The amended bill aims to safeguard freedom of expression whilst still protecting children and adult users in the online environment.

By Gail E. Crawford, Deborah J. Kirk, Alain Traill, and Victoria Wan

The Online Safety Bill (the Bill) was introduced by the UK government on 17 March 2022. The Bill aims to impose obligations on in-scope “user-to-user services” and “search engines” to implement adequate processes to protect users from illegal and harmful online content. Service providers are in scope if they are linked to the UK by either (i) having a significant number of users or targeting users in the UK; or (ii) being accessible by individuals located in the UK and posing a material risk of significant harm to these users. For more information, read Latham & Watkins’ summary of the Bill as initially drafted here and the previous amendments from September 2022 here.

The Bill returned to Parliament on 5 December 2022 with a series of major amendments compared to the previous draft, as detailed in the Written Ministerial Statement on 29 November 2022 and tabled here. The amendments follow criticisms from various stakeholders, including feedback that the obligations relating to “legal, but harmful content” are unclear and/or curtail free speech online and that the obligations relating to children are insufficient to ensure children’s safety online.

Private equity’s growing appetite for UK-listed targets comes with the need for Takeover Code-savvy dealmakers.

By Doug Abernethy, Richard Butterwick, Tom Evans, David J. Walker, and Catherine Campbell

Amid stiff competition for attractive private targets, PE firms are competing more regularly against corporates and rival sponsors for listed targets, requiring skillful navigation of the dynamics of a contested UK take-private within the tight confines of the Takeover Code.

Several deals underline appetite for listed targets at mid-market and large-cap levels, including Towerbrook and Warburg Pincus’ £219 million takeover of The AA, CD&R’s £7 billion acquisition of W M Morrison, and Blackstone’s £3.5 billion acquisition of Signature Aviation, with PE bidders also recently involved in high-profile competitive situations around Sanne Group and Vectura. Once a rarity, Takeover Panel formal auction procedures have become more frequent in recent years, highlighted by the multibillion-pound Morrisons deal.

The EU-UK Trade and Cooperation Agreement has now been agreed. So what rules will apply to jurisdiction and foreign judgments in the UK from 1 January 2021?

By Oliver Browne and Tom Watret

Introduction

It has been a long time in the making, but the UK and EU have finally reached an agreement (the EU-UK Trade and Cooperation Agreement) on their future relationship after the end of the Brexit transition period, which expires today, 31 December 2020.[i]

It has been known since the referendum result on 23 June 2016 that the rules applicable to jurisdiction and enforcement of judgments would change after Brexit, since the regime that currently applies — the Brussels Recast Regulation 1215/2012 (Brussels Recast) — is only available to EU Member States.

In previous posts in this series, we explained the different rules which could apply to jurisdiction and enforcement of foreign judgments in the UK from 1 January 2021, covering the Lugano Convention 2007 (here), the Hague Convention 2005 (here), and the UK’s common law rules (here), in both “deal” and “no deal” situations.

Now that we have a deal, this post provides an overview of the applicable rules.

UK companies interested in producing ventilators and other critical equipment may benefit from regulatory exemptions and use government product specifications.

By Frances Stocks Allen and Oliver Mobasser

On 16 March 2020, Prime Minister Boris Johnson called on the UK’s leading manufacturing businesses to help the UK step up production of vital medical equipment to combat the COVID-19 crisis.[i]

With no proven COVID-19 treatment or vaccine to date, ventilators are a critical piece of equipment to help treat patients with acute symptoms of the disease. The UK industry has responded to the government’s call, with a number of companies in the aerospace and automotive sectors reportedly working on plans to lend capacity to manufacture ventilators. Meanwhile, a number of newly designed ventilators and breathing aids have reportedly gained regulatory approval and are either undergoing trials or are already subject to orders from the UK government.

[i] https://www.gov.uk/government/news/pm-call-with-uks-leading-manufacturers-16-march-2020.

Companies may face a challenging regulatory environment following the EU-wide implementation of the Copyright Directive by 7 June 2021.

By Deborah J. Kirk and Rachael Astin

On 21 January 2020, the UK government confirmed that the UK will not be required to implement the Directive on Copyright in the Digital Single Market 2019/790 (Copyright Directive) and that it has no plans to do so.

The UK left the European Union on 31 January 2020 (Exit Date), and the implementation period will end on 31 December 2020. As the deadline for transposing the Copyright Directive into Member States’ national laws is 7 June 2021, the UK will not be required to implement the Copyright Directive, and the UK government has confirmed that it has no plans to do so. Furthermore, the UK government confirmed that any future changes to the UK copyright framework will be considered as part of the usual domestic policy process.

