Georgina Bligh-Smith joined the insolvency and restructuring team at Pannone Corporate in April 2021, after completing her Legal Practice Course.

Despite joining at a time when many people were still working from home, Georgina says she was made to feel “right at home” very quickly by a team full of legal professionals who have been at the firm for many years.

Nearly one year on, Georgina talks to us about ‘My Life in Law’, her own career ambitions, and her aim to help improve social mobility in a sector where more work still needs to be done.

Tell us a little bit about what you did before joining Pannone Corporate in April 2021?

Before joining the insolvency and restructuring team last year, I worked as a cost litigation assistant, which is a very niche area of law that many graduates don’t even realise exists! It really goes to show how varied the legal profession is and the range of opportunities out there.

While studying at university I also worked as a Topshop sales assistant for three years – I like to think that every experience has made me into who I am today!

As a paralegal in the insolvency and restructuring team, what does your role consist of?

I assist on a wide range of matters relating to both corporate and personal insolvency and restructuring scenarios. This includes administrations, liquidations and bankruptcies – in each case predominantly acting for insolvency practitioners.

What attracted you to the role at Pannone Corporate?

I was first drawn to Pannone Corporate because of its impressive array of clients and the firm’s specialist approach and focus on commercial law, providing business legal services. This really aligned with my interests and meant that my training would be completely tailored to an area I wanted to progress in.

Most importantly, I was looking to join a firm that had a collaborative culture that would nurture me into a great solicitor – something just felt right at the interview and I knew I’d found the place!

What route did you go down, in terms of training and qualifications?

I very much went down the traditional route: I studied law at the University of Manchester, before undertaking the Legal Practice Course at BPP Law School. I start my training contract with Pannone Corporate next year – something which I am really looking forward to. Once completed, I will finally be a qualified solicitor.

Increasingly, there are more and more avenues for people to choose from when it comes to entering the legal profession.  Why did you choose the traditional route?

If I’m honest, at the time it seemed as though this was the only route to a professional career in law. The sector has become so much more diverse in recent years, in that respect.

If I was starting that journey today I would give some serious thought to undertaking a legal apprenticeship. However, despite the hefty price tag, I really don’t know if I would give up that university experience!

Tell us what does a typical day looks like?

It might sound a bit clichéd, but no two days are ever really the same and this is what I love about the job.

I get to assist different team members with caseloads, covering contentious and non-contentious matters for a range of clients which involve both personal and corporate insolvency scenarios.

Typical tasks include conducting investigations into the conduct of directors of insolvent companies relating to antecedent transactions and misfeasance claims or dealing with possession and sale proceedings in bankruptcy matters and generally assisting with hearing preparations.

One thing that is consistent though is a good cup (or two) of coffee!

What is the most satisfying aspect of your job?

Aside from the variety, I would probably say the intellectual challenge. I joined Pannone Corporate right in the middle of the pandemic – something that has had a profound effect on the insolvency sector, in particular.

Not only have companies come under extreme pressure and struggled over the last two years, but insolvency law has continued to evolve in response to the pandemic.

No more so than with the introduction of the Corporate Insolvency and Governance Act 2020, which has introduced both permanent and temporary measures which we have also seen various extensions to.

As such, it’s been really important to keep abreast of all those changes, adapt and continue to find innovative solutions to the issues faced by clients in the current unusual circumstances.

What are you career ambitions?

Apart from the obvious one of qualifying as a solicitor and successfully making my way through the ranks, I really hope to be able to make a difference in improving social mobility within the legal profession.

As someone who was state school educated and the first generation in my family to go to university, I, like many others, have found navigating the legal profession particularly difficult at times.

I want to help level the playing field for younger people from disadvantaged backgrounds, whether that’s by mentoring students or supporting charities/groups that have this kind of aim in mind – for example, The 93% Foundation.

Whilst work is being done to raise awareness and increase diversity within the profession, in my view more must be done.

If you were managing partner for the day, what’s the first thing you would do?

I would go out and invest in employee fitness in some way shape or form, because participating in regular exercise has had such a positive impact on my own lifestyle and mental health.

Perhaps by partnering with a local gym, to arrange weekly group classes that are private to employees of the firm, with maybe with some light-hearted competition thrown in between different teams/departments!

This would help maintain a healthy, happy and productive workforce, whilst increasing camaraderie between employees at the same time (sounds like a great return on my investment!).

What would you be doing if you didn’t have a career in law?

I almost picked psychology for a degree, so it would probably be something in this field.

Why people do things in the way they do, why they feel and react in a certain way, as well as exploring different personality types, really fascinates me.

In fact, there’s a link with both psychology and the law – psychology seeks to understand and explain human behaviour and the law seeks to regulate it.

Understanding how emotions can complicate decisions taken by clients/opponents or having the ability to anticipate your opponent’s reaction, while being able to use effective tools of persuasion, can be really helpful in law too.

What can lawyers / the legal profession do to better support clients and does anything need to change?

I’d say improving client responsiveness remains an important aim, as this is something clients really value and, whilst it sounds simple, it’s also easy to get wrong and fall short sometimes.

By responsiveness, I don’t mean dealing with everything there and then, but making sure you acknowledge it and manage your clients’ expectations appropriately. This involves being more than just reactive but also proactive, such as updating the client before having to be asked. This is something we are very conscious of as a team and as a firm.

What do you enjoy outside of work?

I love hiking, particularly with a good scramble included to make it that bit more adventurous! The highlight of last year was scrambling along a knife-edged ridge called Crib Goch in Snowdonia.

I love escaping from busy city life into the hills with a packed lunch in my rucksack – there is literally nothing better.

This summer I am completing Tour du Mont Blanc – an 11-day hike through Switzerland, France and Italy, covering 170km. The combined elevation of this route (over 10,000m) is higher than Mount Everest is tall.

I always document and post route information/inspiration on my hiking Instagram page @hikewithg_

Pannone Corporate has strengthened its position in the retail sector, after recently being appointed by Costcutter and The Fragrance Shop. The North West law firm has also been reappointed to the BooHoo Group legal panel.

Paul Jonson, senior partner at Pannone Corporate, said: “Retail is a vast, dynamic and ever-changing sector and one that has formed a core part of our growth strategy in recent years. Across a range of teams and specialisms we have built up strong sector credentials over recent years and we’re delighted to be extending that retail footprint through our work with prominent brands, such as Costcutter and The Fragrance Shop.

“Our reappointment to the BooHoo legal panel is also testament to the hard work and sector expertise that the team has shown over the last 15 years, in supporting the global fashion brand on an impressive growth journey since it started trading.

“We look forward to working alongside our new clients and also our many longstanding retail clients, as they expand their presence in the UK and overseas, whether that’s through bricks and mortar growth, or by capitalising on the continued rise of ecommerce.”

Pannone Corporate works alongside a growing list of retail and wholesale businesses including Bestway and Iceland.

In our last update of 2021, we look at the IP stories and case updates making headlines across the UK and around the world.

In December’s edition of our monthly IP round-up, we delve into a Stormtrooper helmet NFT dispute between artists and a curator, the high-profile Supreme Court decision of Lloyd v Google, and Walmart’s issue with Kanye West’s Yeezy LLC. In a more festive theme, we also look at why John Lewis is being urged to donate the proceeds of its Christmas advert to charity, and the importance of clear wording of online promotions as shoppers hit the sales.

Read our monthly IP round up here.

If you would like to discuss these topics in more detail, have any questions or would like to receive our IP round-up directly to your inbox by email each month, contact Melanie or Amy:

Melanie McGuirk on 07790 882567 or email melanie.mcguirk@pannonecorporate-com.stackstaging.com

Amy Chandler on 07920 237674 or email amy.chandler@pannonecorporate-com.stackstaging.com

Pannone Corporate has advised on the USD $8 million investment into games studio and developer of virtual worlds, Dubit. The multi-million dollar deal will fund the world’s first live esports league in the metaverse, starting in Roblox.

The Manchester law firm acted as legal adviser to Metaventures founder and French investor Jean-Charles Capelli, who led the funding round. The Pannone team was led by Tom Hall (Corporate Partner), Andrew Walsh and Behzad Borang.

The capital funding values Dubit at USD $55 million and will enable the Yorkshire-based company to expand its existing metaverse activity, with the launch of the inaugural Metaverse Gaming League (MGL) – branded gaming events and esports tournaments. Following its launch on Roblox, the company intends to expand into other leading metaverse gaming platforms, such as Minecraft and Core.

Tom Hall commented: “We’re delighted to have worked alongside Metaventures and Jean-Charles in what is a hugely exciting deal in a rapidly growing technology space.

“The metaverse is grabbing both headlines and people’s imaginations, as major players commit to the virtual world. With a strong reputation amongst global brands for its development capabilities, the multi-million investment will undoubtedly provide Dubit with further momentum as it continues to expand its presence in the virtual world.”

Established in 1999, Dubit works with companies such as Disney, Facebook and Lego, and is already taking brands into Roblox. As part of its ambitious growth strategy, Metaventures and Dubit also plan to create consumer lifestyle experiences such as concerts and fashion shows for the metaverse.

Jean-Charles Capelli said: “Dubit is in the perfect position to take advantage of the new opportunities in the metaverse. No other company has 20 years’ experience in developing and launching virtual worlds, combined with a great network of brands and organisations that it works with around the world. As an entrepreneur and musician, I’m proud to invest in Dubit, and I’m excited to help scale up the incredible experiences it creates for users of Roblox and other metaverses.”

Dr Patricia Jones is a data protection lawyer at law firm Pannone Corporate: 

This case was brought by consumer rights activist Richard Lloyd alleging that Google had breached its data protection obligations under the Data Protection Act 1998 (DPA 1998) by using the browser generated information of more than four million Apple iPhone users.

Mr Lloyd had brought the case as a representative action on behalf of all the affected iPhone users arguing that they had the same interest.  The Supreme Court disagreed.  It considered that individual assessments of the entitlement to damages of each user would be required. The Court considered it necessary to establish what, if any, unlawful use Google had made of each user’s personal data and what damage had been suffered by the user as a result. The Court did not consider that damages can be awarded for a breach of the DPA 1998, where the individual doesn’t suffer any material loss or distress as Mr Lloyd had argued.

“Although the Supreme Court’s ruling in favour of Google was made under Data Protection Act 1998 which is no longer in force, it will make it more difficult for people to seek compensation for a data protection breach when they have suffered no material loss or distress. The decision will have implications for the bulk compensation claims that can typically follow a data breach affecting a large number of individuals and impact on the burgeoning data protection claims industry that has grown up. There are a number of data protection representative actions which were on hold pending the Supreme Court decision and it will be interesting to see what happens to them.

“Despite the judgement going in favour of the internet giant, it should act as a strong reminder to businesses – both large and small – about the importance of complying with the data protection legislation when collecting and using customer data. If businesses get it wrong, they could potentially face sanction from the Information Commissioner’s Office as well as compensation claims.

The results of Chambers 2022 have been announced with impressive results for individual lawyers and teams at Pannone Corporate.

Chambers and Partners identifies the best law firms globally, from multi-nationals to boutiques, based on independent research and analysis of feedback from clients, peers and the wider market.

Chambers produces annual rankings of teams and individuals according to their area of specialism. They take into account: client service; technical legal ability; depth of team; commercial vision and business understanding; diligence and value for money.

Commenting on this year’s results, senior partner Paul Jonson said: “We’re delighted that so many individuals and teams have been acknowledged in this year’s Chambers rankings, with particular note to our Intellectual Property team, which has moved up to tier two.

“It’s excellent to see such positive feedback from clients, highlighting our strong and client-orientated approach, robust and highly professional advice, ability to translate complex legal matters, and a clear commercial awareness – all important and consistent qualities across the firm.

“I’d like to congratulate everyone who’s been included in this year’s rankings for their continued hard work and commitment to delivering a first-class service to clients across all specialisms.”

The rankings 

Pannone Corporate has advised the founder of streetwear brand, HERA London, on the sale to Gymshark director and former chairman, Paul Richardson.

The Manchester law firm acted as legal adviser to Ashley White, founder of the fashion company, which aims to grow into a £100 million label over the next three to five years. The Pannone team was led by Tom Hall (Corporate Partner), Andrew Walsh and Behzad Borang.

Launched in 2015 by Ashley White, HERA London has become known for its iconic skinny jeans, oversized sweatshirts and loungewear, with the brand attracting celebrities including Hailey Bieber, Brooklyn Beckham and Sofia Richie.

Tom Hall said: “We’ve worked alongside the founder of HERA London for the last few years, during which time the company has achieved exponential growth, established a loyal customer base, and built an impressive reputation amongst brand ambassadors.

“We’re delighted to have advised Ashley on a significant deal, which marks an exciting new chapter for the fashion brand as it looks to scale up and build on its success to date.”

Richardson, who was previously joint owner and director of All Saints, has purchased a majority stake in HERA London and will become executive chairman at the online retailer. He will oversee company strategy, create significant growth and improve brand equity.

Ashley White commented: “I would like to thank Tom, Andrew, Behzad and the whole Pannone Corporate team for their hard work and commercial advice. Their expertise is second-to-none and they made the process an enjoyable one.”

