Commercial Law International

By: Ainsley Brown

Cash or no cash, exchange equals tax

In a previous post, As companies battle the recession, bartering comes in handy, Carsten Lexa a contributor here at Commercial Law International, gave us an introduction to bartering schemes and their advantages for cash strapped businesses battling the global recession.  This piece is an attempt to build on his fine work by expanding the discussion into the realm of taxation.

Bartering in the simplest of terms is a market transaction where the medium of exchange is goods and services rather than legal tender; in effect exchange in kind. Bartering in fact is the oldest form of market transaction. However, despite its historic lineage and a lack of legal tender, bartering is none the less an exchange of value and will attract the attention of tax authorities. It is therefore prudent before individuals or companies enter such transactions that they inform themselves as much they can – ignorance of the law will supply little or no refuge when the tax-man cometh.

Bartering, as aforementioned involves an exchange of value and it must be understood that in kind transactions are treated by tax authorities in the same way cash transitions are treated; that is as being generally taxable. However, before a transaction can be taxed it needs to be valued, with cash transitions that’s relatively easy – tax the named cash price. Barter transactions, however, raise special valuation issues for tax authorities, that is to say how will the in kind transaction be valued; will it be valued on the basis of value in use to the recipient or value in exchange for the goods or services from the giver?

The following will illustration what I mean: let us say an accountant renders his/her services to an architect in exchange for the architect designing their dream home. The accountant provides $1,000 worth of services – the value in use – however he/she receives $1,800 worth of services – value in exchange – from the architect. For the purposes of income tax what value ought the accountant to use, the value rendered or received?

In Canada the approach is to us the value in exchange, that is the price normally charged for the goods or services rendered. In the above example the accountant would include the $1,000 he/she would have charged and not the $1,800 value of the architect’s services received on his/her income tax. While this is the normal approach, Canadian tax authorities will use the value in use – the value to the recipient – where the price normally charged for the goods or services given cannot be readily ascertained.

By: Ainsley Brown

So what is brand management law?

The best definition that I can give is the law or legal practice that facilitates a company or companies managing their band or brands. Yes, I know, I know the definition is a bit circular but hey what do you expect, I am a lawyer after all.

Then what is brand management?

Brand management according to BusinessDictionary.com is: the process of maintaining, improving, and upholding a brand so that the name is associated with positive results…Brand management is built on a marketing foundation, but focuses directly on the brand and how that brand can remain favorable to customers.

Brand management law (BML) is thus defined as the legal facilitation of the above process. It is a multi-disciplinary practice area and brings together many differing areas of law (Intellectual property (IP), litigation, contracts, tax, etc) but more importantly by its very nature also encompasses the non-legal (marketing, public relations, consumer care, business sensibility/sensitivity, etc).

BML is not just a simple matter of commercial awareness or knowing your clients business – both of which are important very important aspects of this area of law, however BML goes beyond either of them. That is to say it is not just a matter of discerning what the client’s interests are, then moving to put in place the requisite legal instruments that establish some right “to” or “in” and then defending said right or rights. Take for example a client that has expended millions on research and development, this client clearly has an interest in seeing a return on this expenditure, a lawyer would move to protect the client’s work product by intellectual propertizing it as much as possible (e.g. registering patents and trademarks), the lawyer would then act as a kind of sentinel, safeguarding the client’s IP through the threat (real or potential) of legal action.

BML is this but much more. Its is practice area that requires a lawyer to be able to keep the legal and non-legal in sync – always remembering that it is the brand that matters.

This practice area requires from a lawyer certain degree of intellectual flexibility. From the nature of our profession lawyers are problem solvers – some might beg to differ – to be more specific we are legal problem solvers. To put it succinctly we will find the legal solution to your business problem. And here lays the problem for many a lawyer when it comes to BML.

Lawyers are good at finding legal solutions to business problems; well that’s what we were trained to do after all. However, BML requires a lawyer to go beyond this and to realize that some times what is in fact needed is a business solution to a legal problem.

What is the difference between these two approaches, isn’t it just matter of semantics? Well, you will just have to stay tuned.

From us here at Commercial Law International: Have a Happy Earth Day.

Let’s all work together for a prosperous and sustainable future.

