28 May 2012
They save companies millions while setting sector precedents, but who will walk away with The Lawyer’s Competition/Regulatory Team of the Year Award? Sam Chadderton examines the shortlist
The UK competition landscape is shifting. The Office of Fair Trading (OFT) has been defeated time and again by specialised competition lawyers. It is to merge with the Competition Commission (CC), with the aim of creating a strengthened market investigation process. But there is a chance that its reinvention as the Competition and Markets Authority, with its axed dishonesty element, could lead to even more appeals and embarrassing climbdowns.
Several of the entries in the competition and regulatory sector of The Lawyer Awards 2012 focus on dust-ups with the embattled watchdog, its second-phase sibling the CC and other foreign jurisdiction regulators.
Fiends for detail
To compare the resources of the OFT with the financial clout of some of the mergers it deals with could be to portray the authority as the heroic underdog, struggling to protect the vulnerable market system as dastardly corporate giants try to take over the world. But that would do an injustice to the devilment of detail these meticulous lawyers have shown in some hugely significant deals.
Other heavyweight entries have broken new ground, sticking their firms’ flags in previously unregulated sectors while working with nothing more than an urgent remit and a bundle of negative press headlines.
The field for the 2012 Competition/Regulatory Team of the Year title is wide open, such is the strength of the category and the fascinating variety of industries that need expert, niche legal advice. This year’s category includes entries of cases from ferry routes and sportswear to oil and education.
Fluctuating economic fortunes around the globe are dictating that some industries are contracting while others are expanding. Companies are either merging to secure their future or swallowing up competitors to dominate the market. Either way, these competition teams are worth their weight in gold.
Ashurst (and others) for the Imperial Tobacco appeal To butcher Rudyard Kipling’s famous poem, Ashurst partners Euan Burrows and Nigel Parr kept their heads while all about them people were losing theirs – and being fined to the tune of £225m.
When an eight-year investigation accused the cigarette industry of mass price-fixing, tobacco company Gallaher and retailers Sainsbury’s, Somerfield, T&S Stores, First Quench and TM Retail threw in their cards, crying ‘cartel’ for a reduced penalty, while pointing accusing fingers at rivals.
Not so Imperial Tobacco and Ashurst, which led the against-the-odds appeal along with partners Laura Claydon of Burges Salmon (Co-op), Suyong Kim of Hogan Lovells (Morrisons and Safeway), Mark Jones and Peter Scott of Norton Rose (Asda), and Richard Pike of Baker & McKenzie (Shell).
The OFT claimed to have evidence of anticompetitive communications between companies to offer price discounts linked to rival brands. But in the largest ever UK Competition Appeal Tribunal (CAT) case, a scheduled 10-week hearing collapsed in humiliation for the OFT, which was chastised for failures of fact in its high-profile, doomed case.
Allen & Overy for the Seagate buyout of Samsung
Speed of thought and deed singles out this complex tech acquisition. It seems unlikely that Allen & Overy (A&O) London partners Philip Mansfield and Simon Pritchard will get a Christmas card from Western Digital this year, as that company’s similar hard-disk deal was bumped off the European Commission’s ‘to-do’ list at the last moment.
The masterpiece of opportun-istic legal brinkmanship saved Seagate hundreds of millions of pounds and two years of deal-making with regulators after Mansfield, Pritchard and their team’s nifty application of the Commission’s priority notification rule, with just a 24-hour margin.
Neither should the A&O team expect congratulations from O’Melveny & Myers if they win, as it lost the Western Digital work to Cleary Gottlieb Steen & Hamilton due to Mansfield and Pritchard’s scoop.
Baker & McKenzie for Trade-Stomil
Good old-fashioned lawyering broke the back of the overpriced synthetic rubber case brought against Trade-Stomil by the European Commission.
The Commission’s key witness placed all alleged cartel participants in a Frankfurt bar, fixing prices. With €519m (£420m) in aggregate Commission fines handed down, previous counsel dropped and the company staring into the abyss, in swept Bakers Brussels partners Bill Batchelor and Fiona Carlin.
Forensic examination of the minutiae of the evidence revealed a car parking stub that undermined the original decision. The case was thrown out and the fines annulled.
Berwin Leighton Paisner for Sports Direct
When JJB Sports called in the regulators about rival Sports Direct (SDI), there was already a history of replica-kit antagonism between them. In addition, SDI’s purchase of 31 JJB stores had been referred to the CC by the OFT in August 2009 for in-depth investigation. At that point SDI turned from Freshfields Bruckhaus Deringer to Berwin Leighton Paisner (BLP) for assistance.
A few weeks later, when the OFT and SFO dawn-raided SDI’s HQ, BLP’s team, led by partners David Harrison and Adrian Magnus, found itself working on an unprecedented three investigations at once.
But after successfully challenging the CC in the CAT, BLP helped Mike Ashley’s company win unconditional clearance from the CC, then see off the OFT and SFO investigations, with no findings of infringement by Sports Direct or any of its personnel.
Bevan Brittan for the SRA on the Halliwells administration
The collapse of Halliwells sent shockwaves through the legal industry. But the role of Bevan Brittan’s commercial litigation head Iain Millar in breaking new legal ground was not known until The Lawyer broke the story in May 2011.
Under intense scrutiny and facing a barrage of unprecedented questions relating to liability, administration and client protection, the SRA turned to Bevan Brittan.
Millar’s meticulous solutions protected the reputation of the profession and will form a template next time an LLP ‘does a Halliwells’.
Shearman & Sterling for advice to the UAE financial services industry
If the time ever comes that the Government decides to rip up the law governing financial services and start from scratch, it could do worse than turn to Barney Reynolds.
The head of the global financial institutions advisory and financial regulatory group at Shearman & Sterling and his international colleagues are shortlisted for their work on drafting a framework for – and offering policy advice to – UAE leaders.
Taking ‘insight and expertise’ from the world’s leading financial jurisdictions may well give rise to some wisecracks in the present climate, but putting in place primary statutes in countries with such limited resources in terms of qualified personnel is not to be underestimated. And like any ambitious Gulf state, the clients wanted it done quickly.
Shearman & Sterling lawyers have enabled an entire economy to diversify away from relying on oil and move towards becoming a global financial centre.
Wragge & Co for Ofqual
In 2010 and 2011 the headlines for the UK’s largest examining board, AQA, were horrific.
Huge marking errors formed the background to an inquiry by newly established regulator Ofqual (the Office of Qualifications and Examinations Regulation). Its report concluded that there was an urgent need for qualifications to become a
risk-based regulatory industry and move away from the hand-holding, resource-heavy current system.
Wragge & Co public law and regulation partner John Cooper and his team took a statutory regime covering more than 170 awarding bodies written on one side of A4 paper to a comprehensive legal manual that will enable Ofqual to impose fines and sanctions, and encourage bodies to be self-policing.
Exams are always a contentious topic, but thanks to some highly specialist regulatory work under intense scrutiny, the industry will at least be properly governed.