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

FCA Proposes Enhanced Disclosures on Diversity and Inclusion for Listed Companies

Posted in Finance and Capital Markets

Proposals reflect growing investor focus on the ESG performance of listed companies.

By Chris Horton, James Inness, Rob Moulton, Anna Ngo, and Johannes Poon

The UK Financial Conduct Authority (FCA) has launched a consultation setting out proposed changes to its Listing Rules (LRs) and Disclosure Guidance and Transparency Rules (DTRs). The proposals seek to: (i) increase transparency for investors on the diversity of listed company boards and executive management; and (ii) improve considerations of broader diversity aspects within diversity policies and related disclosures by listed companies.

The consultation opened on 28 July 2021 and will close on 20 October 2021. Subject to consultation feedback and FCA Board approval, the FCA will seek to finalise the relevant rules by late 2021. Continue Reading

UK Government Publishes Draft Online Safety Bill to Tackle Illegal and Harmful Content Online

Posted in Data Protection

The proposals includes fines for non-compliance of up to the greater of £18 million or 10% of a provider’s annual global revenue.

By Gail Crawford, Rachael Astin, Alain Traill, Katie Henshall, and Amy Smyth

On 12 May 2021, the UK government published the Online Safety Bill (the Bill), which aims to establish a new regulatory regime to address illegal and harmful content online, including fines and other sanctions in the event of non-compliance. While further developments and guidance are expected, the proposed regime seemingly will have significant implications for in-scope user-to-user services and search engines.

The Bill follows the publication of the Online Harms White Paper by the Home Office and the Department for Digital, Culture, Media & Sport in April 2019. An initial government response to the consultation was published in February 2020, and a full government response in December 2020. (For more information, see Latham’s blog posts on the White Paper launch; government interim response; and government full response). Continue Reading

Europe Set for Increased SPAC Activity

Posted in M&A and Private Equity

As interest in European SPACs heats up amid an increasingly receptive regulatory environment, dealmakers must navigate market differences.

By Tom Evans, Chris Horton, James Inness, Mike Turner, David Walker, Tom Channing, and Catherine Campbell

While US special purpose acquisition company (SPAC) IPOs and related M&A activity grabbed the limelight in 2020 and early 2021, European SPACs look set to increase in number in the second half of 2021, with large European SPACs already emerging. In May 2021, British fund manager Hedosophia raised €400 million after listing a blank cheque company in Amsterdam — one of the largest European SPACs to date.

Interest in Europe is heating up amid an increasingly receptive regulatory environment and the ability of a European SPAC to operate in a less-crowded market compared with the US. At the same time, US SPAC activity has slowed down, in part due to uncertainty around the accounting treatment of warrants following an SEC statement in April 2021. Continue Reading

NFTs — A Digital Opportunity for PE Sponsors

Posted in M&A and Private Equity

Beyond creative works and consumer products, NFTs open up new avenues for IP monetisation in the technology, life sciences, and pharmaceutical industries.

By Stuart Davis, Tom Evans, Christian McDermott, David Walker, Gabriel Lakeman, Catherine Campbell, and Amy Smyth

Non-fungible tokens (NFTs), one-of-a-kind cryptoassets stored on blockchain technology, have soared in popularity as artists, gaming companies, retailers, and others seek new monetisation streams.

In October 2020, the US$69 million sale of a work from the digital artist Beeple at Christie’s set the tone for a surge in NFT activity. According to the market tracker Non-Fungible, NFT sales surpassed US$274 million in May 2021 alone, underlining the strength of this nascent market. As consumers and businesses become more comfortable operating digitally, NFTs will unlock new revenue opportunities for organisations across sectors, and offer a range of opportunities for PE sponsors. Continue Reading