Category Archives: Uncategorized

Former Dewey chairman Davis becomes legal chief for Arab emirate

Former Dewey & LeBoeuf chairman Steve Davis has won a new job, as chief legal adviser to the United Arab Emirate Ras al Khaimah.

The post marks the first new role for Davis since his former firm collapsed in May 2012 (29 May 2012).

According to Reuters, Davis’ hire was announced via an internal Ras al Khaimah government memo. It stated that in addition to holding the role of chief in-house legal adviser, Davis will also become chief executive officer of the emirate’s investment and development office.

Since Dewey’s collapse, Davis has been the subject of a number of investigations, alongside other former Dewey senior management figures, for alleged financial misconduct and other alleged criminal activity related to the firm’s demise.

He first became the subject of a criminal investigation by the Manhattan district attorney’s office in April 2012, just days before being ousted from the chairman role at the ailing firm (30 April 2012). It is unclear whether any investigations are ongoing.

Davis was initially excluded from Dewey’s settlement deal, which saw partners pay back an amount of money in return for being absolved of future liability (20 June 2012). However, last April he reached an agreement to pay a settlement of $511,145 (£335,000) to cover claims for which he was not insured (24 April 2013).

Energy specialist Davis will relocate to Ras al Khaimah to take up his new role.

Since Dewey’s collapse, its former CFO Joel Sanders has found a new role at Florida firm Greenspoon Marder (6 September 2012). Meanwhile, its former executive director Steve DiCarmine has reportedly set his sights on a new career in fashion, studying at New York’s Parsons The New School for Design.

Law Society risks claims over forced Christmas leave

Law Society staff have been clobbered with a special holiday treat from senior bosses – they are being forced to take annual leave between Christmas and New Year in a move lawyers speculate could be challenged in court.

The ornate London offices of the body representing solicitors in England and Wales have historically remained open between Christmas and New Year. But managers ruled earlier this year that it was uneconomic to keep the heating and lights on and decided to shut down.

But instead of allocating additional leave time, in a memo from mid-February this year, chief executive Des Hudson informed the 230-plus employees they would be forced to take the leave from their annual allocation.

It is understood the decision sparked anger among staff and union officials. Particularly galling, say sources close to Chancery Lane, was that management imposed the change after the closure of the annual opportunity for staff to “buy and sell” leave days for the forthcoming year.

Therefore, staff were unable to buy more holiday time to replace the three days they are being forced to take at the end of this year.

Employment specialist lawyers report that unilaterally changing leave arrangements around Christmas and New Year is one of the biggest legal traps snaring large employers. Forcing non-Christians and non-believers to take leave at what is still interpreted as a religious festival can spark discrimination claims.

Employers are legally allowed to build into employment contracts mandatory leave days. However, problems arise when bosses attempt to change existing contracts, as arguably Chancery Lane has done.

“The principle is that an employer cannot change unilaterally the terms of employment contracts,” commented Claire Dawson, an employment law partner at Slater & Gordon. “Contracts can only be varied after consultation and consent.”

Chancery Lane sources claim management alerted the Unite Union, which represents some society employees, but discussions were brief and objections around the timing were quickly dismissed.

Specialist lawyers point out that employers can seek to justify changes to employment contracts purely on financial grounds. However, explained Dawson, “good practice is to give notice well in advance after consultation before making the change. Normally that would be equivalent to the employee’s notice period, but with Christmas you have to think about what’s reasonable and the fact that people plan ahead. Ideally, with Christmas leave arrangements, that notice should be a year.”

In his February memo, Hudson told staff “everyone will be required to take the time as part of your annual leave allocation for the year …” He went on to claim “I wanted to let you know as early as possible, so you can plan your annual leave over the year”.

Senior managers also axed the tradition of giving staff Christmas Eve off as a “privilege day”. He told employees: “I know you are disappointed, but we need to think carefully about our spending and this decision is part of that.”

Disgruntling staff comes at a difficult time for Chancery Lane, with senior players recently losing a vote of confidence from the profession (17 December 2013). Criminal law specialists flooded the society’s headquarters last week for a special general meeting to debate the leadership’s handling of the Government’s proposed cuts to legal aid rates.