The Legal 500 is positioned as the ‘client’s guide to the best law firms’ because it is underpinned by client feedback and insight about how a firm and its lawyers work. It’s an important benchmark, which celebrates our team, allows us to build on success and strive for continuous improvement.

The Legal 500 rankings for 2022 – highlighting the practice area teams who are providing the highest quality legal advice – feature Pannone Corporate in 15 areas of law, moving up in two corporate & commercial, and commercial property.

The rankings include Tier 1 listings for our contentious trusts and probate, media and entertainment, and debt recovery teams. As well as the teams’ success, three people were named in the Hall of Fame, the firm had six namechecks for ‘leading individuals’, two ‘next generation partners’ and four mentions for ‘rising stars.’

Beyond the numbers and fantastic recognition in the rankings, we’re proud to see all the feedback from clients. Here’s what they said:

Contentious trusts & probate

“What sets them apart is their ability to combine their knowledge of the law, the softer skills of client care and an ability to be direct. The clients I have referred to them are by the nature of the specialism in a highly emotional state and every one of them has been gushing in their praise of the work done by this team.”

Debt recovery 

“An engaging, tenacious team who are practical and efficient in what they do. They have worked with us and our functions to provide a seamless recovery service to suit our business needs.”

Media & entertainment

“Liaison with clients takes on a personal form and the relevant legal staff do not need reminding about issues. They keep in touch.”

Employment 

“Responsive, accessible and commercial practitioners who work with us, as the client, to arrive at the right outcomes for our business.”

Health & safety

“A new team but one with excellent experience and technical expertise with a dynamic can-do approach and a personable demeanour.”

Intellectual property

“…amazing from our first meeting right to the conclusion of my case, our first meeting gave me hope in a situation which I had long since deemed a lost cause… extremely empathetic to my situation and secured a settlement against a formidable adversary.”

IT & telecoms

“Attentive, personal and always available for advice and guidance.”  

Professional negligence

“Highly specialised firm with a strong track record in claimant professional negligence work.”’

Commercial litigation

“Pannone Corporate has lawyers at the top of their respective disciplines and a client base to match. Customer service is a key ethos at the firm with a high degree of partner involvement ensuring the client gets the service it needs. Electronic document management and searching ensures that key documents are identified early in the case.”

Corporate & commercial

“…adaptive and pragmatic in their guidance and advice. We completed three transactions with them and found them to be sensibly priced and adaptive in their approach to the size and scale of due diligence required.”

Property litigation

“Pannone Corporate strikes an excellent balance: they have the big-firm capacity to handle large and complex cases, but the small-firm responsiveness and personal touch. They have the flexibility and skills to manage cases that cross between different fields, for example real estate litigation that raises company law, insolvency or property damage issues.”

Commercial property

“The approach of Pannone and their staff is very much aligned to our values, what is important to us and the way we like to operate, Pannone recognise this and it’s reflected in the service they provide. It’s important when dealing with legal matters that a firm has the ability to tailor its service to work in partnership with its clients, take time to understand our objectives, the way we operate and therefore offer a more bespoke service to deliver the right outcomes. I feel that this is a specific strength of Pannone.”

Insolvency & corporate recovery 

“The team are always ready to help and have found innovative solutions to technical problems.”

Construction 

“All of the partners feel like extended members of the in-house team. They are flexible and accommodating.”

In our latest IP round-up, our team shares the latest IP headlines and legal developments from the UK and around the world.

This month we cover the rise of social media copyright infringement claims, the news that Superdry sues Asos for ‘flagrantly’ copying its designs and ASA and CAP’s launch of guidance on advertising in-game purchases.

Read our monthly IP round up here: https://mailchi.mp/pannonecorporate/ip-round-up-october-2021

If you would like to discuss these topics in more detail or have any questions, contact Melanie or Amy:

Melanie McGuirk on 07790 882567 or email melanie.mcguirk @pannonecorporate-com.stackstaging.com

Amy Chandler 07920 237674 or email amy.chandler@pannonecorporate-com.stackstaging.com

As part of the launch of our annual Care Report, barrister, Jonathan Landau, looks in more detail at the CQC’s new strategy and the likely consequences. 

The care sector is an integral part of the UK’s societal landscape – both in economic terms and the number of vulnerable people it services. With an ageing population – with estimates suggesting a 36% growth in the number of people aged over 85 by 2025 – it’s clear that the sector will only grow in prominence over the coming years. 

The regulatory structure that sits around the sector has been governed by the Care Quality Commission (CQC) since 2009 when the external body was created to regulate and monitor health and social care services in England, taking over the roles and responsibilities of the Healthcare Commission, Commission for Social Care Inspection and Mental Health Act Commission. In bringing together these three predecessor organisations it was (and remains) the CQC’s stated aim to ensure that, “health and social care services provide people with safe, effective, compassionate and high-quality care.”

Initially the CQC inspected and monitored registered care providers in accordance with 16 ‘essential standards’ of quality and safety. However in the years that followed its creation there was, both within the CQC and the wider industry, a perceived lack of understanding as to how the essential standards were applied and interpreted in practice, prompting new ‘fundamental standards of care’ in 2015. To assist in enforcing the required standards, the CQC was given new powers, transforming it from an inspection and monitoring organisation into a regulator with teeth, including not only civil enforcement powers, but also the ability to prosecute those who had failed to meet those required standards.

Roll on six years and the role of the CQC remains a great source of debate. A global pandemic has made a seismic change to the way in which the CQC has pursued its objectives, and earlier this year it introduced a new strategy ‘for the changing world of health and social care’. The aim of the strategy, published in May 2021, is to strengthen the CQC’s commitment to deliver its purpose.

The CQC claims that its aims and role as a regulator won’t change – but how it works will be different. The strategy is based on four themes:

People and communities

Regulation that’s driven by people’s needs and experiences, focusing on

what’s important to people and communities when they access, use and move between services.

Smarter regulation

Smarter, more dynamic and flexible regulation that provides up-to-date and high-quality information and ratings, easier ways of working with the CQC and a more proportionate response.

Safety through learning

Regulating for stronger safety cultures across health and care, prioritising

learning and improvement and collaborating to value everyone’s perspectives.

Accelerating improvement

Enabling health and care services and local systems to access support to help improve the quality of care where it’s needed most.

The ‘smarter regulation’ theme is likely to have the biggest impact on providers, in terms of how they are inspected and rated. There will be a move away from relying chiefly on comprehensive on-site inspections. Instead, the CQC will develop continuous insight and monitoring methodologies. It anticipates that this will enable inspectors to spend more time speaking with people when on site rather than looking at paperwork.

The CQC also plans to develop innovative ways of analysing data and using AI to make decisions. Ratings will be more dynamic and won’t require an inspection for a change in rating.

All of this presents both risks and opportunities. In terms of risks, the validity of the CQC’s judgements will only be as robust as the systems it uses and the data it obtains. Providers, their advisors, and representative bodies will need to scrutinise the methodologies as they develop and quickly raise concerns. It’s likely that AI, for example, will pose some difficulties, with the potential for some very uncomfortable – even discriminatory – decisions for the CQC. Providers will also need to advocate for a fair system of challenging any decisions, as it seems unlikely that the factual accuracy correction procedure will not be available for such a dynamic regulatory scheme. That is particularly important if the CQC is obtaining information from sources it cannot itself verify and if it is making decisions on an AI (read automated) basis.

In terms of opportunities, providers that develop good relationships with stakeholders, and who invest time in understanding the CQC’s methodologies, will be well-placed to achieve good ratings and may benefit from lighter touch regulation. The more developed the CQC’s methodologies are, the easier it will be for providers to ensure that they can provide the evidence to satisfy the independent regulator.  

Currently, the CQC is targeting services with which it has concerns. In many cases, it does not have concerns about homes with lower ratings because of the improvements they have made. That leaves them stuck on lower ratings, because the CQC is not re-inspecting them. The ability for ratings to improve quickly is therefore very welcome.  

The themes of the new strategy are laudable, but it is inevitable that there will be unintended consequences and teething problems as the methodologies develop. Case associations and providers’ trusted advisors will be well-placed to keep them informed as the detail emerges.

Jonathan Landau is a barrister at 5 Essex Court. He has particular expertise in inquests and healthcare regulation. Joanthan is regularly instructed in relation to high profile Article 2 and jury inquests, often in the context of media coverage or regulatory investigations. He advises in respect of a broad range of healthcare regulatory matters including all levels of CQC and Ofsted enforcement, safeguarding investigations, commissioning disputes, contract monitoring, and mental capacity.

In our latest My Life in Law, we speak to new recruit, Emma Hafez, who joined Pannone in April 2021 as part of our Real Estate team. 28-year-old Emma talks about her career so far and why she decided to join the firm earlier this year after taking a career break to have children.

Tell us a little bit about your career, before joining Pannone.

My route into law was the traditional route. In all honesty, this was the only one I really knew about. At college we had to lay out our career paths and this was the route I chose and stuck to.

I did a three-year degree in law, followed by the Legal Practice Course and then entered into a training contract with brief stints of working as a paralegal in between.

Prior to joining Pannone, I qualified and worked as an immigration and human rights solicitor, before taking a career break to have to have my two children, Ella and Oliver. It was during this time that I decided to pursue a career in commercial law.

Why did you decide to join the firm?

My partner is the managing director of a property development company in Liverpool. He’s genuinely passionate about his work and we often discuss it together in the evenings. As a result of this interest, I felt it was the logical step for me to pursue a career in Real Estate law.

What does a typical day look like?

Every day is completely different, as the work that we do is so varied. However, a typical day usually starts with a call with my supervisor to go through the day’s tasks, followed by liaising with clients and the other side’s solicitors in relation to large developments, leases, residential investment transactions and a whole variety of work.

What is the most satisfying aspect of your job?

I really enjoy getting positive feedback from satisfied clients which I get a great sense of achievement from.

What can lawyers / the legal profession do to better support clients?

I believe solicitors could always be more empathetic to clients, as I have the benefit and perspective of seeing the client’s point of view first hand and can appreciate the challenges faced from both sides.

Looking forward, what are your career ambitions?
I hope to be able to stay at Pannone and grow an impressive client portfolio.

If you were managing partner for the day, what’s the first thing you would do?

I would take all of the teams on a city centre canal party cruise!

What would you be doing if you didn’t have a career in law?

I’ve always said I would have enjoyed being a dentist.

What do you enjoy doing outside of work?
I enjoy taking my children on days out to the zoo or farms, anything which is outdoors.

A six-strong Pannone team took part in the annual Manchester Legal Walk earlier this week, to raise money for the North West Legal Support Trust – the local arm of the Access to Justice Foundation, which funds local advice services.

Money raised from the 10km walk, which started at Manchester Civil Justice Centre, before heading out to Chorlton-on-Medlock and finishing at the Manchester Chamber of Commerce, will be used to help local agencies keep operating and provide access to justice to as many people as possible.

The event, which involves both legal professionals and justice advocates, takes place each year in 27 cities across the UK, including Liverpool, Leeds, London, Birmingham and Glasgow.

Ben Blatch-Hanlon, a solicitor in the dispute resolution team, has taken part in a number of walks in three previous locations. He was responsible for organising the team’s involvement in this year’s event. Walkers included Lorna Shuttleworth, James Brandwood, Georgina Bligh-Smith, Heather Morris, and Emma Hafez.

Ben said: “The Legal Walk is a fantastic industry event to be involved in, raising much-needed funds and awareness of a vital service that has been severely affected by the pandemic.

“Through the charitable efforts of the legal and justice profession, we can play a small part in helping to fund a service that offers free advice to some of the poorest and most vulnerable people in society – making a huge difference to their lives.”

The Legal Advice agencies work to help prevent homelessness, resolving debt problems, gaining care for the elderly and disabled and fighting exploitation.

If you would like to support the team and make a donation, simply visit:  https://uk.virginmoneygiving.com/team/PannoneCorporateLLP

Pannone Corporate has advised Europe’s leading call tracking provider, ResponseTap, on the sale to Infinity in an undisclosed deal.

The Manchester law firm acted as legal adviser to Salford-based ResponseTap, which was acquired by call intelligence provider, Infinity, from the company’s management and venture capital investors. The team was led by Tom Hall (Corporate Partner) and Arshnoor Amershi (Senior Associate), with support from Behzad Borang.

ResponseTap has built up a strong reputation for the development of highly innovative customer experience software to predict caller intent and personalise the call experience. This will combine with Infinity’s leading conversation analytics suite, which enhances its core call tracking services. It will allow the enlarged SaaS group – which has annual recurring revenues of £15 million, employing 135 staff – to better serve its 350 enterprise and over 1,000 SMB clients.

Tom Hall said: “We have worked alongside the founders of ResponseTap for the last 10 years, following the company on an impressive growth journey that has attracted significant interest from across the market.

“ResponseTap has developed and launched pioneering speech analytics technology, expanded beyond its North West roots to international territories, and built up an enviable client portfolio, including Virgin Money and luxury travel group, EFR Travel. It’s a real success story for the region and a significant deal within the marketplace.”

Whistleblowing in the UK’s care sector rose to its highest recorded level in 2020, driven by health and safety concerns brought on by the coronavirus pandemic.

