The Lawyer Awards 2016: transactional teams

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Slaughter and May
Competition team of the year

 Competition Team of the Year_Slaughter and May_2016_169

The award-winning Slaughter and May competition team won an advisory spot last year on a groundbreaking appeal in the electricity and gas sector. The firm advised Northern Powergrid as it lodged an appeal to the Competition and Markets Authority (CMA) against Ofgem’s decision to modify the electricity distribution licences of 10 distribution network operators (DNOs) and include revenue allowances for each.

“It was the first appeal under the new regime and the price controls were the first to be set under a new regulatory model in the electricity and gas sector,” says lead partner Isabel Taylor. “It was a genuinely new process and there was uncertainty on how it would work.”

Being the first appeal of its kind meant that there was no precedent to go on for Slaughters’ team, which made it “difficult to be the protagonist”, adds Taylor. The original appeal document was particularly challenging to put together and Slaughters was required to work under a new regime that prescribed a much more focused and contentious process than ever before.

Screen Shot 2016-07-15 at 14.41.01Taylor was assisted by Slaughters’ special adviser Christopher Wright, as well as a team of three associates and Monckton Chambers’ barristers Daniel Beard QC, Alison Berridge and Alistair Lindsay. Monckton Chambers commends Slaughters’ work, with Lindsay explaining that the real challenge was “persuading the appeal body that the regulator had made a mistake, despite going through thousands of documents”.

Alongside Monckton, Slaughters worked to find a solution to the problem and successfully argued that Ofgem had imposed unjustified costs disallowance on the industry, claiming its decision was not supported by adequate evidence. The CMA agreed, opting to quash Ofgem’s ruling there and then, rather than referring it back to the regulator itself.

Taylor believes “things are not going to be the same again in the price control space” as a result of the Northern Powergrid case, with the issues being of broader application.

The CMA decided to put a revised price control in place to correct Ofgem’s error, with Northern Powergrid securing a £31.5m increase in its allowed total expenditure over the price control period. As if that wasn’t enough, Northern Powergrid’s revenue allowances will also be increased by £11m between 2015 and 2023.

“Slaughter and May is a worthy winner,” says Monckton Chambers’ Lindsay. “Most law firms are great when things go swimmingly, but less so if things go wrong. In a big case, things always go wrong, yet Slaughters was cool and pragmatic. It was good at keeping the team together and it worked well under pressure.”

Working on the first case of its kind was a challenge for the Slaughter and May team. But their success has given them a privileged insight into the energy industry as it strives to come to terms with the new rules.

Innovation

The appeals were groundbreaking because they were the first price controls in the electricity and gas sectors to be set under a new regulatory regime. This meant Slaughters had to come up with a variety of innovative solutions, with the firm setting the bar in terms of evidence required and what could succeed on appeal.

Slaughters worked alongside economic consultants from Frontier Economics and counsel Monckton Chambers, which has teamed up with the firm on a number of cartel and mergers and acquisitions decisions in the past. Slaughters does not have billing targets or hours targets for its fee-earners, meaning it was able to advise Northern Powergrid in the most cost effective way.

History of the client relationship

Slaughter and May was instructed to represent new client Northern Powergrid in these proceedings following a pitch process toward the end of 2014. In March, the company lodged an appeal with the CMA against Ofgem’s decision.

Judges’ comments

The judges say Slaughters showed a “great range of work” across the whole range of anti-trust, mergers, litigation and regulation. They argue
that the team clearly has a “fantastic practice and client-base”, working on “significant cases that are leading the way” in the industry.

In the past year, it has taken on cases for Booking.com and Ball Corporation, as well as British Airways. Slaughters has been working with the latter in relation to the European Commission’s investigation into alleged cartel activity, which one judge said was “the most important piece of competition litigation in the courts at present”.

Another judge says Slaughters “was one of the most impressive submissions of all”, demonstrating a “great range of work” across the piece.

Freshfields Bruckhaus Deringer
Corporate team of the year

 Corporate Team of the Year_Freshfields_2016_145

Advising on the largest-ever acquisition of a London-listed company is no mean feat. Award-winner Freshfields Bruckhaus Deringer pulled out all the stops to ensure that Anheuser-Busch InBev’s (AB InBev) £71bn takeover of SABMiller got over the finish line.

