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Global Legal News: a monthly media round-up of news, views and comment pertaining to global law


Global Legal News

A monthly media round-up of news, views and comment pertaining to global law

 Tuesday 23rd April 2019


Corporate compliance becomes more complex

Compliance officers say the traditional areas of compliance, including awareness of sanctions, defending against bribery and money laundering, are becoming more complex at a time when new risks are emerging. Attendees at an event hosted by Dow Jones Risk & Compliance and The Wall Street Journal heard that corporate culture, executive conduct and the geopolitical environment are making greater than ever demands on compliance departments. Brent Benoit, chief compliance officer at National Oilwell Varco, observed that compliance officers are increasingly unsure about whether new laws are part of their watch. He cited the European Union’s General Data Protection Regulation, saying GDPR compliance presents a “real challenge” for companies.

Wall Street Journal 

Law firms need tech knowledge to help them stand out

A survey conducted by Wolters Kluwer Legal & Regulatory suggests lawyers need to improve their understanding and use of technology to differentiate and improve their practice. ‘The Future Ready Lawyer’ study of 700 US and European in-house and private practice lawyers found that just 34% thought their organisation is very prepared to keep pace with changes in the legal market. Lack of technology knowledge, understanding or skills was the top factor (36%) for resistance to new technology, according to the survey. Dean Sonderegger, vice president and general manager of legal markets, innovation at Wolters Kluwer Legal & Regulatory US, said technology can help firms create deeper insights and specialised services to stay competitive. If they don’t, Mr Sonderegger said, they risk having to engage in “race-to-the-bottom pricing.”

US employers challenged over biometric data storage

More US workers are filing lawsuits challenging their employers over how biometric data about them gets used and stored. Al Saikali, an attorney with Kansas City, Mo., headquartered law firm Shook, Hardy & Bacon, says “The floodgates have opened up” following the filing of many lawsuits in the wake of a recent state Supreme Court ruling in Illinois. In January, the court ruled that plaintiffs don’t have to prove “harm” from violations of local biometric privacy laws in order to bring a suit – only that the law had been violated. The suits filed in Illinois assert that employees weren’t informed what would happen to their biometric data and that it is being put at risk.

Wall Street Journal

Gig labour rules are being shaped state by state

The New York Times looks at how lobbyists for ride-hailing companies including Uber and Lyft are engaged in a state by state effort to model rules governing the gig economy. A proposal made in December from a Texas regulator was a turning point, observes the Times: companies that use a “digital network” to dispatch workers could label them as contractors rather than employees. Uber and Lyft argue that their drivers are contractors because the drivers decide when, where and how long they work. Lyft says forcing it to classify them as employees “may require us to significantly alter our existing business model. »

New York Times  

Diversity warning for law firms

A Department of Labor (DoL) official says that the federal contractor watchdog wants to take a closer look at diversity and discrimination at US law firms. Craig Leen, director of the DoL’s Office of Federal Contract Compliance Programs (OFFCP), said: “Law firms need to get their houses in order . . . There is a big problem at law firms for women and women of colour.” The OFFCP typically uses random audits to enforce pay, hiring, promotion, and other discrimination protections for workers employed by federal contractors.

Bloomberg Law

Baker McKenzie head passes away

Paul Rawlinson, the head of Chicago-headquartered international law firm Baker McKenzie, passed away on April 12th. Jaime Trujillo, appointed global acting chair in Mr Rawlinson’s place in October last year, will continue in that role during the search for a permanent successor.

Bloomberg Law   The Daily Telegraph   Financial Times  



European clampdown on corporate crime

Whistleblowers across the European Union have won greater protection under landmark legislation aimed at encouraging reports of wrongdoing. The new law, approved by the European Parliament, shields whistleblowers from retaliation and creates « safe channels » to allow them to report breaches of EU law. It is the first time whistleblowers have been given EU-wide protection. National authorities are required to train officials in how to deal with whistleblowers under the legislation. Luxembourg Times observes that the role of whistleblowers was recently underscored in Danske Bank’s money-laundering scandal, which was brought to light by an employee intent on uncovering wrongdoing. « From exposing dodgy tax deals between governments and multinational companies to showing how political campaigns manipulated voters using data driven profiling, whistleblowers have played a vital role in holding the powerful to account in recent years, » leading European lawmaker Virginie Roziere said in a statement.