By Charles Wanguhu

Well with Ash rising over European skies causing all kinds of travel chaos, it is quite suprising and hard to fathom the impact of one volcano is having on the continent of europe and over its neighbours.

At the Jomo Kenyatta International Airport in Nairobi a stink has engulfed the main cargo centre where once freshly cut flowers and vegetables are now rotting. As of sunday a $12 Million stockpile worth  of vegetables and roses had piled in cold rooms at the airport.

But more suprising is the impact its having on Naivasha a small lakeside town  is all the more uprising. The flower industry is the main employer in the town with an approximate 50,000 employees. With one flower farmer forced to throw 6.5 tonnes of roses into a compost pit and losses being compounded day by day, nerves are already setting in with fears of unemployment rising.

The only hope is that the European airspaces will clear by the peak period of Mothers day. We all are as citizens of the world  really  interconnected.

By: Carsten Lexa

Money helps a lot when it comes to exchanging goods. One buys the goods, pays with cash and takes the goods away. So far, so good. But what if free cash to spend is a rare thing? For example in times like today, when the economy is not doing well and money is scarce?

Today, more and more companies turn to third party networks to contribute and use barter schemes. Of course, bartering is nothing new: It is a medium in which goods or services are directly exchanged for other goods and/or services without a common unit of exchange, e.g. money (according to Wikipedia). Firms routinely arrange exchanges on their own. But cultivating relationships with business partners in such a way, that barter schemes can be discussed and established among each others takes time and presents numerous hurdles. Let´s assume the owner of a restaurant needs printing services with a value of $ 10.000,00. Where can he find a printshop with an owner who is hungry for a $10.000,00 meal?

Formal barter schemes can help. One of the biggest providers for example is Bartercard, the largest exchange network with trades through its network worth more than $ 2 billion and 75.000 members in more than 9 countries. By using such a provider, the restaurant owner in the example above would owe $ 10.000,00 to the exchange network, not the printshop. The provider provides the business partners and makes sure that every member of the network honors the services of the other members. It therefore provides security and accountability, something informal bartering cannot provide in an adequate way.

What are the additional advantages of such barter schemes, other than security and accountability? The biggest advantage is the fact that no money is needed to “pay” for services and goods. Another one is the fact that a member can “buy” services first throught the network and pays later in his own services and goods – sometimes months later, if nobody wants his services or goods earlier. And finally such a scheme can work not only in one country, but – ideally – worldwide, as long as the members accept the scheme.

Even in Germany such barter schemes are tried and – especially among small and midsize compamies – found helpful. But currently, no big exchange networks exist. So, member of traditional business networks try to establish their own barter networks. Reason is that a company owner who knows another company owner through a traditional business network and has done business with him in a traditional way using cash will be more open towards doing barter transactions with this person than with a total stranger.

Is barter the holy grail for companies in recession times? Probably not. But it can be a helpful to do business if cash is scarce. The difficulty is to find the right partner.

For inquiries please contact the author: kontakt@kanzlei-lexa.de

By: Ainsley Brown

The stage was for a very interesting court battle in Australia pitting advisor against former client; at stake the fees that the advisor could charge. While the case remains interesting the deep probing spotlight that it promised on investment banking fees alas may not materialize.

JP Morgan Chase, the investment bank is suing its former client Consolidated Minerals (ConMin), an Australian manganese miner, in Australian court for the balance of its advisory fees. The case is being followed very closely in investment banking circles because its risks exposing the normally highly confidential fee structure of one of the industry’s leaders. The case also comes as investment banks have come under greater scrutiny, namely because of what some claim are excessive fees.

It is not that disputes about the fees investment bank’s charge never happen or infrequent – on the contrary, I am sure they arise from time to time – it’s just that they are never this public. In fact the choice of the courts as the forum for dispute resolution is rare indeed, negotiations over the board room being the normal venue. What this tells me is that there has been a total break down in trust, trust being an essential if not the essential ingredient in an adviser-client relationship. When it breaks down, as is the case here, more than bitter feelings might ensue.

