UK

Briefings in English - 2010

This briefing explains why pension deficits can be a critical issue in a corporate restructuring and how pension scheme trustees, the Pensions Regulator and the Pension Protection Fund can be key players in the process and outcomes. (August 2010)

The High Court has in the past month ruled on two challenges to company voluntary arrangements (CVAs) on the grounds of unfair prejudice and material irregularity, reaching a different conclusion in each case. This briefing examines the facts and findings of each case and their possible impact on future CVA structures. (August 2010)

The recent case of BNY v Eurosail 1 is an important modern decision on the balance sheet test of insolvency. The High Court considered whether a note issuer was unable to pay its debts within the meaning of section 123(2) of the Insolvency Act 1986 and whether, if the issuer was insolvent, the existence of a post-enforcement call option agreement (PECO) entered into by the issuer would change the court’s analysis. The High Court held that (1) the issuer was not insolvent, (2) ‘taking account of’ contingent and prospective liabilities does not require such liabilities to be aggregated at their face value, (3) the balance sheet test is not necessarily the same as the accounting test and (4) the use of a PECO does not cure balance sheet insolvency. (August 2010)

In the case of Rubin and Lan v Eurofinance SA and others, the Court of Appeal was asked to consider (1) whether foreign proceedings (in this case Chapter 11 proceedings under the US Bankruptcy Code) should be recognised as foreign main proceedings in accordance with the UNCITRAL Model Law on Cross-Border Insolvency (and whether the appointment of the applicants in the case as foreign representatives should be similarly recognised) and (2) whether a judgment of the US Bankruptcy Court against the respondents should be enforced as a judgment of the English courts in accordance with the relevant provisions of the Civil Procedure Rules. The Court of Appeal answered both questions in the affirmative. (August 2010)

On 26 July 2010, HM Treasury published for consultation a paper setting out more detail on its proposals for an entirely new structure for financial regulation in the UK. This briefing explains the main proposals. (July 2010)

This article was first published in BNA's Transfer Pricing International Journal. (July 2010)

This article was first published in the Journal of Taxation of Financial Products. (July 2010)

This briefing considers some recent trends regarding freedom of information and information privacy issues generally, and outlines some of the key commitments made by the new coalition government in the UK to promote transparency. Some of these commitments, which have yet to be fleshed out, may affect the operation of the freedom of information regime. In particular, the coalition looks set to extend the regime to cover new entities. (July 2010)

This briefing comments on the legal and regulatory developments regarding the enforceability of certain standard terms in contracts for retail financial services. (July 2010)

This article was first published in Tax Journal. (12 July 2010)

On 7 July 2010, the European Parliament approved various amendments to the Capital Requirements Directive in relation to bankers’ remuneration. The Council of the European Union is expected to rubber-stamp these amendments in the coming days. The European Parliament has described the amendments as ‘some of the strictest rules in the world on bankers’ bonuses’. This briefing examines the new remuneration provisions, their scope and their impact on UK national law. (July 2010)

The new Bribery Act in the UK introduces a corporate offence of failure to prevent bribery. If a company is convicted, mandatory exclusion from public sector and  utility procurement will follow under the Procurement Regulations as they currently stand. This is a material and critical risk for companies providing works, supplies and services throughout Europe and heightens the need to address compliance programmes to ensure adequate procedures are in place to prevent bribery and to ensure that appropriate remedial measures are taken if wrongdoing is discovered. (July 2010)

Employers should consider asking their pension scheme trustees to pass a resolution to retain a power for the scheme to make payments to employers. Trustees would need to pass this resolution before 6 April 2011, but would need to give three months’ notice to members – so early action may be advisable. (July 2010)

Since 6 April 2010, employers have been able to use two new easements during corporate restructurings to manage pension scheme debts that can arise under section 75 of the Pensions Act 1995. This briefing analyses the changes, discusses whether they will be helpful to employers and considers how they compare to tried and tested strategies for managing section 75 debts and the role of trustees if employers choose to use these new tools. (July 2010)

This article was first published in The Tax Journal. (5 July 2010)

The Financial Reporting Council (FRC) has published the UK Stewardship Code (the Code), setting out good practice for institutional investors when engaging with the UK listed companies in which they invest. It hopes this will be a catalyst for better engagement between shareholders and companies. The FRC has adopted the Institutional Shareholders’ Committee (ISC) Code with only limited changes – in particular, the ISC Code’s seven principles and related guidance. The FRC encourages all institutional investors to report on the extent to which they follow the Code; it will list those who have done so on its website from October 2010. (July 2010)

This article was first published in the BNA Transfer Pricing Forum (June 2010)

This briefing summarises the arguments for and against various possible changes to the Takeover Code (as set out by the Takeover Panel) and where other actions would be needed to implement the suggestions put forward. The Panel is asking for comments by 27 July 2010.

