EALG BRIEFING MAY 2005 VOL. 2 NO. 2
EALG BRIEFING MAY 2005 VOL. 2 NO. 2 A SUMMARY OF RECENT LEGAL
DEVELOPMENTS IN EUROPE AND THE UNITED STATES
IN THIS ISSUE:
ABOUT THE EURO-AMERICAN LAWYERS GROUP (EALG) BELGIUM A law of 27 December 2004 has amended the Belgian Companies Code, introducing a substantial simplification in the convening procedure for the shareholders’ meeting (published in the Belgian Official Gazette on 31 December 2004). In the past, the convening notice for holders of bearer shares in a company limited by shares had to be published once in the Belgian Official Gazette and twice in the national and regional press. As from January 10, 2005, the convening notice for an annual shareholders’ meeting held in the commune, on the day, at the place and on the time given in the incorporation deed, with an agenda limited to the approval of the annual accounts, must only be published once in the Belgian Official Gazette. The convening notice for the other shareholders’ meetings must only be published in the Belgian Official Gazette and once in the national press. Furthermore the new articles 268 and 533 of the Companies Code introduce the possibility of waiving the obligation to convene the shareholders’ meeting by registered letter. The principle that the holders of registered shares, directors and any other participants to the shareholders’ meeting must be convened by registered letter remains unchanged. However the law now explicitly provides that the addressees of a convening notice can accept to receive such notice through another form of communication (e.g. fax, e-mail, website, etc.). Each addressee must agree individually, expressly and in writing with this procedure. For further details, please contact Robbie Tas, Partner, robbie.tas@maxius.be, or Sarah Van Haute, sarah.vanhaute@maxius.be, Maxius, Louvain, Belgium; http://www.maxius.be
Patricia Hewitt, Secretary of State for Trade and Industry, launched the White Paper “Company Law Reform” on 17 March 2005. The publication of the White Paper follows extensive consultation, and in particular builds upon the Department for Trade and Industry’s 2002 White Paper “Modernising Company Law.” The White Paper is aimed at “making company law better fitted to today’s realities”. The DTI believes that the proposed measures will be beneficial to UK companies, and in particular small to medium sized enterprises. Indeed, one of the central themes of the White Paper is the “think small first” approach, which recognises that the vast majority of the UK’s companies are small to medium sized and that legislation should be tailored to the needs of such businesses in the first instance. Some of the principal proposed measures are as follows:
For further details, please contact Alasdair Peacock, Partner, Biggart Baillie, Edinburgh, Scotland, apeacock@biggartbaillie.co.uk;http://www.biggartbaillie.co.uk UNITED KINGDOM - SCOTLAND The Home Secretary, Charles Clarke, published a draft Bill on Corporate Manslaughter on 23 March 2005. The Bill is aimed at updating existing laws on corporate killing in England and Wales. The Scottish Executive is currently considering whether to adopt a similar law. It is proposed that the new criminal offence of corporate manslaughter will apply when an individual is killed due to the fact that the senior management of a corporation has grossly failed to take reasonable care for the safety of employees or others. The main thrust of the Bill is to address the problem under existing law that a single individual at the very top of an organisation must be shown to be personally guilty for manslaughter before the company can be prosecuted. However, the (new) law will not create criminal liability on the part of individual directors. Corporate manslaughter is to be an offence committed by a company and as a result will carry a penalty of unlimited fines rather than criminal liability. The Home Office has stressed that the Bill will impose no further compliance burdens on companies which already operate in compliance with health and safety legislation. The Bill has been welcomed by the Trade Union Congress and the worker’s union Amicus, who estimate that an average of five people are killed every week though preventable workplace accidents. However, the Bill has been less well received by business bodies. The Institute of Directors welcomed the Bill, but is concerned that it does not currently cover unincorporated bodies, such as partnerships. The Confederation of Business Industry has expressed the view that the Bill “has some way to go if it is to be fair to companies”. For further details, please contact David Stevenson, Partner, Biggart Baillie, Glasgow, Scotland, dstevenson@biggartbaillie.co.uk;http://www.biggartbaillie.co.uk UNITED KINGDOM - SCOTLAND Under current Scottish planning law, if a local authority takes the decision to refuse an application for planning permission, the applicant has the right to appeal that decision to the Scottish