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Legal and Financial Risk – April 2012

April 2012

Legal and Financial Risk Newsletter

Hogan Lovells Legal and Financial Risk is a bi-monthly newsletter on recent legal developments that will impact upon corporates and financial institutions.

The April 2012 issue includes:

FSA publishes finalised guidance on unfair contract terms

The Financial Services Authority (the "FSA") has recently published finalised guidance on the scope of the Unfair Terms in Consumer Contracts Regulations 1999 (the "UTCCRs") for authorised firms. It will come as no surprise that the FSA expects firms to take a proactive approach to ensure that the terms of their consumer contracts are clear and fair in accordance with the UTCCRs.

Recommendations and revisions to the Financial Services Bill

As discussed in previous newsletters (March and July 2011), the draft Financial Services Bill (the "Bill") is being introduced into legislation in the wake of the financial crisis, to strengthen financial regulation in the UK.  The Bill amends the Bank of England Act 1998, the Financial Services and Markets Act 2000 and the Banking Act 2009 and represents a radical overhaul of the existing regulatory system. 
Supreme Court upholds the decision of the Court of Appeal in Lehman Brothers client money application

On 29 February 2012, the Supreme Court handed down its decision In the matter of Lehman Brothers International (Europe) (In Administration) and In the matter of the Insolvency Act 1986. The appeal addressed the meaning and application of Chapter 7 of the Client Assets Sourcebook (CASS 7) issued by the FSA for the safeguarding and  distributing of client money in implementation of the Markets in Financial Instruments Directive 2004/39/EC.
Government delays implementation of Jackson reforms

The Government has recently confirmed that it is to delay implementation of the Jackson reforms until April 2013.

Over the past few years we have been reporting on the recommendations made by Lord Justice Jackson on ways of reducing the costs of civil litigation and of increasing access to justice. In our November 2011 note, we explained the extent to which the Government had implemented or would be implementing these proposals into law.

Drafting inconsistencies – a deliberate omission?

The High Court's judgment in Teesside Power Holdings Limited v (1) Electrabel International Holdings B.V. (2) GDF International SAS has recently been published. The case, a rare decision on the contractual interpretation of tax deeds, concerns whether a provision in a tax deed, designed to pass the benefit of a tax repayment to the sellers, could be construed as also including the statutory interest that HMRC paid.

Regulatory round-up

The FSA has been busy again over recent weeks.  We highlight some of the key decisions and announcements including FSA v Sinaloa Gold plc, Further arrest in FSA and SOCA insider dealing investigation, Suspension of shares by CPP Group and the Departure of Margaret Cole.
Don't let limitation limit you unnecessarily
The Court of Appeal recently held in Inframatrix Investments v Dean Construction that without prejudice negotiations, including site meetings, did not amount to the performance of services under a contract, which meant a claim was barred by a contractual limitation clause.  The case illustrates the importance of carefully checking contractual limitation clauses at the earliest opportunity.
Anti-suit injunctions - "egotistic paternalism" or a valid means of protecting English proceedings?
Two recent cases, BNP Paribas SA v OJSC Russian Machines (2011) and Star Reefers Pool Inc v JFC Group Co Ltd (2012) have looked at the court’s jurisdiction to grant anti-suit injunctions against a non-party to an arbitration which has used court proceedings to undermine an arbitration agreement.  

This article looks at the decisions in these cases.

To arbitrate or mediate, that is the question

In Sulamerica Cia Nacional de Seguros SA and others v Enesa Wngenharia SA and others, the Commercial Court was asked to consider the correct interpretation of an agreement that contained competing mediation and arbitration provisions, as well as competing governing law provisions in relation to the arbitration clause.

West Tankers: the latest twist in the saga

The Court of Appeal's recent decision in West Tankers Inc v Allianz SPA & Generali Assicurazione Generali SPA is the latest in a long line of cases involving the same parties that have been heard both by the English courts and the Court of Justice of the European Union (CJEU).

Global Bribery & Corruption Review 2011

Bribery and corruption issues have had a lot of coverage over the past months, and understandably so. Given the scale of the financial penalties, which can often exceed $100 million, and the prospect of lengthy jail terms, multinational businesses need to keep on top of developments in this area (particularly those operating in higher risk industries, such as energy, infrastructure or life sciences, or in emerging markets).  To help client navigate the risks and keep abreast of the latest developments, we recently published our Global Bribery & Corruption Review 2011.
Board members demanding an increasing amount of litigation advice, finds Hogan Lovells research
Against a backdrop of challenging economic conditions and increased regulation, the Hogan Lovells Litigation Benchmarker survey analyses the disputes landscape and the challenges facing in house counsel. Download a copy or the report and for future updates at www.hoganlovells.com/litigationbenchmarker.

Read the full newsletter: 'Legal and Financial Risk –  April 2012'

The team

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