The number of whistleblowing complaints made to the Care Quality Commission (CQC) has increased year-on-year since 2015, with a 43% rise between 2019 and 2020 – a total of 14,508 enquiries were received last year.

The figures obtained through a Freedom of Information (FOI) request to the CQC – conducted as part of an annual Care Report by Pannone Corporate – also show that ‘concern’ enquiries increased by 39% between 2015 and 2020. However, the number of safeguarding complaints fell to its lowest level last year to 25,847, driven in large part due to a reclassification of abuse notifications in March 2018 and an increase in providers notifying their local authorities in the first instance rather than the CQC.

Bill Dunkerley, regulatory lawyer and director at law firm, Pannone Corporate, commented: “The global pandemic has had a profound effect on the care sector, touching every facet of the industry – whether that’s financially, operationally, or from a corporate governance perspective. Prior to 2020, the word ‘pandemic’ was unlikely to be considered as anything more than a theoretical risk. However, events since March last year, and the imposition of the first national lockdown in the UK, have demonstrated that providers must be prepared for all eventualities and risks.”

He continued: “In the context of the last 18 months, it comes as little surprise that the number of whistleblowing enquiries rose to its highest recorded level in 2020. In general terms, the majority of complaints in the UK relate to health and safety matters. It’s therefore reasonable to assume that the increase in complaints from 2019 to 2020 were related to the coronavirus, with safety concerns around COVID-19 extremely likely to have played a role in these figures.”

The Care Report 2021 shows that regulatory interventions rose by 109% between 2016 and 2019, understandably falling in 2020 due to a seismic change in how the CQC conducted itself as a result of COVID-19. The rise in interventions mirrors the number of enforcement actions carried out by the CQC, which revealed an 87% increase since 2014/15 in its latest annual report.

Dunkerley said: “In light of the increasing use of enforcement action by the CQC, as well as the apparent realisation of the intention to prosecute more cases, it’s imperative that service providers review their procedures, systems and address risk areas in anticipation of inspection or intervention. This includes assessing areas of their operation requiring immediate improvement; undertaking pro-active audits of risk areas and implementing remedial or control measures where appropriate; and responding to near misses and learning from them to prevent a recurrence.”

He added: “The last 12 months have had a particular impact on the CQC, which has had to respond to the novel challenges presented, as well as clarify its own role in regulating providers in light of recent criticisms. When you consider that people are also more alive to potential issues of concern, as well as becoming more aware of the CQC’s role as regulator and its power to take enforcement action in response to issues of concern, then we are likely to see considerable change in the care sector over the course of the next 12 months as providers and the CQC adapt.”

To read the report in full, click here

As employers welcome back staff in the coming weeks, Fiona Hamor catches up with People Management magazine to talk about what employers need to be aware of from a HR and employment law perspective.

While remote working has thrown up significant challenges for employers, a return to the office will equally create newfound problems generated by COVID-19. Recent employment tribunal rulings have highlighted some of the issues that have arisen from the pandemic, which have led to unfair dismissal claims being made.

Fiona says: “COVID-19 has undoubtedly left an indelible mark on the workplace and businesses have had to adjust to new ways of operating. The return of workers over the coming months will continue to pose unprecedented challenges to employers. The need to understand, assess and act on potential risk is clear, if businesses are to remain operational and to protect against any potential future claims.”

Read the full article on the People Management website. https://www.peoplemanagement.co.uk/experts/legal/what-to%20consider-employees-return-to-workplace

In our latest IP round-up, our team shares the latest IP headlines and legal developments from the UK and around the world.

In the second of our monthly IP round–ups we cover the clash of two heavyweight brands, New Balance and Michael Kors, over alleged trade mark infringement, the ASA’s clamp down on influencers who repeatedly fail to identify their posts as ads on social media, and a High Court win by Eurovision 2021 contestant James Newman against an ex-Voice UK contestant who claimed James had copied one of her songs.

Read our monthly IP round up here: https://mailchi.mp/pannonecorporate/ip-round-up-september?e=%5BUNIQID%5D

If you would like to discuss these topics in more detail or have any questions, contact Melanie or Amy:

Melanie McGuirk on 07790 882567 or email melanie.mcguirk @pannonecorporate-com.stackstaging.com

Amy Chandler 07920 237674 or email amy.chandler@pannonecorporate-com.stackstaging.com

In our latest My Life in Law, we speak to employment director, Stephen Mutch, about his career in law and his love of bass playing in indie/alternative group, BC Camplight.

•  When did you join Pannone Corporate?

I’m what’s called a ‘one club man’ in football.  I joined Pannone Corporate’s predecessor firm as a fresh-faced trainee lawyer back in 2003. This isn’t actually that rare at Pannone Corporate – there are a good handful of people here who joined when I did.

• What was your role/experience prior to joining?

I joined Pannone straight from university, having completed a law degree at the University in Sheffield and a post-graduate in Chester.

• Why did you join Pannone?

They had a great reputation and a very varied portfolio of legal work. Even back then, they prided themselves on having a more human element than most firms – something I still think is true after nearly 20 years.

• Having gone to university, why did you choose this route?

I’m rather ashamed to say that back then it was simply what most people did. Progress has been made, in terms of alternative routes into a career in law, but there’s still a very heavy reliance on a ‘good’ degree from a ‘redbrick’ university to open up doors. Lots more still needs to be done.

• What is the most satisfying aspect of your job?

I like the intellectual challenge and getting to speak to and help people run their businesses. Employment lawyers are almost always a ‘distress purchase’, so it’s nice to help people with the problems or challenges their business are facing.

• What does a typical day look like?

I spend most of the day on the phone or emailing clients providing advice, mixed in with a healthy dose of preparing clients’ defences for employment tribunal proceedings.

• What are your career ambitions?

I’ve always enjoyed helping more junior lawyers navigate what can be a very difficult first few years, so more involvement in what I enjoy. That’s on top of the usual partnership, world domination type ambitions of course…

• What would you be doing if you didn’t have a career in law?

I would be a penniless and struggling musician (please see below)

• What can lawyers / the legal profession do to better support clients? Does anything need to change?

I think some lawyers can still be a bit stuffy. Rarer these days, but clients don’t want that kind of lawyer anymore. Being user friendly and pleasant to deal with is top of most client’s priorities.

• What do you enjoy doing outside of work?

I play bass in indie/alternative band, BC Camplight, which releases records under the Bella Union label in London, so that takes up a lot of my time. We’ve been on the radio a fair bit and get to do around 30-40 shows a year. We’ve toured in Europe and played some of my favourite venues, such as the Roundhouse in London and the Paradiso in Amsterdam (Nirvana played there!) – there were 3,000 people in the audience, and I turned off my own instrument for our last song. Not cool! Our next record is out in the Spring.

I am also a trustee for a local arts-based charity called Art with Heart. Check them out here  https://artwithheart.org.uk/

• Do you have any particular skills/talents that your work colleagues may not know about?

I would say ‘please see above’, but I bore everyone to death with my tales of the (not so) rock ’n’ roll lifestyle!

In our first IP round-up, our team shares the latest IP headlines and legal developments from the UK and around the world.

We cover the new law for influencers posting edited photos introduced in Norway, Hendrick’s Gin’s copycat claim against Lidl (brought in Scotland but resulting in a UK wide ban on sales) and Adidas’s law suit against US designer Thom Browne for alleged infringement of its three stripe logo.

Read our monthly IP round up here: https://mailchi.mp/pannonecorporate/ip-round-up-august-5399161?e=%5bUNIQID

If you would like to discuss these topics in more detail or have any questions, contact Melanie or Amy:

Melanie McGuirk on 07790 882567 or email melanie.mcguirk @pannonecorporate-com.stackstaging.com

Amy Chandler 07920 237674 or email amy.chandler@pannonecorporate-com.stackstaging.com

Pannone Corporate has advised North West-based medical communications agency, Spirit, on the sale to OPEN Health Group.

The Manchester law firm acted as legal adviser to the shareholders of Spirit, which has been acquired by the global medical affairs specialist. OPEN Health Group is a portfolio company of Amulet Capital Partners LP, a US-based private equity firm focused exclusively on the healthcare sector. The team was led by Tom Hall, Corporate partner, with support from senior associate, Arshnoor Amershi and corporate paralegal, Behzad Borang.

Founded in 2006 by Asif Zaman, and based at premises in Didsbury and Alderley Park, Spirit offers full-service medical communications throughout the product lifecycle, with deep expertise across a range of therapy areas. Services include publication planning, medical strategy, medical education, scientific meetings, training and digital solutions.

As part of the undisclosed deal, Spirit will benefit from OPEN Health Group’s global network, with more than 850 people based in 15 locations across six different countries, including the USA, UK, The Netherlands, Germany, India and China.

Tom Hall said: “Over the last 15 years, Spirit has built an enviable reputation as a leading medical communications agency – not just in the North West, but across the globe.

“We’re delighted that a company of OPEN Health’s stature has recognised the exciting potential that Spirit possesses through its unique approach to scientific communications and its unwavering commitment to exceptional client experience. Having worked alongside Asif and the team for more than 10 years, as a long-standing client of Pannone Corporate, we have no doubt that the deal – one of a number in the sector over the last 12 months – will undoubtedly help to expand Spirit’s global reach and the range of innovative services it offers to clients worldwide.”

Asif Zaman, founder and chairman of Spirit, added: “I am delighted to see the business I started in 2006 move to the next level with OPEN Health. This transaction has exceeded my expectations, and not just in terms of my own personal outcome, but more importantly in finding the right home and cultural fit for Spirit and its fantastic team of medcomms professionals.

“Tom and the team at Pannone Corporate have been outstanding in terms of providing service excellence, adding value throughout the process and quite simply being a great team of people to work with and rely on.”

Spirit was also advised by corporate finance advisors, BCMS and accountants/tax specialists Mitchell Charlesworth LLP

The Building Safety Bill was introduced to Parliament on 5 July by Housing Minister Robert Jenrick MP.

Although the headline proposals contained within the Bill have been known for some time, its formal introduction marks a significant – and crucial – moment in its development. The draft is not only voluminous (running to 218 pages), but also seeks to fundamentally revise the current system of building safety and regulation, with the Government confirming that it intends the Bill will “create lasting generational change”in terms of how buildings are designed, constructed and maintained.

The Bill is incredibly wide-ranging in its proposed scope and extent, but what are the key changes suggested?

A ‘Golden Thread’ of Information

A key objective of the Bill is to establish a ‘Golden Thread’ of information to identify at every stage of a residential building’s lifetime, from planning and design through to completion and occupation, who is responsible for ensuring safety standards, and for managing potential risks.

In general terms, the Bill proposes that the person or entity which creates a potential risk should, as far as possible, also be responsible for managing that risk.

To help the passage of information between duty holders, the current Building Act will be amended to introduce a new ‘Gateway’ regime. Each gateway is intended to act as a ‘hard stop’ with compliance and appropriate sign-off/regulatory approval being required before the next development stage is able to commence.

To assist in retaining the Golden Thread of information following completion, and to act as an identifiable point of liaison for residents, the Bill will establish an Accountable Person for all higher risk buildings, being those over 18m/ seven storeys in height and which contain at least two residential units. The Accountable Person may be an individual or corporate entity. Once appointed, the Accountable Person must apply to the Building Safety Regulator for a Building Assurance Certificate, as confirmation that they are complying with their statutory obligations and must manage the ‘golden thread’ of information.

In addition, the Accountable Person must also appoint a Building Safety Manager (before occupation in relation to higher-risk buildings) to assist them with the day-to-day management of safety within the building.

The Building Safety Regulator must be notified of the appointment of the Building Safety Manager and will have the power to veto their appointment if it is not satisfied that they have the relevant skills, knowledge, and experience to discharge their responsibilities.

Building Safety Regulator

The Bill proposes extensive and wide-ranging powers for the new Building Safety Regulator, including the ability to investigate and prosecute those who fail to meet the new standards and requirements. Where corporate offences are found to have been committed with the consent, connivance or neglect of directors or managers, then those individuals will also be liable to prosecution in addition to the corporate entity. The Regulator will comprise both resident representatives and industry experts.

In addition, the Bill permits the Building Safety Regulator to appoint a Special Measures Manager to replace the Accountable Person or Building Safety Manager, where serious failures endangering the life of residents are identified.

Mirroring existing powers of the Health and Safety Executive, the Building Safety Regulator will also be able to issue compliance notices, which will require duty holders to rectify non-compliance issues by a specified date. In addition, the Regulator will have the ability to issue stop notices during the design and construction phase, mandating the stoppage of work until non-compliances have been addressed. Failure to comply with either type of notice will be an offence, punishable by a custodial sentence of up to two years for individuals, and/ or an unlimited fine for corporate entities.

Peter Baker, Chief Inspector of Buildings within the Health and Safety Executive, has said of the Bill’s introduction that it, “will give HSE the tools to deliver its important role as the Building Safety Regulator and is an important step in setting out what will be expected of future duty holders”.

He continued: “Everyone involved in higher risk buildings from design, construction and day-to-day operations will manage and control building safety in a way that is proportionate to the risks. This will ensure these buildings are safer for those who live in them, and they have a stronger voice. I encourage duty holders to use the Bill’s introduction in preparation for the new, more rigorous regulatory regime.