The meeting passed a no-confidence motion in both Des Hudson and the society’s titular head, president Nick Fluck.

A Law Society spokesman attributed the holiday move to the “low volume of activity and increasing number of staff choosing to take leave” between Christmas and New Year.

He acknowledged that management’s edict was “the subject of a query from union representatives in early 2013. It was made clear that this would affect only a small number of staff who would otherwise have elected to work in this period, and was within the terms of employment contracts”.

The spokesman also said that while the changes were formally announced in February, they had been “trailed” earlier.

Central Bank of Cyprus publishes Code of Conduct on defaulting loans

Central Bank of Cyprus publishes Code of Conduct on defaulting loans
Having regard to the financial difficulties faced by Cyprus bank borrowers and the increased number of non performing loans in Cyprus, the Central Bank of Cyprus has published a Code of Conduct for the treatment of borrowers that face financial difficulties.

The Code applies to all Cyprus financial institutions licensed by the Central Bank of Cyprus.  The primary aim of the Code is to facilitate negotiations between borrowers and financial institutions that would allow an arrangement that would reduce non performing loans.  It contains procedures through which borrowers can restructure their loans and get the benefit of long-term viable solutions that are aligned with their current financial means. The Code also ensures that borrowers that face financial difficulties are receiving necessary, comprehensive and up to date information regarding the restructuring of their loans.

The Code can be found here.

Linklaters tumbles from top 10 as public M&A market stalls in 2013

After holding the top spot for two consecutive years, Linklaters has fallen into 13th place in the 2013 UK M&A rankings.

The figures, which are compiled by Thomson Reuters, encompass all deals launched between 1 January and 16 December 2013 that involved a UK party.

Linklaters’ deal value fell by 72 per cent over the course of the year, due to a drop in the number of transactions it was involved in, falling from 97 to 75. Freshfields’ deal value fell by 61.4 per cent, while its volume shuffled from 70 to 69. The value of Clifford Chances’ M&A deals fell by 86 per cent, from $38.5bn to $20.7bn while its total number of transactions tumbled 14 per cent. Allen & Overy suffered the same fate – its value dropping by 51.8 per cent and volume from 64 to 63 deals (17 December 2012).

Kirkland & Ellis, Shearman & Sterling, DLA Piper, Herbert Smith Freehills and Ashurst also saw their deal values diminish in 2013.

US firms Simpson Thacher and Davis Polk topped the overall rankings, with total UK-related M&A deal values of $142bn and $141.7bn respectively. Slaughter and May is the highest ranking UK firm, taking the third spot having advised on deals worth a collective $137.3bn.

Verizon Communications’ takeover of Vodafone’s 45 per cent stake in Verizon Wireless (2 September 2013) was the largest deal of the year valued at $130bn (£84bn), with each of the top 11 firms ranked in the list advising on an aspect of the deal. Those included Simpson Thacher, Davis Polk & Wardwell and Slaughter and May.

Macfarlanes, another Verizon Communications adviser, and Hogan Lovells, which was one of the Vodafone advisers, were the only two other UK firms to win spots in the top 10.

Discounting the Verizon/Vodafone transaction, the magic circle sit at the top of the next tranche of firms despite all four outfits seeing their deal value plummet substantially in 2013.

Freshfield’s M&A co-head Simon Marchant said: “The first half of 2013 was one of the poorest on record for general M&A activity. It picked up in the second half but that’s not yet shown up in the figures.”

He added: “The US market has been ahead in terms of recovery in the economic and the M&A cycle. There has been more M&A there so they’ve seen more of an uptick, but that is spreading to Europe.”

Interestingly, all but one UK firm featured in the top 25 by M&A value both this year and last saw a decrease in deal volume. Countering the trend was Hogan Lovells, which saw its deal total increase from 27 to 44 during the period.

Hogan Lovells corporate finance head Andrew Pearson said: ”There’s always an element of luck in these things, in terms of which firm’s clients are doing deals, but we’re seeing the benefit of our transatlantic capability.” A prime example is Hogan Lovell’s advice for the Kodak Pension Plan on its £419m purchase of Kodak’s personal film business in May (1 May 2013). “Our other strength is in the heavily regulated sectors,” he continued. “There’s a lot of activity in the financial services, and energy, natural resources and infrastructure space.”

