In-house News Bulletin In association with Keeping you abreast of the big commercial legal stories, that could affect your business. April 2015 Corporate & Commercial Court fees increased From the 9th of March, court fees increased for money claims exceeding £10,000. The new fee will be 5% of the value of the claim capped at a maximum fee of £10,000. This change represents a significant uplift in the fees to be charged ranging from 64% to 481% uplift. Battle of the forms In the recent case of Transformers & Rectifiers v Needs, it was decided that neither party could rely on its standard terms and conditions. Both parties had been trading for 20 years. The Claimant had supplied its purchase order with terms and conditions on the reverse, although there was not any reference to the terms on the front page. When ordering by fax or email, it had not included the terms at all. The Defendant had argued that its terms and conditions applied as they were referred to in its acknowledgment of the order. The Judge added that a particular problem in this case was that there was not any consistent process for ordering goods. This case illustrates the point, that without a signed contract, there will always be the risk of uncertainty about the contracting terms. laim against employee for breaching covenants breached his duties to his employer and, in particular, his confidentiality obligations. It was found that the employee who had been in a senior sales position, had downloaded customer information onto memory sticks and then used that information to solicit customers. The Court ordered the Defendant to pay his former employer over £290,000 and to deliver up the stolen information. This is a good news story, showing that companies that have strong contractual provisions and processes, can take effective action to prevent employees from stealing their confidential information and know-how. In the case of Intercity Telecom & another v Solanki, it was held that the employee had Data Security Enforced subject access requests Safe Harbour A new provision (s.56) in the Data Protection Act came into force on the 10th of March. The effect is to make it a criminal offence to require someone to use a subject access request to obtain and produce their criminal record. This is most likely in the context of an employer/employee relationship. It is legitimate for an employer or prospective employer to seek criminal record information, but this should be done through the authorised channels (normally the Disclosure Barring Service), that save where exceptions apply only unspent convictions are notified. There is mounting tension concerning the data security of Safe Harbour companies. The Data Protection Act states that personal data may only be transferred outside of the EEA if there is an adequate level of data security. In the U.S. companies can sign up to the Safe Harbour list; a voluntary scheme where companies commit to meeting minimum data security standards. There are however, a number of flags being waved to highlight that the Safe Harbour scheme is not being appropriately policed and two Data Protection Authorities in Germany are now filing proceedings against U.S. Companies for allegedly not complying with the Safe Harbour framework. If your business is reliant on the Safe Harbour regime for transferring personal data it will make sense to review your adequacy assessment. Depending on the nature of the data being transferred, it may be appropriate to look for alternative comfort, for example, by use of the E.U. model contract clauses and by undertaking your own data security audit. Advertising & Marketing ASA prioritisation principles The Advertising Standards Authority (ASA), which is the UK’s regulator of advertising across all media, launched a consultation at the end of 2014 on the future of its regulatory activities. The conclusions of the consultation being that it will now implement its Prioritisation Principles to guide its work in the future. The Prioritisation Principles are: 1. Harm and detriment – the ASA will consider what harm and detriment has occurred or might occur; 2. Risk – the ASA will balance the risk of taking action versus inaction; 3. Impact – the ASA will consider the likely impact of its intervention; 4. Resources – the ASA will consider what resource would be proportionate to the problem to be tackled. We also welcome the introduction of the Prioritisation Principles. In the past, the ASA has invested considerable resources into advertisements that have had just one complaint. The additional guidance is also helpful for businesses when creating advertising campaigns, as well as defending complaints. Perhaps the most interesting note from the consultation is that the ASA only had 15 responses. We think this demonstrates how we can all make a significant difference to the shape of regulatory activity, by getting involved directly, or through trade associations. Nuisance calls & messages The Government has announced from 6th April 2015, it will be easier for the Information Commissioner Office (ICO) to issue fines for up to £500,000 against businesses that make nuisance calls or messages. Under existing law, the ICO needs to show that the call/email/text was ‘of a type likely to cause substantial damage or distress’. Under the new regime, the ICO will only need to prove that it was serious and either deliberate or that the business knew the breach was likely. The government also has a stated aim of making board level executives responsible. With this change, and news that just a few days ago the ICO conducted a raid on a company, believed to be using automatic dialling technology about debt management, without consent. Now is clearly a good time to review any cold calling or messaging practices that may be utilised in your business. Is your business screening against the TPS (do not call) lists for consumers? Do you have good internal suppression lists to stop calling consumers that have asked you to stop? You may have handed this over to your marketing agency but you will still be responsible for their actions, or indeed lack of. We recently tested the systems of a large motor retailer, and a hotel chain, by asking them to stop marketing to us. Despite these requests the marketing