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The Future Lawyer Weekly Update – w/c 3rd December 2018

The Future Lawyer Weekly Update – w/c 3rd December 2018

Your round-up of the stories that you should discuss at interview this week:

Brexit

Reported by Anna-Mei Harvey

Britain Capable of Revocation of Article 50

This past week has proven to be very challenging for the Prime Minister and the Government. Last week the news was peppered with reports of a ‘Brexit Deal’ that was intended to map out the divorce and future relations between the UK and the EU.

Such optimism from the PM has been met with a harsh response from other members of Parliament, many of whom criticised the proposal. Leader of the opposition has described her proposal as one that would “put the country [the UK] over a barrel.”

The fervent rejection of the deal has clearly weakened the position of Mrs May however we also must consider the country’s position if the proposed deal is rejected in next week’s vote. The remain camp will undoubtedly refer to and rely upon the published opinion of the ECJ’s most senior advisor, Advocate General Campos Sánchez-Bordona. On the 4th December he stated that he is of the opinion that the UK is able to revoke its notification of withdrawal, which was sent last year in accordance with Article 50 of the Lisbon Treaty, without the need for European consent provided this is done prior to March 29th2019.

Mr Sánchez-Bordona continued to say that such a decision to revoke Article 50 would be possible if it met the same requirements of triggering it i.e. the decision would need to be decided in accordance with our “constitutional requirements.” The simplest way to do this would be to host a second referendum.

One is inclined to think this could happen if serious headway is not made over the next four weeks as the future of post-Brexit Britain seems anything but certain.

Read more here and here.

Equality

Reported by Anna Flaherty

Inquiry into Racism at Universities

An inquiry into racial harassment at UK universities is being launched, due to a “growing body of evidence” that racism is affecting both students and staff. A link has been made between lower qualifications being attained by ethnic minority students and racism – this is in spite of the fact that more ethnic minority students have been entering higher education. The Equality and Human Rights Commission (EHRC) (a public body promoting and enforcing equality in the UK) is conducting the inquiry. The aim of the inquiry is to the public the widespread racism on university campuses and how it suggest how it may be dealt with.

My own campus (University of Kent) is one of many campuses facing this growing issue. A swastika and Ku Klux Klan signs were recently graffitied on one of the buildings in the centre of campus. Kent Union posted a statement saying that “we take incidents of racism extremely seriously and are working with Kent Police and the university regarding the offensive graffiti daubed on Canterbury Campus yesterday, which has now been removed.”

A student at the University of Warwich was banned for life after racist and misogynist messages were found posted by them on social media, with another two students being banned for 10 years and 11 being suspended. At the University of Exeter, another social media group was found with jokes about rape, including racial slurs. At Nottingham Trent, a student was fined for chanting “we hate the blacks”, claiming it was just ‘banter’.

The EHRC is looking for students and staff to share their experiences by the 15th February 2019 to help them compile their report.

For more information, click here and here.

Criminal Law

Reported by Rui Ci Lee

Autonomy co-founder Mike Lynch facing criminal charges over HP takeover

UK entrepreneur, Mike Lynch, is facing criminal charges instituted by the US Department of Justice (DOJ) over financial mismanagement during the acquisition of software company Autonomy by HP back in 2011. Founded in 1996, Autonomy is a British company co-founded by Lynch that uses complex pattern recognition technology to assist companies sort through unstructured information such as emails and telephone numbers.

US group HP purchased the company for $11bn as part of its move into software. However, it was alleged that Autonomy had misled HP about the latter’s revenue and growth prospects. Examples of the misleading include backdating transactions so that revenues could be recorded in different quarters as well as making ‘false and misleading statements’ on the company’s performance following the acquisition.

The DOJ’s criminal proceedings against Lynch is not the first legal dispute the transaction is been embroiled in. In 2015, HP had sued Lynch for $5bn in the British civil courts but Lynch countersued HP for $150bn, claiming that it was HP’s incompetence that led to the downfall of the acquisition instead.

In the same year, UK’s Serious Fraud Office closed investigation into the acquisition due to insufficient evidence for a realistic prosecution. In 2016, Autonomy’s former Chief Financial Officer was also charged and convicted by the DOJ of fraud. Additionally, UK’s accounting watchdog, the Financial Reporting Council, brought complaints against Deloitte and the other audit partners of the company for carrying out conduct that fall significantly below the expected standard.

Lynch has maintained that there is a difference in expectations between the US and international accounting standards, thus the allegation of HP being misled as to Autonomy’s revenues. US accounting expert Lynn Turner explains this difference in standard is due to the waves of accounting scandals in 2002-03. Since then, US auditors have been tightening up their control to stem further accounting scandals.

On the contrary, there are no similar incidents in the past that incentivise British auditors to raise their accounting standards. FT’s opinion and analysis editor, Brooke Masters, is of the opinion that this incident will highlight the shortcomings with UK accounting standards.

Read more at The Guardian and Financial Times.

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