad taste in advertisements. The UK Non-broadcast code and Broadcast code contain clear rules that advertisements should not cause offence. However, it is not always easy to tell where the line is to be drawn and the ASA guidance seeks to provide some pointers on the grey areas.
Holiday pay update: British Gas v Lock The long-awaited Court of Appeal judgment in British Gas v Lock has finally been given. This has been the lead case concerning whether employees are entitled to average commission during holiday periods. It’s an important decision as many similar cases have been on hold pending its decision and many other companies have been treading water waiting for the outcome to determine how they handle holiday pay. Whilst Mr Lock was successful, the court was clear that: • This decision was fact-specific. Decisions in other cases may be different • The calculation of the average commission would be remitted to the Tribunal • Other types of payments would require separate consideration by the courts – the wording implied into UK legislation by the Tribunal had been expressed too widely. It referred to all types of commission rather than just contractual “results-based commission” as was the case with the British Gas matter. Whilst the uncertainty left by this case may be considered unhelpful for some it does provide more opportunity for employers to challenge holiday pay claims.
Asda workers make equal pay claims
Employment TUPE When services are transferred from one provider to another provider the dedicated employees will have the right, under TUPE law, to transfer to the new provider (assuming the other conditions are satisfied) where the services are fundamentally the same. In the recent case of Salvation Army Trustee Company v Bahi there were some differences in the services to be provided after transfer and a dispute arose as to whether TUPE was applicable. In this case, the Tribunal and the Employment Appeal Tribunal (EAT) determined that although there were differences TUPE still applied. The EAT agreed with the Tribunal that to determine whether the activities were fundamentally the same it was correct to ask what were the fundamental differences rather than asking whether the roles were fundamentally the same. It added that activities should be defined in a commonsense and pragmatic way.
In a case reminiscent of the famous 1960’s Ford Dagenham case, an employment tribunal has ruled that lower paid women working in Asda stores can compare themselves to higher paid men who work in Asda’s distribution centres. As this decision is likely to lead to the largest ever private sector equal pay claim it will inevitably be subject to appeals. We’ll keep watching this space with interest.
EasyJet breastfeeding claim Two members of EasyJet’s cabin crew have successfully argued that their employer’s failure to limit their duty days to 8 hours to allow them to express milk, or to offer them ground duties for an unlimited period of time whilst they continued to breastfeed, was indirect sex discrimination.
Shared Parental leave In April last year Shared Parental Leave (SPL) was implemented. To recap, SPL does not replace existing maternity and adoption leave rights but enables mothers/adopters to elect to share up to 50 weeks’ leave and 37 weeks’ pay with the other parent. The default position in relation to Statutory Shared Parental Pay is that it is paid at the flat statutory rate. Employers may offer more generous enhanced arrangements if they wish but the enhancements must be provided to all parents. In the recent Snell v Network Rail case a father was awarded £30,000 for sex discrimination after only being offered statutory pay during SPL while mothers were given full pay for the first 26 weeks. 2
Intellectual Property Landlords responsible for tenants selling counterfeit goods It has already been confirmed that operators of online market places, such as eBay, have obligations to prevent sellers using their service from infringing third party intellectual property rights. The recent decision of the Court of Justice of the European Union (CJEU) in Tommy Hilfiger v Delta Center has extended this principle to offline market places too and permits brand owners to seek injunctions against landlords in such cases. It will not, however, be possible to claim damages from the Landlords. The question still to be determined is who should bear the cost of complying with the injunctions. For online cases, the English Court of Appeal has ruled that whilst the brand owners must pay for the court action, internet service providers must bear the costs of blocking online infringers. We assume the same logic will be applied for the offline world.
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Bribery & Corruption
UK Bribery Act – Adequate Procedures As we have previously reported, major prosecutions under the UK Bribery Act 2010 (UKBA) have gathered pace and we understand that the Serious Fraud Office now has a pipeline of pending cases. One of the most significant features of the UKBA is the section 7 strict liability “corporate offence” under which companies will be criminally liable for bribery by their agents, representatives and employees, unless they can demonstrate that they had “adequate procedures” in place to prevent bribery. In response to this requirement ISO is now producing a new standard – the ISO 37001, anti-bribery management systems. In the event of a prosecution, companies that have implemented this standard will be better placed to defend the prosecution and evidence that they have adequate procedures. ISO say that the standard is flexible so that it can work for all companies, regardless of sector or size. The draft ISO 37001 can be viewed on the ISO website.
Specsavers successfully registers Should’ve and Shouldve as trademarks Specsavers seems to have achieved the impossible with its recent trademark registrations for Should’ve and Shouldve in relation to a range of goods and services. Trademarks will not be registered unless the mark is capable of being able to distinguish one entity’s goods and services from those of another. It is therefore highly unusual for a company to successfully register generic words. Nevertheless, Specsavers were able to evidence that the public do associate these words with its brand.
Financial Services The FCA encourages Smarter Consumer Communications initiative We have already reported that the ICO expects businesses to improve their communications concerning Privacy Notices. The Financial Conduct Authority is also asking businesses to improve their communications to consumers and has launched its Smarter Consumer Communications initiative. The Feedback Statement which reports on the themes arising from the responses to its Discussion Paper on Smarter Consumer Communications sets out the FCA’s planned work.
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