A total of 190 lawyers from the firm worked on the transaction, with corporate partners Mark Rawlinson, Simon Marchant, Vincent Macq and Alison Smith leading from London for acquirer AB InBev.

The magic circle firm is one of a number of big hitters advising on the deal, working alongside Sullivan & Cromwell and opposite SABMiller’s lawyers, Linklaters and Hogan Lovells. As AB InBev’s adviser, Freshfields Bruckhaus Deringer played a pivotal role in moving the transaction forward – not only advising on the terms of the deal itself but battling against tough regulatory conditions around the world.

Screen Shot 2016-07-15 at 14.42.15“It’s the most complex deal I’ve ever done and we’re continuing to work with the team at AB InBev across a number of jurisdictions to get the transaction across the line,” says Marchant. “The Shell deal [with BG Group] was a little more straightforward from a structuring point of view as it was a UK to UK deal.”

Owing to the international aspect of the transaction, Freshfields has been working on remedies to assist the rigorous regulatory process, which has added another layer of complexity to the deal. “It’s a major transaction for the drinks industry,” adds Rawlinson, “and it’s been pretty complex from the anti-trust perspective.”

The anti-trust aspect has involved more than 30 filings around the world, with Freshfields already helping AB InBev to obtain clearance in Australia and the EU. The parties are now well into the process in the US, another significant part of the deal being the sale and divestment of businesses across the world – all of which are significant transactions in their own right.

“It is always challenging to do divestments as part of a bigger merger and acquisition deal,” says Marchant. “They are in a sense completely different work streams, but clearly are tied into the overall transaction. So there is great inter-dependence and pressure to get things done.”

These deals include AB InBev’s $12bn (£8.21bn) disposal of SABMiller’s interest in MillerCoors, as well as its €2.5bn (£1.7bn) sale of the Peroni, Grolsch and Meantime brands. There has also been the $1.6bn (£1.1bn) disposal of SABMiller’s stake in China Resources Snow – all undertaken in the past 12 months.

As one of the biggest deals of the year, AB InBev’s tie-up with SABMiller has courted much publicity, with Freshfields’ corporate team having to conduct their activities against an intense media backdrop. But instead of shying away from the task, Freshfields has seemingly been spurred on by the high-profile nature of the deal as well as scrutiny put upon it.

Innovation

Marchant and Rawlinson agree this transaction has been by far the most complex they have ever worked on. AB InBev wanted to retain a Belgian holding company for the enlarged group and so a three-step process was structured including a UK scheme of arrangement, Belgian law cash tender offer and Belgian law reverse domestic merger.

The steps effectively comprised three separate transactions rolled into one and required significant engagement with the UK Takeover Panel and Belgian markets regulator. The transaction also involved the largest-ever acquisition financing, with debt facilities of $75bn, which was negotiated carefully in line with SABMiller’s two largest shareholders.

History of the client relationship

Freshfields has been engaged as AB InBev’s strategic mergers and acquisitions and regulatory adviser for several years. It has represented the company on a variety of transactions in the past, including the $20bn acquisition of Grupo Modelo and $5.8bn purchase of Malt Holding.

“We always knew a merger with SAB could be a possibility,” says Marchant, who has been involved from the outset to prepare the company for such a deal. When AB InBev finally decided the time was right last year, its long-standing adviser Freshfields was ready and waiting.

Judges’ comments

The Lawyer Awards’ judges praise this award entry for its “size, scope and impact on the world economy and sector”. The transaction has attracted worldwide media attention, but the team has not buckled under the pressure “expertly handling the largest-ever London acquisition”.

“Few law firms could pull off such a huge instruction and manage all elements as effectively, from the detail to the strategic guidance. Given its sensitivity, the reach, the follow-on transactions and the size of the team, this gets top marks for me as a stand-out deal,” one judge comments.

“It’s an incredible transaction, testing the team to their limits,” another says.

