In House Lawyer seminar Thursday 25 April 2013 Birmingham 39 - - PowerPoint PPT Presentation

39 Offices in 19 Countries

In House Lawyer seminar

Thursday 25 April 2013 Birmingham

39 Offices in 19 Countries

Welcome

Nick Green

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Agenda

9.40am-10.10am In house lawyer perspectives 10.10am-10.30am Liabilities and associated business risks 10.30am-11.00am Economic update 11.00am-11.15am Tea and Coffee break 11.15am-12.00pm 5 minute legal updates on:

• Social Media
• Automatic Enrolment: New Employer Pension Duties
• Environmental Compliance
• Real estate
• Employment legislation

12.00pm-12.30pm Facilitated discussions of key issues and networking 12.30pm Buffet lunch and close

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5 key things you may not know about us

Supporting clients in the region and beyond,

for over 140 years

One of the most global legal practices,

with lawyers in 39 offices and 19 countries worldwide

Top-20 global legal practice

based on number of lawyers

In 19 countries, 9th broadest global footprint

Practicing law in more than 140 jurisdictions, in more than 40 languages, but speaking with one

voice

39 Offices in 19 Countries

In house lawyer perspectives

Simon Best, National Grid

39 Offices in 19 Countries

Liabilities and associated business risks

Vicky Wilkes

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Discussion Points

• What do you need to think about before you pick up your

pen?

• Recap of key elements of a liability/exclusion clause,

including current trends

• Practical tips

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What do you need to think about before you pick up your pen?

Points to consider:

• Value/Risk profile of the contract
• Company policy?
• Relative bargaining position

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What do you need to think about before you pick up your pen?

• Are you the supplier or customer?
• Are there any particular/specific concerns?
• Getting in first

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Key elements of liability/exclusion clause

What cannot be excluded?

• death or personal injury caused by a party’s negligence
• fraud or fraudulent misrepresentation
• any matter in respect of which it would be unlawful to

exclude or restrict liability

– implied terms of good title, quiet possession, no

encumbrances.

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Direct or Indirect Losses

• Contractual losses fall into two categories:
• Direct Losses: losses, arising naturally, according to the natural

course of things, from the breach of contract.

• Indirect Losses: losses that may reasonably supposed to have

been in the contemplation of the parties at the time they made the contract, as a probable result of the breach. A clause excluding loss of indirect and consequential loss including loss

• f profits, revenues, etc. is unlikely to be effective to exclude direct loss
• f profit, revenues, etc.

Whether a loss is direct or indirect will depend on the circumstances in each case.

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Direct and Indirect Losses

An example:

• GB Gas Holdings v Accenture (UK) Ltd & Others [2010] EWCA 912
• Defective supply of a new customer billing system resulting in claims

(amongst other things) for: i) £18.7m excess gas distribution charges; ii) £8m ex-gratia compensation payments to customers; (iii) £2m additional borrowing costs; and iv) costs of replacement hardware/software.

• Agreement excluded liability for “any losses, damages, costs or expenses

whatsoever to the extent that these are indirect or consequential or punitive” (clause 16.2). It also stated that damages were only recoverable if Accenture did not promptly fix defects.

• Held: Court of Appeal held that the above losses were direct losses and

not indirect losses and therefore recoverable since they did not fall within these exclusions and common law damages were recoverable.

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Limiting Liability

Type of caps

• property damage
• general liability
• “the [Supplier’s] total liability to the [Customer] in respect of ………..

shall in no circumstances exceed £[ ] for the entire term”

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Limiting Liability

Specific carve outs:

• third party IP infringement claims
• personal data/data security
• others……..

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Trends

• Explicit wording/repudiatory breach
• Internet Broadcasting Corporation (t/a NetTV) v

MAR LLC [2009]

• Astra Zenica UK Limited v Albemarle

International Corporation [2011]

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Trends

• Deliberate default/wilful misconduct
• wilful misconduct may be reckless BUT deliberate default is not
• deliberate default is a narrower concept than wilful misconduct
• drafting tip : use “wilful misconduct” rather than “deliberate

default”

• Statutory interest

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Practical Tips…..Stop Press

Kudos Catering (UK) Limited v Manchester Central Convention Complex Limited [2013]

• Do not bury the exclusions
• Deal expressly with repudiation – be specific

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Practical Tips

• A limitation rather than an outright exclusion is likely to be

viewed more favourably by the courts.

• Important that any liability clause is clearly drafted and expressly

addresses all liabilities that it is seeking to cover.

• Do not ignore standard exclusions of liability – it may make

sense for some of the losses to be picked up in some way.

• Check insurance – how much liability will be picked up by

insurance? …..and remember….

39 Offices in 19 Countries

Economic update:

Global, National, Regional

Paul Forrest, West Midlands Economic Forum

US$ 47.49 trn US$ 67.79 trn US$ 64.29 trn US$ 83.64 trn US$ 110.37 trn

Crisis Economies Eurozone Japan UK Economies Emerging from Crisis USA Strong Growth Economies ? Intellectual underpinning of austerity questioned

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USA Brazil Indonesia Japan China Russia Nigeria India Germany

Regional Economic Motors?

Tectonic Plates of the Global Economy? Ignore BRIC concept & think Growth Markets

Regional Economic Motors? Tectonic Plates of the Global Economy? Ignore BRICs & think component compatibility

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Regional Economic Motors?

Regional Economic Motors?

* - Global Growth rate 2009-2035

Global Parameters – Business Trends

Weaker performance forecast as investment boom falters– China Brazil Russia India Nigeria Indonesia Difficult transition from Middle Income to High Income Despite government shift in focus to domestic consumption Stronger performance in EU?