The case centers around JP Morgan seeking A$30.8 million representing the balance of it’s A$50 million fee it charged Consolidated Minerals when ConMin was up for sale in 2006. After a 14 month bidding war Palmary Enterprises, led by Ukrainian billionaire Gennadly Bogolyubov came out on top with a A$1.3 billion share cash offer. In 2008 after the new owners took control of ConMin, to their apparent astonishment, received a bill from JP Morgan in the amount of A$50.8 million for services rendered. At issue here wasn’t the bill itself – it was expected – but what was unexpected was its size especially since ConMin was operating under the notion that JP Morgan had agreed to cap its fees at A$7 million after an alleged phone conversation that took place in 2006. Although this was its understanding ConMin went ahead and paid JP Morgan A$20 million dollars in what it believed was full and final settlement for the latter’s services.

This brings us to the current situation, where JP Morgan is seeking to recoup the remaining A$30 million owning to it. In an unsurprising move, given the break down of trust, ConMin counter claimed by accusing JP Morgan of failure to deliver, being misleading and deceptive, reneging on the agreement to cap its fees and double and some times even triple charging for the same services.

Now as it turns out ConMin has now dropped its counterclaim after the lawyers for JP Morgan wrapped up its case. What is more, ConMin has now decided not to call any witness or submit any documents to aid its defense – yes you read correct no witnesses and no documents. This is either a case of arrogance or capitulation.

How so, could it not be the case that ComMin’s lawyers are just confident that JP Morgan’s lawyers have not proven their case?

If that were the case, then why not call for the case to be dismissed and move for summary judgment or have it dismissed as being frivolous and vexatious? Now I am not versed on the Civil Procedure Code of New South Wales but I am sure that they have such provisions in their code. Therefore, I will repeat this is either a bout of arrogance or capitulation.

Now all that remains is for both sides to prepare and submit their final submissions to the judge. What an anti-climax to a case that had the promise of so much.

This is a post that recently appeared on Slaw written by my friend Omar Ha-Redeye which I believe would be of some value to my readers. Enjoy.

by Omar Ha-Redeye on February 14th, 2010

On February 9, 2010, David Cruickshank spoke at UWO Law on “The Business of Law: Hot Topics and Emerging Trends in the Legal Profession.”  Cruickshank is a partner at Kerma Partners in New York City, and provides professional advice to law firms and other services.

My notes from his talk follow.

Threats and opportunities in Canadian Legal Market

Canada is still identified as a resource economy, but also innovative in terms of technology exports.  But if you look at the size of the TSX in comparison to other exchanges, it is still focused on resources and commodities.

On the transactional side, there is large consolidation of major companies, such as aluminum and energy.   Many of these transactions are driven from New York, Shanghai, and London.  Realistically, Canadian firms do not drive these transactions.   Although Torys LLP has a New York office, they are still small compared to other firms there.  Those that do set up offices around the world are usually following their clients around the world.

Even though you have purchases and consolidation of Canadian firms, they are being driven by American law firms.  Canadian firms just do not compete in world financial centres.

The opportunity for Canadians is in deleveraging.  Companies are selling others in Canada.  And even though these are being run by New York, Houston, and London firms, they are using some local counsel.   There are opportunities to acquire clients in New York, the U.K. and Shanghai.

Another approach is to identify start-up resource and technology companies, and grow with them.

Opportunities in dispute resolution and litigation

The traditional skill set are harder to acquire, because there are fewer trials available.  It’s not unheard of for a 7^th year associate in New York to be considered for a partnership and have never done a trial except for some pro bono work or junior work on a trial, largely because so many trials settle.  It’s difficult to get a reputation in litigation this way.

Historically litigators could excel by knowing where exactly to find information and specific documents.  But now a paralegal can pull this up with a simple word search in a matter of seconds.  Those memorizing and cataloguing skills are obsolete, and the technology delivers this at a lower cost.  Litigators will have to leverage other skills such as knowledge of procedures and judges.

Large consolidated client organizations are all trying to reduce fees, even before the recession.  They are rejecting increases, and asking for discounts.  Firms have to find ways to do discoveries cheaper.  Firms are now outsourcing to Virginia and India to low cost centers.

Litigation law firms are being divided into the haves and have-nots, those willing to invest large amounts of capital into litigation matters.  And sometimes the have-nots are large 400 lawyer law firms.  The sheer number of documents involved means that some firms cannot deal with large litigation cases.