DLA Piper suffered the biggest loss in volume, as its deal-load fell by 35.7 per cent from 98 to 63.

CMS is the only new UK entry, propping up the top 25. Skadden Latham & Watkins and King & Wood Mallesons (now King & Wood Mallesons SJ Berwin) are among the firms denied a place in 2013.

Total deal volume dropped by 10 per cent over the course of 2013, from 3,567 in 2012 to 3,242. Total deal value was $311.6bn – a 5 per cent drop on 2012’s figure of £327.7bn.

Law Society leadership in chaos as solicitors pass no-confidence vote

Pressure is mounting on key figures at the Law Society to resign after solicitors said today they had no confidence in the leadership’s position on government proposals to slash legal aid rates.

James Parry – the criminal law specialist partner who triggered a special general meeting – said the society’s president and chief executive “need to consider their positions” in the light of the no-confidence vote.

Solicitors passed the motion by 228 to 213, and Parry said that if the existing leadership “can’t address its credibility problem and say it has got it wrong in the past” in relation to its approach to ministers, then it should stand down.

To trigger a national postal vote, five local Law Society presidents or 100 members would have to demand it within the next 28 days.

Speaking to reporters after the vote, society chief executive Des Hudson said “once several immediate issues are dealt with on behalf of our members”, the leadership would consider the ramifications of the no-confidence vote. He said he would discuss with the society’s council – which went into emergency session after the vote – how it could “reconsider and rethink” its approach to the legal aid debate.

An official society statement following the vote said: “There are lessons to be learned and we will reflect on these developments. [The] council will be considering the outcome today. Our immediate priority is to continue to influence the Ministry of Justice in our members’ interests. We will continue to make it very clear to the Lord Chancellor that we remain opposed to cuts.”

The crisis at Chancery Lane was sparked by simmering anger among criminal law specialist solicitors at what they claim has been Law Society appeasement of the Ministry of Justice over Whitehall’s proposed fee rate cuts.The Lawyer revealed inNovember that members were gearing up for a confidence vote in the Law Society (4 November 2013).

At today’s meeting (17 December), a stream of speakers supported Liverpool-based Parry, slamming the society for cutting a deal allegedly without a mandate from specialist practitioners and for maintaining a “culture of secrecy” around its talks with government.

Parry – from Parry Welch Lacey Solicitors – said the government’s proposals “threatened the very existence of the criminal justice system”. While he was saddened at having had to call the SGM, Parry said the Law Society needed to be jolted into taking a more aggressive and campaigning stance of opposition.

Supporters of the society leadership pleaded with rank and file solicitors not to slap Chancery Lane publicly as it would cause Secretary of State for Justice Chris Grayling “to rub his hands in glee”. Society President Nick Fluck told the SGM: “Some may wish we had done it [campaigned] more publicly, but from the start we’ve been there talking to the government, persuading them why they are wrong.”

Hudson claimed the Law Society had a mandate to talk to the government “under the rules of the society”. He told solicitors at the meeting: “You may say you don’t like those rules, that you want to change the rules of the society about how a mandate is formed, but as fellow lawyers, we all know that under our constitution there was a mandate.”

However, those pleas failed to win the day as no Law Society-affiliated criminal law solicitor spoke against the motion. Those backing the society were all from its 100-strong council in addition to a smattering of City law firm representatives.

The latter claimed the no-confidence vote would send a message to ministers that the solicitors’ profession was divided and therefore encourage the government to press ahead with its reforms. But those backing the motion countered, saying it was the Chancery Lane leadership that was causing disunity by failing accurately to represent the wishes of criminal practitioners.

Hudson responded with suggestions that criminal specialists themselves were divided, with those in the Big Firms Group – practices that earn most from the annual criminal legal aid budget – more minded to negotiate with the government in a bid to see consolidation and greater efficiency in the market.

