On 6 September the Law Commission published its final report and recommendations on reforms to the Arbitration Act 1996. The full report is available here.
Read highlights of the key changes on the International Arbitration Blog.
Bribery begins at Home
Two recent anti-corruption enforcement actions in the U.K. are a reminder of how readily the UK’s anti-corruption laws can apply to people who are not ordinarily based here.
On 10 August, the National Crime Agency arrested the Chief of Staff of the President of Madagascar along with another man who is a French national. The next day they were charged with requesting a bribe contrary to the Bribery Act 2010 and made their first appearance in court on 12 August. They are due to appear again on 8 September. The offences are alleged to have taken place at a meeting in London where the two are alleged to have sought significant cash payments as well as an equity stake in a mining project in Madagascar in return for the award of licences.
New Legislation will make it easier to prosecute Foreign and Domestic Companies for financial crimes in the UK
Duane Morris is tracking the passage of the Economic Crime and Transparency Bill 2023 through the British Parliament. Amongst other changes, once it is enacted in the coming months it will introduce major changes to corporate criminal liability in the UK, making it much easier for prosecutors to successfully convict corporates of financial crime.
For more detail see our recent client alert: https://www.duanemorris.com/alerts/uk_making_it_easier_prosecute_foreign_domestic_companies_financial_crimes_0823.html
Avoid Getting Stuck in Employment Tribunal’s Backlog by Resolving Cases Early
With public services seeking to catch up on waiting lists, it seemed timely to provide an update regarding the ongoing backlog of employment tribunal cases.
A statistical data set published on 13 February 2023 by the HM Courts & Tribunals Service reported that there are more than 50,000 live cases awaiting a hearing or decision. This figure is a 7 percent increase from the December 2021 figure of 47,041.
For context, it was reported in 2019 that the number of outstanding employment tribunal cases had reached 23,700, which at the time was the highest level recorded since the abolition of tribunal fees in 2017.
It is clear that the number of cases issued in the employment tribunal continues to increase rapidly and consistently. However, with current wait times of between 12 and 24 months from claims being filed, processed and then heard, it is evident that the tribunals do not have the structural capabilities to support the existing caseload, let alone any further increase to these numbers.
On a positive note, the Employment Lawyers Association’s (ELA) ‘Bringing down the backlog’ report showed that in 2022-23, 74 percent of cases were resolved without the need for a hearing at the Employment Tribunal, either through Acas early conciliation or resolution between the parties. There are also steps organisations can take within their operations to assist in reducing the backlog:
•Increase attempts by the HR department to resolve disputes within the early conciliation window. This can be achieved by working closely with occupational health and trade unions.
• Increase the ‘conflict confidence’ and capability among line managers in dealing with employment issues as they arise. The ELA also stated in their report that this lack of conflict confidence and capability among line managers acts as one of the key barriers to early and successful resolutions.
• Increase line management training to instil confidence in dealing with workplace conflict.
• Update handbooks with clear policies and procedures that are followed and applied correctly and consistently.
If you have any questions or queries on this topic or any other matter, do please get in touch. Our London Employment Law team provides assistance with review of existing policies and procedures or training programmes for line managers and are happy to discuss these at any time.
Social Security Benefits: Increases to Statutory Payments
By Nic Hart
On 14 March 2023, the Social Security Benefits Up-rating Order 2023 made increases to the rate of payment for statutory sick pay (SSP) as well as statutory maternity, paternity, adoption, shared parental and parental bereavement pay.
The new rates are as follows:
-
- SSP: £99.35 to £109.40.
- Statutory maternity, paternity, adoption, shared parental and parental bereavement: £156.66 to £172.48.
The increased payment rate for SSP will come into force on 2 April 2023, and the new rates for statutory maternity, paternity, adoption, shared parental and parental bereavement will apply on 6 April 2023.
The full Social Security Benefits Up-rating Order 2023 can be viewed at legislation.uk.gov.
EU Corporate Sustainability Reporting Directive – New ESG disclosure rules
BACKGROUND
In April 2021 the European Commission presented a proposal for a Corporate Sustainability Reporting Directive (CSRD) that would amend the current Non-Financial Reporting Directive (NFRD) and form part of the wider EU policy to require companies to publicly disclose information and data around environmental, social affairs and governance matters.
On 28 November 2022, the European Council adopted the CSRD following adoption by the European Parliament on 10 November 2022. The CSRD will come into force 20 days after publication in the EU Official Journal and EU member states will then have 18 months to incorporate it into their national laws.
SCOPE
The CSRD creates new sustainability reporting requirements and expands the scope of companies that will be subject to the EU sustainability reporting framework. Under the current NFRD, large EU listed companies, credit institutions, insurance companies and other entities are required to report and disclose certain sustainability information on an annual basis. The CSRD expands the scope of disclosure requirements to non-EU companies with substantial operations in the EU.
Continue reading “EU Corporate Sustainability Reporting Directive – New ESG disclosure rules”
New Plan to Replace GDPR
By John M. Benjamin and Helen Ryan
On Monday, 3 October 2022, the new Secretary of State for Digital, Culture, Media and Sport (DCMS) Michelle Donelan announced that the United Kingdom would be replacing the General Data Protection Regulation (GDPR) with its own business and consumer-friendly system. Continue reading “New Plan to Replace GDPR”
New Compulsory Registration Requirements for Non-UK Entities Holding Real Estate in the UK
Various provisions of the Economic Crime (Transparency and Enforcement) Act 2022 (the Act) came into effect on 1 August 2022 with the intention of increasing the transparency of the ultimate ownership of UK real estate and prevent the use of non-UK entities by those seeking to disguise ownership for the purpose of money laundering or other illegitimate purposes.
