Legal Business

Consumer protection dragged into 21st century with new Bill that could open floodgates to class actions

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A Consumer Rights Bill published on Wednesday (12 June) is set to radically overhaul the rights of consumers in the digital age but could open the door to US-style class actions, lawyers warn.

The Bill was one of many announced in the Queen’s speech at the state opening of Parliament in May, and if enacted, will enhance consumer rights by making them easier to understand and streamline complex areas of consumer legislation into a single bill.

However, the Confederation of British Industry, speaking for some 240,000 businesses that together employ around a third of the private sector workforce, has highlighted the dangers behind a provision that allows members of the public, businesses or consumers to bring collective actions on an opt out basis.

Matthew Fell, the CBI director for competitive markets, said: ‘We will resist any efforts to introduce US-style class-actions into consumer redress, which risks fuelling a litigation culture and making the UK a worse place to do business.

‘Consumer law should be fit for the digital age but any changes must be properly scrutinised before they are put into practice.’

Hogan Lovells partner and product liability specialist Rod Freeman says they are right to be cautious. ‘It could lead to more litigation and that’s the greatest concern,’ Freeman said.

Speaking to Legal Business, he added: ‘The great concern is these measures on this side of the Atlantic are expressly intended to avoid the excesses that you see in the US class action regime, but the practical reality is the kind of infrastructure that’s been described is naturally going to attract those excesses. There are real questions on whether the safeguards being put in place will be effective.’

Few question that reform of the out of date consumer protection framework is necessary and consumer minister Jo Swinson said: ‘For too long, the rules that apply when buying goods and services have been murky for both consumers and businesses.’

This situation has worsened in the digital age, and the Bill specifically covers consumers’ ability to claim for faulty digital content, including film and music downloads, online games and e-books replaced.

Oliver Bray, commercial, IT and technology partner at Reynolds Porter Chamberlain said: ”There is lots of overlap and uncertainty with legislation including the sale of goods act which is now 30 years old. The messy backdrop is a complex patchwork of legislation. What was slightly bizarre is you have a consumer buying a CD with more protection than someone who is downloading music online.

‘This is going to be good for everyone. It’s simplifying and clarifying, and hopefully will make us more competitive. We are moving to a more sane world where digital content in particular is covered and there’s clearer lines of redress for services than before.’

Freeman added: ‘The area of consumer law in the UK is a mess. One of the great challenges is for the legalisation to keep up with changes in technology and changes in practices in the market. It’s important that it’s coherent, understandable legislation in dealing with digital content as much as it’s important for tangible goods and for services.’

Elsewhere, trading standards officers will be required to provide reasonable notice to businesses before carrying out routine inspections, as well as speedier and faster remedies for businesses that have been disadvantaged by breaches in competition law.

Consumers currently spend more than 59 million hours every year dealing with goods and services problems, according to a government statement published. The hope is that the new measures will reduce the effort consumers and businesses have to make to resolve problems.

sarah.downey@legalease.co.uk

Legal Business

RPC second City firm today to announce high double digit revenue increase

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Reynolds Porter Chamberlain has become the second City firm today (11 June) to announce a high double digit increase in revenue, with turnover up by 20% for 2012-13.

The top 50 LB100 firm has seen its revenue rise from £68m in 2011-12 to £82.1m this year. Its profits are yet to be announced.

The results come as top 20 City firm Clyde & Co also today revealed a hike in turnover of 17%, as the firm continues to reap the benefit of its 2011 merger with Barlow Lyde & Gilbert and following a period of international expansion.

The insurance focussed firm’s revenues have increased from £287m in 2012 to £336.6m in 2013, amidst a sluggish prevailing European economy. According to chief executive Peter Hasson, without including Barlow’s revenues, Clyde & Co would have reported a single digit growth of around 6%.

Clyde & Co has opened five new offices worldwide since the start of 2012, most recently in China (after obtaining a licence in Beijing), marking its eighth office in Asia. The firm also launched in Madrid with a four-partner insurance team from DAC Beachcroft in April, in Libya with the hire of local lawyer Albudery Shariha, and in Sydney and Perth after it hired an eight-strong local team from Allens.

Other UK firms to have revealed their 2012-13 results include Bird & Bird and Olswang. Bird & Bird has announced revenue growth of 6%, from £235m to £249m, marking 25 years of continuous growth. Profit figures are yet to be released although a firm spokesperson said that the expectation is that net profits will have risen again in 2012/13.

Meanwhile top 40 firm Olswang has reported a 3% growth in revenues, from £108m to £111.3m, slower growth than the 17% it posted last year. The 410-lawyer firm said that profit figures were subject to audit, it anticipated that its net income would be at roughly the same level as last year. However, this means average profit per equity partner will be around £510,000, down from £530,000 last year.

francesca.fanshawe@legalease.co.uk

Legal Business

Jonathan Watmough – RPC

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Jonathan Watmough, Managing Partner, RPC

Increasingly I realise just how easy some of us in private practice have it compared to general counsel (GC) and in-house lawyers.

Law firms and their lawyers are inclined to be change resistant. Professional experience has conditioned them to be sensitised to the potential downsides arising from a course of action in preference to embracing the likely upsides. And even when they do accept that change is inevitable, often it’s a painfully slow process to effect – it’s hard enough to halt the progress of a supertanker, let alone change its course.

Legal Business

RPC expands corporate practice with partner hires

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RPC has beefed up its corporate practice with the hire of three of Wragge & Co’s heavyweight partners as it targets more mid-sized deals for the largest FTSE 100 and 250 companies and multinational businesses.

The City Domestic firm hired Wragges’ former managing partner Richard Haywood and corporate head Maurice Dwyer. The duo joined fellow partner David Marshall at the beginning of the year.

Haywood was managing partner at Wragges from 2003 until 2006 and was also the firm’s corporate head. Most recently, he advised Premier Foods on the £182m sale of its canning division to Princes Foods.