Ashfords
Employment team of the year

Employment Team of the Year_Ashfords_2016_113

South West firm Ashfords’ employment team won a landmark victory after representing a senior doctor and NHS whistle-blower who was unfairly discriminated against and dismissed while in hospital.

Senior cardiologist Dr Raj Mattu was suspended for five years by the University Hospitals of Coventry and Warwickshire NHS Trust five months after going public about practices that were endangering patients’ lives.

Mattu’s whistleblowing related to the hospital’s “five-in-four” policy, which was designed to cut costs by placing five beds in bays designed for only four. The initiative led to a 35-year-old patient dying after staff could not reach him with vital lifesaving equipment. Mattu also raised concerns about the transfer of Birmingham heart patients to Coventry, which led to the death of patients.

Screen Shot 2016-07-15 at 14.43.10After being barred from working for five years, his suspension was eventually lifted in 2007. However, it took him over a year to complete the retraining needed to allow him to work again.

But Mattu’s problems did not end there. In 2009, after a prolonged investigation, the General Medical Council dismissed over 200 allegations of bullying the trust had made against him. The trust insisted on downgrading his level of training, which meant that he would not be able to return to the position he previously held.

In 2010, Mattu took sick leave due to a pre-existing auto-immune disorder. While he was in hospital the trust conducted a disciplinary hearing and summarily dismissed him.

The work carried out by Stephen Moore, partner and head of Ashfords’ employment and human resources team, and solicitors Emily Felton and Jean Norton, highlighted the need for NHS whistle-blowers to be treated as victims rather than a problem. The team was also assisted by barristers Jack Mitchell, Joe England and Jane McNeil QC.

“This was quite a sad case, where a world-renowned cardiologist was taken away from offering patients his services because he was
suspended and he has never been retrained,” says Moore. “It’s patients that have lost out here and it’s an absolute shame.”

The case was the longest ever employment tribunal case and Ashfords’ dedicated service to their client ensured that Mattu won his case. He was awarded £1.22m in compensation this February.

Following the judgement, Mattu says: “I am relieved that I have won my case. I only hope that the NHS learns from my case and starts to listen to its doctors and nurses who raise concerns.”

Innovation

As a result of the attention the case has received and the diligent work carried out by Ashfords, Mattu has since liaised with the Government about the importance of transparency in public bodies and organisations such as the NHS.

Throughout the firm’s long-standing relationship with their client, Ashfords’ team supported Mattu through a full-service, value-added relationship programme going beyond the usual services a law firm is expected to provide.

Ashfords supported its client through a flexible fee structure. The case also received a mixture of funding through legal expenses insurance,
conditional fee agreements and finance raised by the client.

History of the client relationship

Ashfords has acted for Mattu for almost a decade, a relationship that precedes the case. Due to the sheer length and ever evolving complexity of the case the small Ashfords team had to maintain a high standard of organisation.

As the case developed each of the lawyers worked on specific areas, such as discrimination, unfair dismissal and whistle-blowing.

Judges comments

The judges praise the team at Ashfords for its ground-breaking work on the whistle-blowing case, which will have far-reaching implications
for the UK’s public-sector bodies and health organisations.

The judges describe the case as a “long slog” but highlight the “solid work” carried out by Ashfords’ employment team. While much of the intricate details have remained confidential, as they involve the client’s private life, the impact the case has had on a wide range of important issues meant that there was no other team as deserving of the award.

CMS
Energy team of the year

Energy Team of the Year_CMS_2016_567 

CMS advised UK Power Networks (UKPN), the UK’s largest distribution network operator group, on two appeals to the Competition and Markets Authority (CMA) against the framework that sets distribution network operators’ allowed revenues for the next eight years.

The appeals against the RIIO-ED1 price control brought by British Gas Trading and Northern Power Grid  were the first ever such appeals to the CMA. They were brought under new provisions of section 11 of the Electricity Act, which replaced the old Competition Commission process.

Energy partner Robert Lane led the CMS team, with help from competition partner Susan Hankey and a number of associates. Lane instructed Brick Court Chambers’ Richard Gordon QC, Tony Singla and Andrew McIntyre.

The result was that the CMA maintained the original Ofgem and distribution network operator-agreed price controls, with only one minor exception in each appeal.

