Author: Whitestone Chambers

The COVID 19 crisis has called for a change in the way businesses operate and the legal sector has had to undergo many changes to adapt to the current situation. After the initial emergency response to the pandemic in March/April HMCTS has moved into phase 3 which focuses on recovering operations. In an, “all hands to the pump,”[1] response Lord Chancellor Buckland has outlined plans are underway for recovery. Despite the move towards resuscitation the measures outlined have raised many questions and stirred controversy amongst those in the legal sector.

Included within the recovery plan are a range of measures to be used across various jurisdictions to ease damage caused by the pandemic. There is a focus on the need for continued social distancing and so some hearings will still be held virtually but with an increase in the backlog of cases there is a need to reopen all tribunals that have been closed off. With plans to reopen all sites by July HMCTS has proposed using alternative sites nicknamed, “Blackstone courts,”[2] in an effort to catch up with cases that have been backlogged. Sites up for consideration include council-run facilities and conference areas with existing sites set to undergo intense screening measures to ensure physical modifications are in place to protect staff and clients. Lord Chancellor Buckland has also said, “a renewal for justice,”[4] for courts can only be achieved with a move towards better technology systems. HMCTS has outlined this move in their recovery plan with an increased focus on having courts increase the use of audio and video technology to tailor to new types of hearings.

Where the controversy lies, however, is in, “all hands to the pump,” recovery measures that include additional court hours for staff and proposals to remove juries from either-way trials. Lawyers are under intense pressure and regular working hours already fall into weekends and extended hours. Some have pointed to the recovery plan as being sparse in detail and not taking into consideration the burden it will cause to staff and parties involved in cases. Simon Davis, President of the Law Society, has been critical of the move to increase hours and commented, “ extended working hours for already beleaguered judges, practitioners and court staff needs to be treated with utmost caution.” [5] Davis has recommended a reconsideration of the move suggesting that focus should first be on ensuring normal court hours are being maximised and that there are no restrictions on judges sitting. HMCTS has already come under scrutiny following its proposal to replace removed juries with a single judge and two magistrates. There are reports circulating that the proposal could be dropped after the opposition it has faced from those in the legal profession.

In response to the backlash Lord Chancellor Buckland has declared that the crisis, “demands a new perspective on the way we deliver justice.”[6] It’s clear the justice system needs to evolve to meet the current demands of the pandemic but are some measures too unpalatable for the legal profession to accept?

© 2020 Whitestone Chambers

https://www.lawgazette.co.uk/news-focus/news-focus-all-hands-to-the-pump-in-court-recovery-plan/5104882.article

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/896779/HMCTS368_recovery_-_COVID-19-_Overview_of_HMCTS_response_A4L_v3.pdf

https://www.wired-gov.net/wg/news.nsf/articles/Coronavirus+recovery+in+Her+Majestys+Court+and+Tribunal+Service+01072020153300?open

https://www.lawgazette.co.uk/news-focus/news-focus-all-hands-to-the-pump-in-court-recovery-plan/5104882.article

https://www.lawgazette.co.uk/news-focus/news-focus-all-hands-to-the-pump-in-court-recovery-plan/5104882.article

https://www.gov.uk/government/news/coronavirus-recovery-in-her-majesty-s-court-and-tribunal-service

A recent survey shows that eight out of 10 Britons want the government to focus more on wellbeing than economic growth during the COVID 19 crisis [1] With this in mind we’ve compiled a list of simple things you can do each day to destress and work towards making your well-being a top priority.

Carve out “me time”

With schools shut until September and new work routines there has never been a more needed time for “me time.” If you live with your family or partner then tensions have likely built during the lock-down. Hectic work schedules, daily home-schooling and pandemic worries will all make home life more stressful. Make a point of having your own alone time where you can let go, refocus and destress. Whether that means doing nothing or taking up an old hobby like painting it all makes a difference. Taking time away from your busy schedule and thoughts will help reset your mind and make you sharper for your next task.

Make moving a priority

Gyms may still be closed but that doesn’t mean you should let your fitness slide. Aside from the obvious physical benefits staying active will aid your sleep, improve digestion and lift your mood. With summer approaching it’s a perfect time to hit the pavement and catch up on your step count. It’s not a one size fits all approach; choose an activity that you enjoy.

Live in the present

It’s such a simple concept but so few people do it! Unplug yourself from worries of the future and focus on the now. This is especially important during our current situation when we are constantly being bombarded with bad news. The situation is so delicate that we face uncertainty every hour. Focusing on what could happen or what might come into place will not make the situation better. Snap yourself out of this habit by working on yourself. Focus your time and energy into something that is actually tangible. Take up running and start working towards a 5k or enter that writing competition.

Be mindful of what you eat

It’s easy to eat without thinking, especially since we’ve spent the last couple of months in lockdown. The stress of the current situation coupled with more time at home can lead to unhealthier eating habits. You don’t have to restrict yourself but become more mindful of what you put into your body. Try swapping sugary or high-salt content foods with more nutritious snacks like carrots with hummus and fresh fruit. There’s nothing wrong with treating yourself but moderation is key.