Bloomberg   BBC News   Luxembourg Times

EU backs digital copyright law overhaul

The European Parliament has voted in favour of copyright laws that will force tech giants to compensate media creators for using their content. While the UK will be exempt from implementing the directive at a national level, firms operating in Europe will have to invest in filtering technology similar to YouTube to ensure that content does not breach copyright. The vote will be followed by another decision from the European Union’s Council, which is set to determine how the proposals will be enacted in law, but experts believe that proposals are likely to be implemented by 2021. Raffaella de Santis, associate at Harbottle & Lewis, acknowledged that creators will welcome the move, but warned: “The effect of the text of the directive as passed could at the same time have very concerning and unintended consequences for vast swathes of online services, not simply those operating in music or news.” The FT editorial board says that it is a long overdue “necessary” measure.

The Daily Telegraph   Financial Times    The Times  

Gender pay gap widens at top UK law firms

Women working at one of the ten largest UK law firms are paid 43% less than their male colleagues on average this year. This median gap is wider than the 42.6% recorded last year and exceeds the national median average of 9.6%. Of the ten largest firms, Freshfields Bruckhaus Deringer, where women make up less than a quarter of its UK partners, performed the worst, with a median gap of 57.6% – down from 60.4%. The second worst was Herbert Smith Freehills, with a median gap of 51%. The gap for staff employed by the law firms, which does not include partners, rose from 27.6% on average to 28.3%. All ten law firms published their combined gender pay figures for staff and partners in 2018, up from only six the year before.  

The Times  

EU fixes minimum rights for ‘gig economy’ workers

The European Parliament has approved new EU rules to protect ‘gig economy’ workers. The law sets minimum rights and demands increased transparency for those in ‘on-demand’ jobs, such as at Uber or Deliveroo. It proposes more predictable hours and compensation for cancelled work, and an end to « abusive practices » around casual contracts. Member states will now have at most three years to enforce the new rules. The European Parliament says the new legislation will apply to « the most vulnerable employees on atypical contracts and in non-standard jobs » – including those on zero-hour contracts.

EU News   BBC News   The Daily Telegraph

UK in world first on social media rules protecting children

Under plans for rules forcing social media giants to protect children online, British children will no longer be able to “like” posts on Facebook and Instagram. The code of conduct to be introduced by the Information Commissioner’s Office includes a ban on tactics that encourage children to spend more time on apps; only a minimum amount of personal data should be collected and held; children’s data should not be shared; and tracking children’s movements should be switched off by default. The rules are the first of their kind in the world. Companies that do not stick to the code face fines of up to 4% of their global turnover. The code covers British and overseas companies that operate and have offices here. Experts say it is possible that some US technology companies would no longer serve Britain. Alan Woodward, of the University of Surrey in the UK, said that the measures could lead to some companies withdrawing. “If your whole business model assumes that you can exploit personal data then you may choose to leave the UK rather than risk these fines,” he said.

The Times    Daily Mail

Big Four look to law

The Times’ Jonathan Ames looks at moves by the UK’s ‘Big Four’ auditing firms into law, saying any regulatory crackdown on their domination of the audit market could accelerate Deloitte, EY, PwC and KPMG’s interest in the legal sector. He notes that all four have obtained alternative businesses licences from the Solicitors Regulation Authority, adding that their reach could see them pose a threat to mid-tier City law firms. Gervase MacGregor, a senior adviser at BDO, comments: “If they see that their audit market in the UK is curtailed and that they start losing some of that work to firms outside the Big Four, then they’ve got to look for growth to replace that revenue. »

The Times

High demand for blockchain knowledge

Brian Burlant, managing director at Major, Lindsey & Africa, says demand for legal experts with blockchain technology knowledge is high, saying law firms are struggling to keep up with cryptocurrency and blockchain industry demand for lawyers because of a lack of understanding of the technology. Mr Burlant has advised law students and those early in their legal careers that “coupling a practical business approach with a working understanding of the technology is a good way to go.” Mary K. Young, a partner at Zeughauser Group, has said that while blockchain was extremely popular for lawyers toward the end of 2017, the cryptocurrency crash meant “a lot of lawyers who were working in crypto or blockchain went back quietly to whatever they were doing before.”