“The wins were a tremendous result for our client, as they maintained regulatory certainty and cemented the hard work they had committed to developing their RIIO-ED1 price control over a two-year period,” CMS says.

Innovation

The UKPN motion was the first test of the new law on price control appeals. It involved interpreting what the law required and to apply it in practice, but also advising and shaping the whole process of a CMA appeal in these circumstances.

Screen Shot 2016-07-15 at 14.43.49The new legislation introduces different tests and criteria to be applied to those in use under the old legislation. Working to extremely tight deadlines, this information had to be analysed and positions argued in relation to what should happen.

CMS’s team was dealing with brand new, novel legal issues that had no direct precedent in the market and where the interpretation of the law would have a significant outcome.

CMS provided UKPN with a designated trainee, Tom Forman, who acted as the dedicated client contact for the company to assist with any process and status queries.

He worked with the programme manager to map the work streams, action lists and document versions on an online portal that allowed
CMS and UKPN to access them from the same platform.

Working together, the two co-ordinators managed the case progressions and a huge amount of documentation, helping to make the number of documents more manageable for all of those involved.

Client relationship and key deals

CMS was chosen to advise on the price control appeal because of its previous relationship with the company. UKPN is a long-standing client
of CMS and the firm has acted for the energy company on numerous issues, including its 2014 medium-term note programme and a refinancing of its GIB facilities.

According to CMS, it does not only act for the company on regulatory matters, but also advises on commercial and construction issues.

Aside from its work for UKPN, the CMS energy team has also worked on a high-impact regulatory framework for the Kingdom of Saudi Arabia Electricity and Co-Generation Regulatory Authority,  designing and developing a framework to govern the country’s system operator, transmission owner, principal buyer, distributor and generation companies. This involved revising existing laws and drafting new licences.

The team also advised the Mexican Ministry of Energy on the landmark reform of the electricity industry in Mexico, which entailed opening the market for the first time to the private sector.

Judges’ comments

CMS’s winning entry detailed an impressive lead case, as well as supporting cases involving Saudi Arabia, Mexico and other domestic deals.

One judge says: “This is a complex area of law, testing new regulations and tribunals for the first time. This team leveraged the strength of an existing relationship and used foresight to consider the appeals process in advance.

“This placed the firm at an exceptional advantage to act on this case for its client, in particular given the fact that this was a precedent-setting and high-profile case.”

Herbert Smith Freehills
Finance team of the year

Finance Team of the Year_Herbert Smith Freehills_2016_151

Last year Herbert Smith Freehills advised long-standing client Virgin Atlantic on its groundbreaking, £220m secured bond financing. The team faced the crucial challenge of how to raise debt finance against a highly regulated asset that is not capable of being owned.

The HSF team, led by finance partner Michael Poulton and regulatory partner Kim Dietzel, used the complexities involved in raising debt against Heathrow slots as an asset, rather than a disadvantage, during this transaction.

While US airlines have used access to airport gates as debt collateral for some time, this is the first time such an approach has been approved in Europe, where access is allocated by time slots rather than physical infrastructure.

Under European law, slots at Heathrow and many other European airports cannot be owned outright by airlines, which instead have to obtain the right to use the slots depending on the usage of the space and the compliance to complex
regulation. If they do not comply with these conditions, they may lose their entitlement to slots.

Screen Shot 2016-07-15 at 14.44.31According to HSF, the firm worked with Virgin Atlantic to “agree a pragmatic fee proposal which shared the risk and reward of a successful execution”. Key to keeping costs down was the firm’s provision of a number of secondees to help support the transaction.

The deal was a milestone for Virgin Atlantic, which returned to profit in 2014 following three years of losses, helped by its partnership with Delta Air Lines of the US, which owns a 49 per cent stake. Founder Richard Branson’s Virgin Group retains the rest.

The deal attracted participation from blue-chip investors including Pension Insurance Corporation, a client of Hastings Funds Management, Standard Life Investments and Edmond de Rothschild Asset Management.

Virgin Atlantic’s parent company is the third-largest slot holder at Heathrow. In the event of a default it could sell them to repay investors, reducing the risk that they would not get their money back.