“The Building Safety Regulator will continue to work with industry and others to deliver the new building safety regime to ensure that residents of higher risk buildings are safe, and feel safe, in their homes now and in the future.”

New Homes Ombudsman

The Bill also proposes the establishment of a New Homes Ombudsman scheme, to receive complaints from the owners of new build homes and to help hold developers to account. The Ombudsman will be able to impose sanctions on developers who breach requirements, although an appeals procedure will also be available.

However, unlike other Ombudsman services, the Bill mandates that developers become, and remain, members of the new scheme.

Regulation of Construction Products

The Bill proposes to regulate construction products placed for sale on the UK market, through the concept of ‘safety critical products’ and their inclusion on a statutory list. The Bill also contains provision for future regulations to be introduced to prohibit the supply or marketing of products which are unsafe.

Where products do not fall under an existing regulatory regime and are not included on the statutory list, the Bill enables regulations to be created which will require manufacturers to ensure that the products they supply are safe, with breach resulting in prosecution.

Conclusion

The draft Bill has a long way to go before it receives Royal Assent. Given that there is little time for further discussion before the start of the summer recess at the end of July, the majority of discussions will likely take place from the autumn. Thereafter, it is unlikely that the Bill will come fully into force much before summer 2022.

Whilst it is hoped that the Bill will be able to be enacted without significant amendments, to the benefit of all stakeholders and residents, it is not expected to have an entirely smooth transition through Parliament. For example, it is anticipated that substantial amendments will be proposed by the opposition and rebellious Conservative backbenchers, especially in relation to the redress available to leaseholders within unsafe buildings.

If you would like more information on the Building Safety Bill, contact regulatory director, Bill Dunkerley, on Bill.Dunkerley@pannonecorporate-com.stackstaging.com or call 07920 237681.

Pannone Corporate has acted for the management team, Maven Capital Partners, and Mercia Fund Managers, on the proposed sale of Macclesfield-based fintech start-up, Mojo Mortgages, to RVU – the owner of multiple digital brands, including Uswitch, Confused.com and Money.co.uk.

The transaction remains subject to regulatory approval and customary closing conditions.

Mark Winthorpe, corporate partner, who lead on the deal, commented: “Mojo is fantastic North West success story, demonstrating the significant potential that exists in the regional’s fintech community when you cleverly combine smart technology with market and consumer insight. This deal is testament to the considerable investment and ambition that the team has made in the last few years and is an exciting milestone in the growth journey of the tech start-up.”

Pressure is clearly mounting on the Government to classify long-COVID as a disability. The aim is to provide thousands of employees with legal protection against any potential discrimination in the workplace.

Interestingly, a recent survey commissioned by the TUC revealed that just over half of people with symptoms, which typically include extreme tiredness, brain fog and dizziness, have experienced some form of discrimination or disadvantage at work.

The online poll of 3,500 people found that long-COVID sufferers are frequently met with disbelief and suspicion, with 19% of respondents saying that managers questioned the impact of the condition.

With calls for long-COVID to be given ‘occupational disease’ status for healthcare workers, there is clearly growing momentum for the condition to be given greater precedence in the workplace. While long-COVID is something that is entirely new, the Equality Act 2010 talks about disability as a physical or mental impairment that affects you day-to-day. The Act doesn’t contain a long list of conditions; it’s all about how it impacts your daily life. As such, there is a strong case for the emerging condition to be classed as such.

If long-COVID is categorised as a disability, employers will have to be very cautious about how they deal with the condition moving forward, to avoid any potential discrimination claims. However, from a HR perspective, the motivation shouldn’t be about avoiding employee action. Rather, it should be about what the long-term effects are going to be on workers, so that employers can put appropriate measures in place to support staff. The problem is, we don’t know a huge amount about the condition, which seems to differ enormously from one person to another.

As we wait to see how long-COVID is treated from a legal perspective, there are a number of key things that HR Directors and business owners should consider to ensure they are dealing with the condition in the most appropriate way – now and in the future.

• Develop a robust relationship with an occupational health specialist, or ensure you have a well-functioning OH department in place, depending on your size. This will allow you to access professional advice and support when dealing with long-term conditions.
• Review and update your current sickness absence policy, how people report sickness and what procedures are in place to manage absences.
• Focus on wellbeing in the workplace, not just in relation to long-COVID, but also people returning to the office after months working remotely. The issue of health and wellbeing has grown in prominence in recent years and the global pandemic has only served to propel the topic up the business agenda, as employers adopt the approach of ‘prevention is better than a cure’.
• Create clear lines of communication, encouraging open dialogue with employees regarding their physical and mental health. It’s vital that staff have both the confidence and the appropriate channels to be able to discuss health and wellbeing issues, knowing that their concerns will be listened to, and the support will be forthcoming.

If you would like to discuss how to implement an effective strategy to help manage occupational health, please contact Adam Pavey on 07980949525 or email Adam.Pavey@pannonecorporate-com.stackstaging.com

In the first of our quarterly retail law updates, we look at the latest news and legal developments affecting the sector.

It covers the upcoming Children’s Code, which will come into force in September and will impact those online retailers that currently process personal data of under 18s. We also look at the new guidance on buy now, pay later, as well as key fashion cases setting the tone for the industry, including when drawing inspiration becomes infringement.

Read our quarterly update here https://discover.pannonecorporate.com/retail-update

If you would like to discuss these topics in more detail, or have any questions, contact partner, Melanie McGuirk on 07790 882567 or email melanie.mcguirk @pannonecorporate-com.stackstaging.com

In our latest My Life in Law, we speak to paralegal Holly O’Farrell about her move from retail into law and her career so far as a legal apprentice. 

• When did you join Pannone Corporate?

I joined the firm in January 2020, so I only had a few months in the office before the first national lockdown was imposed in late March. So far, the majority of my Pannone Corporate career has been undertaken from home!  

• What was your role/experience prior to joining?

Before starting at Pannone I had been in private practice for approaching six years – at Clyde & Co for two years and then at Weightmans LLP. Prior to entering the legal profession, I worked in retail as a trainee assistant manager and ‘Style Advisor’ (read: personal shopper!). 

• What is your role at Pannone?

I am a paralegal in the construction team. I assist the head of construction with her day-to-day work and conduct some matters of my own under her supervision. 

• Why did you join Pannone?

What drew me to Pannone Corporate was the fact that it was a boutique firm that focused on commercial law and, as such, was a specialist in this area of work. The staff are so experienced because of that focus, and it has a hugely impressive roster of clients. As a result, the exposure and training available to a junior lawyer like me is fantastic. 

• What route did you go down, in terms of training and qualifications?

I am currently in the process of completing my CILEx qualification and will shortly qualify as a Chartered Legal Executive. 

• Why did you choose this route?

I began my legal career as a legal apprentice. I don’t have a degree – I withdrew from the University of Manchester because, despite the advice from all my teachers, I felt that university wasn’t for me. I loved the idea of higher education but, in reality, I found I wanted to learn in a more practical environment. As I was living away from home, I needed to ensure I was still earning, so an apprenticeship was ideal for me. Doing it this way also means that, by the time I am formally qualified, I will have had the benefit of eight-plus years’ legal work experience, which puts me in a great position compared to graduates and other newly qualified solicitors. 

• What does a typical day look like?

It might sound like an over-done answer, but genuinely each day is very different! In construction law, you do both contentious and non-contentious work. So, one day I may be working on a dispute for a client which might involve document review, possibly drafting submissions in adjudication or court proceedings and/or providing strategic advice to the client; the next I could be working on the contracts underlying a new building project, drafting a contract, or providing comments on a draft received from another firm to ensure that the client’s position is protected and there are no sneaky clauses in there that might cause them trouble down the line! 

• What is the most satisfying aspect of your job?

The most satisfying aspect of the job for me is its variety – I purposefully sought a role in an area that provided variation to keep me hooked. My manager in my first construction role told me that even after 35 years in the sector he was still presented with work that he’d never encountered before. After four years specialising in construction, this is certainly ringing true and I can’t wait to keep being surprised for the rest of my career. 

• What are your career ambitions?

Following completion of my CILEx qualifications, I am considering completing the SQE in order to cross-qualify as a solicitor. After I’ve achieved that I don’t intend to focus on any particular thing; I think there is some danger in having too fixed a plan. I just want to keep enjoying my work and be open to whatever opportunities arise. 

• If you were managing partner for the day, what’s the first thing you would do? 

Get the corporate credit card out and get everyone to the pub, after so many months apart! 

• What would you be doing if you didn’t have a career in law? 

I would probably have continued working in retail. I had ideas about moving into buying or visual merchandising. I definitely wouldn’t have continued in personal shopping. Pouring champagne and hoisting people into cruise-wear is not what five-year-old me dreamed of!

• What do you enjoy doing outside of work?

The usual – walking the dog, binging on Netflix and worrying that I don’t have enough hobbies! 

• Do you have any particular skills/talents that your work colleagues may not know about?

None that I wouldn’t be ashamed to admit to! However, I fancy myself as a bit of a dancer so, maybe when we’re all allowed to socialise again, I’ll get to embarrass myself! I do also have an excellent memory for song lyrics – in conjunction, these ‘talents’ result in quite the performance!

The latest figures from The Advisory, Conciliation and Arbitration Service (Acas),  show the significant financial impact workplace conflicts can have on a business.

In its latest report, Estimating the Costs of Workplace Conflicts, Acas has said that workplace conflict costs UK employers £28.5 billion every year, an average of just over £1,000 for every employee. This is based on the total cost to organisations in handling workplace conflict that includes informal, formal and legal processes, as well as the cost of sickness absences and resignations.

During a period where margins are being stretched, additional costs such as these will only increase the considerable financial pressure being placed on businesses. If you add to the fact that, according to Acas, nearly half a million employees resign each year as a result of conflict, then the argument for taking a proactive approach to workplace conflicts has never been clearer.

Handling disagreements and complaints early before employment relationships are damaged not only helps to save businesses time and money in managing those claims, but it can also prevent unnecessary recruitment costs further down the line.

So, as a business, what can you do to try and prevent workplace conflicts from materialising?

A proactive approach

The key is prevention. Having a robust set of policies and procedures in place that are clearly communicated to employees and managers is an important step in creating an open and transparent workplace. If your business instils agreed customs, ideas and behaviours that everyone buys into then you can create a positive culture where people believe they are being listened to and one that encourages employees to handle any potential conflicts in a proactive and positive way.

Handling grievances

It’s essential to have a formal, written grievance procedure in place that is reviewed on a regular basis in line with any changes in legislation or official guidance, and managers should receive relevant training, so they know the steps to be followed. Ensure that when a grievance is raised, you refer to your procedures immediately – allowing you to manage workplace conflicts effectively and in a formal way. This includes investigating grievances fairly and consistently; creating open lines of communication for everyone involved; taking action and making decisions as soon as possible; and allowing the employee the right of appeal.

Focusing on diversity and equality

Creating a culture of fairness and inclusion is key when focusing on diversity and equality. This should be displayed throughout an employee’s journey with the company – from recruitment, through to day-to-day activities and any formal exit interview. Ensure key members of the team are aware and follow the correct procedures and are actively identifying and acting upon any potential breaches. Finally, arm each and every member of staff with the skills and training to ensure diversity and inclusion become a natural part of the organisational makeup of the business, and not something that you simply pay lip service to.

Bullying and anti-harassment

A policy on bullying and anti-harassment is also helpful as it can set out the company’s standpoint on such behaviour, give examples of what this can look like and make it clear it won’t be tolerated. This can reassure employees who feel they are being bullied or harassed that they can raise any concerns in a safe space, and set out the steps for you to take action against any perpetrators where appropriate. Training for staff and management on this subject can also help to the avoid behaviour arising in the first place, by illustrating that it is not acceptable in your workplace and highlighting the potential consequences.

In a world where more than half of employees are currently working from home, it’s vital to have the right systems in place that provide you with the flexibility to manage potential grievances that may arise remotely, while ensuring they’re firmly in place once people start to return to the office.

If you would like to discuss providing training for your staff around any of these issues, contact Chloe Pugh on chloe.pugh@pannonecorporate-com.stackstaging.com call 07500 797553, or visit our training website Pannone Academy at https://www.pannoneacademy.com.

Pannone Corporate has strengthened its insolvency and restructuring team with the appointment of Richard Wolff as partner.

Richard, who joins from JMW where he established the firm’s insolvency practice over a decade ago, brings nearly 25 years’ experience to the role. He will assist in team growth and development, as well as the expansion of the practice’s client base and professional network.

Specialising in both non-contentious and contentious insolvency and restructuring work, Richard has acted for a wide variety of clients – from insolvency practitioners and lenders, to corporates and private individuals.

Paul Jonson, senior partner at Pannone, said: “We’re delighted to welcome someone of Richard’s calibre to the firm, as we look to expand our expertise and reach within the insolvency and restructuring market.

“The insolvency landscape has changed markedly over the last 12 months and, as a firm, we are keen to capitalise on those developments by strengthening our team.”

Richard’s arrival follows the appointment of Georgina Bligh-Smith, as a paralegal in the insolvency and restructuring team. She will work alongside Richard, together with associate partner, Daniel Clarke, and senior associate, Heather Morris.

