City watchdog consults on huge expansion of ombudsman scheme

City watchdogs want to radically expand access to redress for tens of thousands of small businesses that cannot afford the legal costs of taking banks and other financial services providers to court.

In a consultation paper today, the Financial Conduct Authority proposes bringing an additional 160,000 SMEs within the remit of the Financial Ombudsman Service (FOS), which has the power to order compensation for loss up to £150,000. This would be achieved by greatly increasing the eligibility threshold for referring complaints to the ombudsman, which presently covers only individual consumers and microbusinesses.

Today’s development follows a Commons debate last Friday on calls for a formal tribunal system to deal with such disputes, spurred by controversy enveloping Royal Bank of Scotland and its Global Restructuring Group. Barrister Richard Samuel of 3 Hare Court, principal author of the tribunal plan, insists this route would be ‘100% better’ than expanding the ombudsman scheme because tribunals can ‘change culture’ and develop the law.

In today’s consultation, the FCA points out that many SMEs struggle to resolve disputes with financial services providers through the courts and have few alternative routes to redress. Only a tiny proportion of SMEs go to court as the associated legal costs can swallow up a large chunk of the claim.

’Not all legal action requires a court hearing, but even starting legal proceedings can be very expensive,’ says the FCA. ’The court fee alone for starting a claim of over £10,000 is 5% and fees are only capped once the value of the claim goes over £200k. SMEs might also be discouraged from taking issues to court by the prospect of having to cover the other party’s legal costs.’

Under the FCA’s plan, about 160,000 additional SMEs would be able to refer complaints to the ombudsman. The watchdog wants to widen eligiblity to those with turnover below £6.5m, an annual balance sheet total under £5m and fewer than 50 staff.

The FCA points out that a more formal scheme of resolving disputes – such as a tribunal – would require legislation, ‘which only the government is in a positon to bring about’.

But Richard Samuel dismissed this, pointing out that primary legislation already exists in the form of the Tribunals, Courts and Enforcement Act 2007. ’You could simply expand an existing chamber or bolt on a new one,’ he told the Gazette.

Samuel suspects the Treasury has little appetite for establishing a new tribunal as its civil servants grapple with Brexit. But he believes a new tribunal would not be difficult to establish or expensive, as funds could simply by reallocated from mass redress schemes that are being closed down anyway.

’Tribunals could change banking culture,’ Samuel stressed. ’Look at how employment tribunals moved us on from the “master-slave’ scenario to the current framework of unfair dismissal and discrimination. A second factor in the favour of tribunals is that they apply and create law – the ombudsman service does not, merely coming to a “reasonable outcome”. If we want the law to develop that is the way to go.’

Samuels also pointed out that the ombudsman service is not wholly independent in that it is funded by the banks.

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Trump lawyer sues BuzzFeed for publishing document

Donald Trump’s personal lawyer is suing news website BuzzFeed almost exactly a year after it published an explosive dossier containing serious and salacious allegations about collusion with Russia.

Michael Cohen posted on Twitter on Tuesday night: “Enough is enough of the #fake #RussianDossier. Just filed a defamation action against @BuzzFeedNews for publishing the lie filled document on @POTUS @realDonaldTrump and me!”

Cohen told Bloomberg News he had also filed a second defamation suit against political intelligence firm Fusion GPS, which compiled the dossier, in federal court.

Cohen is one of Trump’s closest business advisers and most loyal confidantes and it seems improbable that he was acting without the president’s blessing. His move came hours after Dianne Feinstein, the top Democrat on the Senate judiciary committee, unilaterally released a transcript of testimony from Fusion GPS founder Glenn Simpson.

BuzzFeed vowed to fight the action in court.

The publication of the 35-page dossier in January 2017 triggered a political storm and debate over media ethics. The raw research by former British intelligence officer Christopher Steele suggested the Russian government had both compromised and colluded with Trump during the 2016 presidential election, and included lurid allegations.

Steele also recorded claims that Cohen had held secret meetings with Russian officials in Prague in August 2016, where he allegedly discussed how to pay Kremlin-associated hackers for targeting Hillary Clinton.

Cohen told Bloomberg that he was mentioned in the dossier 15 times. “It will be proven that I had no involvement in this Russian collusion conspiracy,” he said. “My name was included only because of my proximity to the president.”

In an interview with ABC News, he added: “I want to be very clear. I have never been to Prague or the Czech Republic, and I have never engaged with, been paid by, paid for, or communicated with anyone representing the Russian Federation or anyone else to hack anyone or any organisation or disseminate false news reports or interfere in any way with this election.”

The dossier came into the possession of several media organisations but BuzzFeed posted the unredacted documents just 10 days before Trump’s inauguration, with a warning that the contents contained errors and were “unverified and potentially unverifiable”. The decision was attacked by both Trump and some traditional media outlets, claiming it was irresponsible to publish unverified allegations.

Cohen’s complaint against Buzzfeed names editor-in-chief Ben Smith, reporter Ken Bensinger and editors Miriam Elder and Mark Schoofs.