Anti-bribery and corruption procedures should now be a key area of focus for all financial institutions, given recent regulatory and legal developments. The Financial Services Authority (FSA) has recently published a report that considers the adequacy of commercial insurance brokers’ anti-bribery systems and controls, with particular emphasis on controls to address the risk of illicit payments to third parties. It has expressly stated that many of the issues covered in the report, as well as examples of good and poor practice, are relevant to firms in other sectors. (June 2010)

The FIFA World Cup 2010 starts on Friday 11 June and employers are making contingency plans for staff who want to watch their favourite team play. The key consideration for employers is how to be fair when managing requests for time off but also having a strategy for minimising and dealing with ‘unexplained’ absenteeism.

The UK’s Financial Services Authority has published a consultation paper on proposed changes to its client assets rules. These address some of the problems highlighted by the failure of Lehman, though not all of them. This briefing outlines the client protection issues arising from the Lehman administration and how the consultation paper addresses them. Firms carrying out prime brokerage work in particular should watch these developments closely and be aware that clients are more closely scrutinising their performance in this area. (May 2010)

The Financial Reporting Council (FRC) has published the new ‘UK  Corporate Governance Code’ which replaces the Combined Code for accounting periods beginning on or after 29 June 2010. The new Code is largely in the form of the FRC’s December 2009 consultation draft, but with a new recommendation that all directors of FTSE 350 companies be put up for re-election every year and an express reference to gender diversity in the Code principles on board appointments.

We have commented in recent briefings on the new approach by the Serious Fraud Office (SFO) to incentivise companies to self-report cases of corruption, a potentially fundamental change in the environment. However, the recent decisions in Innospec and Dougall have posed serious problems for this strategy by raising doubts as to whether courts will approve agreements between the SFO and co-operating companies or individuals, or order significantly lighter penalties because of such co-operation. As it currently stands, this tilts significantly the decision against self-reporting corruption and co-operating with the SFO, damaging a key SFO enforcement policy. (May 2010)

This article first appeared in the seventh edition of The International Comparative Legal Guide to: Environment Law published by Global Legal Group. (May 2010)

Bribery and corruption have risen rapidly up the UK political agenda in recent years. The Bribery Act finally looks set to come into force later this year. It repeals existing bribery offences and introduces new ones – including, for the first time, a corporate offence of failing to prevent bribery. In this briefing we consider some of the key issues that arise from the Act as well as some practical steps that corporates may wish to consider taking now to prepare for when the Act becomes law. (May 2010)

Recent studies confirm that the scramble for global talent is high on employers’ agendas. Global companies that were largely introspective, focusing on cost-cutting and downsizing during 2009, are now considering how best to adapt to dealing with those long-awaited ‘green shoots of recovery’. The steps taken during 2009 to reduce head count may not have left companies with the right blend of employee skill and experience to maximise the opportunities for recovery and therefore the search for global talent is now on. Employers are considering not just their own key staff, but, more important, are looking at the talent of their competitors.This guide gives a flavour of the types of protections available and associated issues that arise in some key jurisdictions. (April 2010)

This briefing summarises two recent publications by the Financial Services Authority (FSA) in which the FSA proposes that certain changes be made to the Mortgage Conduct of Business Rules (MCOB). The publications are Discussion paper 09/3: mortgage market review and Consultation paper 10/02 – mortgage market review: arrears and approved persons. We discuss the implications of some of the main changes put forward, with a particular focus on how the proposed amendments to MCOB will affect firms’ obligations in respect of the fair treatment of mortgage customers in arrears. (April 2010)

This article was first published in the BNA Transfer Pricing Forum (April 2010)

This article was first published in Derivatives and Financial Instuments. (March/April 2010)

This article was first published in the Bureau of National Affairs' Transfer Pricing Report, Vol 18 No. 21. (March 2010)

An employer may have good reasons to delay notifying the trustees of a defined-benefit scheme, the Pensions Regulator or scheme members about a proposed transaction – especially if the transaction is not yet finalised. But failure to notify may be a breach of the employer’s legal obligations and can have significant consequences. This briefing explains the legal obligations to notify these parties and when these may be triggered. (March 2010)

The Financial Services Authority (FSA) published a consultation paper on effective corporate governance earlier this year. The paper reinforces the FSA’s renewed focus on the quality of firms’ governance and sets out proposed changes to the approved persons regime, the FSA’s expectations in relation to non-executive directors (NEDs) and implementing measures in support of Sir David Walker’s recommendations. This briefing examines the key proposals and their likely impact for firms. (March 2010)