Richard commented: “Pannone has an excellent reputation for its ethos and outlook and has exciting ambition and aspirations for insolvency and restructuring as a core practice area within the firm – something that really drew me to the role.

“Over the next 12 months, there will undoubtedly be a period of sustained development and growth for this area of practice within the firm, as the pace within the insolvency and restructuring marketplace shifts up a gear off the back of the coronavirus pandemic and the withdrawal of the government and legislative-backed support measures for the UK economy.”

The impact of the coronavirus pandemic has been complex and far-reaching. No facet of business, or society, has escaped the effects of COVID-19 and serious questions have been asked of both employers and employees. 

While the issue of fraud – and more specifically employee fraud – has been on the radar for many years, the unique challenges posed by the pandemic have brought the problem under the spotlight in recent months. 

Whether it’s payment fraud, procurement fraud, personnel management, travel or subsistence fraud, exploiting assets and information, or receipt fraud, cases of employee fraud are common. According to Action Fraud, nearly 1 in 5 small businesses have been defrauded by an employee at some point during their trading history, causing significant loss and damage. Unsurprisingly, recent figures from NatWest show that UK businesses have been hit by fraud at a cost of £190 million a year, with 40% being caused by internal employees.

Despite a general perception around the issue, fraud isn’t always the product of malicious intent. Quite often, it materialises from despair, a lack of ability, or even inexperience. With many employees working remotely, and feeling disconnected from the structure and security of the workplace, it’s little wonder the problem of employee fraud has come under the spotlight. 

Times of economic uncertainty or economic boom, as evidenced before and as a result of the 2008 financial crash, often lead to an increase in fraud. Circumstances created by the pandemic – homeworking, job insecurity and financial hardship, and availability of financial support from the Government – all create an environment in which workplace fraud can increase.

Pre-pandemic, the fear of the boss “looking over the shoulder” could be a key factor in limiting employee wrongdoing and minimising the risk of employees falling victim to fraud from third-parties. However, the pandemic has forced employers to rely to a greater extent on its internal policies and procedures, as well a trusting its employees to do the right thing.

 To minimise the risk of fraud by employees, employers should consider:

• Reviewing and (as appropriate) improving their internal policies and practices, so that employees understand what is and is not acceptable in the workplace.
• Ensure their IT security is fit for purpose now that many employees are working from home and will continue to do so long term.
• Deal with concerns promptly and proactively before they escalate. This approach can help maintain high standards within the workplace and promptly deal with issues before they get out of hand.
• Implement mandatory periods of annual leave, job rotation and other similar measures to protect against employee fraud.
• Review the financial incentives provided by the employer and consider whether they could in fact encourage employee wrongdoing.
• Ensure employees receive adequate training on the employer’s systems and their obligations under the likes of the Bribery Act 2010.
• Work on creating a culture in which employees feel they can talk to their employer about concerns, such as financial worries. If the employer does not have one it could look at implementing an employee assistance programme.

 To minimise the risk of employees’ actions resulting in fraud by others:

• Make sure employees know that they can speak to their manager if they have concerns or are worried about anything.
• Ensure employees receive adequate training and support.
• Educate employees on the risk of fraud and how fraudsters may target them individually or the employer’s business. 

Whilst a determined and sophisticated fraudster will always find a way, most workplace fraud (committed by or against employees) is often opportunistic and possibly due to lapses in oversight, poor management, or simple human or technology error. Taking a risk-based approach to identifying the greatest areas of risk within a business can help an employer effectively review, monitor, and minimise risk and to put in place the appropriate systems and defences to protect against internal fraud.

 If you would like to discuss the topic of employee fraud, contact employment director, Michael McNally, on 07736617394 or email Michael.McNally@pannonecorporate-com.stackstaging.com

Background

The employee, who is of Pakistani descent and her religion is Islam, was working for a food retail company in the sales team. She pursued a claim for direct discrimination and harassment on the grounds of her race and religion for various matters, including: 

• That she had higher targets than her colleagues and her concerns regarding this were ignored;
• That she was not awarded a salary increase;
• That her manager treated her differently to her colleagues in the way he addressed any performance concerns with her; and 
• That her manager asked her to pick up an item that went against her religious belief, namely a pork product, and allegedly laughed at her when she said it was against her religious belief.

Some of the allegations relied upon were outside of the Tribunal’s time limit, however the Tribunal had to consider all of the allegations to understand whether time should be extended on the basis that the treatment complained of was a ‘continuing act’. 

The ruling

All of the employee’s allegations failed. The Tribunal found that she was not treated differently because of her religious beliefs, nor was she forced to pick up an item that went against her belief or laughed at when she informed her manager that it was against her beliefs.

 Why is it important?

The case is a useful reminder that if a poorly performing employee is the only individual within the company of a certain race or religion, this will not necessarily translate into a claim if an employer can clearly evidence the underperformance.

The allegation that the employee was asked to purchase and handle an item of food that went against her religion is of particular interest. It’s likely that many employers in the food and hospitality industry will come across employees who adhere to certain values or beliefs. This may mean that they don’t consume or handle certain food or drink items for this reason, but who would be expected to handle such items during the ordinary course of their employment. 

This case serves to demonstrate that employers should be aware that there could be a risk of discriminating against employees if they are asked to handle items that go against their religious beliefs and they should be mindful of this when allocating tasks. 

The saving grace for the employer in this case is that no pressure was put on the employee to purchase or handle the pork product. In fact, when the manager in question was informed that this request went against the employee’s religion, he immediately told her he could organise for someone else to source this product, but the employee said she would be willing to do it provided her contact with the item was minimal.

If you would like to discuss any employment related concerns within your workforce, contact Katie Kennedy on Katie.Kennedy@pannonecorporate-com.stackstaging.com or call 07711 767099.

Radhika Das is a Legal Executive in the employment team at Pannone Corporate. In the first in our series, My Life in Law, she tells us more about how she got into the profession and life at the firm.

When did you join Pannone Corporate? I joined Pannone in July 2018, so coming up to three years ago.

What was your role/experience prior to joining? I worked at a large respondent firm in Manchester which provided Employment Tribunal support.

Why did you join Pannone? The Pannone name is really respected in the industry, and I wanted more exposure to a different type of work. In my previous role, I dealt purely with litigation and defending Employment Tribunal claims; at Pannone, I do everything from HR advice, drafting contracts and handbooks and litigation. I have also provided on site HR support to clients.

What route did you go down, in terms of training and qualifications? I graduated with a LLB law degree and went straight into full time employment. I started off doing claimant work for a Trade Union and then moved to respondent work in 2016. I qualified as a Legal Executive in April 2021, after doing three years qualifying employment and submitting a portfolio.

Why did you choose this route? I liked the idea of being able to work in employment law and do my qualification at the same. It’s meant that I have had lots of exposure in employment law.

What is the most satisfying aspect of your job? It always feels great when we get a win at Tribunal. Giving evidence can be tough for the witness, especially when the case is a particularly emotive matter such as a discrimination claim. It is really satisfying when a witness gets through that and gets a judgment in their favour.

What does a typical day look like? It is really varied. One day I could be doing a telephone preliminary hearing, and on the same day I could be advising an employer about whether it is legally safe to dismiss an employee. The next day, I could be meeting with witnesses to take their statements or attending Tribunal – no two days are the same!

 What can lawyers / the legal profession do to better support clients? Does anything need to change? I think technology is the way forward. Everything in our lives is so much more accessible and I think the legal profession still has some work to do in that regard. COVID-19 has certainly raised some challenges for all sectors, but I think some changes may be around to stay – for example, electronic bundles and video hearings, which have worked really well in most circumstances.

Before the coronavirus pandemic began, it was estimated that around 4.6 million people in the UK worked from home. Despite being in the millions, this represented just 14% of the country’s 32.6 million workforce.

Figures from market and consumer data analyst, Statista, show a steady rise in home working over the last few years, growing by 1.69 million since 1998. Fast-forward to 2021 and the ‘WFH’ landscape has changed exponentially, with a reported 60% of the UK’s adult population working remotely. 

COVID-19 has undoubtedly left an indelible mark on the workplace and, despite positive steps being made towards opening up the economy and a return to ‘normal’ working life, businesses have had to adapt to new ways of operating and, importantly, new ways of managing their employees in a remote world.

Technology has clearly played a crucial part in the transition from the office to home, but performance management still remains a ‘hands-on’ task – whether that’s appraisals, reviews with underperforming workers, or rewarding high performing individuals. 

While remote performance can be harder to observe online, or over the phone, the argument for effective feedback, regular conversations about performance – good or bad – and setting clearly defined goals, has never been stronger. These are all fundamentals of good performance management, regardless of the current climate. 

Performance management is both complex and crucial in equal measures, made more so by the experiences of the last 12 months. Many factors need to be taken into consideration to ensure it is delivered effectively, particularly online. In a remote world, it’s all too easy for employees to misinterpret actions, emails and comments, which can result in them believing they are being bullied or discriminated against. What is clear is that the fundamentals of performance management remain important cornerstones of creating an effective, happy and well-run team – whether in the office or at home. 

If you would like to discuss any employment-related concerns within your workforce, contact Katie Kennedy on Katie.Kennedy@pannonecorporate-com.stackstaging.com or call 07711 767099.

The growth in online retail hit a 13-year high in 2020, as bricks and mortar retailers were forced to close their doors for large parts of the year.

The momentum behind eCommerce was already gathering pace, but the global pandemic has only served to accelerate this growth, resulting in an increase in online retail sales of 36% year-on-year in 2020, according to the latest IMRG Capgemini Online Retail Index.

Government-imposed restrictions were debilitating for the high street, but presented online retailers with the upper hand, as consumers continued to move towards digital channels in an attempt to navigate a series of tiered lockdowns.

There’s little doubt that retail in 2020 was fundamentally shaped by the coronavirus. As we continue on the roadmap to recovery, the question now is whether the online momentum can be sustained, and whether online retailers can capitalise on the largest growth seen in the market since 2007.

Data, data, data

While adaptability was crucial in 2020, it’s on the utilisation of customer information that will be key to providing a more personalised and targeted consumer approach moving forward – particularly for retailers trying to harness the last year’s online trading boom now that physical stores are re-opening in the UK.

Even retailers without an online sales platform, such as Primark, often have a strong online presence, utilising social media channels, influencers and online gaming. This can help retailers stay connected with consumers, build a sense of community and loyalty to the brand and maintain a relevance in the virtual world.

The main commercial driver for online expansion, aside from sales, is the collection and utilisation of personal data. But retailers have to be smart to maximise the potential this has and translate it into improvements in the customer journey and, ultimately, sales.

Since the implementation of the GDPR, consumers are increasingly savvy about the monetisation of their personal data and find certain marketing techniques intrusive. The ‘holy grail’ for retailers is to collect personal data in a discrete and authentic manner, whilst still complying with transparency and fairness obligations of the GDPR.

Challenges to online retailers

The challenge for retailers is that many consumers are tired of the over-use of marketing emails, although there is a proven record that these do lead to increased sales. Fairly recent changes to the interpretation of cookies rules in the UK (PECR) have made it harder to set cookies that are beneficial to retailers, rather than merely essential for the operation of the website. Many retailers are not yet completely compliant with these rules, demonstrating the tension between lawful practices and maintaining a competitive advantage.

Under PECR, retailers should obtain opt-in consent before setting cookies which track user behaviour on other websites. What’s more, they should have some form of marketing consent prior to sending any “abandon cart” emails that prompt consumers to complete the checkout process. Collecting this type of data is extremely valuable to retailers and helps inform future product lines, advertising campaigns and business strategy. Clearly, it’s not possible to obtain this kind of detailed personal data in real life – shop assistants are not about to starting following customers down the high street or harassing them to come to the checkout!

However, many retailers are able to combine online behaviour with real life activity to truly monopolise on consumer insights. For example, they can offer free Wi-Fi in-store and link reward cards to online accounts.

As we all adjust to living in the real world again, it will be interesting to see whether the online growth can be maintained and to what extent retailers are able to convert an enhanced online presence into sales in physical stores. Interestingly, the IMRG Capgemini Online Retail Index shows that it was actually multichannel retailers that performed better than online-only counterparts for the first time since 2017, with growth of 57% vs 9.1%.

Over the next 12 months we expect the UK data regulator, the ICO, to have a close eye on the innovative ways in which retailers are collecting data and perhaps start to take action against those who are not fully complying with the requirements of PECR.

If you would like to understand more about the latest regulations on data, email Danielle Amor on danielle.amor@pannonecorporate-com.stackstaging.com or call 07920 237676.

The mental and physical wellbeing of employees will be the biggest HR challenge for businesses in the next 12 months, as concerns grow about the welfare of remote workforces. 

More than half of HR professionals (55%) admit that the issue will be the main focus in the year ahead, with an overwhelming 83% saying they have concerns about the overall mental wellbeing of employees as a result of the pandemic.

According to our survey of HR professionals, carried out during a recent HR Forum, managing the ongoing COVID response, including the Coronavirus Job Retention Scheme (CJRS), redundancies and health and safety, was also a significant HR obstacle. Furthermore, managing change for future working ranked highly amongst HR professionals, as they continue to adjust to a new hybrid of home and office working, the impact on wellbeing, recruitment, flexible working and performance management.

