-          A guide on what action a business should take if it comes across counterfeit goods in the supply chain.

-          A guide on how businesses can protect their own intellectual property rights against infringement and counterfeiters.

-          Examples of good practice by businesses within the supply chain.

The toolkit is available here.

It took 18 months for the fake review to be removed by Google, despite the fact that Google had been contacted several times to remove the post. Google’s only comment was that it had rules against impersonation and hate posts, but could not be an ‘arbitrator’ and that the best way to respond to a fake post was by posting a follow up review to share both sides of the story. The police agreed that the post had no foundation but said they were powerless to act.

The individual concerned estimated that he had lost 80% of his local business and said that he intended to sue Google for defamation. In reality, though, he would have an uphill David against Goliath battle to win to beat Google. Critics are calling for Google to introduce a verification process for posts, despite the man-power that such a policy would require.

One particular area of concern for some businesses is the requirement on businesses to seek the express consent of the consumer to any extra payment in addition to the main payment obligation. If there has not been express consent but it is inferred by using default options which the consumer is required to reject in order to avoid the extra payment obligations, the consumer may be refunded for the extra payment.

The UK Government will have two years to implement the Directive, but it may well do so before that, as it has already signalled its desire to amalgamate consumer laws into a single Consumer Bill of Rights, which the Government hopes will be less confusing for consumers and businesses than the plethora of laws that exist today.

The full text of the Directive can be found here: http://register.consilium.europa.eu/pdf/en/11/pe00/pe00026.en11.pdf.

Munir Yakub Patel is due to appear before Southwark Crown Court on 14 October 2011 for allegedly “requesting and receiving a bribe intending to improperly perform his functions” (a breach of section 2 of the Act.) It is alleged that Mr Patel told an individual, who had been summonsed to court for a motoring offence, that he could influence the course of the proceedings in exchange for £500.

The Bribery Act, which came into force on 1 July 2011, increases the maximum penalty for bribery from seven to 10 years imprisonment. Further details of the Act are here.

The Act has also introduced a corporate offence of failure to prevent bribery by persons working on behalf of a business. To avoid breaching the Act, employers must demonstrate that they have adequate procedures in place to prevent bribery. For more details of what employers should be doing to avoid breaching the Act, please click here to read an article by our head of employment, Michael Delaney.

Paul Gershlick, a Partner at Matthew Arnold & Baldwin LLP and editor of Upload-IT, comments: “The Bribery Act is the biggest legal development of the year and given its very wide reach and political force behind it, it is no surprise to see a prosecution so soon after it came into force.  What this prosecution shows is that the law is there not just to catch big businesses on complex international deals, but also small payments made on a local level too.  Prosecutors will take action regardless of size.  Every business should be aware of the Act and should take appropriate steps to stop its employees, agents and other representatives from breaking the law, particularly as their actions can in turn leave their business criminally liable too.”

The ECJ ruled that the supplier had to not remove and replace but also install the replaced goods despite not having been responsible for the original installation as the goods had been faulty on delivery and consumers needed to have an absolute right for them to be put right without suffering loss. Alternatively, the supplier would have to bear the cost of someone else doing so. The ECJ further said that if only one remedy is possible then the seller cannot refuse to provide that remedy even if the cost of removing and reinstalling would be disproportionate to the value. In this case, the tiles cost €1,382 and the cost of removing and replacing was €5,830. The seller would not have been liable for the replacement if the reason for the defect was the poor installation (that the supplier was not responsible for), although proving who was at fault may not be easy.

I have outlined some of the ways employers can ensure they comply with the new Act – please click here.

This article is only intended as guidance. There are many issues to consider, so employers should seek legal advice where necessary to ensure they are not contravening the Act, or inadvertently breaking other laws when implementing compliance measures.

If you would like any legal advice regarding the Bribery Act and its implications on your business, please contact me at michael.delaney@mablaw.com.

The High Court has agreed with the OFT that such a minimum term was unfair and designed to take advantage of the naivety and inexperience of the average consumer and were weighted in favour of the gym or health club causing a significant imbalance in the parties’ rights and obligations. Gym members would not anticipate all the events which might render the use of the gym impractical and the agreements did not address the tendency of users to overestimate the amount that they would want to use the gym when signing up. Accordingly, those provisions were unfair contrary to the Unfair Terms in Consumer Contracts Regulations 1999 and were unenforceable.

