News in brief: week beginning 3 November 2014

ABS

Unprecedented growth: International law firm Kennedys has obtained a licence from the SRA to operate with an alternative business structure (ABS) in the UK. The firm has emphasised that the licence, which is effective 1 November 2014, is not intended for obtaining external investment. Rather, the it is necessary to accommodate the firm's four non-solicitor partners. The ABS licence comes at a time of unprecedented growth for the firm, which reported a 10 per cent increase in turnover in 2013/14 to £128.5m, of which £98.3m came from UK activity alone.

CRIME

Safe haven: The Bar Council has warned the UK risks becoming a 'safe harbour' for criminals if it does not opt back into the European Arrest Warrant (EAW). The chairman, Nicholas Lavender QC, said: "The UK can and should be a leading voice in that reform process. The EAW regime replaced a much more cumbersome structure. It has substantially cut down the average time an extradition request takes, while increasing the numbers of fugitives returned."

EMPLOYMENT

Holiday pay: The Employment Appeal Tribunal (EAT) has ruled it is wrong for employers to only take into account basic pay when calculating how much employees should be paid while on holiday. The EAT added that workers could make backdated claims, but only if it is less than three months since their last holiday.

This could leave businesses facing a multibillion-pound bill payable to their workforces. Following the ruling, the business secretary, Vince Cable, declared: "Government will review the judgment in detail as a matter of urgency. To properly understand the financial exposure employers face, we have set up a task force of representatives from government and business to discuss how we can limit the impact on business." Darren Isaacs, a partner at GQ Employment Law, said it was almost certain the result will be appealed.

LITIGATION

Flight delay: A new survey from IRN Research provides a note of caution for law firms and claims companies exploring the flight delay compensation market following the Supreme Court rejection of appeals by Jet2 and Thomson. A survey of 500 UK air travellers during October 2014 found that the overwhelming majority would be likely to go directly to an airline for compensation rather than use a law firm or claim company. Furthermore, air travellers are much more aware of EU flight delay compensation rules than the sector publicises. Moreover, difficulties in the travel delay claims process puts some travellers off making a claim altogether.

EMPLOYMENT

Zero hours: Evidence from Acas' analysis of calls to its helpline has discovered that some employers could find ways to circumvent the ban on zero-hours exclusivity clauses announced by the Department for Business, Innovation and Skills earlier this year. Acas' discussion paper 'Give and take? Unravelling the true nature of zero-hours contracts' looked at research around zero-hours contracts as well as employers and employees who called the Acas helpline concerning these contracts.

On average there are 70 calls a week about zero-hours contracts to the helpline. Acas' research revealed that many workers on such contracts feel excluded from the sense of security, fairness and trust that's associated with contracts of employment with guaranteed hours.

BUSINESS DEVELOPMENT

Firm merger: Charles Russell and Speechly Bircham have completed their merger to create Charles Russell Speechlys, which will be one of the world's largest private wealth and business law firms. Charles Russell Speechlys has 170 partners and revenues of £135m, ranking it alongside the UK's top 30 legal firms. Partners at both firms voted in favour of the merger on 16 July 2014. The new firm's head office is based in London and has 500 lawyers in offices across nine jurisdictions around the world.

REGULATOR

Identity theft: The number of bogus law firms and scam alerts is on the rise in the UK with the SRA warning that almost half of the incidents recorded in the first eight months of 2014 involved identity theft of a law firm or solicitor. In many cases, genuine law firm websites were cloned and fraudsters sent out bulk emails claiming to be from established firms, requesting money or confidential information. The SRA has warned that firms which fall victim to scams may also be subject to increases in their professional indemnity insurance premiums.

BUSINESS DEVELOPMENT

Firm acquisition: The Irwin Mitchell group has completed the acquisition of private wealth specialists Berkeley Law. The Mayfair-based firm has an emphasis on providing wealth management services to high-net-worth private clients. Irwin Mitchell hopes the acquisition will allow the group to expand further into London and diversify its range of services for clients with complex financial affairs in the UK and abroad. The purchase marks the group's sixth acquisition since it became an ABS in 2012; it has recently opened new offices in Cambridge and Southampton. SJ