Global Parameters – Political Trends

Political Cycle – fiscal restructuring in the US and Europe generational cycle in China, India & Saudi Arabia consolidation post-Arab Spring withdrawal from Afghanistan the impact of Shale Gas on US Energy policy & economic prospects for Poland and Ukraine.

US Gas Prices have fallen dramatically from the 2008 peak 80% of US energy needs now originate domestically (highest since 1991)

While Manufacturing has declined relative to GDP overall......

...............in absolute terms it continues to expand

The Midlands comparative advantages are in the sectors that recorded the strongest pre-crisis productivity growth

10000 20000 30000 40000 50000 60000

UK Domestic industry value added of gross exports

global total: US$275 billion

US$ million source: OECD Direct domestic industry value added content of gross exports

Output growth has been sustained despite sectoral shifts – with real GVA growth rates comparable to national performance

West Midlands Economic Sectoral Structure

2011(p) Source: ONS & WMEF

In contrast to previous transitions from recession, the Midlands economic response has been firmer than other parts of the UK

Productivity performance has kept pace with that of EU & North American competitors

International Competitiveness

International Competitiveness

Struggling in the Premiership – policy mix to sustain competitiveness

The number of exporting companies reflects the strength of Innovation in the local economy & its inherent competitiveness

Strengthening potential demand in the principal non-EU markets of the West Midlands

30.0 35.0 40.0 45.0 50.0 55.0 60.0 65.0 Jan-05 Jul-05 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12 Jul-12 Jan-13 All West Midlands EU West Midlands Non-EU West Midlands Markit West Midlands Export Climate Index Source: Markit

Reinvigorated demand in key export markets

0.0 5.0 10.0 15.0 20.0 25.0 30.0 35.0 40.0 45.0 50.0 55.0 60.0 65.0 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13

Spain Italy Russia Irish Republic Netherlands France Germany China United States Markit West Midlands Export Climate Index Source: Markit

Employment take-up remains problematic, and reflects output capacity constraints as much as skills mismatch

Paul Forrest Director West Midlands Economic Forum mail@westmidlandseconomicforum.co.uk Tel: 0121 533 7130 Mob: 07738 324 517 www.westmidlandseconomicforum.co.uk West Midlands Economic Forum The Public, New Street West Bromwich, West Midlands, B70 7PG.

39 Offices in 19 Countries

Legal Update: Social Media

Ramez Moussa

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• Facts and figures
• What are the issues?
• What are the risks?
• What are your action points?

Social Media

39 Offices in 19 Countries

Legal Update: Automatic Enrolment: New Employer Pension Duties

Matthew Giles

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• What are the new requirements?
• What is the cost for employers?
• How can the burden be minimised?
• How can the cost be off-set?
• What is the risk of getting it wrong?

Automatic Enrolment

39 Offices in 19 Countries

Legal Update: Environmental Compliance

Dave Gordon

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• REACH enforcement – who’s being

prosecuted?

• Corporate reporting of environmental

performance – what are your obligations?

• Criminal liability – is jail now a real

enforcement option?

• Civil sanctions – are they now being used

for environmental enforcement?

• Contaminated land – it’s back, so ensure

that you carefully manage your brownfield land

Environmental Compliance

39 Offices in 19 Countries

Legal Update: Real Estate

Nick Green

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• Business Premises Renovation Allowance
• use of property fund structures to assist

regeneration;

• valid until April 2017;
• provides initial capital allowance of 100% of

qualifying expenditure.

• Break Clauses
• virtually all tenant break clauses have some

form of conditions attached;

• PCE Investors v Cancer Research UK [2012];
• effect of payment of apportioned rent.

Real Estate

39 Offices in 19 Countries

Legal Update: Employment legislation

Ramez Moussa

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• Changes to parental leave;
• Changes to the Equality Act;
• Reduction in redundancy collective

consultation periods;

• Reforms to the Tribunal system;
• New status of employee shareholder;
• Changes to whistleblowing legislation;
• Extension of right to request flexible

working; and

• TUPE.

Employment legislation

39 Offices in 19 Countries

Facilitated discussions of key issues

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• Issue 1
• How do I keep myself updated with general

legislation and relay this in a digestible form back to the business in advance of its implementation?

• Issue 2
• How do I deal with the volume of day-to-day

issues mostly arriving via a relentless stream of emails?

• Issue 3
• How has risk management changed during

the economic downturn and how do I best manage this?

Facilitated discussions of key issues

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• How do I keep myself updated with general

legislation and relay this in a digestible form back to the business in advance of its implementation?

• Use PLC and/ or Lexis Nexis
• Attend conferences and seminars (like today’s)

as well as those provided by Commerce & Industry, barristers chambers, the Lawyer magazine, universities (such as Warwick University)

• Receive regular briefings from panel law firms
• Challenge is to relay complex legislation in

layman’s terms back to the business (to both Executive Board and Operational business)

• Run an annual conference for the entire

business and invite external speakers

Facilitated discussions of key issues - feedback

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• How do I deal with the volume of day-to-

day issues mostly arriving via a relentless stream of emails?

• Use of ‘out of office’ automated replies on

emails

• Print out larger emails for review at home
• Be ruthless particularly with emails where you

are cc’d to cover sender)

• Prune email in box on an hourly basis
• Prioritise dealing with stream of clients turning

up at your office by being polite but firm

Facilitated discussions of key issues - feedback

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• How has risk management changed during

the economic downturn and how do I best manage this?

• Banks are scrutinising contracts more –

approvals and vetting process has been significantly upped

• Budgets are increasingly being centralised to

ensure closer management and tighter regulatory regimes

• Fewer options available to negotiate –

something we need to be aware of and live with

• Risk management decisions are both taken

and advised on by in house lawyers – varies according to the company. But in all instances, in house lawyers need to make commercial calls on risk

Facilitated discussions of key issues - feedback