has continued. Don’t forget the guidance produced by Which, in conjunction with ICO, that we have previously reported on. You can find the link in the written version of this bulletin. Amazon The ASA has ruled that a mailshot from Amazon, misled consumers about subscription fees. The mailshot offered a 30 day free trial to its Prime and video service. In the small print it stated that the subscription starts after the free trial, unless cancelled. The ASA held that the information was not sufficiently prominent to make clear the extent of the commitment. This is an interesting case, as in our view the practices of Amazon are not unusual, therefore it provides some helpful guidance to other businesses that may be considering similar promotions 2014’s most complained about ads The ASA has published the top ten most complained about ads in 2014. Not all of the complaints were upheld. It is worth a read as it gives real insight into the ASA’s thinking on where it draws the line. Paddy Power obtained the infamous no.1 spot; for promoting betting on the outcome of the Oscar Pistorius trial. The 5,525 complaints were upheld in this case. Employment Pensions – IBM case It’s not unusual for companies to want to restrict existing generous benefits and particularly defined benefit pension schemes. If your business wishes to cut back on what it offers to staff, it will make sense to first read about the recent IBM case. The judgment on remedies demonstrates the importance of treating the members fairly and getting the consultation process right, otherwise it’s likely that the changes will get unravelled. There is too much detail to go into in this bulletin, but briefly it has been confirmed that: 1. IBM’s attempted exclusion notices from the defined benefit scheme are voidable; 2. the non pensionability agreements (to prevent future pay increases being pensionable on a defined benefit basis) are unenforceable and 3. IBM breached its duty of trust and confidence to some members that took early retirement options and are likely to face compensation claims. Employment ACAS code on right to be accompanied ACAS has changed its guidance on the right to be accompanied at grievance and disciplinary hearings. This followed a 2013 case (Toal and Anor GB Oils), which suggested that the guidance did not reflect the law. The Employment Rights Act states that workers have a right to be accompanied if they make a reasonable request. The problem however is that reasonable request is not defined. The old ACAS guidance had stated it would not normally be reasonable to insist on being accompanied by a colleague who worked in a remote office, if there was a suitable and willing colleague who was based more locally. The guidance has now been updated to allow the worker a wider choice of companion. Obesity as a disability Introducing LexisNexis In-house We reported last month of the first case of obesity being classed as a disability. Now an employment tribunal in Northern Ireland has ruled (Bickerstaff v Butcher NIIT/92/14) that obese employees may be entitled to disability protection. The landmark case involved a former employee of Randox Laboratories who brought a claim alleging that he had been discriminated against because of his obesity. The claimant said that he had been harassed by fellow employees for over four years, and that the abuse he was suffering intensified considerably, until he eventually went on sick leave due to stress. He left his job in June 2014. You’re sitting at your desk. Emails are flying backwards and forwards from sales, customers, law firms, your finance director. Where do you start? Competition Voluntary redress schemes We have previously reported on the voluntary redress schemes that are set to be implemented in October under the Consumer Rights Act. The new power is intended to make it easier for consumers that have been harmed by companies breaching competition law to obtain compensation. There is an incentive for companies that have done the wrongdoing to establish the redress scheme by gaining a reduction in fines. The Competition and Markets Authority has now initiated a consultation concerning the guideline for approving such voluntary redress schemes. On one hand, you’re firefighting and solving problems. You have to know about almost everything – from balance sheets to social media. On the other, you know that the role of the in-house lawyer is increasingly critical to business risk management. Further still, you want to add value to the business – and to be seen doing so – not just for commercial reasons, but your own development. No one understands this the way we do. Why? We invest hours every month listening to in-house lawyers. That’s how we know every lawyer is different, as is every in-house team. As a result, we’ve developed an unrivalled portfolio of information and services to help you meet your immediate and longer-term challenges, so that you get the best result for your business. www.lexisnexis.co.uk/inhouse Introducing Radius Law When we provide advice we won’t sit on the fence, nor will we use legal jargon. We say what we would do if it was our business. We’ll get to the point in the quickest way possible. Our aim is to provide the best service, not the service that generates the most fees. Radius Law is inexpensive. It’s a virtual firm so real estate costs are low and it does not have an expensive partnership model to sustain. These savings are passed on to you. Furthermore, the commercial and pragmatic advice ensures we get to the point, saving hours of fees. We are socially responsible and put our money where our mouth is; 10% of profits to charity every year. www.radiuslaw.co.uk New powers for the Financial Conduct Authority From the 1st of April the Financial Conduct Authority will gain powers to prosecute competition offences. There is no change otherwise to the existing laws, but this does mean that there is likely to be increased scrutiny of competition law offences in the financial services sector. A division of Reed Elsevier (UK) Ltd. Registered office 1-3 Strand London WC2N 5JR Registered in England number 2746621 VAT Registered No. GB 730 8595 20. LexisNexis and the Knowledge Burst logo are trademarks of Reed Elsevier Properties Inc. © LexisNexis 2015 0315-063