BuzzFeed said it was ready to defend the case in court. Spokesman Matt Mittenthal said: “The dossier is, and continues to be, the subject of active investigations by Congress and intelligence agencies. It was presented to two successive presidents, and has been described in detail by news outlets around the world. Its interest to the public is obvious. We look forward to defending the free press and our First Amendment rights in court.”

In an article in the New York Times on Tuesday, headlined I’m Proud We Published the Trump-Russia Dossier, Smith wrote: “A year of government inquiries and blockbuster journalism has made clear that the dossier is unquestionably real news. That’s a fact that has been tacitly acknowledged even by those who opposed our decision to publish.”

Cohen said the suit against Fusion GPS and Simpson was filed in federal court in the southern district of New York. It reportedly claims that the firm “recklessly placed [the dossier] beyond their control and allowed it to fall into the hands of media devoted to breaking news on the hottest subject of the day: the Trump candidacy”.

Fusion’s lawyer, Joshua Levy, told Bloomberg he had not seen the suit and had “not received a letter from counsel on anything”.

Cohen has emerged as a person of interest to congressional investigators examining Russian meddling in the 2016 election. He testified to the House intelligence committee behind closed doors on 24 October and publicly to the Senate intelligence committee on 25 October.

Briony Clarke becomes the UK’s youngest female judge at age 31

A solicitor who joined her local law firm as a 15-year-old work experience intern has become the youngest ever female judge.

Briony Clarke was sworn in as a deputy district judge after 16 years at Essex firm Taylor Haldane Barlex LLP (THB).

The 31-year-old took her judicial oaths this week, the day before International Women’s Day, in front of Chelmsford Crown Court resident judge Charles Gratwicke.

“It’s nice to have someone from our own community, embarking on the same career that we have all, at some stage, had to launch ourselves into,” said Mr Gratwicke.

Ms Clarke will not hit compulsory retirement age until January 2056.

“It’s a long time,” he said. “It just goes to show how young you are and how long a career you have.

“Many congratulations. Enjoy it.”

A View from the Top: Janet Cooper OBE, founder of Tapestry Compliance LLP

At Tapestry, a law firm based in Yorkshire, 75 per cent of staff and 85 per cent of senior staff are female.

Janet Cooper was into flexible working long before it was fashionable. She joined Linklaters, a leading law firm headquartered in London, as a trainee lawyer in 1984 and made partner in 1991, in the shortest time possible. A couple of years later, she faced losing one of her best lawyers because the woman in question was about to have her second child at the same time as her husband was relocated away from London.

“She was going to leave to get a job locally, but we made it work so that she could work flexibly,” Cooper says. “She’s actually still at Linklaters, which shows the power of working this way.”

Flexible working became the heart of Cooper’s philosophy when she set up her own firm called Tapestry Compliance with Bob Grayson, a former in-house counsel of Shell, in 2011. Tapestry has just been awarded the Queen’s Award for Enterprise, the highest award for British businesses, for its significant growth in overseas sales of some of the world’s biggest companies. Cooper herself was awarded an OBE in the New Years’ Honours list for services to equality, women’s empowerment and employee share ownership.

While London has long laid claim to the country’s best law firms, Tapestry, which is based in Yorkshire, bucks the trend. Two offices in Sheffield and Leeds have hoovered up top staff from magic circle firms looking to live outside the capital.

Cooper says she wanted to start a firm in the north of England because of her own experience as a trainee lawyer. “Back in the day to get a good job in corporate law you had to go to London. So I went down to Linklaters,” she remembers. “I had to leave all my lovely family and friends to get the job. These days with technology you don’t have to. So my goal was to create jobs in Yorkshire so people didn’t need to leave.”

Born in Warrington, but brought up near Huddersfield, Cooper never expected to become a lawyer. Her mother managed a coffee shop in Huddersfield and her father managed a steel mill. She left school at 16 and did A-levels and an OND in business studies at c before joining Rowntree Mackintosh, the sweet company, as a secretary in Halifax.

It was at college that a teacher called Bernard Atha, a former Lord Mayor of Leeds known for supporting minorities and those with disabilities, encouraged her to pursue law. Atha helped her find a suitable university and they landed on Leeds. Cooper stayed in Yorkshire to do her training contract and then left for London when she qualified.

Though her career would bring her full circle, offering women not so different from herself a great career in Yorkshire, her home remains in London. She talks to The Independent from her desk at home in Ealing Broadway, where she works remotely and lives with David Geake, her husband of almost 35 years, who is a retired lawyer.

She visits the two company offices and the 30 staff often. Bob Grayson, her partner, built the team up in Sheffield and runs the office from day to day, while Cooper spends a lot of time abroad working with the big clients the firm is now known for.

Grayson’s experience of managing major global projects, combined with Cooper’s expertise as global head of a magic circle employee share plans department, has attracted clients including Goldman Sachs, Morgan Stanley, HSBC, Aviva and Dell. Seventy per cent of Tapestry’s business came from the US in the last year, with other clients in Canada, Switzerland, Finland, Germany and Japan.

