Watch out! Communications referenced/reproduced in settlement agreements might lose without prejudice or litigation privilege from production

In BGC Brokers LP & others v Tradition (UK) Ltd & others, the Court of Appeal dismissed BGC Brokers LP’s (“Claimant“) appeal against an order allowing inspection by several other defendants of an unredacted settlement agreement between the Claimant and Simon Cuddihy (“Third Defendant“).


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Responsible Investment Framework: IA aims to increase clarity and consistency

The Investment Association (IA) published the Final Report on its Responsible Investment Framework on 18 November 2019 (the Report). The Report was created following an industry-wide consultation led by the IA at the beginning of 2019 regarding the Responsible Investment Framework (the Framework); the proposal for a UK retail product label; and the use of disclosure frameworks.

Responsible Investment

The IA developed the Report in response to a noted increase in interest among investors about where their money goes and how it is invested. “Responsible Investment” is a broad term which according to the IA encompasses:

  • maximising long term returns to manage environmental, social and governance (ESG) risks and opportunities;
  • achieving particular sustainability outcomes; and
  • reflecting a particular set of values and beliefs.

The Framework

The Framework is the first industry-wide system to categorise common approaches to Responsible Investment and aims to bring clarity and consistency to clients. It is supported by definitions of such common approaches to Responsible Investment in its glossary. In order to avoid duplication of existing well understood and widely adopted terms, explicit links have been made to such terms.

Chris Cummings, Chief Executive of the IA believes that following the publication of the Framework, “the investment management industry can now give its customers a clear picture of the opportunities available to them and the confidence that their chosen product matches their expectations.”

Proposed UK Retail Product Label

 A UK retail product label was proposed as a means for investors to quickly identify whether a particular individual is adopting a Responsible Investment approach. The IA believes that it would have the additional benefit of promoting the UK as a leader in Responsible Investment. Although this proposal gained the support of 85% of firms consulted at a fund-level, details of its implementation have yet to be provided.

The use of disclosure frameworks

The final part of the IA’s consultation sought clarity regarding how investment managers are using existing frameworks to disclose:

  • how they have embedded ESG considerations into their investment processes; and
  • how they disclose against indicators such as the UN Sustainable Development Goals.

As there is no one single framework relating to this disclosure, the IA notes that there is a lack of consistency in this area. The European Securities and Markets Authority’s sustainability indicators consultation which is due to be published in Q1 2020 may provide helpful guidance here.

Next Steps

From January 2020, the IA will be asking firms to denote which of their funds should be tagged as having Responsible Investment components. The IA then intends to publish statistics on Responsible Investment characteristics later in 2020. It also plans to set up a working group to consider the use of Responsible Investment terminology in fund documentation, reporting on sustainability and a further review of the proposed UK retail product label.

Guidance for firms is provided in the Report which encourages the use of the Framework, the implementation of appropriate accountability structures to deal with Responsible Investment policies and transparency of communications regarding Responsible Investment.

Freezing Order can cover cryptocurrency

The recently reported High Court decision in Vorotyntseva v Money-4 Ltd (T/A shows that freezing orders can cover Bitcoin and ethereum cryptocurrency. It is another example of the Courts finding that a cryptoasset is a form of property capable of being the subject of a Court order.  The case was heard in 2018, but the judgment was only published last week.

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Business Banking Resolution Service launches new dispute resolution pilot for larger SMEs: a new Financial Ombudsman Service?

On 1 November 2019, the Business Banking Resolution Service (“BBRS”) launched a new dispute resolution pilot in preparation for the introduction of its new service, which was originally announced in November 2018 by UK Finance, a trade body for British lenders.

The service aims to provide alternative dispute resolution services for “larger” eligible small and medium sized enterprises (“SMEs”) and participating banks, in order to deliver what is said to be stronger and fairer outcomes.

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PRA updates its policy on settlement of enforcement action

Back in the Summer we reported on the Prudential Regulation Authority’s (“PRA”) explanation of its approach to enforcment action against those who the PRA think have broken the rules. In a further development last week the PRA updated its policy on settlement of enforcement action (“Updated Policy”), which consolidates proposals in its April 2019 consultation report (CP10/19). It aims to simplify and clarify the settlement procedure and discount scheme.

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