Ministers. At present, there is no similar right granted to objectors to appeal the grant of a planning permission. As part of its ongoing review of the Scottish planning system, the Scottish Executive consulted on allowing third parties such a right. However, a leaked memo written by Communities Minister Malcolm Chisholm suggests that although the Scottish Executive are considering radically changing the planning laws, he has concluded that “it would be unwise to pursue a third party appeal”. This has angered environmental body Friends of the Earth, who claim that if the Executive were to shelve the plans to allow third appeals, they would be acting in the face of huge public support during the consultation. For further details, please contact Dr Martin Sales, Partner, Biggart Baillie, Edinburgh, Scotland, msales@biggartbaillie.co.uk; http://www.biggartbaillie.co.uk
In publishing the Licensing (Scotland) Bill on 1 March 2005, the Scottish Executive has announced the first major review of liquor licensing laws in 30 years. The review has been welcomed, particularly due to the complexity of current legislation, being the Licensing (Scotland) Act 1976. The principal changes introduced by the Bill are to:
It is considered likely that the new system will be more costly, however it has been suggested that significant administrative savings will arise as a result of the more streamlined system. For further details, please contact Alison Grant, Partner, Biggart Baillie, Glasgow, Scotland, agrant@biggartbaillie.co.uk; http://www.biggartbaillie.co.uk UNITED STATES Federal anti-trust legislation commonly referred to as the “Hart-Scott-Rodino” Act requires entities that are parties to certain types of mergers or acquisitions to notify federal enforcement agencies prior to consummating a proposed transaction. In addition to filing such a notice, a waiting period and a substantial filing fee are imposed before the transaction may proceed. Recently new rules have been adopted to: (i) increase the financial thresholds which mandate notification of a proposed transaction; and (ii) require notification previously not required by unincorporated entities such as general partnerships, limited partnerships, limited liability partnerships, limited liability companies, cooperatives and certain business trusts. These new rules became effective on April 7, 2005. For additional details, please read a more detailed article on the EALG website, http://www.ealg.com/news-info.htm or contact Marshall N. Lester, Partner, Warshaw, Burstein, Cohen, Schlesinger & Kuh, LLP, New York, New York; mlester@wbcsk.com ; http://www.wbcsk.com UNITED STATES The United States Supreme Court has issued a decision on the protection of retirement accounts from bankruptcy creditors. It is good news for the owners of those accounts. The Court has ruled that individual retirement accounts like pensions can not be reached by bankruptcy creditors. This settles an issue that has been a continuing battle in the lower courts and the subject of conflicting opinions. The particular case here involved money invested in Individual Retirement Accounts (IRAs) by a husband and wife who filed a Chapter 7 Bankruptcy Petition. The bankruptcy trustee attempted to seize the funds for creditors on the theory that the debtors had unlimited access to the IRA funds even if they had to pay a penalty for early withdrawal. The Supreme Court said that its decision disallowing seizure by the trustee allows workers to preserve retirement savings when their circumstances force them into bankruptcy. For additional details, contact Ronald N. Cobert, Partner, Grove, Jaskiewicz and Cobert, Washington, D.C.; rcobert@gjcobert.com; http://www.gjcobert.com. UNITED STATES The United States Supreme Court has issued a ruling that opens the door for more age bias lawsuits. This decision will not make employers sleep easier at night knowing that plaintiffs can now file "disparate impact" cases under the federal Age Discrimination in Employment Act ("ADEA"). A "disparate impact" claim addresses employer acts that appear neutral on the surface but result in discriminatory impact to a protected class. For example if an employer had a height minimum which applied to all, such a limitation could discriminate against shorter people and women may fall into that category. For a "disparate impact" claim to fly in the courts it is not essential for the plaintiff to prove that the employer had an underlying purpose or ill will. This decision by the Supreme Court will certainly encourage more age discrimination law suits under the ADEA. However, once in court the road for the plaintiff may hit a stumbling block since one provision in ADEA allows employers to engage in otherwise prohibited conduct if their reasons for the conduct are based on reasonable factors other than age. For additional details, contact Ronald N. Cobert,
Partner, Grove, Jaskiewicz and Cobert, Washington, D.C.; rcobert@gjcobert.com;http://www.gjcobert.com.