Law firms are undercapitalized.  The investors are partners, who cannot raise enough money.  They even pay their own payrolls.  This makes law firms somehow weaker than other businesses.

The opportunities to get the skill sets that litigators will need can be found in small organizations, pro bono work, and government settings.  Associates in their 5^th-6^th year of practice in these contexts will have much more skills.

But the most important skill in litigation day in and day out, which is often ignored, is interviewing skills.  Negotiation skills are a close second.  Cross-examinations are rarely used, even for experienced litigators.  Young lawyers rarely recognize the importance of the right skills needed for litigation.  Even in mid-trial, most lawyer s will not have major trials.

Litigation turns on reputation, and writing on speaking are good ways to build that reputation..  The best way to get known in litigation is to write about it, in news magazines, speaking at conferences, and blogs.  You should have an area of expertise to focus on.

Two  Impacts of Technological Changes

Technological changes are impacting law firms in their recruitment.  Potential recruits are asking about the technology that the firm is using.  Some law firms did not provide their lawyers Blackberries, and these firms are now laughed at.  Technology is needed just to keep lawyers happy.

The other area of impact for technology is in litigation, which has become incredibly technological.   Most large firms now have litigation support programs that have an IT person and a lawyer that manages all the documents.

In the U.S., demonstrative aids like videos and accident reconstructions, are allowing for sophisticated trial demonstrations in the court rooms.   Jury selection and the science of making an impression on a jury are becoming crucial for trials.

Holland & Hart in Denver, Colorado put $1.2 million into a studio to create these aids, giving them a competitive advantage in their region, which has turned into a business of selling these aids to other lawyers.  It created a business within a business, paying off their costs.  But making the initial investment was probably a tough sell for the firm.

One of the initiatives that Gowlings undertook in the mid-90s was a technology platform that let a client know the status of any litigation at any time.  During that period, it was a very sophisticated system.  When clients then considered seeking other counsel, they decided to stay with the firm when they realized that they had developed an affinity for the system, and would benefit from it elsewhere.

Firms need to be ahead of passive technology, but also interactive with the client and ahead of embedded technology.  Getting embedded with your client means investing in them, keeping the property in the system that ties them into you, and thereby making it very difficult for them to leave you.

Business analytic software such as Redwood help make better business decisions like how to staff work by looking at billing and lawyer utilization hours.  By analyzing what parts of work are profitable and why, firms can develop strategic decisions by modelling different ways to plan work.  Although it started as a way to make a law firm more profits, but it is not being used more defensive tool to deal with lower RFPs and still be profitable.

Individuals have an enormous advantage, because many senior lawyers are still working on their keyboard skills.  They are more than willing to push it on to junior associates, who should seize the opportunity.  Few firms are even familiar with tools like Microsoft Project.

Partners are getting over 500 e-mails a day, and they are not reading them.  They are inundated by e-mails.  You have to catch people in other ways.  Lawyers will be more valued if the look for direction in person.

Even e-mails have to be structured when dealing with busy partners.   Put the major issue in the first paragraph.  Writing skills and analysis still count, and clarity is needed.

Young lawyers can also benefit greatly from planning tools, learning them and offering them to senior management.

Speed of conversion:  innovative to commodity work

Lawyers are moving between practices of different sizes, and the practices themselves are becoming commoditized for smaller firms.

In the U.S., the rise of white-collar crime has resulted in small firm criminal lawyers joining big firms.

Hedge funds in the U.S. have become a commodity work.  You can gear it up with set forms, and it used to be something only for large firms.  For high-end bankruptcy cases, they become public the day they are filed.  These lawyers are giving away their knowledge immediately, and have to be more innovative in the way they do their work.

Once a lot of lawyers realize they are competing for the same service, it drives prices down.  By making the service more automated, firms can save themselves and their clients money.

A number of small employment law boutiques across the U.S. have linked up to become national law firms.  They have very little real affiliation, but can tell a national employer that they can provide regional advice for a third of the price of large firms.  Their success has come from their ability to organize themselves differently.