Coin Telegraph  

Legal worker union seeks to unify the UK profession

Legal workers in the UK are being urged to join a single trade union aimed at unifying the profession, with Michael Mansfield QC among senior lawyers who have endorsed the initiative. Legal Sector Workers United (LSWU), a new branch of the United Voices of the World union, is looking to bring together paralegals, solicitors, barristers, receptionists, interns, personal assistants, administrative staff, cleaners, and security guards. Mr Mansfield comments: “I was involved in an earlier effort in the 1970s which was far less ambitious and did not survive. This has the advantage of a far wider constituency of workers who are constantly at risk of exploitation and marginalisation. »

The Guardian 

Deutsche admits risk of legal action over ‘Russian laundromat’ scandal  

A confidential internal report shows Deutsche Bank faces fines, legal action and the possible prosecution of “senior management” because of its role in a $20bn Russian money-laundering scheme. US and UK regulators are likely to take “significant disciplinary action” against the bank over its involvement in the so-called Global Laundromat, which saw Kremlin-linked criminals and the FSB use illicit payments through shell companies and corrupt officials in eastern Europe to move as much as $80bn into the western financial system. The Guardian, which broke the story in 2017, explains that shell companies typically based in the UK “loaned” money to each other. These then defaulted on the fictitious debt. Corrupt judges in Moldova authenticated the debt – with billions transferred to Moldova and the Baltics via a bank in Latvia. Deutsche Bank was used to launder the money via its corresponding banking network – effectively allowing illegal Russian payments to be funnelled to the US, the European Union and Asia.

The Guardian   Financial Times 

Mastercard mega-claim brought back to life

The UK Court of Appeal has reversed an earlier decision to have a £14bn class action against Mastercard dismissed, after three judges found that the case could be reheard for certification in the Competition Appeal Tribunal (CAT). The action was brought by former financial ombudsman Walter Merricks, who claims consumers paid higher prices in the shops because of the unlawful fees that Mastercard charged merchants in the 16 years to 2008. If the case is successful, in theory it would enable anyone who was aged 16 or over between 1992 and 2008 to claim compensation of £304 per person. A spokesperson for the firm remarked: “Mastercard continues to disagree fundamentally with the basis of the claim and we believe UK consumers receive real value from the security, convenience and consumer protection of our payment services.”

City AM   Financial Times   The Guardian   The Times   The Daily Telegraph   

AI judge built in Estonia

An AI-powered ‘robo-judge’ is being built in Estonia to rule over a backlog of small court cases. The system will analyse legal documents, before coming to a decision based on its pre-programmed algorithms and training. It will preside over disputes of less than €7,000, and any ruling will be legally binding but could be appealed to a human judge. It is hoped the technology will free up more time for humans to work on bigger cases. Estonia’s economic ministry is also considering granting AI and robots a legal status that would sit somewhere between having a “separate legal personality” and being an object that is someone else’s “personal property.”


Former Volkswagen chief Winterkorn charged with fraud

Former Volkswagen CEO Martin Winterkorn is facing criminal charges in Germany over his involvement in the auto company’s emissions testing scandal. Braunschweig prosecutors has pressed charges against Mr Winterkorn and four other executives. This comes in the wake of Mr Winterkorn being charged with alleged serious fraud and violation of competition law in Germany, while US authorities have already filed charges against Volkswagen and its former boss. Prosecutors have accused Mr Winterkorn of breaching both trust and competition laws.

Deutsche Welle   Financial Times

Danish police probe audit firms

Denmark has reported the local operations of EY and KPMG to the police amid a widening crackdown on money-laundering. EY is being investigated for its work auditing Danske Bank’s accounts for 2014, while KPMG is being looked at in connection with its audit of Kobenhavns Andelskasse, a small local lender that was shut down last year amid concerns it was systematically used for money-laundering.

Bloomberg   Financial Times   Irish Examiner

Soldier charged over virtual battlefield incident

A British soldier has been formally charged after an incident in which he ‘killed’ comrades during a virtual battlefield exercise, with the case believed to be the first where a soldier has faced punishment under UK military law for offences in a virtual scenario. The unidentified rifleman was formally charged with disobeying orders.

The Daily Telegraph



Legal developee program is launched in UAE

The UAE’s nuclear regulator has launched a Legal Developee Programme to train UAE nationals in nuclear law and prepare them for employment.  The first-of-its-kind program in the UAE is part of  a strategy by the Federal Authority for Nuclear Regulation (FANR) to build long-term sustainability in the nuclear energy sector and related fields by developing local talent. “Since its foundation, FANR has been committed to empowering talented UAE nationals to develop the skills and expertise necessary to become the future leaders of our peaceful nuclear energy program, » said Shaima Al Mansoori, director of Education and Training at FANR.