If you need help – ask for it

If you are struggling and need extra help or advice don’t be afraid to ask for it. Knowing when to reach out is a sign that you’re making your well-being a top priority. There are so many services out there that are free and confidential. The NHS has a whole page dedicated to support services that offers more information on who to seek for help.[2]

https://www.theguardian.com/society/2020/may/10/britons-want-quality-of-life-indicators-priority-over-economy-coronavirus

https://www.nhs.uk/using-the-nhs/nhs-services/mental-health-services/how-to-access-mental-health-services/

The UK is currently entering its third phase and many non-essential businesses are set to reopen on the 4th of July. With the country easing some of its restrictions Grant Shapps, Transport Secretary, has announced that, “the government will begin to ease health measures at the UK border.” Up until now a 14 day isolation period had been imposed by the government for those entering the country. The latest news from the Foreign Office is set to change that with the UK starting to lift its ban on non-essential travel by introducing travel corridor exemption for some countries.

Drawn up by the country’s leading scientists, the decision to form air bridge deals and open up borders is being closely monitored and based on current statistics. From the 10th of July onwards you will be allowed to travel or return from the countries that have travel corridor exemptions without having to quarantine for 14 days. This will cover all modes of transport including train, ferry and air travel. Government guidance is to stay updated on the coronavirus regulations in other countries as they may have different requirements to the UK. Upon arrival in the UK you will be asked to fill out a passenger locator form which will help in the recent track and trace scheme. Countries that currently have travel corridor exemptions include:
• Andorra
• Antigua & Barbuda
• Aruba
• Australia
• Austria
• Bahamas
• Barbados
• Belgium
• Bonaire, Sint Eustatius & Saba
• Croatia
• Curacao
• Cyprus
• Czech Republic
• Denmark
• Dominica
• Faroe Islands
• Fiji
• Finland
• France
• French Polynesia
• New Caldeonia
• Netherlands
• Monaco
• Mauritius
• Malta
• Macau
• Luxembourg
• Lithuania
• Liechtenstein
• Japan
• Jamaica
• Italy
• Iceland
• Hungary
• Hong Kong
• Guadeloupe
• Grenada
• Greenland
• Greece
• Germany
• New Zealand
• Norway
• Poland
• Reunion
• San Marino
• Serbia
• Seychelles
• South Korea
• Spain
• St Barthelemy
• St Kitts and Nevis
• St Pierre and Miquelon
• Switzerland
• Taiwan
• Trinidad & Tobago
• Turkey
• Vatican City
• Vietnam

Ireland, The Channel Islands and the Isle of Man are also exempt and so are the 14 British Overseas Territories. This list is subject to change and will be kept under constant review in line with the current situation.

© 2020 Whitestone Chambers

On Wednesday 1st of July at 6pm Mina Heung, Harriet Ho and Jackson Ng, international barristers at Whitestone Chambers, will be joining Robert Pidgeon, Head of Legal Operations at Whitestone Chambers and mediator of this panel, to host an informative webinar  on The New Rule of Law & Commerce China & Hong Kong Beyond 2020.

RSVP by email to law@whitestonechambers.com to secure a place. Webinar details will be provided upon a RSVP being received.

SLG, who operated several businesses that sold holidays and other travel arrangements including Shearings Holidays and National Holidays, entered into administration on the 22 May citing the impact of COVID 19. The group have also advised that 44 UK hotels under their control, will close and not re-open.

Over 2,500 jobs have been lost as a result.

The SLG group had already furloughed the overwhelming majority of their staff before last week’s news as the group were hit massively by the travel restrictions imposed by the government in response to the COVID-19 crisis.

SLG’s various groups primarily specialised in UK based holidays. Their trips were aimed at the over 50s and retired people who enjoyed the variety of locations and the convenience of taking the coach rather than having to drive.

According to ABTA, The UK travel trade association for tour operators and travel agents, the majority of customers will be able to get a refund. In a statement releases on their website, ABTA stated: (1)

The Group (SLG) had over 64,000 bookings, the vast majority of which were coach package holidays. All package holiday bookings are financially protected so customers with these bookings will receive a full refund, with coach packages protected by the Confederation of Passenger Transport. Shearings also offered a small number of flight package holidays which are ATOL protected and will be processed by the CAA.

The news came in another devastating week for the travel and aviation industry. Rolls Royce confirmed that 9,000 jobs, almost one fifth of their workforce, would be lost with 8000 of the 9000 cuts coming in the civil aerospace division.

One glimmer of light was provided by Easyjet who, in the same week, announced that they would resume some flights from June 15. Easyjet will fly between UK airports Gatwick, Bristol, Birmingham, Liverpool, Newcastle, Edinburgh and Belfast. (2)

(1) https://www.abta.com/news/specialist-leisure-group-which-includes-leading-coach-companies-shearings-and-national
(2) https://www.bbc.co.uk/news/business-52751791

 

Legal Sector Affinity Group (LSAG) – Advisory Note

COVID-19 –and preventing Money Laundering/Terrorist Financing in Legal Practices

Legal practices and practitioners should be aware that criminals will continue to operate throughout, and look to take advantage of, the COVID-19 outbreak. This includes laundering the proceeds of crime and terrorist financing, so it is important that everyone is aware of the changing risks.