As management terms converge, deal teams must still navigate cross-border differences in ratchets, put and call options, and management warranties.

By Alexander Benedetti, Tom Evans, David Walker, Neil Campbell, Catherine Campbell, and Eric Loubet

French and UK private equity firms are increasingly looking across the Channel for attractive buyout opportunities. Cross-border transactions involving French and UK sponsors have grown steadily since the global financial crisis, with an uptick in activity in recent years. According to PitchBook, French sponsors bought 33 UK-headquartered companies last year, the highest volume at any point in the past decade. Meanwhile, UK sponsors acquired 56 French-headquartered companies in 2018, up from 34 companies 10 years ago. The long history between the two nations continues to facilitate a strong level of deal flow.

Given the prevalence of pan-European management advisors and the increased number of cross-border deals, cross-pollination of deal terms is occurring. While we expect management equity terms in France and the UK to continue to converge, specific conditions under local tax regimes mean that there are still key areas of distinction. In our view, sponsors considering a buyout across the Channel must carefully navigate differences in the treatment of management equity terms in each jurisdiction. In a sellers’ market, appealing to management can help to win a deal. However, sponsors should proceed cautiously and avoid a one-size-fits-all approach, taking note of the following key developments.

All firms should take note of the FCA’s latest feedback on SMCR implementation.

By Rob Moulton, Charlotte Collins and David Berman

In its latest piece of feedback on firms’ implementation of the SMCR, the FCA indicated that firms must improve their implementation of the Certification Regime and, most particularly, the Conduct Rules. While the FCA’s review focused on SMCR implementation within banks, which have been subject to the regime for more than three years, the findings are relevant to all firms, whether already subject to the SMCR or due to become so this December.

The FCA observes that firms are taking the regime seriously, and focusing on the spirit of the regime. Generally, there is a correlation between size, resources and regulatory interaction, and how mature firms are in their approach to the SMCR. However, the FCA has found that some firms seem to have been less successful in embedding the regime below senior manager level. The FCA considers that there is some room for further progress on the Certification Regime, and that there are potentially more significant weaknesses in the implementation of the Conduct Rules.

By David BermanCarl Fernandes  Nicola Higgs, Rob Moulton and Charlotte Collins

In our January publication, we highlighted what we were seeing as the top regulatory focus areas for our clients during the year ahead, focusing on wholesale market structures and conduct risk.

In a series of 10 blog posts, we will take a closer look at the key areas highlighted, mapping developments from the first half of 2019, and looking ahead to the remainder of the year.

The English High Court held the tribunal lacked jurisdiction as the defendant ceased to exist.

By Eleanor M. Scogings

In Ga-Hyun Chung v. Silver Dry Bulk Co Ltd,[i] the English High Court upheld a challenge to an award under Section 67 of the Arbitration Act (the Act). The award was made in favour of Silver Dry Bulk Co Ltd (SDBC) against Homer Hulbert Maritime Co Ltd (HH). The claimant, Mr Chung (trustee of HH), successfully challenged the jurisdiction of the tribunal on the grounds that there was not a valid arbitration agreement, and the tribunal had therefore not been properly constituted, because HH had ceased to exist at the time the notice of arbitration was filed.

This case serves as a useful reminder of the importance of carrying out due diligence on defendants prior to commencing arbitration proceedings, especially if they are incorporated in a foreign jurisdiction. If one of the parties to an arbitration agreement has ceased to exist, then a tribunal cannot be properly constituted and the arbitration proceedings cannot produce a valid and enforceable award.

English Supreme Court rules that there is no reasonable diligence requirement barring a fresh action to set aside a judgment obtained by fraud.

Oliver E. Browne and Alex Cox

Introduction

In Takhar v Gracefield Developments Limited and others [2019] UKSC 13, the English Supreme Court considered whether a party applying to set aside an earlier judgment on the basis of fraud is required to show that it could not have discovered the fraud by the exercise of reasonable diligence. The court unanimously ruled that there is no reasonable diligence requirement barring fresh actions based on fraud, and allowed the appeal.

Background

The appellant, Mrs. Takhar, acquired a number of properties in Coventry as part of a separation from her husband in 1999. She subsequently suffered personal and financial problems, largely as a result of the poor condition of the properties. In 2004, she became reacquainted with her cousin, Mrs. Krishan, whom she had not seen for many years. Mrs. Krishan and her husband, Dr. Krishan, agreed to provide financial help and practical assistance to Mrs. Takhar.