Topical legal current affairs - March 2024

Each month, Jake Schogger (ex-Magic Circle lawyer and founder of City Career Series) and Peter Watson (ex-stock broker, head hunter and founder of Watson's Daily) host a free webinar summarising the key current affairs and trends from the previous month, including insights from a business, markets and legal perspective.??The below articles are based on Jake's contributions during the March 2024 current affairs webinar.

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March 2024 legal current affairs

This newsletter covers topical legal current affairs from March 2024, including the legal issues around posting a video of yourself resigning on social media, Shein's avoidance of UK import duties, the law regarding state subsidies, and hedge fund concerns around new rules in India.

Please note that these articles do not constitute legal advice and should not be relied upon. They simply reflect the author's research and opinion.

It seems that there is a rising trend of Gen-Z workers participating in the “QuitTok” trend where they film themselves being made redundant and then upload it to social media apps like TikTok. HOW LEGAL IS THIS AT THE MOMENT? WHAT COULD COMPANIES DO TO YOU IF YOU DID THIS??

There are various considerations here.

In the UK, if an employment contract or employee handbook explicitly precludes an employee from, for example, recording meetings or discussions with colleagues without those colleagues’ consent, or recording inside the office more generally, the employee would be in breach of contract if they did so.

Even if recording in the office is not explicitly mentioned, it could potentially be caught by broader contractual obligations around confidentiality.

Individuals are also protected from being filmed without consent by data protection law, given that a video recording of somebody would include that person’s personal information (i.e. information by which that person can be personally identified), provided that the limited exceptions under the Data Protection Act 2018 and UK General Data Protection Regulation do not apply.

Note that even if a video only captured a colleague’s voice, this would likely still constitute personal information (assuming the voice hasn’t been distorted beyond all recognition).

Human rights law may also be relevant, as this contains a general right to privacy.

So in short, there’s a good chance that secretly filming discussions with colleagues may well breach both contractual obligations and legislation, whilst also potentially seriously burning bridges with your ex-employer and at least some of its employees. I’m also not sure it would look great to potential future employers if they come across it, so be careful!

To access our links to sources / further reading recommendations, check out the blog post version of this article.

Some of Britain’s biggest retailers lobbied ministers about Shein’s alleged used of tax loopholes to dodge customs bills, pushing back on Hunt’s recent efforts to tempt Shein to list on the LSE. WHAT ARE THESE LOOPHOLES AND HOW CAN SHEIN USE THEM AND NOT OTHERS?

The main loophole that is being discussed in the press centres on an import “de minimis” rule, which states that import duties need not be paid in respect of goods shipped from certain countries, provided that each shipment of goods is worth less than ￡135.?

Shein ships individual orders to consumers from countries (including China) to which this rule applies, meaning it is essentially exploiting the de minimis rule to bypass import duties. Of course, Shein claims that it ships directly because this is more operationally efficient, suggesting the tax benefit is a happy ancillary consequence.

However, high profile business people, including Theo Paphitis and Lord Wolfson have been very vocal regarding their concerns that practices such as Shein’s create an uneven playing field with businesses that cannot exploit the rule.

To access our links to sources / further reading recommendations, check out the blog post version of this article.

The US and Europe are both looking into whether the Chinese government has unfairly given their companies advantage with state subsidies that help Chinese companies to undercut their foreign counterparts. WHAT ARE THE SUBSIDY RULES IN THE UK, AND WHAT GIVES OTHER NATIONS THE RIGHT TO QUESTION UK SUBSIDIES?

A subsidy is essentially:

• The provision of direct or indirect financial assistance, out of public resources, by a public authority;
• Which confers an economic advantage on one or a selection of specific enterprises; and
• Which is capable of having a genuine impact on competition or investment in the UK, or on international trade or investment.

At the national level in the UK, the Subsidy Control Act provides a framework that governs the circumstances under which UK public authorities are allowed to grant subsidies to businesses and other organisations.

The aim of the act is to strike a balance between driving economic growth, minimising distortion to UK competition, and protecting international obligations regarding subsidies. Note that there are specific exemptions where public authorities don’t need to comply with some or all of the requirements under the act, for example where the value of a particular subsidy is low (currently up to ￡315,000).

At the international level, the UK is also bound by subsidy-related restrictions via its agreements with the World Trade Organisation, the UK-EU Trade and Cooperation Agreement, and the UK’s other free trade agreements.

These agreements set out specific requirements that must be met if the parties to the agreements wish to grant subsidies to businesses in their jurisdictions.?In general, certain categories of subsidy are more likely to result in concerns, including:

• High value subsidies;
• Subsidies granted to organisations operating in historically sensitive sectors (such as steel, automotive and aerospace);
• Subsidies to domestic enterprises that usually compete with companies operating in other parties’ jurisdictions; and
• Subsidies that are likely to impact the sales volumes, prices or profits of international producers of similar goods, both in the UK and in foreign markets.

Note that China is a member of the World Trade Organisation, so is bound by the same rules as other members. However, the EU has complained extensively about China allegedly breaching WTO rules regarding trade. China has also raised its own complaints about the US also allegedly breaching WTO rules, including on the basis that the US had previously incorrectly relied on a national security exception. It’s all very complicated!

To access our links to sources / further reading recommendations, check out the blog post version of this article.

Hedge funds are threatening to pull investments from India due to new rules from the regulator that will force them to “out” their underlying investors. The new rules were probably designed to prevent further Hindenburg-like shorting attacks on Indian companies. WHAT ARE THOSE RULES? HOW WILL THIS AFFECT HEDGE FUNDS?

According to the FT, the Indian markets regulator has set out new rules that require foreign investors with more than $3 billion of assets (including hedge funds) that bet on Indian stocks to reveal granular details of all end investors who stand to benefit from investments in such Indian stocks.

The rules are designed to unmask foreign investors, as part of the regulator’s desire to better understand the investors that are ultimately buying stocks in Indian companies.

Hedge funds claim that these rules create “severe practical difficulties”, which I’m guessing is referring in part to the administrative hurdle involved in trying to identify the ultimate end investors. I’m also assuming part of the real problem relates to the desire of hedge funds and their clients to maintain some level of privacy.

Note that the rules are subject to certain exemptions, including exemptions that mean banks which do business with hedge funds will not necessarily need to disclose details of their own investors.

To access our links to sources / further reading recommendations, check out the blog post version of this article.

Peter Watson helped to deliver Commercial Law Academy's Discussing current affairs and industry trends course, which offers in-depth advice on how to research into and confidently discuss current affairs, including how to select which news stories to focus on, what to consider when reading the news, and how to structure your discussions in interviews.

The course also includes recordings of our monthly current affairs wrap-ups from Jan 2021 to present, an overview of legal industry trends and challenges, and an insight into how legal technology is changing the legal landscape. This is just one of our SEVEN courses covering different aspects of commercial awareness.

As a reminder, Commercial Law Academy offers 22 in-depth courses, covering: insights into legal careers, firm profiles and interview insights, expert advice on writing applications and tackling psychometric tests, dozens of example (verified) successful cover letters and applications, resources to help you prepare for interviews and internships, example interview case studies, practical content to help you understand and confidently discuss commercial concepts and current affairs, plus tips on how to network, negotiate, deliver presentations and write professionally. Check out this animated explainer video for more information.