Legal Sector Anti- Money Laundering (AML)/ Counter-Terrorist Financing (CTF) supervisors understand the particular challenges currently facing legal practices and practitioners. This includes the difficulties associated with undertaking customer due diligence (CDD), including appropriate levels of identification and verification (ID&V) – particularly where clients cannot be met face-to-face.

Please note legal practices and practitioners in scope of The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended) (the MLRs) must still comply with their statutory requirements at all times.

However, in line with a risk-based approach, the MLRs provide flexibility in the application of their requirements. There exist options for practices seeking to comply while also observing requirements such as social distancing.

Risks that may arise due to COVID-19

As well as changes to how we live our lives, COVID-19 is also changing the economy. An economic downturn may make legal practices more susceptible to financial difficulties or other pressures, which creates risk and potential weaknesses for criminals to exploit. As the UK economy enters a period of uncertainty, practitioners and practices should be particularly alert to the following risks in new or prospective customers:

• Being asked to work with unusual types of client or on unusual types of matter
• Resistance from a client regarding compliance with due diligence checks, for example being pressured to forego necessary due diligence checks or to “speed up” the process.
• Becoming involved in work that is outside of the practice’s or practitioner’s normal area of experience/expertise – without full understanding of the money laundering and counter terrorism risks associated with the new area of work
• Any attempt to gain access to your client account where not accompanied by the provision of legal services
• Transactions where the business rationale for the transaction is not clear.
Always ensure that you are comfortable as to your understanding of the matter, including its purpose and why it is happening in the particular way it is happening. Sensitivity: General

Identification and Verification
ID&V, is often undertaken in person, on the premises of the legal practice using suitable identification documents. This can provide a strong level of assurance, but this may no longer be possible in the current circumstances and you should consider what risks this may create.

An inability to conduct in person ID&V does not mean you cannot complete CDD, but you may need to consider using other methods that give you the necessary assurance that the person is who they say they are.

Practices and practitioners are reminded to adopt a risk-based approach, taking into account the contents of their practice-wide risk assessment, policies and procedures (and where necessary updating them) and the circumstances of individual clients/matters. As an alternative to face-to-face documentary verification, legal practices and practitioners may adopt or further utilise electronic means of ID&V where appropriate to the risks present in the client/transaction.

Such methods may include (but are not limited to) using independently or in combination:

1. Digital ID&V services that meet the requirements of the MLRs (R28(19) – “secure from fraud and misuse and capable of providing an appropriate level of assurance that the person claiming a particular identity is in fact the person with that identity.”)
2. Gathering and analysing additional data to triangulate the evidence provided by the client, such as geolocation, IP addresses, verifiable phone numbers etc.;
3. Verifying phone numbers, e-mails and/or physical addresses by sending codes to the client’s address to validate access to accounts
4. Using live and/or recorded digital video (many reliable and free options exist for this) of the customer showing their face and original photo identification documents so that you can compare them to a scanned copy of the same document (e.g. passport or driving license).

No matter what ID&V service or procedure is used, the responsibility to make sure the ID&V is undertaken correctly, is with the relevant practitioner and practice. If you are placing reliance on others to conduct CDD under Regulation 39, e.g. an instructing solicitor or accountant, you should ensure that you understand how they have adapted their CDD procedures to the different circumstances.

Make sure that you keep a record and evidence of the processes you follow; for example, of any video calls you make.

These methods alone may not be appropriate or sufficient where the money laundering and terrorist financing risks inherent in the particular client or matter are greater. In higher risk situations, further verification (including verification of source of funds/wealth) will likely be required. Sensitivity: General

Where you need to update ID&V records for existing clients, you should not rely on old ID just because you cannot currently meet them face-to-face.
Further, information and advice may be available on your Supervisors website. You are also referred to the HM Treasury approved LSAG Anti-Money Laundering Guidance for the Legal Sector (March 2018) and LSAG Key Changes Document issued January 2020.

Digital Identification and Verification Services

If you are considering whether to use a digital ID&V service, you must carefully consider whether it provides the assurance needed. In order to make this judgement, you may have regard to the Financial Action Task Force (FATF) guidance on Digital Identity, particularly recommendations 22-27 in the Executive Summary as summarised below:

1. Understand what the service actually does i.e. what checks is it doing and what databases is it checking, if any.
2. Take a risk-based approach to relying on the service including understanding the assurance level provided and that it is appropriate to the risk.
3. Understand whether the service provides levels of assurance and how these may be appropriately used in different circumstances.
4. Consider whether using the service, negates the idea that all non- face to face transactions are high risk.
5. Use anti-fraud and other cyber security processes to support the service.
6. Engage with the service provider to ensure the practice has access to the information it may need to prove its compliance to its supervisor or to law enforcement.

 

April 2020