UK Net Zero Strategy: Understanding the Impact on Key Sectors

Posted in Environment

The strategy sets out plans to reduce emissions from key sectors of the UK economy to ensure that the UK remains on track for net zero by 2050.

By Conrad Andersen, John Balsdon, David Berman, Paul A. Davies, Nicola Higgs, Sam Newhouse, Simon J. Tysoe, Michael D. Green, James Bee, and Anne Mainwaring

On 19 October 2021, the UK government published its climate change strategy, “Net Zero Strategy: Build Back Greener” (the Strategy), which outlines plans to support the UK economy’s transition to a greener and more sustainable future. On 31 October, the UK will host the 2021 United Nations Climate Change Conference, COP26, in Glasgow.

Last year, Prime Minister Boris Johnson set out a 10-point plan for a “green industrial revolution”, which laid the foundation for a green economic recovery from the impact of COVID-19. The Strategy builds on that approach to align the UK with its carbon budget and nationally determined contribution to the Paris Agreement, both of which aim to reduce economy-wide greenhouse gas (GHG) emissions by at least 68% by 2030 and 78% by 2035, compared to 1990 levels. Further, the Strategy details the UK’s vision for a decarbonised economy by 2050. Continue Reading

Filter Future? Updates on the Copyright Directive and Platform Liability

Posted in Dispute Resolution, EU and Competition

Recent developments at the CJEU give some shape to the practical implications of Article 17 of the Copyright Directive.

By Jean-Luc Juhan, Susan Kempe-Mueller, Deborah Kirk, Elva Cullen, Alex Park, Pia Sophie Sösemann, Victoria Wan, and Amy Smyth

7 June 2021 was the implementation deadline for the Copyright in the Digital Single Market Directive (EU) 2019/790 (the Copyright Directive), yet just four EU Member States (including Germany and the Netherlands) have fully transposed the Copyright Directive, whilst four others (including France and Denmark) have transposed only parts of the Copyright Directive. The delay in implementation is perhaps unsurprising given the controversial nature of certain of the Copyright Directive’s provisions, in particular Article 17.

Recent developments have started to add colour to how Article 17 may work in practice, and how it might align with the broader regulation of platform liability for infringing content. This blog post will discuss these developments and analyse the implications for platforms and rights holders. Continue Reading

Could PE Benefit From the Universal Adoption of “Super Senior” RCFs in Leveraged Financings?

Posted in Finance and Capital Markets, M&A and Private Equity

By Francesco Lione, Charles Armstrong, Tom EvansDominic Newcomb, David Walker, and Catherine Campbell

Undrawn credit lines are essential to private equity but in short supply from banks.

Undrawn revolving credit facilities (RCFs) are essential to private equity. They are a backup in the event of mismatches in the working capital cycle, provide comfort for a rainy day, and preserve swift access to deal-making when other financing sources are unavailable, or less easily accessible. The COVID-19 pandemic could not have proved the importance of undrawn RCFs more clearly. Within a few weeks of the onset of the pandemic, as credit markets gummed up and businesses worldwide grappled with evaporating liquidity, leveraged companies dashed for cash and drew revolving lines.

PE firms may be able to persuade banks to offer RCF commitments more freely by transcending the limitations of current transactional templates and allowing banks to consistently provide undrawn revolving credit in its most secure form — alongside all leveraged loans and secured bonds, rather than just on bond backed deals, as is current practice. Continue Reading

ESG Toolkit Expands for European PE

Posted in Environment, M&A and Private Equity

By Paul A. Davies, Tom Evans, Nicola Higgs, Farah O’Brien, David Walker, Michael Green, Hannah Berdal, Anne Mainwaring, and Catherine Campbell

Green shoots emerge as PE firms consider new ways to incorporate ESG into dealmaking.

Market sentiment and the increasing importance of environmental, social, and governance (ESG) to firms’ competitiveness across the market, combined with wide-ranging and rapidly developing ESG regulatory reforms, are driving increased focus on ESG at both LP and GP levels across Europe. As a result, the market is showing demand for enhanced diligence, and a wider range of deal provisions are being considered in light of their potential to enhance the ESG outlook of PE investments. Continue Reading

Watch What You Write: Communications on Personal Devices Could Be Disclosable in Litigation

Posted in Dispute Resolution, M&A and Private Equity

By Tom Evans, David Walker, Daniel SmithAisling Billington, and Catherine Campbell

The location of the data is not sufficient to avoid a disclosure order.

When it comes to personal devices, people increasingly communicate across multiple platforms, often in an informal and unguarded manner. However, high levels of litigation driven by the COVID-19 pandemic (including insolvency and restructuring litigation), the recent M&A boom (including shareholder disputes and other transactional litigation), and the rise of remote/hybrid work mean that PE firms must remain alert to the risk of personal device communications being disclosed in litigation.

As seen in recent cases, the English courts place value in contemporaneous written evidence, and take a pragmatic and targeted approach to disclosure. While English courts are mindful of the privacy rights of individuals, they recognise that employees conduct work on personal devices and non-proprietary third-party apps.