In addition, the practice of describing members who wanted to terminate their agreements as defaulters and registering or threatening to register that with credit reference agencies was an unfair commercial practice and harmed the collective interests of consumers, contrary to the Consumer Protection from Unfair Trading Regulations 2008.

A bribe is defined in section 1 of the Act as “a financial or other advantage” offered, promised or given to “induce a person to perform improperly a relevant function of activity, or to reward a person [for doing so.]”

This definition covers many “advantages”, including gifts, hospitality and entertainment, political or charitable donations, sponsorship and publicity.

Employers should note the following:

1. A “financial or other advantage” is still a bribe even if it is given or paid after the event; and

2. Employers or other individuals can be liable even if they unwittingly give or receive a bribe.

Section 7 of the Act introduces a criminal offence for the failure of a commercial organisation to prevent bribery by an “associated person” for its benefit. The statutory definition of “associated person” is very wide, and it covers those people who perform services for, or on behalf of, the employer (e.g. employees, agents and subsidiaries.) However, other people working for the employer, such as consultants, agency workers and volunteers, will also be “associated persons” for the purposes of the Act. Consequently, an employer is potentially responsible for the actions of a wide range of individuals, some of whom it may have only minimal control over.

Breaching the Act: The penalties

* Individuals who breach the Act could be imprisoned for up to ten years; and

* Commercial organisations can face an unlimited fine and be prevented from tending for public contracts.

Preparing for the Bribery Act: The key principles for employers

In March 2011, the Government published Guidance on the Bribery Act which set out six key principles to give commercial organisations assistance in planning, implementing, monitoring and reviewing their anti-corruption and bribery policies and procedures before the Act comes into force.

1. The employer’s anti-corruption and bribery policies (and related policies) should be clear and accessible to all those people who work for them and who  fall within the definition of “associated person”;

2. The management team should establish a zero-tolerance culture regarding bribery and corruption, and ensure that all workers, and those that the company does business with, are fully aware of the company’s anti-corruption and bribery policies;

3. Employers should be fully aware of the bribery risks they face in their sector(s) and in the countries or regions in which they do business. They should carry out regular and comprehensive risk assessments;

4. Employers must take steps to ensure that they know who they are doing business with;

5. Employers should embed anti-bribery principles into their internal controls, recruitment and remuneration policies, operations, communications and training; and

6. Employers must decide who will be responsible for monitoring and reviewing their policies and procedures. They should ensure that they have effective financial and auditing controls that pick up potential and actual irregularities.

Staying on the right side of the law: The key considerations for employers for 1 July and beyond

Employers should consider the following issues to ensure that they do not contravene the Bribery Act, and should seek legal advice where necessary.

1. Recruitment: carry out additional background checks and vetting during the recruitment process (e.g. bankruptcy checks, criminal record checks and additional references);

2. Inductions: include training on the company’s anti-corruption and bribery policies and procedures for all employees and workers (e.g. agency staff, voluntary workers and independent consultants);

3. Expenses: carry our regular audits and ensure there is evidence as to how and why money was spent for each expenses claim submitted;

4. Hospitality: create a hospitality policy, including clear guidance on both the giving and receiving of gifts;

5. Disciplinary procedures: amend disciplinary policies and procedures to make it clear that any breach of the company’s anti-corruption and bribery policies (and related policies) may amount to gross misconduct. Employers may wish to (1) consider making it a specific contractual requirement that employees and other workers comply with these policies and procedures, and (2) consider whether it should be a contractual requirement for some workers to report any suspicions or knowledge they have of a breach of these policies;

6. Bonus and commission schemes: review these schemes to ensure that, as far as possible, they do not unintentionally encourage employees to ignore bribery and corruption risks. Employers should also review incentive arrangements to ensure they do not unintentionally incentivise workers to act improperly or illegally;

7. Whistleblowing: set up a comprehensive and up-to-date whistleblowing policy. All workers should be made aware of its existence, understand how it applies and be given access to a copy of it;

8. Investigating potential breaches: ensure that every incident of a suspected breach is investigated and documented. All investigations should be fair and confidential; and

9. Discrimination: ensure that any anti-corruption and bribery policies and procedures are not based on racial stereotyping of certain nationalities.