Shai Weiss, chief financial officer at Virgin Atlantic, says of the deal: “This is an innovative financing arrangement. It represents not only a significant milestone for Virgin Atlantic as our maiden capital markets deal, but is also the first time an airline has successfully accessed the value of its London Heathrow slot portfolio in this way.”

Innovation

In structuring this highly innovative financing exercise, the company used a major proportion of its Heathrow landing and take-off slot portfolio  as security for the debt. It took over a year to develop the bespoke structure to access the slot portfolio’s value – something that other airlines had attempted and failed in the past.

The structure that was created allowed Virgin Atlantic to balance the significant tensions between providing security for investors, ensuring that it retained maximum operational flexibility and satisfying regulators in the UK and abroad with the oversight of the airline and the costs.

The key features of the structure include the creation of a ring-fenced special purpose vehicle airline within the Virgin Atlantic group with its own operations for UK licencing purposes; a trust structure over the slots in favour of the SPV airline; and a usage and collateral posting regime to ensure operational flexibility was retained while protecting investors.

History of the client relationship

Virgin Atlantic is a long-standing client of HSF – as is Virgin Group. The firm advises the company on a range of regulatory, corporate and finance matters. During the Virgin Atlantic deal, HSF needed to field an integrated team with great knowledge of the business, as well as structured finance and airline regulatory expertise.

On the corporate and regulatory side the firm recently led on the transatlantic joint venture with Delta Air Lines. Corporate partner Gareth
Roberts and airline regulatory and competition partner Kim Dietzel acted as the relationship partners for Virgin Atlantic and were both involved in the slots deal.

Judges’ comments

One judge describes the deal as “an industry first – innovation at its best. There was very positive client feedback on the quality of service provided.” Another adds: “This is my kind of submission; punchy, clear and showing innovation.”

King & Wood Mallesons
Funds team of the year

Funds Team of the Year_KING & WOOD MALLESONS_2016_115

King & Wood Mallesons’ (KWM) award-winning funds team of the year advised long-standing client, private equity partnership Palamon Capital Partners, on a general partner-led ‘stapled’ secondary transaction, which provided investors in two existing Palamon-owned funds with a liquidity option.

KWM partner Warren Allan led on the secondary transaction, and partner Ed Hall led on the primary fundraising.

The deal significantly boosted fundraising for Palamon’s latest fund by securing capital from new and existing investors, while also providing liquidity to investors in Palamon’s 1999 and 2006 funds and access to invest in both.

Buyers consisted of several new and existing investors, including Adam Street Partners, Goldman Sachs AIMS Private Equity Group, Morgan Stanley Alternative Investment Partners, Dutch pension fund service provider PGGM and the Rothschild Merchant Banking Group.

Screen Shot 2016-07-15 at 14.45.08“It was a deal in two parts,” says Hall. “We needed to do the transaction itself while also arranging the terms of the fund. You wouldn’t normally come across this sort of deal.

“It was essentially running two deals in parallel that were conditional upon each other. The biggest challenge was managing the different processes and making sure they were keeping up with each other to eventually close it.”

Allan adds: “It wasn’t a plain vanilla transaction. We didn’t simply have the seller wanting to market its interest in a fund to a number of purchasers.

“It was the general partner itself, together with the intermediaries and lawyers that put the deal together and structured a transaction that matches purchasers with sellers in a number of different existing funds.”

Innovation

The deal combined three separate transactions simultaneously, while also managing to align the interests of buyers, sellers and the GP to achieve a successful outcome. The three elements involved: the secondary transaction of interests in Palamon I and Palamon II; the first closing of Palamon IV using the stapled commitments of the buyers in the secondary transaction; and the merging of Palamon IV with the Palamon Auxiliary Partnership. The combination of these elements made the process more difficult, because a roadblock in one part of the transaction could have scuppered all three parts of the project.

“It was a win-win-win situation,” says Hall. “These sorts of transactions are very interesting to people at the moment because they can provide a beneficial outcome for all parties if done correctly, but equally they are complicated to manage and get right.”

The merging of Palamon IV with the Palamon Auxiliary Partnership gave the secondary buyers access to more existing deals, which made the overall transaction a more attractive proposition for them.