However, the location of the data is not sufficient to avoid a disclosure order, and PE firms should consider how to best protect themselves. Continue Reading

European Commission Outlines Proposed Regulation for Artificial Intelligence

Posted in Emerging Companies and Technology

The proposed Regulation will be the first EU legal framework specifically focused on the rapidly accelerating landscape of AI.

By Deborah J. Kirk, Elisabetta Righini, Laura Holden, Luke Vaz, and Amy Smyth

The feedback period for the European Commission (EC) proposal for the Regulation of artificial intelligence (AI) (COM (2021)206) (proposed Regulation) closed on 6 August 2021, during which time 304 pieces of feedback were received, marking another milestone in pursuit of the first EU legal framework specifically focused on AI.

The proposed Regulation follows the EC’s strategy for AI, as outlined in its coordinated plan on Artificial Intelligence for Europe in 2018 and its AI White Paper in 2020. The proposed Regulation seeks to balance the safety and fundamental rights of EU consumers while improving the AI investment and innovation landscape. Although the proposed Regulation may change significantly before its entry into force, entities that use (or plan to start using) AI should be prepared to comply with a comprehensive regulatory framework in Europe.

This briefing discusses who the proposed Regulation will apply to and what its risk-based approach will mean in practice.

UK Supreme Court Affirms “Orthodox” Approach to Liquidated Damages in English Law

Posted in Commercial, Dispute Resolution

Importantly for commercial parties, the decision indicates that parties are assumed to be aware of this approach.

By Daniel Smith and Rebecca Angelini

Liquidated damages clauses provide pre-agreed remedies for contracting parties in the event of particular breaches of contract. This allows the innocent party to avoid the time and effort of quantifying its loss, and provides the parties with commercial certainty in respect of the remedies available for a particular breach. On 16 July 2021, in Triple Point Technology, Inc v. PTT Public Company Ltd,[1] the UK Supreme Court overturned a Court of Appeal decision and affirmed several important principles in relation to liquidated damages:

  • Liquidated damages cease to accrue upon termination of a contract, but rights accrued as at the date of termination survive.
  • Following termination of a contract containing a liquidated damages clause, the contracting parties must seek damages for breach of contract under the general principles of English law.
  • Contracting parties do not have to include provisions concerning the effect of termination on the accrual of liquidated damages. Instead, they can reason that such consequences are assumed.

Continue Reading

Executive Vice-President Vestager Champions Green Deal in Policy Announcement

Posted in Environment

The European Commission continues to explore how competition policy can support the bloc’s increased focus on sustainability and progression towards climate neutrality by 2050.

By David Little and Anuj Ghai

On 10 September 2021, Inge Bernaerts, Director of DG Competition, delivered a keynote speech at the 25th IBA Competition Conference on behalf of Executive Vice-President and Commissioner for Competition, Margrethe Vestager. (The speech was complemented by a concurrent Policy Brief.) The European Commission (the EC) has often used the annual conference as a platform to announce new policy initiatives. This year, the Commissioner’s speech focused on how competition policy could be used to support the European Green Deal — a set of policy and regulatory initiatives intended to enable the bloc to achieve climate-neutrality by 2050. For more information, see Latham’s previous posts here, here, and here. Continue Reading

The Smile Telecoms Restructuring Plan: A Closer Look

Posted in Finance and Capital Markets

A restructuring plan completed earlier this year by Smile Telecoms notches up a number of firsts.

By James Chesterman and Tom Davies

African telecommunications provider Smile Telecoms Holding Limited, incorporated in Mauritius, successfully completed a restructuring plan (the Plan) under Part 26A of the UK Companies Act 2006 at the end of March 2021.

The Plan features a number of novel actions, including:

  • The first time a non-European company has used the Part 26A restructuring plan since its introduction in June 2020
  • The first time any company has layered in new money on a super-senior basis by way of a cross-class cram-down, a feature of the Part 26A restructuring plan not available under schemes of arrangement
  • The first time that sanction of a restructuring plan had to be adjourned due to the fact that a closing condition, which was subject to the discretion of a third party (namely a development finance institution acting through its representative, the Public Investment Corporation (PIC) of South Africa) rather than the court, remained unsatisfied at the initial time of sanction, which went to the core of the Plan’s effectiveness

This blog post takes a closer look at the implementation of the Plan. Continue Reading

Key Proposals for the UK’s Vertical Block Exemption Successor

Posted in EU and Competition

The proposals include certain notable changes, while also mirroring the current UK framework and the European Commission’s planned approach in many respects.

By David Little, Alexandra Luchian, and James Mathieson

The UK Competition and Markets Authority (CMA) has proposed replacing the retained Vertical Agreements Block Exemption Regulation (Retained VABER), which has applied in the UK following the country’s departure from the EU and will expire on 31 May 2022, with a UK Vertical Agreements Block Exemption Order (UK VABEO). The CMA’s proposals include a number of changes intended to reflect evolving market conditions and enforcement practice, and to widen the CMA’s existing powers.

Concurrently, the European Commission is consulting on the draft revised Vertical Block Exemption Regulation (VBER) and Vertical Guidelines, planned to enter into force in the EU at the same time as UK VABEO.

This blog post provides an overview of the key similarities and differences between (i) Retained VABER and the proposed UK VABEO, and (ii) the proposed UK VABEO and the draft EU VBER. Continue Reading