The survey found that a significant number of respondents planned to make permanent operational changes in 2021, as a result of their lockdown experience, with nearly half (44%) intending to introduce flexible working, and a further 44% looking at a working from home model.

Jack Harrington, partner and employment lawyer at Pannone Corporate, commented: “The workplace has changed beyond recognition in the last 12 months, with what were sometimes seen previously as peripheral HR issues being brought to the fore as a result of the pandemic. 

“Unsurprisingly, the majority of HR professionals (94%) anticipate an increase in flexible working requests as restrictions are gradually lifted, with nearly half (44%) planning permanent changes to contracts of employment or HR policies, as businesses continue to adjust to the new ways of working that COVID-19 has forced many employers to adopt.”

Currently, all employees have the legal right to request flexible working – not just parents and carers. Employees must have worked for the same employer for at least 26 weeks to be eligible for making a ‘statutory application’. However, campaigners, including employment and discrimination barristers Ijeoma Omambala QC and Rebecca Tuck QC, presented their ‘Flexible Working Beyond a Crisis’ report, funded by Sir Robert McAlpine, to the Law Commission last month. This follows a six-year campaign to make flexible working a right for everyone from day one. 

Sarah Bazaraa and Alexandria Winstanley, intellectual property and media lawyers at Pannone Corporate

Colin and Cuthbert the Caterpillars have hit the headlines and captured the attention of the nation as M&S issued High Court proceedings to challenge Aldi on its sale of an alleged copycat cake.

M&S is well-known for having a range of successful and hugely popular ‘character’ products such as Colin the Caterpillar and Percy Pig. Colin the Caterpillar is said to have hit the market in 1990 and to have had the same look since around 2004, securing its place as a firm favourite for birthdays and celebrations over the years. Such is this cake’s notoriety, he’s recognisable to many by his first name only.

It has been widely reported that M&S issued High Court proceedings on 14 April 2021 to challenge Aldi’s sales of Cuthbert the Caterpillar on the basis that Aldi’s product ‘rides on the coat tails’ of the success of Colin the Caterpillar. M&S may be concerned that Aldi’s lower priced cake will result in a diversion of sales and undermine the success of its own product.

What protection does M&S have?

M&S seeks to protect its intellectual property rights in relation to its products and brands, including by securing trade mark registrations. Trade mark protection offers brand owners the exclusive right to use the registered marks for the types of goods and services for which they are registered.

In circumstances where M&S can establish a goodwill in the ‘look and feel’ of its products, M&S can also challenge third parties who deal in confusingly similar goods where that conduct misrepresents a commercial connection between them and causes M&S damage.

This isn’t the first time Aldi has found itself in hot water over selling products with names and packaging which are intentionally similar to well-known and established brands. The retailer has taken a tongue-in-cheek, unashamed approach to offering ‘Like Brands, Only Cheaper’, which treads the very fine line between inspiration and intellectual property infringement.

High profile cases have included a successful claim by celebrity makeup artist and beauty brand Charlotte Tilbury in 2019, who won a legal battle against the supermarket for selling £6.99 copies of her Filmstar Bronze & Glow palette which she retails for £49. Other brands have taken a different view. Brewdog perhaps viewed the imitation as flattering when Aldi launched a copycat of their famous Punk IPA. The beer company responded with a spoof Aldi IPA which ended up being stocked in UK and German stores, as well as inspiring an initiative which means a tree is planted for every case sold.

What next for M&S?

If M&S succeeds in its claims, then the retailer may secure an injunction preventing Aldi from marketing or selling the Cuthbert the Caterpillar in future. Any such decision could also serve as a warning message to Aldi and the market more generally that M&S will not tolerate copycat products, which may act as a deterrent in future.  Certainly the dispute has already attracted a lot of high profile attention, meaning that M&S will be educating the public through the PR this case attracts that Aldi’s product is the copycat and M&S’s product the much loved original.

Notwithstanding  the media spotlight and social media memes in this case, there is a serious commercial issue at the core. Retailers and brands understandably want to protect their creative investments, ensure brand loyalty from customers, and maximise their ability to challenge a competitor who oversteps the mark. This high profile example acts as a reminder to retailers and brands to have the proper intellectual property protections in place in order to be able to do so effectively, as well as emphasising the value of an accompanying PR campaign to shine a spotlight on acts of alleged infringement.

Pannone Corporate has advised online fashion giant, Boohoo, on the acquisition of a new £72 million London headquarters.

The Real Estate and Corporate teams acted as legal advisers to Boohoo, which has purchased the high-profile offices previously occupied by Microsoft and Nokia. The team was led by Tim Hamilton, Corporate partner and Gareth Birch, Real Estate associate partner, with support from Barbara Wang, Danielle Amor and Helen Jadhav. Nick Davies, partner at Axis Property Consultancy LLP, acted as property consultant for Boohoo.

The six-story office building located at 10 Great Pulteney Street will become home to all London-based product, marketing, technology and central support teams – approximately 600 staff – as well as offering flexible working for Boohoo staff.

Gareth Birch said: “As a longstanding client, we’re absolutely delighted to have advised Boohoo on the acquisition of such a prestigious building in London’s West End.

“Boohoo is a real success story for Manchester and the North West and this latest move, which bolsters its expanding property portfolio and cements its presence in the capital, is testament to its exceptional growth in recent years and the boom in online retail, particularly over the last 12 months.”

The purchase of the 43,963 sq. ft. building, follows Boohoo’s acquisition of Debenhams out of administration and several Arcadia brands, including Oasis, Warehouse, Dorothy Perkins, Burton and Wallis, which significantly grow its presence in London.

Nick Davies added: “We were delighted to assist Boohoo in securing the premises, given the interest from other high-profile global brands. The premises is in the heart of Soho, providing a vibrant London West End headquarters building and a strong commitment to the city.”

The majority of North West businesses will not make the COVID-19 vaccination mandatory within their organisation, despite the growing debate around ‘no jab, no job’.

As the Government considers plans to introduce COVID certification, as it continues to open up the UK economy, 83% of the region’s business and HR leaders confirmed that they don’t intend to force employees to take up the vaccine, before returning to the office.

In a survey conducted during our recent HR Forum, more than a third of respondents said that staff had indicated they would not take the vaccine, with ‘anti-vax’ beliefs being the biggest driver (50%). Medical reasons (40%) and race (10%) also accounted for the most common reasons why North West employees would refuse to be immunised. 

Adam Pavey, director and employment lawyer at Pannone Corporate, commented: “The issue of COVID vaccinations in the workplace is a highly complex one and a unique problem facing the region’s business and HR leaders. 

“There are a number of employment law implications arising from a mandated vaccine. The law as it currently stands does not give an employer an automatic right to vaccinate. In fact, an employer is not able to force any employee to undertake what is essentially a medical procedure.”

Under the current law, an employer would have to argue that requiring an employee to take a vaccination is a “reasonable instruction”.  If an employee fails to follow this, then it could give rise to a disciplinary issue which may ultimately lead to dismissal.

Pavey added: “Requiring employees to take a vaccine is not automatically a reasonable instruction. There is of course no case law on this point and the employment tribunals have yet to deal with this issue. However, whether the instruction is reasonable will likely depend upon the particular circumstances. For example, an employee who works in the care sector may be seen differently from somebody who is able to work from home.”

Pavey continued: “A mandatory workplace vaccine would undoubtedly give rise to complaints of discrimination. The science indicates that people with certain health issues may have an adverse reaction to the vaccine. It’s likely that many would be classed as disabled and so dismissal for a failure to vaccinate could amount to unlawful discrimination.”

The Wateredge Inn on Ambleside has been sold to The Inn Collection Group for an undisclosed sum.

The Wateredge Inn dates back to the late 17th century and is located in Ambleside on the banks of Lake Windermere in the Lake District. The hotel is well known for its spectacular location and attracts guests from all over the world due to its landmark site. It has been owned by the Cowap family for almost 40 years.

The Inn Collection Group is a rapidly expanding, award winning, Northumberland based pubco who has expanded its presence outside its North East heartland with sites in Lancashire, Cumbria, Yorkshire and County Durham.

The Cowap family, former owners of Wateredge said:

“For 38 years we have been supported by a loyal and dedicated team. We feel the Inn Collection Group will sustain the Wateredge legacy and maintain the uniqueness of the place. We are leaving the business in great hands and would like to thank our fantastic team, customers and suppliers for their support over the years.

“We have received terrific support from the teams at Azets and Pannone Corporate, who helped us navigate and negotiate the transaction. We appreciate the dedication of the team in managing a smooth process throughout and delivering a successful transaction.”

Rob Richardson, Corporate Finance Partner at Azets in Manchester led the deal and provided corporate finance advice while Jenny Pape, tax partner, provided tax advice to the family. Tom Hall, Andrew Walsh and Miranda Foy at Pannone Corporate provided legal advice to the vendor. Julian Troup at Colliers advised the Cowap family.

Rob Richardson, Corporate Finance Partner at Azets, in the North West said:

“We were delighted to advise the Cowap family on their sale to The Inn Collection Group and it’s great to see the success of their business being recognised. Despite the challenges of the pandemic and the uncertain economic outlook for hospitality and leisure businesses, this deal proves that attractive, well managed businesses will always be in demand.  It’s credit to the resilience and enterprise of the North West business community that our teams remain so active.”

Tom Hall, partner at Pannone Corporate said: “This is a fantastic deal for everyone involved and it’s always rewarding to see a strong family business secure its legacy having sold to an ambitious, well-backed buyer like The Inn Collection Group. As the UK’s staycation market looks set to continue to grow, we’d expect an uplift in positive M&A activity across the region’s leisure and hospitality sector.”

The reputation of so called ‘pre-pack’ administrations has not always been positive but, in the right circumstances, they’re an effective way of ensuring the future of an otherwise insolvent business. The mechanism allows a potentially valid company to survive, but relieves it of otherwise debilitating debt.

In the midst of a global pandemic, when otherwise viable businesses are finding themselves in unfamiliar financial territory (in many cases, for no reason other than the impact of the pandemic), the option of restructuring in this way is, unsurprisingly, likely to be attractive. For creditors though, the prospect may not be as appealing.

In recent years, the number of pre-packs has generally been falling – be it because of a negative reputation, a changing regulatory and legal landscape, or the appeal of alternative routes. But, as Government restrictions relating to Covid begin to be lifted – whether that be the furlough scheme, or the kind designed to provide businesses with breathing space to continue operating throughout the pandemic – the prospect of a rise in pre-pack administrations is definitely on the horizon.

It’s perhaps no coincidence that the process has come under Government scrutiny at a time when a pre-pack may be regarded as a ‘quick and easy’ solution for struggling companies. Reforms, which will come into force at the end of April, following lengthy consultation by the Government, are designed to rehabilitate the process. The changes (which introduce an independent evaluator) are likely to make pre-packs less straightforward and potentially more expensive to complete.

The reforms are broadly well intentioned – designed to increase trust in the process and reduce the perceived abuse of the mechanism in the past – they may well prove to be an effective way of shaking off the generally negative perception of pre-packs in some quarters. In the right circumstances, and conducted appropriately, pre-packs have always served as a useful tool. It is to be hoped that these reforms will complement the process rather than hinder it.

Whilst it appears unlikely that the floodgates are about to open, with businesses rushing to complete pre-packs before the changes come into effect, there is a window of opportunity for those considering restructuring and it may be prudent to review potential options in that respect prior to the changes coming into effect.

That said, pre-pack administrations will, of course, continue to be a viable option post 30 April. No doubt the industry will adapt to the reforms and we will continue to see the use of the process in appropriate circumstances.

10 April marks 100 days since the EU/UK Trade and Co-Operation Agreement came into force. Much like the ‘first hundred days’ analysis that follows the start of a leading politician’s term in office, it’s interesting to step back and think about the impact and changes that have, or haven’t, been made since the end of the Brexit transition period on 31 December.

Brexit caused an immediate shock to the import/export market following the end of the transition period in January. The latest export figures issued by the Office for National Statistics (ONS) record that UK goods exports to the EU fell by 40.7 per cent in January, while imports dropped 28.8 per cent. They were the largest declines since comparable records began in 1997.

Additional red tape appears to be hitting food and drink importers and exporters particularly hard (think seafood and wine), whereas the imposition of customs duties and VAT is causing trouble for online retailers.

But has it been as bad as the “Project Fear” predictions? The picture is certainly complicated, with the lingering disruption of COVID-19 and stockpiling in anticipation of the end of the transition period also playing their part. We have not seen the much talked about excessive lorry queues and holding pens in Kent (although there were issues before Christmas when France closed its borders due to the UK COVID variant) and commentators generally expect the initial trading difficulties to iron themselves out over the coming months.

So, what can we expect next, and will the Government be able to shift away from the EU’s general direction of travel?

An interesting insight into UK policy comes in the form of the new “right to repair” rules, which the Government has confirmed will be introduced in the UK this summer. These changes reflect the EU rules which took effect on 1 March throughout the EU, meaning that manufacturers of certain white goods must supply spare parts for up to 10 years, to reduce electrical waste.