“Doing transactions like this adds to our experience,” says Allan. “These types of transactions are talked about, but they rarely get executed because of differences in matching up and conflicting interests.

“It’s also great for us to have worked on a transaction that was a success story for Palamon, and it has created a lot of interest from intermediaries trying to understand how it was done, in case it’s an option for them in the future.”

Because a portion of the amount was recoverable from transferring investor base, pricing had to be considered early on. KWM says it provided flexible but clear pricing for the firm’s advice.

The UK team also had to draft in expertise from across its international network, with Hall and Allan describing the involvement of KWM’s German and New York transactions teams as “absolutely critical”.

Pulling the deal off was a resounding group effort. Hall and Allan praised the work of managing associate Brendan Gallen, who worked on both sides of the transaction.

“Brendan worked extremely well to co-ordinate between the teams and pick up potential problems early,” says Hall.

History of the client relationship

Palamon has been a long-standing client for KWM, with a relationship dating back to 1998 as a legacy SJ Berwin client.

Judges’ comments

The Lawyer Awards’ judges describe the transaction as “risky” because one of the parts could have damaged the results of all three parts of the deal.

“This is an innovative transaction and the legal advisers were clearly key to ensuring that all three elements could come together successfully,” the judges say.

Pinsent Masons
Infrastructure team of the year

Infrastructure Projects Team of the Year_Pinsent Mason_2016_166

Pinsent Masons won the infrastructure team of the year award for its work advising Chinese investors on two projects: the $700m financing of the Thar Block II coal mine and the $821m financing of a power plant in  Pakistan.

These projects were part of China’s Belt and Road initiative, designed to increase trade and investment across Eurasia. The plan involves building infrastructure across the ancient Silk Road trading route through 65 countries.

The project Pinsent Masons worked on in Pakistan is significant as it is the country’s first step toward addressing its energy shortage and reducing its dependence on imported oil and gas by using domestic coal for the first time.

Screen Shot 2016-07-15 at 14.45.42Partners David Platt and Amanda Yao led Pinsents’ teams as they advised the mining company and power company. The mining company was a joint venture between the Government of Sindh, Engro Corporation and the Chinese Machinery Engineering Corporation; while the power company was a joint venture of Engro, CMEC and a Pakistan investor.

Pinsents’ infrastructure team also included senior associate Kate Terry as well as associates Annie Wat, Nick Wang, Umbreen Meenai and Mary Tran.

“It was a truly stand-out transaction in the international infrastructure arena,” says Nick Ogden, head of client relationships, infrastructure. “It was such a significant transaction and it invoked innovative finance structures that had
not been used by Chinese investors before. It got us to the forefront of new activity in Chinese investment into international projects  using the contractor club investment model.”

Ogden adds that the work had placed Pinsents in the vanguard of firms advising on the Belt and Road project.

As the work involved seven joint-venture parties, the mandate required outstanding project management skills to ensure that the project benefitted all parties and was completed efficiently.

Innovation

The work was instrumental in changing how China funds infrastructure projects. Contractors rejected the traditional government-led lending and instead agreed to a “contractor plus investment” model. This allowed them to receive enhanced financial rewards and gave them greater control during the negotiations of crucial project contracts.

“The way the deal was structured and financed was a change in how the Chinese fund infrastructure, not using government lending, which is how Chinese infrastructure has been delivered and Chinese investors have participated.

“In this instance, it was something akin to what we in the UK would more closely align to a project finance structure. It was a mix of debt and equity.

“It led to the Chinese investors saying ‘we can participate in this project not just as a builder but as an equity participant’.”

This model, used for the first time in the Thar Block II project, has quickly been adopted by other infrastructure developments, such as the financing of the 220MW Bengkulu coal power station in Indonesia.

Because it was at the forefront of work relating to the Belt and Road project, Pinsents is now in a perfect position to provide advice to those looking to become involved in future work on this initiative. It has also given the firm the opportunity to win more work from new clients.

“We’re in conversation with a variety of participants to understand, and help them understand, how these models will work and how they can deliver successful projects along the Belt and Road route,” adds Ogden. “Our expectation is that we will win further mandates.”