The trick for large law firms to stay lucrative is to get in get in on the front end of innovative work, and ditch the commoditized work that will be picked up by smaller firms.  The challenge is how do you reinvent yourself and find your skills in a new way. Nimble lawyers do this all the time, but it is a tough thing to do.

Strategic positioning in the legal market means looking at emerging and growth markets.  Jumping into the emerging markets come with some risks.  They might not take off, and may have little returns.  In preparation for Y2K a number of lawyers branded themselves as Y2K lawyers, but that specific market never really emerged.

If a large firm is on the front edge of a growth curve (usually a year to 18 months), they will usually do very well and can make a lot of money.  At this point the purchase of their services will not realize that a choice of people who will do it for less even exist.  They assume it is innovative, and assume that you will be charging the highest rates, and will pay it.  It’s only after that they realize they can go elsewhere for less.

During the mature stage of the market, the growth has tapered off.  Firms have a regular client who comes back to them again and again.  But this mature phase is getting increasingly slimmer, before turning into the saturated phase.  Other firms come in, and drive the price down based on their ability to commoditize the work.

Clients will say in the saturated phase, we love you for this cutting edge stuff but we’re going to use a boutique firm for forming companies, convert income trusts, and other activities where we’re getting it for a third of the price.

Where large firms want to be dominant is in emerging and growth markets, but it means taking on some risk.  They should get out before saturation.  Young associates should also be asking law firms what practices they are in, and get close to partners involved in emerging and growth markets.

Some of these markets are cyclical.  So although bankruptcy lawyers are a hot commodity right now, in a few years they will be looking for work.  Smart bankruptcy lawyers develop litigation skills to move to those areas of practice during downturns.  M&A work is similarly cyclical.

Four areas of pricing of legal work

The traditional pricing in law is billable hour.  There is some contingency work in Canada, but does not count for any significant percentage of revenue in Canadian law firms.  Economics for law firms are driven by the ability to bill.

Associates tend to cost firms for the first two years, and only make them money after that.   Firms want to make as much billable hours out of associates after two years of practice because that’s where they make the money.  Before that, they’re investing in these individuals.

But the economics different in Canada, since lawyers are a low cost to firms as articling students.  Canadians become more profitable about the 2^nd year of practice.

Law firms used to be able to increase annual with impunity.  The annual rate increased, and the client passively accepted it.  Seniority was another basis for charging more, especially in litigation.

Clients are now pushing back.  They want results and asking for discounts.  Corporate legal departments run by lawyers from inside firms and are seeking value.  They are able to pressure firms based on their knowledge of those firms.

From the perspective of the client, the legal department is a cost center.  Everyone hates them at business meetings, especially when litigation present.  They are under big pressure to cut costs.

One survey demonstrated that 20% of law firm revenue in NYC is under scrutiny.  The Association for Corporate Counsel has a target by the end of 2010 of 25% fixed or alternate fees for corporate work.

Law firms will have to wake up.  The billable hour won’t die, but how much will get paid is a different issue.  How much gets paid affects profitability.

Many years ago, other professional associations like accounting, management consulting, engineers all abandoned hourly rate for budget fees.   Law firms will have to learn to do the same.

The implications for individual lawyers are that clients want value, but with value comes certain amount of risk.  Clients want lower fees, but higher value.  They are saying show us value, don’t show us a million processed documents.  Show us the value that you achieved for us.  The new paradigm is trying to achieve the client’s goal of value, but in some cases still getting a premium for some services.

What are the options?

Firms can consider discounts, but that means firms have to do something internally to adjust their economics, such as cut salaries or move to cheaper office space.  But there are only so many internal controls that can be changed.

Another option is what could be called the ostrich approach.  Firms can try waiting for return of the good times, and continue raising rates annually, with all senior partners billing over a thousand dollars an hour.  But this is a no-go for the short-term and clients are just not accepting it.

A third option is progressive pricing.  Firms negotiate a lower rate, but pay a premium for set successes.  If a settlement is found for under a set amount of dollars, they will receive a predetermined bonus.  In the current economy it’s still going to be rare.

The fourth option is protective pricing, where mainstream work is provided at project prices rather than hourly rates, and new revenue sources get in early in the curve with a low hourly rate that is increased over time.  Clients recognize that they will face these increases over time.