The UK was not obliged to adopt these same rules, no longer being a member of EU. However, irrespective of the UK rules, UK-based manufacturers and distributors would still need to comply with the “right to repair” legislation when selling into the EU. The reality of businesses having to operate under two different systems was a headache too soon for many.

While divergence from the EU will be seen over time, the fact is we were never going to see any radical changes in the first 100 days, with sectors still trying to adapt to the free trade agreement. Any move, and additional red tape, would undoubtedly be hugely unpopular with businesses and could put the zero-tariff agreement at risk.

In the short term, the adoption of more EU-led legislation is probable, as the UK has to align with what EU member states are doing. The export figures for January make a compelling case for maintaining the status quo, despite our departure.

Alongside this, there is likely to be a lot of political noise and posturing from the pro-Brexit Government to demonstrate that the UK is not following the EU’s lead. For example, there’s currently a lot of talk about the need to refresh the GDPR – on both sides of the Channel actually. In reality, our ability to substantially depart from the EU’s data protection regime is limited if we want to retain near-frictionless trade. When we consider that it took nearly eight years for the GDPR to be implemented, any such changes would be longer term in any case.

Some short-term certainty will be favoured by most businesses, with few having any real appetite for a drastic overhaul of legislation or introduction of separate UK regulatory regimes in the current climate. For this reason, a review of the first 100 days tells us little we did not already know; a review of the next 10 years will give a fairer assessment.

Jane Shaw, private wealth lawyer and director in the dispute resolution team at law firm, Pannone Corporate, commented:

“Despite a flurry of activity from individuals and business owners in anticipation of changes to CGT and IHT, the Chancellor has unsurprisingly delayed making any big decisions at this point, given that the economy is still in a fragile state. This has provided people with another window of opportunity to prepare and plan forany changes, such as the alignment of CGT and income tax rates, as well as changes to IHT and the introduction of a gift tax for all lifetime gifts over a low threshold.

“While the proposed tax reforms have been kicked into the long grass once again, it’s only a matter of time before CGT and IHT receive the kind of tax treatment that’s been on the cards for the last couple of years, with reports by the Office of Tax Simplification (OTS) and the Wealth Commission amongst others, demonstrating that a move is highly likely. In the last few weeks, an increasing number of people have been setting up Trusts in order to trigger a gain in advance of any CGT rise, or at least putting themselves in a position to pay it should they need to. This trend will undoubtedly continue in anticipation of future changes.

“It’s essential for people to take stock and get their affairs in order if they believe any changes to CGT and IHT are likely to affect them, particularly for those business owners where a third-party sale is on the horizon.

“Despite a recent rush of activity, it’s important to note that individuals and business owners can trigger a gain at any point, by transferring a property or shares to a Trust of which they are the Trustee and the main beneficiary. Where there is a proposed gift – for example, the individual is happy to give the property away – it’s also possible to dispose of that asset to a Trust that they are not a beneficiary of and, as such, ‘holdover’ or defer the CGT charge.”

Pannone Corporate has advised Place Capital Group on the acquisition of Fourth Street Place Consultants.

The corporate team, led by partner Tim Hamilton, advised the housing estate regeneration specialist on its first acquisition as part of an ambitious buy and build strategy.

Fourth Street Place Consultants is a specialist place making consultancy which works with public and private sector clients involved in place making and destination-led developments. As part of the transaction, Fourth Street will retain its own brand and management structure and will continue to serve existing clients, while launching a new expansion plans with the support of Place Capital Group.

Commenting on the acquisition, Tim Hamilton said: “Place Capital Group is an exciting and highly motivated business that is well placed to achieve rapid growth in a vital regeneration sector that is underpinned by a comprehensive national strategy – one that is intended to improve and accelerate estate regeneration schemes to deliver more and better quality housing, drive local growth and improve outcomes for residents.

“Fourth Street lays the perfect foundations for growth and will undoubtedly help to unlock increased market potential, as their complementary expertise are combined to fulfil a growing portfolio of partnering contracts with local authorities and housing associations.”

Place Capital Group, which was formed by David Smith-Milne and Peter Martin in early 2021, works with large public organisations such as local authorities and housing associations through Strategic Development Partnering contracts, applying its expertise and capital solutions to the regeneration of housing estates to create much needed additional affordable and mixed tenure housing.

David Smith-Milne, Place Capital Group Chief Executive, said: “We are delighted to be bringing Fourth Street into the Place Capital Group. The acquisition made perfect sense as the Fourth Street team is totally aligned to our vision to bring excellence and creativity to the regeneration of the UK’s forgotten housing estates.”

Dan Anderson, who formed Fourth Street alongside Jim Roberts in 2012, added: “We were immediately drawn to the Place Capital Group concept – both its commercial structure and its ambitious and transformative vision to bring much needed, imaginative place-making to housing estates across the UK. Through the deal, we retain all that is special and unique about Fourth Street but get the added benefit of being part of an ambitious, challenging and mission-led group structure that will introduce much needed new thinking to the UK’s housing problems.”

Pannone Corporate’s corporate team works with a wide range of clients, including private equity houses and businesses large and small across multiple sectors.

Pannone Corporate has expanded its team with a triple appointment as it looks to strengthen the law firm across its specialisms.

Michael McNally and Adam Pavey have both joined as directors in the Employment and HR team. James Brandwood joins the firm as a Real Estate associate.

Michael and Adam will be responsible for advising clients on all aspects of employment law, including providing regular representation and advocacy in the Employment Tribunal.

Michael, who joins from Freeths LLP in Liverpool, has particular experience in acting for SMEs through to multi-nationals in the manufacturing, transport and logistics, hospitality and leisure and care sectors. Adam was formerly a solicitor at Poole Alcock, where he helped to develop the Cheshire firm’s employment department, with clients spanning a number of sectors. He has a particular specialist interest in healthcare.

Pannone Corporate’s employment team works with a wide range of clients, predominantly those with 400-500 employees across a number of sectors, including social housing, manufacturing, retail and hospitality.

James, who joins from Addleshaw Goddard, will work alongside a highly experienced Real Estate team, led by partner, James Wynne, which advises on a wide range of commercial real estate matters for major property groups, together with national retail and leisure operators. James will be responsible for property acquisitions and disposals, financings, as well as development, landlord and tenant transactions.

Paul Jonson, senior partner at Pannone Corporate, commented: “Both the Employment and Real Estate teams have built up an excellent reputation in recent years for their experience and expertise across their core specialisms. We’re committed to enhancing that offering and the appointment of Michael, Adam and James is testament to that drive and ambition.”

The Real Estate team recently advised Palmbest Limited, part of the Bestway Group of companies, on the acquisition of Staples Corner Shopping Park, leading the £28 million retail park transaction.

A Company Voluntary Arrangement (CVA): a term not necessarily high on the agenda for many businesses, but one that has risen in prominence over the last two years or so, and particularly since March 2020. Most notably on the high street, where retailers have sought to use the arrangement as a means to continue trading in the toughest of conditions.

Increasingly a point of debate and discussion, CVAs were once again thrown into the spotlight earlier this month, when the British Property Federation (BPF) urged the government to overhaul UK insolvency rules.

In a letter to corporate responsibility minister Lord Callanan, the industry group representing landlords questioned the manner in which CVAs have been used more recently. It argued that commercial landlords were being disproportionately impacted by arrangements that can be voted through by other less-affected creditors.

The increased use of CVAs to manage obligations to landlords, in particular, is clearly divisive – driven by a global pandemic that is accelerating the fortunes and misfortunes of many businesses, particularly those on the high street. There are companies that have suffered irreparable damage due to COVID-19; those that have weathered the storm, but have been left with a balance sheet in need of repair; and those that have benefited and seen revenues grow through diversification, or simply by being in the right place at the right time. CVAs have increasingly become an option for those businesses finding themselves in the former two categories.

Whatever your view on the current framework, it’s hard to deny that CVAs have played, and continue to play, a vital role in enabling businesses to continue to operate. Without such arrangements, more retailers would have disappeared from the high street in 2020, with repeated national lockdowns adding even more pressure to cash-stretched and under-capitalised businesses.

COVID-19 has blighted seemingly secure companies and placed them in a position of fragility – a prospect that seemed unfathomable for many 18 months ago. The ongoing restrictions imposed by the government will only make it harder for businesses to gain the kind of financial footing they need in which to attract suitable funding and ultimately recover – whether that’s from lenders or stakeholders. What’s more, there are several issues sitting on the horizon that will only make that recovery more difficult. The furlough scheme has, of course, been extended, but it cannot continue indefinitely.

There are countless deadlines that have been kicked into the long grass – quite rightly, some would say, to provide much-needed respite for struggling companies. These include deferred VAT and PAYE and, more informally in many instances, supplier costs, rental payments and obligations to lenders. Added to that is the ban on commercial landlords evicting tenants. The eviction moratorium has been extended once again until the end of March, together with restrictions on the use of statutory demands and presentation of winding up petitions. Given the current state of affairs, there’s nothing to say that these deadlines won’t be extended further. However, when all of these issues do finally crystallise, it could be particularly difficult for cash-poor businesses with little working capital and growing liabilities.

It’s clear that banks and lenders will be keeping a watchful eye on businesses over the course of 2021, reviewing their financial position and deciding whether further support is justified. The reintroduction of the preferential status enjoyed by HM Revenue and Customs in insolvency is a change that may well force lenders to reassess their position as to financial risk. Under the changes, which came into force at the beginning of December 2020, ‘crown preference’ places the UK tax authority ahead of banks, lenders and other holders of floating charges. This is in respect of certain tax liabilities when it comes to the priority of payments in insolvency proceedings. This potentially significantly weakens the position of lenders in insolvency scenarios.

With so many unknowns and factors outside of the control of businesses, the key is to be prepared, flexible and open to opportunities for restructuring and re-organisation. It’s important for businesses to take a proactive approach, to keep their financial position under ongoing review and consider all of the possibilities potentially available in a timely manner. Waiting in hope will only minimise the options available and force businesses into increasingly difficult choices.

If you would like to discuss business restructuring and re-organisation further, please speak to our insolvency team.

Never has it been easier to buy and sell online. But in a changing world, what considerations do online retailers need to make when selling overseas? Danielle Amor explains to First Voice magazine.

 Danielle Amor, Director in the Commercial Services team, says that moving online has never been easier or been more vital. But, while the internet and social media have opened up a sea of opportunities for independent retailers, the ability to engage with larger audiences outside of the UK is not risk free.

“Trading online has never before offered as much opportunity; but, with cross-border sales comes a host of legal and compliance considerations that every business, large or small, must be aware of. The secret is to start off small – focus on your key markets and set up your online shop to meet those overseas obligations, before branching out further afield.”

Read the full article on the First Voice website.

No one quite envisaged a year like 2020. It threw up a plethora of obstacles and challenges – the likes of which have not been experienced before by many businesses. Bill Dunkerley speaks to First Voice magazine about one particular issue that’s been grabbing the headlines in recent months – business interruption insurance.

So, why has it been dominating the front pages? At the end of last year the Supreme Court heard the appeal of a case initially brought by The Financial Conduct Authority (FCA), concerning the correct interpretation of business interruption insurance policies – with the judgement ruling in favour of businesses on 15th January. Bill Dunkerley, Director in the Regulatory team, considers that it’s a potentially contentious issue and one that many businesses will now be eagerly watching, to see whether the ruling obliges insurers to pay out on claims relating to trade lost during the coronavirus.

“While the most scrupulous of business owners will pore over the finer details, few would have paid close attention to the inclusion, or exclusion, of specific diseases in their business interruption insurance policy. Yet, for many, this particular detail has left them potentially out of pocket and exposed, as a result of Covid -19.”

Read the full article on the First Voice website.

Once again, the controversial topic of ‘wealth tax’ has reared its head – this time as a potential solution to the ever-increasing bill caused by the coronavirus pandemic.

The Wealth Tax Commission believes that a one-off tax on millionaire couples – taxing those households an extra 1% above a £1 million threshold – could raise £260 billion over five years.

The Commission has suggested that this would prevent the need to increase income tax or VAT, as the government desperately searches for answers on how to repair UK public finances that have been battered by COVID-19. In the last nine months, the government has reportedly spent £280 billion in a bid to conquer the pandemic and support the UK economy. 

While the mere notion of a ‘wealth tax’ is likely to cause great concern amongst those above the threshold, the idea is fraught with problems – one of the reasons why, to date, it has not been introduced. 

Firstly, it would represent a double charge – unfairly taxing money that’s already been subject to tax. This could include income, property or assets that people buy. Secondly, there has been little agreement so far on what the threshold should be. While the Wealth Tax Commission has said £1 million – which would include all assets such as main homes and pension pots, as well as business and financial wealth – this would capture a significant number of people who would not regard themselves as HNW individuals, particularly in the likes of London, where property prices are so inflated. In addition, it would also include any UK resident, including ‘non-doms’, which in itself is steeped in controversy. 

Most experts agree that it would be too complicated to enforce, with the valuation of assets alone causing a considerable headache – meaning people would be required to declare their assets every single year. However, the idea of a wealth tax is not unrealistic and is reasonably common in other European jurisdictions, such as France. But, in its current format it would create significant issues. 

