The impact of E-data on business law

The way business approaches litigation has changed enormously over the past decade due to the growth of electronically stored information.

New costs are experienced for data management and some cases are being settled for a shorter amount of time. Both businesses and law firms now have legal e-discovery departments and hire individuals with strong information technology abilities.  Even opposing parties are cooperating more during the early stages of litigation, but simultaneously courts are imposing severe sanctions for those fail to preserve or produce information.

People witness document collection to be transformed from warehouse search for paper to gathering of e-mails and figuring out how to produce it. Therefore, businesses and law firms need individuals with a special set of skills to deal with ESI. Since the cost of e-discovery is the primary drive of the costs of litigation, there has been noted an increase in the willingness of clients to settle. However, it is important to note that if a client spoils e-discovery, regardless of the merits, the case can be lost. Courts are becoming more and more willing to allow some severe relief. Sanctions vary from tough ones, such as case dismissal, default judgment and financial penalties, to more moderate, such as adverse jury instructions and evidence preclusion.

Lawyers had to find new ways to manage the arrival of documents due to the sheer volume of information. Thus, e-discovery has become a specialty and it is vital that lawyers develop and interest and ability to understand technology which differentiates from being a traditional litigator. Now more cooperation among parties can be observed, as well as transparency and desire for proportionality. Also, businesses simply cannot keep everything because storage costs go out of control.

Thus, the growth of ESI has led to the creation of new departments and positions to manage the intersection of law, business and IT. If the e-discovery does not have one person in charge of supervising all the parties involved, timelines will be missed which will cause further costs.

The process of e-discovery itself is in phases and each phase requires corresponding technological tools. The key is the formulation of a strategy and incorporating the use of data analytics and technology to reduce collection and cost.

Algorithms, statistics, key words, e-mail threading, data sampling, and predictive coding help businesses and law firms achieve these goals. Thus, the most cost-efficient e-discovery cases are those that apply a consistent strategy from start to finish.

Regulation makes it costly to run a media business

Some of the nation’s most respected newspaper and publisher groups have threatened to lodge a European legal challenge if the government penalises them if they fail to sign up to the royal charter backed regulation on the press. The papers fear that this is likely to increase legal costs in privacy and libel court action if the government does not allow self-regulation and insists on the royal charter standard of media regulation.  

The law has been already inserted in to section 20 of the Crime and Courts Act and means that magazines and newspapers will be unable to recoup their legal fees even if they are to win in their high court cases unless they have gone through a process of arbitration with a unit approved by the regulator. In the larger more complex cases there are likely to be other legal fees incurred such as punitive and exemplary damages in addition to the libel damages.

This effect of the proposed regulation is threatening for the business of the media groups since they are already faced with hefty legal burdens in the region of £500,000 to £1,000,000 for those prolonged libel disputed. The newspapers have made no secret of their concern which in their eyes will have a “chilling effect” on journalism across the board. The changes are likely to mean that there is more safety in publishing with sources being checked thoroughly and some articles remaining unpublished.

Insiders in the press business say that if the proposals regarding exemplary damages and legal costs are not reconsidered and revised, they are likely to lodge a challenge on the government’s proposed regulation with the European Court of Human Rights. A newspaper executive stated that the action would signify the little choice which the newspapers are left with the legal costs being so hefty and out of proportion that they would simply be unbearable.

Deep disappointment has already been expressed by the Sun, Daily Main and the Telegraph who have all had proposals turned down by the government. Stig Abell, the managing editor of the Sun, stated that the government’s latest refusal of the regulation proposal has given them one final push for negotiation which could either end up in the press setting up its own regulation system which does not get government approval or a government backed regulator to which no paper signs up. Essentially the argument is one of business with the proposed penalties for not signing up to the royal charter possibly leading to intolerable trading conditions with little room for the maintenance of a sustainable business.

 

 

 

What are the new rules & regulation regarding mis-selling?

Following the scandal of the systematic mis-selling of PPI in the United Kingdom, various rules and regulations have been formulated in an attempt to stop such things from happening again in the future.