For lawyers this means that there will be more project fees, but law firms are woefully unequipped to provide estimates based on project management skills.  Even when you show them rudimentary project management skills they are resistant due to their billable hour mentality.  They cannot bill planning and managing, but can bill for a document, but this is the very skill they need for profitable practice.

These issues also affect women in law firms, and the statistics related to female retention is abysmal.  There is some hope from the accounting profession, where Deloitte Touche developed a mass career customization that allowed them to custom careers for women.

Instead of thinking of a career as 60 hours a week times a number of years, firms need to look at it as a set of skills and experience that are developed over time.  They can ignore the number of years and allow associates to get to the same place over different times and customize the work that they do.

Instead of basing compensation on time, it should be based on skills.

Skills in managing self and others

Law firms can actually make money on a project basis by properly using technological change, pricing, and proper management.  It’s increasingly important to bring a team approach to law firms.

The key skills that are needed include:

Time management

Staff utilization; use support staff properly, challenge them

Delegation and feedback skills

Supervision skills

Matter leadership; focus on specific issues

Project management skills; will have to get from outside, can’t get it in law

Many law firms don’t even know what a Gantt chart is.  Project management skills will have to be obtained outside of a law firm, and brought into the profession because they simply don’t exist in firms.

These skills are not appropriately taught in law schools, because you need to understand the complexity of the field to properly apply it.  Instead, he focuses on 7-8^th year associates.  At present, many firms are run by stone age tools like issue lists, group lists, and often a magic markers on a wall calendar.

Young lawyers will also have to take ownership by finding a solution, explaining why it is the best one, and explain how it will affect the client.   But these associates have to be diplomatic in how they introduce it, usually by making it useful to one partner.

Law firms can be incredibly resistant to change, the response often quoting the amount of profit made in the past year.  But these firms are profitable in spite of themselves, not because of their effectiveness.

In a law firm the first question is always if anyone else in the industry has already done this.  But even if it hasn’t, that in itself is an opportunity.  In the business world the mentality is exactly the opposite.  The recession will invariable force firms to take on more risks and consider new ideas.

By: Ainsley Brown

Cricket, lovely cricket…it would not be an overstatement to say that in India the love of sport of cricket is close to being if not equal to religious devotion.

The Indian Premier League (IPL) it could be argued is the hottest tournament right now in the world of cricket. The broadcasting rights are reportedly worth $1 billion over ten years for Sony and the eight teams in the league are worth an estimated $250 million. The league is so popular in India that many cinemas are forced to give up showing very popular Bollywood movies in order to meet the IPL demand.

The IPL and its shorter 20/20 version of the game are clearly not some passing fancy but a viable commercial concern.

With numbers like these is it any wonder that Google has sought out and closed a deal with the IPL. What Google knows and is demonstrating with this investment is that India is no longer some far off exotic backwater and cricket is not some obscure game with limited marketing potential. On contrary if the IPL by itself is any indication and now with this deal with Google ought to clearly show is that India and cricket are big business.

While the details of the deal are scanty it is expected that Google will stream live IPL games on YouTube when the tournament kicks off in March. Google will earn money from sponsorship and advertising.

By: Ainsley Brown

The safety of the people is not the supreme law

While terrorism, terror financing and constitutional principles such as the rule of law and Parliamentary supremacy are not the usual subjects covered here at Commercial Law International, this seeming break from tradition is in fact not such a stretch.

As our moniker indicates Commercial Awareness is Global – it is important to note and as will soon become clear, coverage of this case in no way departs from this.

This landmark ruling is instructive for the “normal” subjects covered on this blog because it illustrates the legal limits imposed on the state – read the government – as it pertains to its ability to interfere with the assets of an individual (natural or juridical). These limits are even justified, as their Lordships have ruled, when combating the scourge of international terrorism. As the Deputy President of the Court, Lord Hope of Craighead, put it: “Even in the face of the threat of international terrorism, the safety of the peoples is not the supreme law.” In other words the government of the day only has as much power as Parliament has allowed it to have; the will of Parliament being express of course in the laws its passes.

