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International Edition

Hong Kong's top prosecutor calls for committee to regulate SFC

The Securities and Futures Commission (SFC) of Hong Kong should be subject to internal checks and monitoring by a community-based committee, the city's top prosecutor said yesterday. Director of public prosecutions Kevin Zervos, who earlier called for the investigatory body to be stripped of its powers to prosecute, said that at the very least the SFC should be appropriately regulated, to ensure proper use of its powers and to prevent any internal misappropriation.
4 minute read

International Edition

Linklaters and HSF lead on £1.3bn credit card mis-selling compensation deal

Linklaters and Herbert Smith Freehills (HSF) have taken the lead legal roles on an agreement between the Financial Conduct Authority (FCA), Card Protection Plan (CPP) and 13 high street banks which could see £1.3bn returned to customers who were mis-sold insurance products. Seven million customers, who between them bought and renewed around 23 million policies covering card and identity protection, may now be entitled to compensation, after the parties settled on a 'redress bill'.
2 minute read

International Edition

Damage control – how law firms can reduce their risk of costly negligence claims

Claims against solicitors can be expensive, not just in terms of damages and costs, but also in terms of reputation risks, the amount of time likely to be spent dealing with the claim and a resultant increase in professional indemnity insurance (PII) premiums. A good place to start for any firm concerned about its risk profile and wishing to improve its risk management is to identify the top 10 risks faced by the firm and then consider the steps necessary to minimise those risks. For those with serious concerns, there are specialist risk management firms that can audit firms and prepare risk reports. A firm's risk profile will vary depending on its size and personnel, and the type of work. Property work is the most common source of claims, and commercial and financial work can give rise to the most costly claims; but all areas carry risk.
6 minute read

International Edition

Kirkland secures trophy hire of SEC enforcement head Khuzami

Kirkland & Ellis has hired Robert Khuzami, former director of enforcement at the US Securities and Exchange Commission (SEC) to the firm's government regulatory and internal investigations group. The move - for which Khuzami has reportedly been guaranteed $5m (£3.3m) a year for two years - represents a trophy hire for the Chicago-headquartered firm.
2 minute read

International Edition

Hong Kong firms poised to advise on PRC law in China as liberalisation gathers pace

Hong Kong law firms are set to discover whether they will be permitted to advise on PRC law in China in a new special economic zone under development in the south of the country. The Law Society of Hong Kong has submitted proposals to the mainland authorities asking for Hong Kong firms to be allowed to advise on the ground in China by setting up joint ventures with mainland outfits in the new Qianhai Special Economic Zone (SEZ), which is due for completion in 2020. It is expecting a decision within the next two months. The proposals state that Hong Kong firms should be allowed to tie up with mainland Chinese firms based in the Guangdong province to form new joint entities, which in turn could offer a one-stop shop for legal services for Chinese clients.
4 minute read

International Edition

Waiting for the tide – will the expected flood of financial crisis negligence claims ever surface?

In the wake of the global credit crisis of 2007 and 2008, there was an expectation among some lawyers that a 'tsunami' of professional negligence work was bound to follow. Their hope was based on the theory that during boom times, companies make more use of professional advice to secure property deals, plan construction projects, and launch mergers and acquisitions, while claims for negligence become far less common. But when the economy flatlines and companies and individuals see the value of portfolios nose dive – thanks to falling or stagnating property prices and market values – they 'reappraise' the quality of that expert advice and seek to claw back their money in the courts.
11 minute read

International Edition

On dangerous ground – negligence cases against lawyers have fallen, but the sums being claimed are soaring

It remains the case that, following a peak in 2009, the number of claims against solicitors has generally decreased. It has been widely reported that the most marked increase has come from lender litigation. Residential claims are now tailing off to a degree, although commercial property claims continue to come through. Opinions are divided about whether the worst of the lender claims are now over. If interest rates rise (perhaps unlikely while economic troubles continue) we may see something of a resurgence. For larger firms the trend is towards fewer claims, but of markedly increased severity in terms of amounts claimed. This is because the downturn followed a boom period where there were many complex high-value transactions. A significant development has been this April's introduction of the Jackson reforms to litigation procedure and costs, which end the recoverability by a winning party of a success fee under a conditional fee agreement (CFA) or an after-the-event (ATE) insurance premium.
5 minute read

International Edition

The cost of compliance – offshore tax structures are in the spotlight post-G8

Top of David Cameron's stated agenda for the G8 summit on 17-18 June was a move towards tax openness and transparency – part of a political campaign that came into the media spotlight last year when it was discovered that large multinationals such as Google and Starbucks had avoided paying large sums of tax in the UK. But lawyers in offshore jurisdictions are divided as to whether the UK's calls for automatic tax information exchange, hot on the heels of the US Foreign Account Tax Compliance Act (FATCA), will have a positive or negative impact either on or offshore. What is clear is that this move towards global tax information exchange is well underway, with more governments signing up all the time – with the exception of China, which has sufficient economic clout not to feel pressured to fall in line with what the US or any other jurisdiction might demand.
8 minute read

International Edition

Crystal clear – is transparency the solution to the 'dirty tactics' of tax avoidance?

It is perhaps unsurprising that mass media outlets in the UK have increased their focus on tax avoidance by large corporations as well as by private individuals, not least as we begin to feel the pinch from the government's austerity package and as politicians start to limber up for the next general election. Hearts and minds are to be won, and the legality and morality of tax mitigation are hot topics with a plentiful diet of opinion. The voice of the international financial centres (IFCs), which are criticised for their use of attractive rates of taxation to entice business, is often quieter than the voice of their critics. This is particularly the case for the smaller IFCs among the UK's crown dependencies (CDs) and overseas territories (OTs), but what they have to say is of merit and should be listened to. Indeed, in many areas of tax transparency as well as compliance and anti-money laundering, standards are higher in the more sophisticated and well-regulated offshore centres than in their counterparts onshore. Furthermore, with IFCs contributing to the efficient flow of capital between developed and less-developed economies through direct and indirect investment, their role in promoting trade is well-established.
5 minute read

International Edition

Senior City lawyers lambast 'naive' and 'monstrous' bank reform plans

Senior City partners have come out strongly against proposals for banking reform published yesterday (19 June) by the commission tasked with restoring confidence in the industry in the wake of the Libor scandal. The parliamentary commission's report on banking standards, which includes proposals to jail bankers who engage in "reckless misconduct", has been met with strong criticism from senior lawyers, who describe aspects of the report as 'unworkable', 'naive' and 'monstrous'.
3 minute read

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