What can you do if your insurer goes bust?

Insurance | 01 February 2010

History shows that, at least since the 1950s, the likelihood that any authorised insurance company will not be able to pay its claims in full is reassuringly small. The level and composition of assets required by insurers, and their liquidity in particular, is carefully regulated by the Financial Services Authority (FSA), as is the standard of their management.

The FSA rigidly enforces its regulations because a problem with an insurer can result in disproportionate loss to its policyholders. Past examplesSuch stringent regulation is the result of some high-profile collapses. The failure of Emil Savundra’s Fire, Auto & Marine Insurance Company to pay debts owed to 400,000 motorists in 1966 led to a significant tightening of UK insurance legislation and responsibility for insurance supervision shifting to the Board of Trade under the Companies Act 1967. [Continue Reading]

The twilight zone: legal issues for directors

Finance | 01 February 2010

There is no legal definition of the term ‘twilight zone’ (perhaps derived from the cult TV series, the writer would like to think), which is now widely used to describe a period of trading when a company has, or is predicted to have, insufficient cash to pay its debts as they fall due. This might be an immediate cash-flow crisis or the problem might be anticipated many months ahead. [Continue Reading]

Cloud computing: key issues for SMEs

Technology, Media and Telecoms | 01 February 2010

Although many definitions exist, broadly speaking ‘cloud computing’ is the outsourcing of specified IT functions via the internet (the cloud) to provide or receive services that would otherwise only be available if the end user had installed the appropriate hardware and/or software on desktops, or on local networks controlled by that organisation itself. Such services may include the use of software over the internet or remote storage of business data by a third-party provider. One benefit of this is that businesses can structure payment for these services differently (for example pay-as-you-go or on a subscription basis), rather than having to pay large sunk costs for long-term software licences, and the purchase and installation of IT infrastructure necessary to support the services locally. [Continue Reading]

Commission victorious in ‘regulatory holiday’ action brought against Germany

Public Sector | 01 February 2010

On 3 December 2009, following an action brought by the European Commission under article 226 of the EC Treaty (now article 258 of the Treaty on the Functioning of the EU) the European Court of Justice (ECJ) confirmed that Germany had failed to comply with its obligations under the European regulatory framework for telecommunications (the Common Regulatory Framework (CRF)). The ECJ’s judgment in European Commission v Germany [2009] confirms that Germany acted unlawfully by adopting a national law excluding ‘new markets’ from regulation – so called ‘regulatory holidays’. [Continue Reading]

Surrogacy in India: a dilemma

India | 01 February 2010

A search for the terms ‘surrogacy’ and ‘India’ on Google would reveal that surrogacy tourism in India is on the rise. The trend is attributed to the fact that:

  • the cost of a surrogacy arrangement in India is much lower than other countries;
  • the low income levels of a vast majority of the population mean that it is comparatively easier to find somebody willing to act as a surrogate; and
  • India does not have a legal regime governing the rights of the surrogate (a cause for major concern).

[Continue Reading]

UK immigration law and procedure updates

Human resources | 01 February 2010

This article will look at several developments within UK immigration law and procedures that have been implemented over the past two months. These include recommendations for changes to Tier 1 of the Points-Based System (PBS) by the Migration Advisory Committee (MAC), changes to requirements under Tier 2 of the PBS, both for sponsors and sponsored migrants, as well as matters relating to citizenship and Judicial Review. [Continue Reading]

Will it be a Happy New Year for your company?

Crime, fraud and licensing | 01 February 2010

The year-end audit process can bring headaches for in-house lawyers. With the financial year for most companies ending on 31 December, the first few months of the New Year bring the deepest scrutiny by external auditors of a company’s transactions and dealings, in addition to year-end procedures being run by internal audit. This increased scrutiny can lead to the discovery of evidence pointing to improper or even illegal conduct by employees or management during the financial year. [Continue Reading]

New Commission

Corporate and commercial | 01 February 2010

On Friday 27 November 2009 the new European Commission, which will begin its mandate early in 2010, was announced by Commission President José Barroso. This announcement followed a week after the appointment of Herman Van Rompuy and Catherine Ashton as the President of the European Council and the High Representative of the Union for Foreign Affairs and Security Policy respectively, the two new roles created by the Lisbon Treaty, which entered into force on 1 December 2009. [Continue Reading]

Ombudsman’s decision: Intel

Corporate and commercial | 01 February 2010

The European Ombudsman, Nikiforos Diamandouros, has published a decision upholding a complaint against the European Commission by Intel Corporation (Intel). The complaint relates to the Commission’s handling of its investigation into Intel’s business activities and, in particular, its record of a meeting with a senior executive from Dell Inc (Dell), one of Intel’s biggest customers. The Ombudsman has found that the Commission was guilty of maladministration in its handling of the investigation. [Continue Reading]

Commission turns up the heat on cartels

Corporate and commercial | 01 February 2010

On 11 November 2009, the European Commission imposed fines totalling over €173m on companies involved in a cartel in the market for heat stabilisers (Commission decision of 11 November 2009 in case 38.589). This brings the total value of fines imposed by the Commission in 2009 for cartel activity to over €1.6bn. The Commission found that 24 companies from ten corporate groups had been involved in price fixing, allocation of markets and customers, and the exchange of commercially sensitive information. [Continue Reading]