To assist in project budgeting and to help give the legal team an incentive to work efficiently, the project financing work was carried out on a lump sum basis.

History of the client relationship

Pinsents’ representation evolved over the course of the year. Initially the relationship developed after Beijing-based Yao introduced CMEC to the firm, which it then began to advise on its proposed investment in the coal mine and power stations.

As the project developed, the team’s brief expanded to advising the two project companies and the mining company. The expanded role allowed the team to demonstrate its ability to manage complex, multi-faceted transactions with numerous global clients.

Judges comments

The judges praise the “good range of work” by  Pinsents’ team, which spanned both the public and private sector.

As “very complex, very large, cross-jurisdictional projects”, the judges also say that the work needed strong leadership and management skills, which the Pinsent Masons team demonstrated in abundance.

Powell Gilbert
IP team of the year

IP Team of the Year_POWELL GILBERT_2016_184

Pharma giants collided for this year’s IP team of the year, as Powell Gilbert secured a hard-fought High Court victory for client Actavis against Pfizer.

The case – Warner-Lambert Company (Pfizer) v Actavis Group – had an estimated value of over £500m.

The dispute centred on Pfizer’s patent for the use of the drug pregabalin. The company owned a second patent for treating pain, but the patent on the active ingredient itself for its primary use had expired.

Actavis launched a competing generic drug, with a so-called ‘skinny label’ focused on the non-pain market. Pfizer sued Actavis, stating that the drug would also be dispensed for relieving pain.

In the nine months from Actavis commencing patent revocation proceedings to trial, Pfizer counterclaimed for infringement and Actavis successfully resisted an application for an interim injunction.

Screen Shot 2016-07-15 at 14.46.13During the proceedings, Pfizer also threatened medical professionals with legal proceedings if Actavis’ product was prescribed for pain. This escalated when Pfizer secured a court order against NHS England, compelling it to issue guidance pending a final determination of the dispute, that only Pfizer’s product should be dispensed for pain.

Representation did not change during the course of these proceedings. Powell Gilbert partner Tim Powell instructed 8 New Square barristers Richard Meade QC, Adrian Speck QC and Isabel Jamal.

“It was a massively hard-fought case, fought on a very fast timetable,” says Powell. “I think what both parties were struggling with was that we were in fairly uncharted territory and the interrelationship between the patent issues and policy issues of how medicines are prescribed were in the fore.”

Innovation

This case required an innovative and fast-moving strategy because this was new legal territory, straddling patent validity and infringement, as well as commercial considerations and wider public policy issues. How medicine is distributed to patients in the NHS was at the heart of the case, going beyond straightforward patent litigation.

The case, which is currently under appeal, will have serious ramifications for the industry after the final ruling.

“Let’s say we lose the appeal, then the ramifications may be that in the future, drug companies in this situation may decide it is not worth the potential damages to go into this market at all,” says Powell.

“If we win on the appeal and the judgment is upheld, Pfizer’s behaviour of threatening pharmacists will be found to be wrong. The NHS will have to look at its policy with doctors on how prescriptions are written.”

Supporting deals

During the same period, Powell Gilbert partner Penny Gilbert represented Cambridge life sciences startup company Kymab against one of the world’s largest biotech companies, Regeneron.

The case involved cutting-edge technology, patent infringement, Nobel Prize-winning laureates and a bunch of mice.

Regeneron sought to cripple Kymab’s business, pursuing patent infringement proceedings to prevent its use of transgenic mice that are able to produce human antibodies.

The company was using the mice to develop human-friendly antibodies to diseases such as Ebola and was exclusively dedicated to this purpose. Had it lost the case, the company would no longer have been able to operate.

This case put a spotlight on the IP rights of companies’ dormant patents.

The trial took place in November and December 2015, and Mr Justice Carr handed down his judgment, which held that Regeneron’s patents were invalid.

Gilbert instructed 8 New Square’s Michael Tappin QC and James Whyte.

Powell Gilbert’s team was also involved in an epic telecoms battle with Unwired Planet for its client Huawei. The case concerned six patents and posed a number of important queries that are at the forefront of fair, reasonable and non-discriminatory (FRAND) licences.