Judgment was handed down yesterday by the High Court in Tullett Prebon v BGC ([2010]EWHC 484), the much anticipated ‘team move’ case involving rival inter-dealer brokers. BGC, Mr Lynn (President and senior officer in Europe) and Mr Verrier (Executive MD and GM) were found to have entered into an unlawful conspiracy to poach ten brokers and to have induced them to breach their employment contracts. What are being referred to in the press as ‘astronomical’ damages and legal fees are to be determined at a later stage if the parties fail to agree amounts. With the judgment running into some 130 pages this briefing summarises the decision and distils some of the key points arising from it. (19 March 2010)

This briefing provides commentary on the Enforcement Financial Penalties Policy Statement (10/4), and outlines the key amendments to the Decision Procedure and Penalties Manual (DEPP) and the Enforcement Guide (EG) that were published by the Financial Services Authority (FSA) on 1 March 2010. Financial penalties will now be linked more closely to any income generated by breaches. The FSA has indicated that the effect of the regime is likely to be that its financial penalties will double or treble in size. (March 2010)

Our response to the Department of Business, Innovation and Skills consultation on the role and powers of the consumer advocate, which closed on 5 March 2010. (March 2010)

This guide covers the main aspects of investing in commercial real estate in Austria, Belgium, England and Wales, France, Germany, Italy, the Netherlands and Spain. It summarises types of ownership and property rights, the acquisition process, legislative controls on the use and development of land and taxes and other costs involved in acquiring real estate. It is neither an exhaustive summary nor a detailed analysis of property-related legislation and therefore cannot replace detailed advice from qualified legal counsel on specific cases or transactions. (March 2010)

A loan from a sponsoring employer to a defined-benefit pension scheme can sometimes be an attractive way to provide short-term funding for the scheme. This briefing discusses the UK pension and tax law implications of funding the scheme in this way. (March 2010)

The thin capitalisation group litigation has the transfer pricing world transfixed. This article explains the importance of the High Court decision. It was first published in the March 2010 edition of International Tax Review. (March 2010)

This briefing provides an overview of the issues raised by the limitation on employerrelated investment imposed by section 40 of the Pensions Act 1995. These provisions can be technically difficult, but potentially severe civil and criminal penalties apply for trustees and managers who breach them. There may also be secondary criminal liability for employers who persuade trustees to invest in employer-related investments. (February 2010)

In the Cemex case, the High Court interpreted the meaning of ‘employment-cessation event’ in the Employer Debt Regulations 2005. The impact of this case is that an employer may still be liable to pay a debt under section 75 of the Pensions Act 1995 in the future even if they (purportedly) triggered the debt before 6 April 2008 and discharged it. This briefing explains. (February 2010)

In Independent Trustee Services v Hope the UK High Court rejected a cunning plan to partially buy out benefits before the Ilford defined-benefit pension scheme entered the Pension Protection Fund’s (PPF’s) compensatory regime. Although the facts of this case are unusual, the effect of the High Court’s decision is that trustees may not be allowed to consider the existence of the PPF when making some decisions. This briefing explains. (February 2010)

The UK High Court’s decision in HR Trustees v Peter German has made it more difficult to change past defined benefits under the scheme’s amendment power or by direct agreement with employees. This briefing outlines the decision and its implications for other pension schemes. (February 2010)

In this briefing we consider, in light of the Financial Services Authority’s enforcement activity in 2009, what the main themes are likely to be for regulatory enforcement in the coming year. (February 2010)

This is an update to our briefing of December 2009, which considered the provisions in the Financial Services Bill relating to collective redress and regulator-led redress. These provisions have now been debated in parliament by the House of Commons Financial Services Bill Committee. This update sets out the key issues raised before the Committee and the government’s response. (February 2010)

The judge's approach to pricing in the GE guarantee fee case in Canada could have implications for discussions about similar issues in the UK. This article was first published in the February 2010 edition of International Tax Review. (February 2010)

The prudential regulation of insurance and reinsurance companies across the European Economic Area (EEA) is due for radical modernisation from October 2012, including a review of the insurance industry’s solvency framework. This follows the adoption in November 2009 of the Solvency II Directive and its publication in the Official Journal. One of the primary aims of the Directive is to produce a more consistent solvency standard that will protect consumers across all markets. This third edition of our client guide outlines progress on the project to date and how it may evolve over the next few years. (February 2010)

This briefing looks at the consequences of employers not paying contributions to pension schemes or paying them late. In particular it looks at the notification obligations that may arise and the sanctions that could be imposed on employers. (January 2010)

HM Treasury has published a consultation paper setting out tentative proposals for changes to resolution arrangements for investment banks. Responses are invited by 16 March 2010. This briefing outlines the main proposals. (January 2010)

This article, first published in the BNA's Transfer Pricing International Journal in January 2010, provides a round-up of key UK transfer pricing developments in 2009. (January 2010)

Changes in domestic and international transfer pricing law have placed a greater emphasis on economic analysis and legal expertise, explains this article first published in Legal Strategy Review. (Winter 2009/10)

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