Payment Protection Insurance (PPI) was designed for people so that in case of any accidents, sickness, death or unemployment they can continue repaying their loans.  This PPI was sold by the banks and lenders when customers took out both personal and business loans, mortgages and credit cards.  The mis-selling, most of the time deliberate, was to people who were not eligible to ever make a claim on the insurance due to self-employment, retirement, medical conditions etc. Many people were wrongly told the PPI was compulsory, or even were opted in to pay the PPI premiums without their knowledge or consent.

The Financial Services Authority helped bring about the end of the PPI mis-selling, paving the way for millions of people to claim their money paid in premiums back, with added interest.  Due to the sheer scale of the scandal however, new bodies have been set up to monitor our financial services industry, with the FSA now called the Financial Conduct Authority.

The government’s Competition Commission have introduced a batch of measures (rules and regulations) aimed at bringing a change in the way the PPI policies are sold to those who apply for loans, mortgages or credit cards.  Under the new laws and regulations, the banks or financial companies selling PPI policies to the customers have to make the following things clear and explain about the primary features of the policies to the potential customers:

The banks and financial companies have to make sure that aren’t involved in any mis-selling of PPI policies.  If they do, not only do they have to pay further in the form of compensations, they also have to face the legal consequences.

The banks must make it very clear to all customers that PPI is optional and not mandatory.

In case a customer is keen on knowing the claims ratio that explains the number of policy holders who make a claim on the insurance policy, the banks and the financial companies have to give proper information on it.

A credit card holder must be furnished with the annual statement of his account.

The banks must spell out clearly the right to cancel a PPI policy.

Budget 2013: Effect on Businesses

The Chancellor’s Budget 2013 was announced on Wednesday, and British businesses were given a boost both directly and indirectly.  One of the most manifest ways this was outlined was in changes to National Insurance. When the measures come into effect in April 2014, small to medium enterprises (SME’s) will find that they have less obligations for employee National Insurance Contributions (NIC’s). Seen by the government and economic experts as the force which will give the greatest growth to the stalling UK economy, under the new proposals up to 450,000 SME’s will not pay NIC’s at all.  Being called the Employment Allowance, the Chancellor said in his speech that it is “the largest tax cut in the Budget” and that it is “taking a tax off jobs”. It will also apply to community sports clubs and charities.

Additionally, this will be an automatic rebate, with no administration or paperwork necessary. This new employment set of allowances will overall cut £2,000 from the National Insurance bills of all firms overall. A Treasury brief stated that companies will simply have to inform HMRC, and that it will be “delivered through standard payroll software”.

Many employers, particularly small companies or start up, find NIC’s a heavy levy. Charged at 13.8% of pay, they represent a pseudo tax on hiring an employee, and one of the hidden costs of employment for business.  Many business leaders are glad at the move. With the financial barrier to hiring employees set to disappear, it means that SME’s can hopefully stop unemployment trends by being able take on more staff with less financial consequences. Increased employment will only serve to boost the economy, and increase spending and business potential.  With less NIC’s, this puts less pressure on business, and potentially gives employees more take-home pay, as less will be taken off in NIC deductions. For both employers and employees, this new change is therefore very welcome.

Taking this amidst other measures designed to support businesses, the Federation of Small Businesses (FSB) welcomed the Employment Allowance. FSB chairman John Walker said that “”the Chancellor has pulled out all the stops with a wide-ranging package of measures to support small business… [the measures are] beyond what we were asking for”.

Not all are overall pleased, however, with the Budget proposals.  Mr Osborne made no mention of business rates.  Many firms, in particular retailers who are struggling severely, were hoping the planned rise in rates would be cancelled: “Pressing on with a third successive business rates rise is very disappointing. Freezing rates would have made a real difference to our troubled high streets” stated Helen Dickinson, Director General of The British Retail Consortium.  As it stands, the rates will be rising by over 2%, meaning many businesses will be struggling further after overall rate rises of over 12% in just 3 years.

Business Contracts

Although commercial contracts do not specifically have to be in writing, it makes perfect sense to at least have the basic rights and responsibilities of all parties involved in the transaction written clearly and signed by those involved. This simple written contract may be very important if a commercial dispute is to arise.