This article is intended to simply highlight the main issues and potential problems that employers may face when trying to comply with the Bribery Act. There are many issues (and pitfalls) to consider, so employers should seek legal advice where necessary to ensure that they are not contravening the Act, or inadvertently breaking other laws when implementing compliance measures.

If you would like any legal advice regarding the Bribery Act and its implications on your business, please contact me at michael.delaney@mablaw.com.

There is the thorny issue of facilitation payments – payments made to officials to speed up processes, for example to get an export licence through quicker.  Lots of business are asked to pay these, but what should you do, as the Bribery Act makes it clear that you should not pay them?

Corporate hopitality – can you take clients to Lords or out to lunch?  Can you send them a client to say “thank you”?  One interesting question that came up yesterday was whether you can take away the personal partners or families of the people you want to impress?

But a big thank you must go to Lord Triesman and the Sunday Times.  Thank you for providing a very live case study about alleged corruption by certain members of football’s international governing body, FIFA.   Can the Bribery Act catch them if they have done anything wrong?  Would accepting a gift that is for a charity or a “good local cause that helps the community” rather than the member of the committee’s back pocket amount to a bribe?  And what is the story with Qatar’s bid, because according to Transparency International Qatar is deemed to be a less corrupt place than the UK, as can be seen here: http://www.transparency.org/policy_research/surveys_indices/cpi/2010/results?  Should England have played ball to have won the right to host the 2018 World Cup?  Or should England be keen to be the winner of the more humble fair play award?

In your own business, can you afford not to play keepy uppy with what your competitors are doing?  Or can you afford not to play ball with the requirements of the new Bribery Act?  Do you play a gung ho formation and just go for it, or play it with a solid defence?

These are the dilemmas facing businesses.  But there are very serious issues at stake and businesses can’t afford to bury their heads in the sand.  To continue the sporting analogy, you might want to make your own luck, and speak to us to find out more what tactics to pursue.

The Government is calling on interested parties to submit a response on the website, suggesting which regulations should be scrapped, merged with other regulations, simplified, or improved.

In the recent Budget Report and Plan for Growth document, the Chancellor outlined proposals to reduce the number of UK regulations in an effort to boost economic growth. (Click here for further details.) This ‘Red Tape Challenge’ is the first step.

There are 21,000 regulations in the UK, and these will be grouped into themes on the website. Every 1-3 weeks, the Government will publish the regulations that relate to a specific sector (‘themes’), with interested parties given a set amount of time to comment on them. The Government will then collate the comments and, after the theme has been closed for public comment, the relevant government departments will have three months in which to justify the continued existence of the regulations called into question. The Government will then decide which regulations should stay, which should go and which should change. All regulations that are to be repealed will be listed on the website.

NB: regulations regarding tax and national security are exempt from this project.

At the time of writing, the timetable for comment is:

7 April – Retail;

6 May – Hospitality, food and drink;

20 May – Road transportation;

2 June – Fisheries, marine enterprises and internal waterways;

16 June – Manufacturing;

23 June – Healthy living and social care;

7 July – Media and creative services;

21 July – Utilities and energy;

4 August – Rail and merchant shipping; and

18 August – Mining and quarrying.

Each of these themes will be split into topics. For example, the current theme, retail, is split into Sunday trading, hallmarking, weights and measures, and so on.

The project is also divided into six “cross-cutting themes”. Government departments must comment on these themes every four months. These are:

1. Employment law;

2. Pensions;

3. Company law;

4. Equalities;

5. Health and safety; and

6. Environment legislation.

The project is expected to run from April 2011 until April 2013.

To read the Government press release which launched the Red Tape Challenge, please click here.

The High Court originally and now the Court of Appeal decided that a contract had been formed between the parties. It was a question of construction as to whether the further contract to be executed was a condition of the contract being formed or a mere expression of the contract already agreed. The Court referred to D’s acceptance of the quotation with the statement that D “hereby accept the terms of your quotation subject to your Board approval” as showing that the only condition for the contract proceeding was C’s board agreeing to the deal. This was clearly done because C accepted D’s offer. Therefore, C’s statement that a formal contract would follow in due course was merely an indication that the parties’ contractual desires would be reflected in a further document.