Hudson maintained that while the society leadership considered there was a strong chance today’s result would not be repeated in a profession-wide ballot, he ruled out Chancery Lane itself calling for an electronic postal vote.

He said the society had already spent £120,000 organising the SGM and that a profession-wide vote would boost that to £200,000. “We can’t operate on the basis of continuing plebiscites,” he said.

Supporters of the motion called on criminal law solicitors to back barristers in their half-day of action on 6 January. The Criminal Bar Association is pushing for its members not to attend at court on that day.


Current status of capital restrictions in Cyprus

A series of temporary capital restrictions measures has been imposed in Cyprus in late March 2013 with the aim to avert the collapse of the banking sector and to safeguard the stability of the Cypriot banking system. The temporary capital restrictions were implemented through decrees issued by the Minister of Finance pursuant to the provisions of the Restrictive Measures on Transactions in case of Emergency Law of 2013.
These decrees are revisited on a regular basis (usually weekly) and they are gradually being lifted upon assessment of the situation. While it was difficult to lift such restrictions from the moment they were introduced, Cyprus has gradually relaxed controls. The most recent decree is the twenty-third (23rd) decree, which was issued on the 22nd of November 2013 and is currently in force. No specific time has been set for lifting the restrictions. Nevertheless, the Minister of Finance has recently announced that all capital controls would be lifted in the first months of 2014 except in the case of transferring money abroad.

New funds from abroad or from other Banking institutions in Cyprus which are indicated as new funds with credit value date 28.3.2013 and after are not subject to any of the restrictions imposed on transfer of funds.

The maximum amount of cash withdrawal cannot exceed €300 daily, per natural person or €500 daily per legal person, in each credit institution or the equivalent of these amounts in foreign currency. Provided that any part of the maximum cash withdrawal allowed daily which is not withdrawn by the beneficiary during the day in which the limit applies, may be withdrawn at any time afterwards.

The following payments are permitted:

  • Cashless payment or transfer of deposits/funds to accounts held in other credit institutions within the Republic up to €15.000 per month per natural person.
  • Cashless payment or transfer of deposits/funds to accounts held in other credit institutions within the Republic up to €75.000 per month per legal person.
  • Cashless payment or transfer of deposits/funds to accounts held in other credit institutions within the Republic for the purchase of goods and or services regardless of the amount provided that the cashless payment from one credit institution to another, for a person’s own account is not permitted and provided that the credit institution may request justifying documents if it is deemed necessary.

Cashless payment or transfer of deposits/funds to accounts held abroad is permitted provided that the transaction falls within the normal business activity of the customer upon presentation of justifying documents as follows:

  • Payment and or transfer of deposits/funds of up to € per transaction, is not subject to the Central Bank Committee’s approval.
  • Payment and or transfer of deposits/funds from €500.001 to €1.000.000 per transaction, is subject to the approval of the Committee.
  • Payment and or transfer of deposits/funds above €1.000.000 per transaction, is subject to the Committee’s approval.

Transfers of deposits/funds outside the Republic up to €5.000 per month, per person are permissible regardless of the purpose and without any justifying document. Payment of salaries of workers abroad can be made upon the presentation of the relevant documentation; In addition, the transfer for living expenses up to €5.000 per quarter for the tuition fees of a person studying abroad is also permitted.

It is prohibited to terminate fixed term deposits prior to their maturity unless the funds are used:

  • To repay a loan and/or overdraft and/or credit card within the same credit institution granted before 27.03.2013.
  • To create one or more fixed term deposits, within the same credit institution, the total amount of which is equal to the initial deposit and for a term at least equal to the initial term of the terminated deposit.
  • To transfer up to €5.000 monthly, from a fixed term deposit in a sight/current account within the same credit institution.
  • To transfer amounts to be solely used for the payment of medical expenses to the medical care provider, provided that justified documents are presented.
  • For a transfer to a sight/current account within the same credit institution, to repay obligations to the Republic.
  • For the payment of real estate acquisition in the Republic provided, inter alia, that the funds are paid directly into a loan account of the seller and the justifying documents are presented to the credit institution.