The offending powers struck down by their Lordships are the Terrorism (United Nations Measures) Order 2006 and the Al-Qaeda and Taleban (United Measures) Order 2006. The Orders were issued by the then Chancellor of the Exchequer and now Prime Minister Gordon Brown in response to United Nations (UN) Resolutions passed in response to the September 11th attracts. The Resolutions sought global co-operation on combating the financing of international terrorism.

Unlike in many other countries the United Kingdom under its UN obligations did not pass legislation in order to give effect to the Resolutions. Instead, the Chancellor issued these Orders, empowering Her Majesty’s Treasury (Treasury) to seize the assets of suspected terrorist, Al-Qaeda and or Taleban members or supporters. The seizures could take place on mere suspicion without an hearing and would not be under scrutiny of the courts through judicial review.

The case was the first to be heard in the newly minted Supreme Court when it opened last year. The appeal was brought by five men whom successfully argued their case in the High Court that the Orders were unfair and breached their fundamental right guaranteed by the laws of Britain; however, they were later over turned by the Court of Appeal.

The question before their Lordships though a simple one was non the less a profound one. And it was this when Parliament empowered the Treasury to make orders did it in turn give the Treasury the power to “interfere so profoundly with individuals fundamental rights without parliamentary scrutiny[?]”

With word such as “oppressive,” “paralysing” and “draconian” peppering the decision, their Lordships answered the question with a resounding NO!

In a nation such as Britain, with a “unwritten constitution” it must always be remembered that Parliament is supreme and it is only through Parliament that the government has the exercise power. Moreover, when such power involves the interference with an individual’s basic rights such authorization cannot be implied but must be explicit. In any democratic-capitalistic society access to the courts and property rights are sacrosanct. As Lord Phillips of Worth Matravers, the President of the court put it: “Access to the court to protect one’s rights is the foundation of the rule of law.” And without the rule of law there can be no liberal-democracy.

For those that would say that this ruling is just another example of judges legislating from the bench in breach of Parliamentary supremacy, Lord Philips has a stern rebuke. His Lordship countenanced with “on the contrary it upholds the supremacy of Parliament in deciding whether or not measures should be imposed that affect the fundamental rights of those in this country” without explicit grant by Parliament.

It is important to not that Supreme Court are not saying that these laws are in and of themselves illegal – not at all. However, what their Lordships are saying is that if the government of the day wants exercise such extensive powers they much first seek and then be granted Parliamentary approval. Lord Hope put it best: “If the Executive considers that such far-reaching measures are necessary or expedient for combating terrorism or honouring the United Kingdom’s international obligations it must obtain approval for them form Parliament.”

In response to the judgment the Gordon Brown’s is rushing through Parliament the Terrorism Asset-Freeze (Temporary) Provision Bill which is expected to have retrospective effect and by and large mirror the quashed Orders. If all goes to plan the Bill will become law some time this week.

By: Ainsley Brown

When it comes to the hype around a new product no body does it better than Apple. In fact you could even say that Apple has made the hype surrounding a new product a large part of its advertising and marketing campaign.

However, the key to such marketing is maintaining such levels of secrecy that would make the CIA proud. This same approach was taken with all its “i” products – the iPod, the iPhone and now the iPad. With the importance of secrecy such high levels of secrecy it’s only a matter of time before the lawyers get involved.

And yes, they did get involved.

In the lead up the release of the iPad this week, Apple’s lawyers Orrick, Herrington & Sutcliffe LLP sent out a stern warning letter to a website that offered a cash bounty to any one that could produce pictures of the then unnamed iPad. The Silicon Valley gossip website, Valleywag received the warning after it offered $10,000 for a photo, $20,000 for a video and $50,000 for a video with Apple co-founder/CEO Steve Jobs holding the iPad.

Now if this was simply a joke by Valleywag, and I don’t know if it was or wasn’t, Apple and their lawyers certainly weren’t laughing. In the letter to Valleywag, Orrick, Herrington & Sutcliffe warned: “While Apple values and appreciate vibrant public commentary about its products, we believe you and your company crossed the line by offering a bounty for the theft of Apple’s trade secrets. Such an offer is illegal and Apple insists that you immediately discontinue the Scavenger Hunt.”

There is no word of if Valleywag was moved by the warning but it is important to note that the iPad was released without incident to the joy of Apple.