UNITED STATES The U. S. Supreme Court just heard arguments in the Grokster and Aimster cases. The defendants’ software allows internet users to share with each other copyrighted content such as music. The owners of the copyrights argue that the software providers are enablers of copyright infringement and are liable under a “secondary infringement” theory, even though they do not directly infringe. In order to establish secondary infringement, the following factors must be present: (1) there is direct copyright infringement occurring or possible by the customers; (2) there is no actual or possible significant non-infringing uses for the software; (3) the defendants know or should know of infringing use by their customers; and (4) the defendants take no steps to prevent infringement. While these cases have been wending their way through the appellate courts, trial courts are being asked to extend the Grokster secondary liability theory, even when none of the other Grokster elements are present, to right of publicity law. If that happens, providers of names, voices and likenesses over the internet would be liable as secondary infringers if their customers make, or can make, unlicensed commercial use of those rights. A decision in Grokster is expected by August of this year. The Supreme Court’s opinion will reflect the balance between copyright holders, on the one hand, and internet consumers of music, films and other content, on the other hand. For further details, please contact Bela G. Lugosi, O’Brien Zarian LLP, Los Angeles, California; blugosi@obrienzarian.com; http://www.obrienzarian.com.
The U.S. Supreme Court recently issued an important ruling in what has come to be known as the "wine case." In recent years, 24 of the 50 states (including Michigan and New York) have adopted regulations allowing in-state, but not out-of-state, wineries to make "direct sales" to consumers. In the states that passed these regulations, wineries from outside the state were required to sell through "wholesalers" (who might not be interested in distributing boutique wines with limited demand) or, in some cases, to open a branch office and warehouse within the state (driving up costs). In Granholm v. Heald (May 16, 2005), the Supreme Court ruled that these regulations violate the federal constitution because they discriminate against out-of-state businesses in favor of in-state businesses, and because they deprive citizens of their right to have access to the markets of other states on equal terms. According to the Court, the states involved did not provide evidence that the purchase of wine by minors over the Internet was a problem, and, in any event, any such problem could be addressed by "less restrictive" means, such as requiring an adult signature on delivery. The Supreme Court's opinion reflects the balance that must be struck between state and federal laws in the United States. The opinion has been viewed as a victory for the Internet and free trade -- as well as wine lovers around the country. For further details, please contact John N. Zarian, O'Brien Zarian LLP, Los Angeles, California; jzarian@obrienzarian.com; http://www.obrienzarian.com. The Euro-American Lawyers Group (EALG) is an association of Law Firms founded in 1985. The members of the EALG believe that they can best serve their clients' interests overseas by co-operating with like-minded firms who have local knowledge of, and immediate access to, the legal system operating in their own jurisdiction. EALG's philosophy is that local representation is vital in today's dynamic market where both legislation and commercial practice is changing regularly at both the national and international levels. The EALG has steadily developed since its inception in 1985. It now comprises twenty seven (27) law firms working in 20 different jurisdictions. Each member has their own network of local contacts. With member firms throughout Europe, the United States, and Asia, the EALG provides excellent communications to many of the important commercial centres of the world and access to hundreds of lawyers. For further information about the EALG and its member law firms, please visit our website at http://www.ealg.com. back to topEALG BRIEFING is a free monthly e-mail publication of the Euro-American Lawyers Group (EALG) and is distributed by EALG member law firms. The articles contained in EALG BRIEFING are a brief overview of recent legal developments in Europe and the United States. The articles do not constitute legal opinions or advice and should not be regarded or relied upon as such. By using this publication you agree to the Terms and Conditions of the EALG, which may be viewed on our website at http://www.ealg.com. If you have colleagues who may wish to subscribe to EALG BRIEFING, please feel free to pass along this e-mail to them. To subscribe and be placed on our distribution list, they may send an e-mail to adanas@gjcobert.com or to the EALG contact in their jurisdiction. To unsubscribe, please send an e-mail to the same address(es). |
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