On the maturity of fixed term deposits, the higher amount between €5.000 or 20% of the total amount of the deposit in question, shall, according to the choice of the depositor, either be transferred to a sight/current account or be deposited in a new fixed term deposit in the same credit institution. For the remaining amount the maturity shall be extended for one month. It should be noted that new fixed term deposit that is created, during or after the entry into force of the Enforcement of Temporary Restrictive Measures on Transactions in case of Emergency Fifteenth Decree, of 2013, with funds from a sight/current account is not subject to the restrictions.

The restrictive measures apply to all accounts, payments and transfers regardless of the currency denomination.
The opening of a new account for any person who is not an existing customer of a credit institution on the date of entry into force of the Enforcement of Temporary Restrictive Measures on Transactions in case of Emergency Sixth Decree of 2013 (11.04.13), is prohibited unless:

  • the account will only be credited with funds transferred from abroad to the Republic, or
  • the prior approval of the Committee is obtained or
  • The account is a new fixed term deposit created with funds from cash provided that the amount to be deposited exceeds €5.000 and the term of the new fixed term deposit is at least 3 months or
  • The account relates to a new loan granted after 2.08.13:
    • Provided that the funds in the current/sight account can only be used for the servicing of the loan and for the regular activity of the customer and not for depositing purposes,
    • Provided further that the credit balance of the current/sight account, cannot at any time exceed the amount of the loan balance,
    • Provided even further that the loan proceeds must be disbursed into a current/sight account, within the same credit institution, within the Republic and shall be subject to the prevailing restrictive measures. The funds in the current/sight account can be deposited in cash or be transferred from an account abroad or from other accounts within the Republic, subject to the prevailing restrictive measures.

Withdrawal of cash using credit or debit or prepaid card issued by foreign institutions on accounts abroad is exempted from the restrictive measures. Moreover, exempted is the cashing of cheques issued on accounts held with foreign institutions abroad and the payments via a debit or credit or prepaid card.

There is no restriction for existing bank customers or new accounts to be credited with new funds transferred from abroad.

Cyprus introduces a new Administrative Court

A new draft law on the establishment of a new autonomous Administrative Court is under discussion in Cyprus.  This initiative, probably one of the most fundamental developments of the Cyprus legal system of justice in the last decade, aims to diminish the case load of the Cyprus Supreme Court, which currently adjudicates on administrative and public recourses at first instance and, consequently, reduce the time required for the Supreme Court to rule on civil and criminal appeals.

Currently, civil appeals are heard by the Supreme Court within a period of 3 to 4 years from the date when the appeal is filed.  This is an inherently problematic phenomenon, especially where the nature of justice is directly associated with the speed of litigation, e.g. in provisional remedies.  It is expected that this period shall dramatically decrease in a span of a few years after the operation of the new Administrative Court.

The new Administrative Court is planned to be established in Nicosia and shall be composed of one (1) President and four (4) judges. This Administrative Court will be competent to review at first instance the lawfulness of decisions, actions or failures to act by administrative authorities.  The jurisdiction of the Administrative Court shall be revisional, i.e. it shall only be able to validate or nullify the decision, action or default, excepts in Cyprus tax matters or immigration litigation, where the jurisdiction of the Court shall be more extensive and shall include the power to amend a decision so as to be compatible with applicable laws.

Judgment of the Administrative Court could be the subject of appellate proceedings before the Supreme Court, which will hear them in a panel of three Supreme Court judges.  Appeals can be lodged within forty two (42) days from the issuance of the first instance court decision.

Transitional provisions would regulate the administration of cases that are pending before the Supreme Court at the date when the new law will enter into force.  These will be transferred to the new Administrative Court for adjudication, unless final submissions were made and judgment was reserved prior to the date of enactment of the new law.

Harris Kyriakides LLC establishes Cyprus law internship program in association with the University of Oxford

Harris Kyriakides LLC has reached an agreement with the University of Oxford that will allow the operation of a summer internship program to be offered to Oxford University law students interested to enhance their knowledge and expertise on the Cyprus legal system.