The Act has introduced new compulsory requirements for any non UK corporation, partnership or other entity that is a legal person under its governing law (Overseas Entity) that owns or acquires a qualifying estate in any real estate in the UK to register itself and details of its managing officers (e.g. director, manager or secretary) and beneficial owners at UK Companies House in a newly created Register of Overseas Entities (ROE).
To read the full text of this Duane Morris Alert, please visit the firm website.
The UK Loan Recovery Scheme
By Helen Ryan
The British Business Bank’s (“BBB”) Coronavirus Business Interruption Loan Scheme (“CBILS”) was first introduced in April 2021. The new iteration of the Scheme, the Recovery Loan Scheme (“RLS”) launched in August 2022 and will run until 2024.
Following on from our previous article regarding the CBILS, our follow-up article provides updated guidance regarding the new iteration of the Scheme, and examines the amendments that have been made to the Scheme.
Background
The RLS is a government-backed scheme aimed at supporting access to finance for businesses in the United Kingdom, operated by the BBB on behalf of the Secretary of State for Business, Energy & Industrial Strategy. The Scheme’s accredited lenders provide support by means of either a loan, overdraft, invoice finance facility or asset finance facility[1]. The Scheme’s aim is to provide financial aid to businesses that have been affected by Covid-19. The loan can be used for any legitimate business purposes, such as managing cashflow, investment and growth. The eligibility criteria for availing of the Scheme remains the same: small and medium businesses with an annual turnover of up to £45 million. Previously, the CBILS required that the borrower must confirm that it has been negatively impacted by Covid-19.
New Developments
As an update to the previous Scheme, the Covid impact criterion is absent in the new iteration of the Scheme. In the eligibility section of the BBB’s website, it states that there is “No Covid-19 impact test required: Unlike the previous iteration of the scheme, for most borrowers, there is no requirement to confirm they have been affected by Covid-19”[2]. It is unknown whether the absence of the requirement is in direct response to market feedback on the CBILS, however, the lack of the impact requirement is likely due to the ongoing effect that the pandemic has had on the economy, as observed through the ongoing supply chain issues and the cost of living crisis.
Previously, the Scheme supported loans of up £10 million for individual businesses and £30 million across a group, and also provided accredited lenders with a government-backed guarantee of 80 per cent on losses that may arise on facilities of up to £10 million. By contrast, the new iteration will support lending of up to £2 million for borrowers outside the scope of the Northern Ireland Protocol. Borrowers within the scope of the Northern Ireland Protocol may apply for lending of up to approximately £1 million, (subject to aid limit restrictions), and will provide the lender with a 70 per cent government-backed guarantee[3].
The BBB states that businesses that took out a previous CBILS facility before 30 June 2022 are not prevented from accessing the new iteration of the Scheme[4]. However, there is a possibility that businesses may not be eligible to receive the maximum amount.
The BBB also states that the term loans and asset finance facilities are available from three months up to six years, with overdrafts and invoice finance available from three months up to three years[5].
Lenders in the Scheme and the Application Process
When considering a prospective lender, the BBB’s website offers two filter options: ‘Filter by Financial Variant’ and ‘Filter by Region’. The current list of accredited lenders is detailed below:
The new iteration’s list of accredited lenders is short in comparison to the previous list affiliated with the RLS (but does include RBS, HSBC, Lloyds Bank and Natwest among others) and availability varies by region. However, it is likely that the list of accredited lenders will expand over time.
Under RLS, lenders are required to undertake their standard credit, fraud, Anti-Money Laundering (AML) and Know Your Customer (KYC) checks for all applicants[6]. Once an application has been submitted to an accredited lender, the lender will determine whether they can offer a commercial facility on better terms than the RLS facility. If they are able to offer better terms, they will do so. Otherwise, the lender, at their discretion, may elect to use the RLS to support an application. If one’s application with a lender is rejected, a borrower is not prohibited from applying to other RLS-accredited lenders.
For More Information
If you have any questions about this blog, please contact Drew D. Salvest, Natalie A. Stewart, Rebecca Green, Helen Ryan, any of the attorneys in our Banking and Finance Industry Group or the attorney in the firm with whom you are in regular contact.
[1] https://www.ukfinance.org.uk/covid-19/business-support/recovery-loan-scheme-qa-businesses
[2] https://www.british-business-bank.co.uk/ourpartners/recovery-loan-scheme/for-businesses/
[3] https://www.british-business-bank.co.uk/ourpartners/recovery-loan-scheme/for-businesses/
[4] https://www.british-business-bank.co.uk/ourpartners/recovery-loan-scheme/
[5] https://www.british-business-bank.co.uk/ourpartners/recovery-loan-scheme/
[6] https://blogs.duanemorris.com/london/2020/03/31/new-covid-19-uk-government-financing-options-available/
Bank of England explores impact of climate change on the UK banking sector
On 8 June 2021, the BoE published the “Climate Biennial Exploratory Scenario: Financial risks from Climate Change” (CBES), identifying climate change as a financial risk with a view to exploring its impact on the banking and insurance sectors. In this post we take a look at the CBES and its implications for banks and borrowers.
To read the full text of this blog post by Duane Morris attorneys Drew Salvest, Natalie Stewart and Rebecca Green, please visit the Duane Morris ESG Blog.