Trade Arabia

Kuwaiti government warned over labor law

Kuwaiti MP Osama Al-Shaheen has warned the government of a political confrontation over controversial amendments to the labour law for the private sector. The lawmaker, who is Rapporteur of the National Assembly’s health and labour committee, said the committee was in receipt of a letter from Mariam Al-Aqeel, the Minister of State for Economic Affairs, saying the government rejects the amendments to the labour law, even though the committee agreed to maintain annual leave at the original 30 days instead of 35. Shaheen said the government must change its stance if the amendments are to meet their objective of attracting more Kuwaiti nationals to the private sector. Currently, 95.6% of private sector employees are expatriates.

Kuwait Times

More Saudi women wanted for court jobs

Saudi Arabia’s Ministry of Justice has been ordered by the Shoura Council to increase the number of women in its workforce. The council said more women were needed in administrative roles to better reflect the different requirements of the court system.

Arab News



Japan targeting overtime caps

A new labour reform law has come into effect in Japan as part of efforts to tackle the nation’s culture of long working hours. Workers are now limited to 45 hours a month and 360 hours a year, with potential fines of 300,000 yen for companies that violate the new rules. The law will initially only target major companies and permits an extension of up to 100 hours a month and 720 hours a year in busy periods for a maximum of six months a year. According to government statistics, as many as 190 people reportedly died from overworking in Japan, including suicide caused by work pressures, during the 2017 financial year.

The Japan Times   The Daily Telegraph

Brunei defends penal code

Brunei has defended its decision to impose death by stoning as a punishment for sexual relations between people of the same gender, claiming convictions will be rare as they require at least two male witnesses of « high moral standing. » In a letter to the European parliament, the kingdom called for « tolerance, respect, understanding » of laws which see punishments including amputation and execution for offences such as theft, robbery and adultery. Despite the correspondence, MEPs backed a resolution condemning the “retrograde” penal code.

The Guardian   The Independent



Crackdown ordered on food delivery firms in Buenos Aires

A Buenos Aires judge has ordered the city to immediately halt operations by the three main food delivery firms, Colombia-based Rappi, Spanish start-up Glovo and Argentine firm PedidosYa, but the municipality of Buenos Aires said it would appeal the order. The judge had said that the companies currently were operating in “clear violation of current regulations” and called for strict rules around safety measures for delivery staff, insurance cover and food sanitation.




Mining firms facing new legal threats after Supreme Court ruling

The UK Supreme Court has said that a claim brought by Zambian villagers against mining firm Vedanta can be heard in London because the claimants would struggle to access justice in their home country. The villagers allege Vedanta is liable for the contamination of water supplies by its subsidiary, Konkola Copper Mines, which led to the loss of livelihood and health problems. The ruling paves the way for more environmental claims to be brought in London against large multinationals with global operations. Martyn Day, of Leigh Day, which represented the Zambians, said: “I hope this judgment will send a strong message to other large multinationals that their CSR [corporate social responsibility] policies should not just be seen as a polish for their reputation, but as important commitments that they must put into action.”

The Daily Telegraph   Financial Times    The Guardian   Reuters Africa

Zimbabwe criticised over judges’ wigs spend

The Zimbabwe Independent reports that the country’s legal authorities have ordered handmade horsehair wigs for its most senior judges from one of London’s leading judicial outfitters. The move has drawn criticism in some quarters, with Arnold Tsunga of the International Commission of Jurists saying: « The conditions in Zimbabwe’s courts are dire and yet they can find money for wigs costing thousands of pounds – it’s obnoxious. »

The Times   Zimbabwe Independent



Encryption adoption driven by new tech and compliance

Organisations worldwide are increasingly turning to encryption to protect applications and sensitive information to improve security and meet compliance requirements, a survey across multiple sectors in 14 countries reveals. The 2019 Global Encryption Trends Study from the Poneman Institute, sponsored by nCipher Security, found that the main driver of the trend is the need to protect data used and generated by such technologies as the Internet of Things, blockchain, and digital payments. Other drivers include compliance with new data protection laws around the world and a desire by boards to avoid reputational damage due to a data breach.

Computer Weekly   

Anti-slavery database maps supply chains

A free-to-use open-source global fashion database is being developed to help crack down on slavery and worker abuse by mapping every clothing and footwear factory in the world. The Open Apparel Registry (OAR) seeks to increase supply chain transparency for workers, businesses and customers. Leslie Johnson of the C&A Foundation, which is funding the tool, said: « It will help factories enhance their credibility. And it will help civil society groups to identify who is sourcing from a factory when there is a problem. Ultimately, it will help workers get access to remedy quicker. » A growing number of major brands, including Adidas, H&M and ASOS, now share information about their supply chains.



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