In establishing this program, Harris Kyriakides LLC has teamed up with the Internship Office of the University of Oxford, an excellent institution facilitating summer internships for students of the University of Oxford. These are offered globally by selected multi-national corporations, world-leading NGOs, cutting-edge research institutions and many other organizations and are exclusively available to Oxford University students. Since the program’s inception, Oxford University students have undertaken internships in over 30 countries.

The Cyprus law internship at Harris Kyriakides LLC shall operate in the course of the summer months of each year, with a duration ranging between 4 to 8 weeks.  It will be open to all current and matriculated (i.e. not visiting) Oxford University students (undergraduates and postgraduates), including those in their final year of study. The internships are advertised from the beginning of Hilary term and students may only apply via the Oxford University Internship Program.

The internship is ideal for enthusiastic and motivated law students, who seek to experience a professional environment of a Cyprus law firm and be introduced in the principles of Cyprus law that run through their field of choice or expertise.  It is intended that the intern will produce a final paper at the end of the internship, which may be submitted for publication in national and/or international journals. Candidates must be fluent in English and computer literate. Knowledge of the Greek language is not necessary.

The intern will be given free access to national and international legal databases and other resources that are useful to carry out his/her research. Harris Kyriakides LLC also offers a subsidy towards accommodation and living expenses, which is set from time to time by the Board of the firm.

Ministry of Finance issues roadmap for lifting capital restrictions in Cyprus

The Ministry of Finance in Cyprus has announced a road map for the lifting of restrictions on bank transactions imposed in March 2013. In a statement issued on 18 September 2013, it was announced that restrictive measures enforced on grounds of public interest and to ensure stability of the financial system will be gradually removed. Although no fixed calendar dates were given, the roadmap links the relaxation steps to specific key milestones related to the recapitalisation and restructuring of the Cypriot banking sector, as these are instrumental in rebuilding depositors’ confidence in the Cypriot banking system and help economic recovery.

The relaxations will take place in two main phases: firstly, the restrictive measures on transactions within the Republic will be abolished and, subsequently, the restrictive measures on transactions for the cross border movement of capital will be abolished.  The restrictive measures linked to the particular relaxation stage will be removed in a step by step process, having regard to the prevailing level of confidence in the banking system and to financial stability related indicators, including the liquidity situation of credit institutions, it is added.   At the same time, the Ministry of Finance underlines that the removal of the restrictive measures could also be accelerated if conditions allow

Wragges votes in favour of LG merger to create Wragge Lawrence Graham & Co

Wragge & Co and Lawrence Graham (LG) are to finally merge after partners voted in the move on Monday, creating a £170m firm under the name Wragge Lawrence Graham & Co.

The two firms started speaking in 2009, when Wragges began drawing up a list of London merger targets as it looked to invest £20m in reserved cash (18 November 2013). However they decided not to go ahead with the tie-up, a decision Wragge’s senior partner Quentin Poole today blamed on the difficult market at the time.

He said: “Neither firm has gone through a metamorphosis since 2009. [The previous talks] were just after Lehman, everyone was very risk adverse and you didn’t know where the world would end up. It was a mighty, mighty uncertain time. Fundamentally, the waters are much calmer [now]. The environment looks more user-friendly.”

Partners were told of the vote last month, with the merger needing 75 per cent approval to go ahead. However Poole said they achieved “way more than that” with over 90 per cent giving the idea the thumbs-up on Monday.

The firms are currently working out how to align their remuneration structures in time for the May 2014 tie-up date. A decision is expected to be made within the next six-weeks.

“Someone might lose their Christmas bonus but gain a Bupa policy,” said Poole when asked about potential pay cuts.

He added that, although the merger was about growth, duplication of jobs will be “inevitable” and so there may be a number of redundancies. Trainees will not be impacted by the tie-up.

The firm does not have any local managing partners, instead operating each office from a central management committee. Wragges managing partner elect David Fennell is becoming the new firm’s chief executive, while Poole will maintain his role and LG senior partner Andrew Witts will take on the position of chairman.

The move comes a little more than a year after Field Fisher Waterhouse (FFW) called off talks with LG. At the time FFW managing partner Matthew Lohn said: “Whilst there were some good synergies between the two firms we never reached the stage of putting it to partners and are not taking the process forward.”