This case could have been decided either way. On the facts, the courts decided that the parties had intended for a contract to have been formed. It was the change in circumstances to D that led to D’s claims. However, instead of the parties spending large legal cost, wasting management time and incurring aggravation and uncertainty in going to the Court of Appeal, the situation could have been avoided if the contract wording and processes had been clearer.

The need for software escrow agreements has increased dramatically with the economic downturn, with many software suppliers experiencing financial difficulties and failing to fulfill their support obligations and having increased risk of going out of business. The lack of a software escrow agreement in such a situation could leave the software licensee in serious difficulty if they want to keep using their business-critical software.

Registered name

A company’s registered name must appear on all forms of business correspondence and documentation including:

• business letters, notices and other official publications;
• business emails;
• order forms;
• cheques purporting to be signed by or on behalf of the company;
• orders for money, goods or services purporting to be signed by or on behalf of the company;
• invoices and other demands for payment;
• receipts and letters of credit; and
• its websites.

In addition, a company must display its registered name at: its registered office; any location at which it keeps its records available for inspection; and any location at which it carries on business.

Additional information

Additional information is required to be displayed on all business letters and order forms (whether in hard copy, electronic or any other form) and on all websites of the company including:

• the part of the United Kingdom in which the company is registered;
• the company’s registered number;
• the address of the company’s registered office;
• if a company is exempt from the requirement to use “limited” in its name, the fact that it is a limited company;
• if the company is a community interest company which is not a public company, the fact that it is a limited company;
• if it is an investment company, the fact that it is this type of company;
• if it is a company which has chosen to display its share capital, it must refer to the amount of paid up share capital; and
• if the letter includes the name of a director of the company (other than in the text or as a signatory), the name of every director of that company.

If a company is supplying goods or services through a website then its VAT registration number should also appear on its website. HMRC has its own requirements as to the information to be included on a VAT invoice.

Failure to comply with the information requirements constitutes a criminal offence and the company and its officers who are in default are liable to a fine.

If you have any questions about what information your company needs to disclose, please contact a member of the Corporate Team at Matthew Arnold & Baldwin LLP.

Basics

Inheritance tax (IHT) generally arises on death. It is normally only a concern if the estate on death is over the nil-rate band threshold, currently set at £325,000 for a few years. Over this amount, IHT is charged at 40%. IHT is also charged on gifts made in the seven years prior to death.  IHT can be charged on gifts made during someone’s lifetime, including gifts made to trusts.  

Married couples and registered civil partners are able to benefit from the transferrable nil rate band.  This can effectively increase in the nil-rate band threshold when the second partner dies – to as much as £650,000 currently.

Saving IHT with business property relief

Business property relief (BPR) is one of the most useful IHT reliefs. BPR can reduce the value of the relevant assets in the estate by up to 100% of its value. It is available in respect of a range of shares, securities or other property classed as an interest in a business.  The relief is also available for unquoted shares, which includes shares in AIM listed companies. The business property needs to have been held for two years before relief is available.

Top Tips:

• Some providers offer investments in a selected portfolio of shares all of which qualify for business property relief after 2 years. Clearly there are risks involved in investing in shares, and proper advice should be taken.
• BPR is only available for businesses which are substantially trading businesses.  If the business comprises a mix of investments and trading stock, or even large amounts of cash, careful planning will be required to ensure that relief is not restricted.  Compare, for example a business which develops properties and then rents them.  The development trade would qualify but the property rental would not, potentially contaminating the overall BPR position.
• For business owners, will planning is essential.  Not only does this give the opportunity to plan for the continued success of the business but through careful use of the nil rate band and other reliefs, it may be possible to minimize the overall IHT burden on the estate.
• If you are owed money by your business then this is an asset in your estate (and therefore subject to IHT).  It may be possible to convert this into a security which can benefit from BPR.

For more information about these planning ideas (or others) or to discuss inheritance tax generally please contact me on james.odds@mablaw.com