Standard contract terms (usually called ‘terms of business’ and ‘terms and conditions’) are normally appropriate when the business is selling goods are services that are the same or very similar.  For other goods and services that may be different each time, you may want to negotiate separate contract for each transaction that take place; typically for services such as software development or one off goods or services.

Basic terms of trade and business will normally outline what each party in the transaction is agreeing to. Clauses must be included that detail the price of the good or service, payment terms, how and when they will be delivered and a description of the good or service.

Commonly, terms and conditions for the sale of goods allow the seller to keep ownership of the product until the full payment has been made to them. This protects the seller from a customer who may initially want the product and receives it, but later defaults of their promise to pay for it. If the seller choses to, they can opt out and decide to give the product to a buyer on finance or credit. The seller is well within their statutory rights to charge an interest rate of late payments. The rate of interest must be detailed on the detailed in the terms and conditions of the transaction.  It is very advisable to consult a legal expert when drafting up any terms and conditions for transactions, whether they are one off or continuous, this is to make sure that as a business, you are honouring legal requirements.

This information was provided by LegalIdiot.

Commercial Disputes

Commercial disputes can be very costly, stressful and time consuming. They also damage relationships and the reputation if the businesses involved. To minimise the rise of commercial disputes, it is advisable for businesses to have clear written contracts between customer, suppliers and other third parties.

Resolution

Despite taking up precautions that minimise the risk of commercial disputes, it is likely that eventually, one will arise. Sometimes it is necessary to fight for the right deal and not settle for an unjust outcome. It is advisable to aim for a resolution to a dispute rather than to try to come out on top. At the end of the day, although a conflict of interests has occurred, it is still possible to retain a working relationship and minimise the costs and disruption as a result of the dispute. When attempting to resolve a dispute, it is important to remain firm and have any dispute resolution clauses or terms put into writing with the aid of a legal expert.

If Negotiation fails, it is possible to seek other forms of resolution, such as mediation or arbitration.

Legal advice is can be very beneficial when it comes to safe guarding against commercial disputes. A long term relationship with a law firm would usually mean that standard terms and conditions would already be put in a way such they too also minimise the risk of disputes; a highly cost effective use of legal advice. A long term relationship with a law firm may also be very beneficial when it comes to dealing with recurring disputes such, such as debt recover issues; a common cause of many commercial disputes in the business world.

Commercial disputes can be very expensive, especially if they make it to court. You may want to consider an insurance policy to cover legal expenses as part of your strategy to deal with disputes.

Steve Turnbull has been financial writer and commentator for five years, covering topics such as personal and business finance. He is currently a resident blogger at http://www.missoldppiclaimsco.co.uk, where he is covering the latest financial news as well as reporting  on the mis-sold PPI claims scandal.

Is there a need for a solicitor on your start-up company?

A lot of entrepreneurs often are focused on the core areas of their business. These areas would include sales, business development, marketing, production, and customer retention. When it comes to legalities, most entrepreneurs would have very basic to no knowledge about these aspects. Some might want to try understanding these legalities, but others do not have enough time and energy to consider these legal implications when they establish their business. With thousands of companies being established each year, most of them end up fighting a losing battle. The guidance of a solicitor in handling the legalities early on could help these businesses to level down their expectations and understand that there are many aspects to consider and rules to follow to keep the business in good form.

A solicitor can help a business owner in handling disputes related to copyrights, or maybe analyse taxation rules. It is also important to have a legal expert especially if you are a growing company or a larger operation wants to partner with you or want to own some shares of your business. If you want to make your business public, it would also require some legal aspects. A solicitor’s role in your business is not limited to contracts and deals; he or she can help you in setting up the business the right way, making the contracts and agreements and making tax investigations.

The role of a solicitor varies considerably depending on what you need from them. Corporate law covers a lot of ground and you will definitely need a specialist who understands the areas that you need legal advice and support from. The role of solicitors in your business is as important as choosing a guardian for your child. It is important that they are responsible and skilled in handling your business.