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World Report - UK & Ireland
OCTOBER 2013
Regulators continue to probe and punish UK businesses for financial misconduct
The study revealed that 76% of all investigations and 93% of the fines identified in the past six months were directed at financial services firms and personnel, resulting in over £154m in fines to the sector. It suggests that regulators’ focus on the behaviours of financial institutions is not waning, following an end to 2012 where 94% of investigations and 99% of the value of fines were focused on the financial services sector including the largest fine ever issued by the FSA.
EY’s EMEIA Fraud Survey suggests, however, that Financial Services remain ahead of the pack when it comes to fighting corruption and bribery. For example, more than three quarters (79%) of people surveyed who work in financial services firms said their company had a clear code of conduct and an anti-bribery/ anti-corruption policy in place. This contrasts with the cross- industry average of 57% and a figure as low as 44% in the real estate industry. John Smart, Head of EY’s UK Fraud Investigation & Disputes Services practice said: “While the total value of fines issued so
far this year is down £56m compared with the second half of 2012, this is as a result of one extremely large fine in late 2012. Furthermore, when disregarding any fines over £30m, we have seen an increase in the average fine handed out by regulators (from £2.8m to £3.9m), indicating the continuing tough stance that regulators are taking across all industries.” The study’s findings also suggest that the restructuring of the FSA to the FCA does not appear to have resulted in a significant change in the number of investigations.
In the first
quarter of 2003, EY identified 11 completed investigations, while in the FCA’s first three months from April-June 2013 10 investigations were identified.
John Smart concludes: “This research clearly shows that there has been no let-up in regulator activity with regards
to
investigations into fraudulent activity and business misconduct. With the Sentencing Council proposing changes to guidelines that would make England and Wales one of the toughest regimes
in the world for
fraudulent activity and other corporate offences, directors
and board members must ensure that their houses are kept in order. The best way firms can make sure they aren’t caught unaware is to ensure full risk and systems reviews are in place and any blind spots are quickly identified and resolved.”
Additional findings from the
research include: • Average prison sentences increased from 6 years and 4 months to 6 years and 8 months since the end of 2012 • Sizable fines have been issued to the essential and non-essential consumer goods sectors, totalling £6,500,000 and £2,857,369 respectively, showing that regulators are not reserving significant fines simply for the financial services industry • The SFO undertook just 10 of the 74 investigations reviewed - this is largely due to the SFO’s status as a prosecutor compared to the FSA/FCA’s regulator status -
in order investigation,
to launch an the SFO must
suspect a crime has been committed whilst the FSA/FCA and the OFT can take actions at any time
Lawyer on family law reform after High court Judge slams system
After High Court Judge Sir Paul Coleridge called for family law to be overhauled to reflect society “as lived now – not in the distant past”, Frances Sieber, a partner at Thomas Eggar with more than 30 years of experience as a family lawyer, adds to the debate.
Frances, who is on the Law Society Advanced Family Law panel, accredited by Resolution and is a collaborative lawyer, said: “More support should be given before the marriage, so the couple understand what the responsibilities are to each other and what stresses there may be within marriage.
“The pre-nuptial agreement, which is gaining traction in this country, helps to force a financial
discussion and a discussion about the long term financial responsibilities of marriage and having children. Some couples do not make it to the wedding as a result of those discussions.
“In terms of divorce, matters should be resolved by agreement between the parties rather than imposed by the court. Help is needed to support the couple through the process. Collaborative law, where there are two trained collaborative lawyers who try and help the couple resolve matters by a series of meetings, is a better way forward. One benefit is the ability to include, within the process, family consultants (who come from a therapeutic background) who can help deal with the
emotional fallout and give support to the weaker party.
“The English courts are also seeing an influx of cases from abroad where there is an attempt
to get the more
generous financial packages awarded by our courts than those abroad; and of course where there is a lot of money at stake it adds to the overall hostility in the case. If the English financial
brought in line with Europe, this would reduce this need.
“Finally, the English law still fails to protect
the position of
cohabitants on separation, and this causes further problems for the single mother with children as there can be serious financial hardship.”
UK signs agreement with Isle of Man first on automatic sharing of tax information
The Isle of Man has become the first British dependency to sign an agreement with the United Kingdom extending
the
automatic disclosure of tax information.
The agreement was
intergovernmental signed in
London by Chief Minister Allan Bell MHK and HM Treasury Exchequer Secretary David Gauke MP, and has been welcomed by Chancellor George Osborne MP.
It is modelled on the requirements of the Foreign Account Tax Compliance Act
(FATCA)
introduced by the United States to ensure the tax compliance of its citizens with international inter- ests.
On the current timetable for implementation
of new agreement the the two
Governments have agreed to start exchanging additional information from 2016.
The Isle of Man already shares information automatically on personal savings income, with the UK and other European Union countries, having been the first non-EU jurisdiction to make a public commitment to this under the EU Savings Directive in June 2009. The Island was also the first to commit, in December last year,
to the FATCA-
style agreement with the UK extending the scope of automatic disclosure to include,
for example, companies and trusts.
The Chief Minister said: ‘In signing this historic agreement with the United Kingdom we are underlining the message to our neighbours and the wider world that our
Island is a
responsible centre for top quality international business.
‘The Isle of Man was the first to strike this agreement with the UK and we are now the first to sign, demonstrating the clear commitment of both countries to the development of a new global standard in automatic exchange.’
Mr Bell added: ‘Today’s signing is a significant step towards that global standard and further proof that the tax haven moniker in relation to the Isle of Man is well and truly dead, as David Cameron recognised recently in the House of Commons.’
He went on: ‘The Isle of Man is a forward looking country with a diverse, dynamic economy and a track record of leading the way in the field of international tax co-operation.
‘We have a long-established policy of complying with global standards, and we saw some time ago that enhanced automatic
exchange of
information on the FATCA model was becoming the new global standard in tax transparency.’
Lawyer Monthly Legal awards
2013 Winners announced The winners of the Lawyer Monthly Legal Awards 2013 have recently been announced, and can be viewed by visiting the website – www.lawyer-monthly.com.
settlements were
This year’s worthy winners include Epiq Systems, Morrison Foerster, EC3\Legal, Shook, Hardy & Bacon, Trilegal, The Employment Law Group and DLA Piper to name just a few.
Editor-in-chief, Mark Palmer commented: “The constant trickle of good news stories in
2013 has no doubt brought confidence back to the legal sector. This confidence has seen firms go beyond the consolidation phase and move into real growth. We are delighted with the level of participation this year and I extend my congratulations to all winners.”