Quick fix
Short on time but need to know the latest in-house commercial news? It's all here for you, from coronavirus business interruption insurance to easyJet’s cyberattack, flexible furlough and ethnicity pay gap. Watch our Commercial Bulletin or read the blog which has direct links to relevant materials in Lexis®PSL.
Brexit bulletin
The UK and EU have published the agenda for the fifth round of negotiations on the future UK-EU relationship, taking place in London between 20 and 23 July 2020. The next round focuses on the core areas of divergence in the talks including level-playing field, governance, law enforcement, judicial co-operation and fisheries. It also includes sessions on trade in goods and services, transport and energy, as well as sessions on participation in EU programmes, mobility and social security co-ordination and thematic co-operation. See: .
International data transfers
In Facebook Ireland and Schrems, (commonly known as Schrems II), the European Court of Justice considered two key mechanisms used to legitimise personal data transfers to third countries under the GDPR: standard contractual clauses (SCCs) and the EU-US Privacy Shield.
The Court of Justice ruled that the EU-US Privacy Shield is invalid. This is a major blow to the thousands of organisations that rely on the Privacy Shield for personal data transfers to the US. No grace period is provided in the judgment, but the ICO has stated that it is reviewing its Privacy Shield guidance and if you are currently using Privacy Shield, you should continue to do so until new guidance becomes available, but you should not start to use Privacy Shield from 16 July 2020.
The European Court of Justice took the view that SCCs are valid but are solely intended to provide contractual guarantees that apply uniformly in all third countries. Parties using SCCs must verify, on a case-by-case basis, whether the law in the recipient country provides a level of protection that is essentially equivalent to that provided under the EU data protection regime. If not, it may be necessary to supplement the SCCs with other clauses or additional safeguards. In the absence of adequate safeguards (and/or situations where there are laws in the recipient country that prevent the recipient from complying with the SCCs) the data transfer must be suspended—unless another lawful mechanism can be identified.
The Court’s decision on SCCs is particularly problematic for transfers to the US, bearing in mind the court’s criticism of US safeguards and redress mechanisms and the nature of US surveillance programs. It may therefore be difficult to justify transfers to the US based on SCCs for any personal data that may be of interest to US public authorities.
Further guidance is awaited from European and domestic regulators and organisations may wish to defer any major decisions about new data transfers to third-party countries until this guidance is available. We will shortly be publishing amended privacy notice Precedents with expanded sections regarding international data transfers. In the meantime, for more detailed analysis, see News Analysis: .
Risk & Compliance forecast
Our new Risk & Compliance forecast (as at 21 July 2020) is now live. This month, we report on issues including (1) data protection; (2) AML and CTF; (3) crime prevention; and (4) criminal records checks. You can rest assured we’re tracking forthcoming regulatory changes so you can plan ahead. See Practice Note: .
Financial crime prevention
MLex, London: G4S’s deferred prosecution agreement (DPA) with the Serious Fraud Office (SFO) illustrates that companies can still benefit from significant discounts despite limited co-operation during much of a probe. At the same time, though, the agreement is striking also for the scale of the compliance burden imposed. It may be a benchmark of the enthusiasm for reform and compliance required of those seeking to strike a deal with the SFO. See News Analysis: and .
Consumer protection
The Court of Justice ruled that it is possible for a potentially unfair term to be the subject of a novation agreement between a seller/supplier and a consumer, and that a consumer is able to waive their right under the Unfair Terms in Consumer Contracts Directive (UTCCD) to rely on the non-binding nature of an unfair term, provided such a waiver was a result of the consumer’s free and informed consent. However, a consumer cannot waive their rights under UTCCD in respect of future disputes. See News Analysis: .
Corporate veil
The court considered whether a builder/restaurant fitter had contracted with Mr Sayed, the first defendant, in his personal capacity, or with the company of which he was a director. On the facts and applying relevant authorities, the court preferred the claimant’s position and decided the first defendant had contracted in his personal capacity. See News Analysis: .
Supplier management
MLex, London: UK importers and exporters will face significant red tape from 1 January 2021 under the border operating system published by the government this week—and possibly more serious trouble if not everything goes to plan. See News Analysis: .
Coronavirus
Corporate analysis: This analysis looks at the 97 secondary equity fundraisings on the Main Market or AIM raising at least £10 million which were announced during the three-month period 1 April 2020 to 30 June 2020. It looks at placings, rights issues and open offers and considers the impact the coronavirus (COVID-19) crisis has had on secondary equity offers. See: .
The Financial Conduct Authority (FCA) has a consultation on a proposal to delay by one year the implementation of the European Single Electronic Format (ESEF) reporting requirements under the Transparency due to the exceptional circumstances caused by the coronavirus crisis. The consultation closes on 28 August 2020. See: .
Corporate governance
The Financial Reporting Council (FRC) has its first since the coronavirus pandemic began. The FRC contends that ‘although companies provided sufficient information to enable a user to understand the impact COVID-19 had on their performance, position and future prospects, some—particularly interim reports—would have benefited from more extensive disclosure’. See: .
The FRC has also its annual report for the year ending 31 March 2020. In the report, the FRC sets out its highlights for the year, which include the publication in May 2019 of a guide for smaller listed and AIM-quoted companies to improve their financial reporting, the appointment of Sir Jon Thompson as the FRC’s new CEO in October 2019 with a mandate to transform the regulator into the Audit, Reporting and Governance Authority (ARGA), and the FRC’s response to the ongoing coronavirus pandemic, which saw the regulator issue ‘advice to companies and auditors on the associated governance, reporting and auditing issues’, among other things. See: .
Reflective loss rule
In a long-awaited and highly significant judgment, the Supreme Court has held that the rule against reflective loss does not apply to a company’s creditors. See News Analysis: .
HMRC has clarified that a Coronavirus Job Retention Scheme (CJRS) grant in respect of a given employee may be used to pay the whole of his or her statutory or contractual notice period (whichever is the longer) in circumstances where the contract of the furloughed employee is terminated on notice, in further updates to two guidance documents relating to the CJRS. See News Analysis: .
With lockdown measures being eased throughout the UK and people gradually returning to work, Helen Farr of Taylor Wessing looks at how employers can protect those among their workforce who are vulnerable or anxious not to return to work. See News Analysis: .
Status and worker categories
In (1) Angard Staffing Solutions (2) Royal Mail Group v Kocur () the EAT considered whether a worker supplied over four years to one hirer in one place on a succession of time limited assignments was supplied ‘temporarily’ under the Agency Workers Regulations 2010. The EAT decided that the issue for the tribunal is not whether the overarching relationship between the agency and the worker is temporary or permanent. Ultimately, the question for the tribunal is what was, in fact, the basis on which the given supply or supplies were made on each occasion. See News Analysis: .
Prohibited conduct
In Hill v Lloyds Bank () the EAT held that, in suitable circumstances, it may be a reasonable adjustment required of an employer to give an undertaking to provide its disabled employee with certain benefits if certain circumstances arise in the future. See News Analysis: .
LexTalk® is a new online community forum which gives Lexis®PSL subscribers the opportunity to post questions, hold conversations, participate in discussions and share best practice. It has been designed to provide a secure place for legal professionals to discuss legal developments, offer and receive peer support, and gain a sense of up to date market practice and advances in real-time.
Click to sign up and meet like-minded community members, create a profile, connect, share, and start participating today! Alternatively, you can access LexTalk® on the key resources tab on your Practice Area home page.
* denotes a required field
0330 161 1234