Clients are also attracted by fees up to 40 per cent cheaper than the competition. “Being based in Yorkshire means we’re so much more cost effective,” Cooper says. “Rent is so much cheaper up there and that makes it cheaper for our clients.”

Cooper credits Tapestry’s flexible working strategy for helping parents especially to keep working after the birth of a child. This has led to an impressive retention record: only one staff member has left in the last six years, while fifty per cent of the firm’s work comes from repeat business.

Three quarters of the staff are female and Cooper says the proportion is even greater for senior management, which is 85 per cent female. “There are issues in all City firms about retaining and promoting women when most of the City firms have less than 20 per cent women partners,” she later tells me via e-mail. “That masks that even fewer women make it to senior management in law firms or as General Counsel.”

Not all those making use of flexible working are parents. Rebecca Campsall joined the firm as a legal trainee just as her athletics career was taking off. Now she’s ranked 11th for the 100 metre sprint in the UK. She hopes to compete in the 2018 Commonwealth Games in Australia and later in the 2020 Olympics. Campsall trains every evening and every Sunday and in two years, she has never missed a session.

“In terms of England selections, they really don’t give you much notice, so I could be told on Thursday, ‘On Friday you’re flying out to Bratislava.’ In a normal workplace that would be really difficult,” Campsall says. When a consultant recommended Tapestry for the flexible working, Campsall made sure to be open about her training schedule in the interview.

“A lot of firms can promise that it will be ok, but it was clear when I came here that this was the only place where I found that it was encouraged,” she says.

A quarter of British women do not return to work after childbirth and the pay gap gets increasingly wider for those who do, with women earning on average 17.5 per cent less than men in their forties, according to research by the Trades Union Congress.

Cooper, who does not have children, says she hasn’t experienced sexism at work. “Linklaters were a good firm for promoting merit. I wouldn’t say it was the same for everybody, but I was very grateful for them,” she says. “But it was very unusual going into a room where you weren’t the only women at the table.”

Nonetheless she recognises that at some firms, having a baby is assumed to mean that a lawyer wants to do less. “We need to understand the unconscious biases that go on in decision-making about promotions and assignments,” she says. “Particularly if a lawyer has children there may be the assumption that they don’t want training or to spend a lot of time abroad. I don’t agree with quotas but I do think things need to be improved.”

Tapestry hopes to show through its flexible policy that parents, and women especially, can be excellent lawyers if they are given the chance to thrive at a time when 60 per cent of law graduates are female, according to the Law Society, while only 27 per cent of partners are women in firms of over 50 people.

“My mother left school at 13 and was a very smart lady but didn’t have the opportunities I have had,” says Cooper, who was once on the UK board of UN Women, the United Nations for Gender Equality. “I am very keen to support women to reach their potential.”

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London reveals 80%+ retention rates

City firms have begun to release retention rates for the autumn cohort of trainees, with many posting figures in excess of 80% – a significant indicator of health in the sector.

Slaughter and May leads the way in the magic circle so far. It has taken on 29 of 32 trainees (90%). Allen & Overy had 47 trainees and made offers to 41, of who 40 accepted (85%). Linklaters took on 47 of its 56-strong group (84%). Read more


Law At Work Celebrating a Decade of Advisory Excellence

Law At Work, the Channel Islands’ employment relations specialists, marked its 10th anniversary of advising Channel Island businesses in the fields of employment rights, human resources, and health and safety, by holding a series of briefings and training on the forthcoming Discrimination (Jersey) Law 2013.

Established in 2004, Law At Work came under Channel Island ownership in 2010 following a management buyout and is today led by Kelly Flageul, Managing Director, Heidi Gibaut, Executive Director, Sharon Peacock, Technical Director and Richard Plaster, Director who between them have over 75 years of combined legal and human resources experience.

Ten years on and Law At Work’s experienced HR professionals and health and safety experts, supported by their non-practising legal team, continue to deliver training, documentation and support on employee relations matters. The service is tailored to the specific requirements of a business from day-to-day HR management to the roll out of more strategic programmes, as well as guiding clients through the tribunal process. The health and safety team deliver practical training, site and office safety inspections and accident investigation services, assisting clients to meet their legal obligations and provide a safe workplace for their customers and employees.

Kelly Flageul, Managing Director of Law At Work, said: “We’re celebrating our 10th anniversary at a time when significant anti-discrimination legislation is about to be introduced in Jersey and businesses are only too aware of needing to be prepared for it. This has highlighted the value of the service that we offer to businesses, large and small, who are seeking support and guidance to navigate their way through new laws.

“Over the last 10 years the Law At Work service has evolved to meet the changing needs of businesses, it is no longer just about making sure HR policies and employee handbooks are up to date; with new employment laws there is a great deal more for businesses to consider and we’re there to support them. We have also developed our service lines to serve local businesses with support in regard to health and safety laws, an area which is often neglected at great cost.

“We would like to thank our clients for their ongoing support and we are now seeking to take the business forward and continue supporting Channel Island businesses for the next decade, and beyond.”