It’s very clear that the level of public spending is unsustainable. While the idea of a ‘wealth tax’ may disappear once again only to appear again in a few years’ time, what it does signal is that change is on the horizon. Next year’s Budget is set to impact on current inheritance tax (IHT) and capital gains tax (CGT) arrangements. 

A number of reviews, commissioned by the Chancellor, have already suggested that changes need to be made to how these taxes are administered – it’s only a matter of time before we see rate increases by the government. 

For example, the Office of Tax Simplification and an All-Party Working Group of MPs, have both suggested changes to IHT, that could impact HNW individuals and business owners if they were to be implemented – with one recommendation stating that all life-time gifts over a modest, but increased, annual allowance should immediately attract IHT and no business property relief should be available.  

The writing is on the wall. There will be changes to the current tax regime. As such, it’s essential that people review their affairs, prioritise estates planning, and put structures in place before any amendments are made. In the past, when significant tax changes have been announced, the cut off date for making plans to mitigate those amendments is the date of the Budget itself – once that happens, the opportunity is lost. Clients need to take advice now. Waiting until the Chancellor makes an announcement in the Spring, regarding specific tax changes, will be too late. 

If you would like further advice on tax planning, speak to our private client team.

A staple in every employment contract, the non-compete clause serves to act as a deterrent for any employee looking to jump ship and set up a similar business in direct competition with their former employer.

Despite being somewhat difficult to enforce, it’s their mere presence in a contract of employment that makes them as effective as they are, particularly when coupled with other clauses, such as confidentiality and protection of intellectual property.

However, there are two schools of thought emerging on the non-compete clause – one that thinks they’re an essential way of protecting a business, by deterring employees from taking ideas, clients and staff to set up shop round the corner within a certain period of time; and then another, which believes that the contractual clause is actually stifling entrepreneurship, particularly in the technology sector, inhibiting economic growth and innovation.

According to reports, the government falls into the latter and will launch a public consultation within days to determine what changes need to be made to non-compete clauses, and to make it harder for employers to block staff from leaving to set up rival companies, in an effort to nurture more start-up businesses.

Apparently, the government is concerned that current use of the clauses is thwarting workers from leaving jobs and setting up their own businesses. As such, ministers are looking at whether reform in this area could enable free movement of future talent – as seen in California and, more specifically, Silicon Valley.

For many business owners, the thought of diluting such a clause, regardless of how difficult it is to enforce, is a worrying one – particularly smaller businesses that don’t have the means to challenge employees who go on to set up rival companies. Importantly, ministers are not expected to ban non-compete clauses altogether, but instead focus on whether they are well targeted and reasonable.

Regardless of the outcome, the fact still remains that the detail within an employment contract is crucial – not only in protecting a business, but also employee rights. We see time and again the value in getting contract wording right. Nothing can be put down to interpretation; nothing can be stretched to fit a certain situation; you have to have an employment contract that is properly drafted to enable an employer to show that the restriction goes no further than is necessary to protect its legitimate business interests. This point was illustrated in the recent case of Gemini Europe Ltd v Sawyer where the High Court agreed to uphold an interim injunction, enforcing a nine-month non-compete clause in a former employee’s contract of employment. This centred on the managing director of Gemini, a company that operates in the emerging and highly lucrative cryptocurrencies sector, leaving the business and joining a competitor three days after his employment came to an end.

Despite a complex contractual arrangement, the court found in favour of the business and was satisfied that the contract was valid, enforceable and that Gemini was entitled to protect confidential information which would have given the competitor an unfair advantage.

Whether a government-inspired public consultation will lead to a reform of non-competing clauses is yet to be seen, but what it does emphasise is the importance of regularly reviewing employee contracts to ensure that not only their restrictive covenant clauses are appropriate and reasonable, but also the confidentiality provisions are up-to-date and relevant.

What’s more, any changes to non-compete clauses can only serve to emphasise and heighten the significance of other clauses contained within employment contracts, such as confidentiality and protection of intellectual property.

If you would like further information on ensuring your employment contracts are watertight, contact our employment team.

“A Member State may not prohibit the marketing of cannabidiol (CBD) lawfully produced in another Member State when it is extracted from the Cannabis sativa plant in its entirety and not solely from its fibre and seeds”. – the European Court of Justice (ECJ)

Beleaguered by a patchwork of regulation and shifting goalposts, these words from came as music to the ears of the burgeoning CBD industry in Europe.

Background

The case followed the criminal conviction of the directors of a French vaping company, prosecuted following the use of CBD extracted from hemp plants (including their leaves and flowers) lawfully grown in the Czech Republic.

French legislation prohibits the marketing of CBD lawfully produced in another member state when it is extracted from the cannabis sativa plant in its entirety.  Current law allows only the commercial use of hemp fibres and seeds.

The French Court asked the ECJ to determine whether its domestic laws were compatible with the free movement of goods.

The ruling

The ECJ determined that free movement of goods should apply to CBD.  Importantly, this was decided on the basis that CBD is not a narcotic (which of course cannot benefit from such freedom).

The ECJ ruled that member states cannot prohibit the marketing of CBD, lawfully produced in another member state when that CBD is extracted from the cannabis sativa plant as a whole.  Such a prohibition can only be justified by the objective of protecting public health but countries should not go beyond what is necessary in order to achieve this.  Member states wishing to introduce such rules must assess available scientific data to ensure that any risk to health alleged is real and not based solely on hypothetical considerations.  A prohibition will only be lawful if that risk is sufficiently established.

Why is this important?

In our last newsletter, we reported on the shockwaves created when the European Commission paused all novel food applications for naturally occurring CBD products.

The FSA’s position is now entirely in line with that of the ECJ.  In making its recent decision, the court concluded that:-

• The (natural) CBD product in issue did not appear to have any psychotropic effect or any harmful effect on human health.
• Synthetic CBD would be allowed under French law but has the same properties as the banned natural substance. From a public health perspective, there was no difference between the two.
• According to the current state of scientific knowledge, the CBD in this case appeared to have no psychotropic effect or any harmful impact to humans.

In celebrating the result, Managing Director of the European Industrial Hemp Association Lorenza Romanese welcomed the ruling noting that, in her view, what the European hemp sector needs now is “a fair and coherent legal framework”.

What next?

The Commission has confirmed it, “takes note of the Court’s ruling…and will carefully assess the judgment”.  Its approach to the paused novel food applications will no doubt await events at the UN in early December when the UN is due to vote on a World Health Organisation (WHO) recommendation that cannabis be reclassified under the Convention – it is currently in the same category as cocaine and heroin.

A WHO scientific working group has examined the risks of CBD, cannabis and THC and concluded that the current classification could not be justified.  WHO also recommends that preparations with a THC content below 0.2% should be excluded from the Convention altogether.

In the meantime, those placing products on the UK market can enjoy the relative certainty of the timetable set out by the FSA earlier this year. In summary:-

• all CBD products currently on sale can remain so until 31 March 2021, by which time the CBD ingredient must be subject to a valid novel food application. The products can then remain on sale until the application is determined;
• if no application is made, the products should be withdrawn from sale;
• no new products should be placed on the market now.

From April 2021, the FSA will encourage Trading Standards to take enforcement action against businesses contravening the above position.  As a result of this clear framework, it is anticipated that the UK market will begin to flourish ahead of its European counterparts.

If you have any questions about this update or the use of CBD in food and beverages, please contact Rhian Greaves in our Regulatory team.

The British high street has seen a number of significant casualties over the course of 2020, as the sector has faced unprecedented challenges – a word too often overused during the pandemic, but one that is fitting given the strain businesses have been put under.

National and localised lockdowns have forced non-essential retailers to close their doors for significant periods, while reopening has triggered restrictions on capacity and extensive store remodelling to manage footfall in a safe and controlled way.

One of the many high-profile retailers to suffer at the hands of COVID-19 is Edinburgh Woollen Mill – which, together with Ponden Home, called in administrators earlier this month [November], as it closed 56 stores with job losses reaching more than 900. It’s difficult in the current economic climate to point to anything other than the global pandemic as the cause of EWM’s demise, but it does appear that the trading conditions caused by the coronavirus, and the subsequent lockdowns, have primarily led to Edinburgh Woollen Mill’s administration. Comments from the administrators suggest that the brand was trading well pre-pandemic, but the strain of the last six to seven months seems to have created irreparable issues.

The perception is that Edinburgh Woollen Mill’s primary target demographic has either been reluctant or unable – particularly in the case of stores based in tourist-dependent locations – to return to stores because of the pandemic and the restrictions imposed as a result of it. In that respect, the pandemic has clearly been a very significant factor in the situation reaching this point.

Other brands in the EWM Group have also fallen victim to COVID-19, with Jaeger and Peacocks also going into administration only last week [19 November], placing 4,700 jobs at risk. The loss of three brands under one group may be seen as somewhat surprising. At this time of the year, I would expect to see retail businesses attempt to ‘hang on’ in the hope that Christmas trading might improve their position. Clearly, EWM, Jaeger and Peacocks did not feel that was viable here – most likely because of the continuing uncertainty around what impact the restrictions will have moving into December.

Planning and anticipating the future is almost nigh-on impossible in 2020. But, when asked recently by Retail Gazette, ‘does Edinburgh Woollen Mill have a future in the UK?’, my immediate response was, ‘I certainly hope so’. The administrators are trading a significant proportion of the business and continue to look for a buyer. By closing 56 stores, which it’s assumed were underperforming, the business should now be a more attractive proposition for a potential buyer.

The fact of the matter is there’s clearly value in the brand. It’s well-known, with strong customer recognition and trust, which is extremely valuable in the retail sector. There’s an opportunity here for any potential buyer to restructure and streamline the business with a view to trading the brand successfully moving forward.

And that is the key for many retailers that are struggling during irrepressible trading conditions. Businesses and their directors should be alive to the possibility of taking action to restructure or streamline their position before formal insolvency becomes inevitable. There are a number of ways to achieve that – administration isn’t the only option. We’ve seen a significant number of CVAs in the retail sector over the last six to 12 months and there will undoubtedly be more looking at this option. CVAs are often attractive because they allow businesses to minimise the issues that loss-making stores are causing them, while focusing on the sites that are more profitable. Restructuring outside of a CVA/formal process is also a viable option and I’m sure businesses will be reviewing all of their options in that respect.

The decision to go into insolvency will not have been taken lightly by EWM. Whilst the administrators have indicated that the pre-pandemic trading performance was good, it’s probably fair to say that this was a business facing familiar problems caused by the general decline of the high street. Those issues will have been significantly exacerbated when COVID-19 struck. The immediate closure by the administrators suggests that those sites were either trading at a loss, breaking even, or operating at only a small profit. It would then have taken only a few weeks’ reduced income for those stores to become something of a millstone for the rest of the business.

The challenges that Edinburgh Woollen Mill is facing are the same for the majority of the retail sector –  a significant reduction in income and uncertain trading conditions moving forward. Unfortunately, as a result, I would expect to see an increase in retail insolvencies in due course. However, I don’t think we will see that immediately. A lot of retailers, if they’re able to do so, will try and continue operating over Christmas in the hope that will bring increased income. The extension of the furlough scheme until March 2021 will also be crucial for many retailers – it has clearly enabled many businesses to weather the storm so far.

At some point, however, businesses will have to reckon with the end of government support and an increase in creditor pressure. The reduction in income suffered over the course of this pandemic will not make that easy. Nothing is inevitable, and the hope would be that businesses can find restructuring solutions which will prevent them from going out of business entirely, but an increase in insolvency numbers over the next 6 to 12 months does look likely at this point.

Daniel Clarke is Associate Partner, Corporate Services, at Pannone Corporate

Palmbest confirms £28m retail park acquisition

The business has completed the purchase of Staples Corner Shopping Park

Palmbest Limited, part of the Bestway Group of companies, has acquired the 50,500 sq ft site on the Edgware Road. With tenants including Decathlon, Wren Kitchens, Bensons, Argos and HomeSense, the high footfall out-of-town retail scheme is adjacent to the entrance of the future Brent Cross West Thameslink Station.

The Bestway Group is a multinational group of companies which is also the owner of the adjoining four-acre site.

KLM Retail completed the marketing and sale for the vendors. KLM Retail’s Jonathan Perkins said: “The scheme attracted numerous investors and developers, not only due to its reputation as an iconic retailing destination, but also due to the potential future residential value of the site given its close proximity to the new Thameslink station opening next door in 2022.

“This asset is a good example of the resilience and agility of the retail warehousing sector given the continued strong trading performances of the stores; the flexibility for the retailers to use their stores for online fulfilment; and the adaptability of the buildings in the future should other more valuable uses present themselves.”

Pannone Corporate advised Palmbest Limited.  Real estate associate partner, Gareth Birch represented the seller and led the deal. He added: “Palmbest is a strong property business with big growth ambitions. We take a commercial approach to any transaction we’re involved with and in this instance, we were able to lead the acquisition negotiations, as well as handling the legal aspects against a very demanding timeline. The deal is a great result for everyone involved.”

Commenting on the acquisition, Zahir Fazaldin, Head of Property at Bestway said: “The sentiment around retail parks is positive, and Staples Corner is home to some high profile and long established tenant companies that have traded relatively well throughout what has been a very challenging year. The location and connectivity of this site together with its strategic value made this a compelling acquisition for us.”