The first three of five patent trials were heard in October 2015, December 2015 and February 2016, with others scheduled for later in 2016.

Powell Gilbert partners Simon Ayrton, Zöe Butler and Tim Whitfield led on the case for Huawei, while Unwired Planet was represented by Enyo Law and Samsung by Bristows.

Judges’ comments

The judges were impressed at the scale of the work the firm undertook, as well as by the innovation in pricing arrangement.

“It sounds like a terrific result for a small, cost-effective team against much bigger players on the opposite side in both the client and opposing law firm,” one judge says.

“This is ground-breaking, and a David and Goliath story against Pfizer,” says another.

Irwin Mitchell
Litigation team of the year

Litigation Team of the Year_Irwin Mitchell_2016_280

Some litigators go their whole careers without having a case in the UK Supreme Court. Ros Bever, Irwin Mitchell’s head of family law in Manchester, has had two in 12 months.

Bever’s clients Alison Sharland and Varsha Gohil claimed they were misled by their ex-husbands to the tune of millions of pounds when securing historic divorce settlements.

Two lengthy and expensive court battles followed. Last October the Supreme Court finally ruled in their favour, sending both cases back to the High Court in an incredibly significant ruling for the world of family law.

The Irwin Mitchell team worked tirelessly to achieve the unprecedented rulings, which have opened the floodgates to thousands of similar cases and set in stone that a division of the parties’ financial assets during a divorce must be based on a valid disclosure of funds.

The cases highlighted an endemic issue in the family courts, with Bever saying the UK justice system had turned a “blind eye” to dishonesty in divorce proceedings for too long.

Gohil had previously accepted £270,000 and a car as settlement when she divorced her husband in 2002, but in 2010 he was convicted of money laundering and jailed for 10 years. At his criminal trial, evidence revealed he had failed to disclose his true wealth during the divorce.

Meanwhile, in the case of Sharland, who had been Bever’s client during her time at her previous firm, lawyers had to contend with a complex financial relief dispute in the midst of the main suit. Assets in dispute exceeded £155m and there was also a worldwide freezing injunction application and difficult arguments concerning the care of a disabled child.

Both cases have changed Irwin Mitchell’s legal and practical approach to all non-disclosure cases and the firm has already experienced an influx of work from potential new matters arising out of the Supreme Court decisions.

Innovation

Although Bever led the central elements of both cases, a number of other departments at Irwin Mitchell advised the claimants across its corporate, public law and court of protection teams, including associates Jenna Lucas and Hannah Saxe.

In Gohil’s case, Bever was instructed at the eleventh hour when public funding was not extended to cover the Supreme Court appeal. It posed a difficult decision for the firm, given the potential adverse costs, and the team created its own ATE insurance policy to protect the client and achieve a favourable outcome.

Bever took the instruction while on holiday, securing leading and junior counsel and submitting the application for permission to appeal to the Supreme Court within 10 days of the first call.

Screen Shot 2016-07-15 at 14.47.03As well as changing the approach to all non-disclosure cases, the firm’s work on both cases has had a ripple effect across the whole family legal market, thanks to the redefinition of the set aside test. The live contribution arguments that will follow are likely to have an impact on the legal landscape in the area of special contribution.

The team’s deep-rooted ethos of fighting for fairness and justice dominated these cases and provided a beacon of hope for ex-wives considering similar cases who have been denied legal aid funding at some point during the court process.

Bever’s work was widely recognised in the media in the run up to, and following, the Supreme Court judgments. Bever was named in The
Lawyer
’s Hot 100 2016 for inspirational and ground-breaking legal work. She was one of just three private client lawyers in this year’s list and the only one outside of London.

Testament to the work of Bever and the rest  of the team is this comment from Gohil: “I am particularly grateful to Ros Bever, Sally Harrison QC, Samantha Hillas, Sheena Cassidy and the whole team at Irwin Mitchell who have believed in me and my case. At the eleventh hour they gave up their time to put in a tremendous amount of hard work to bring my case to this court.”

History of client relationship

Bever brought the Sharland case with her from her previous firm, Mace & Jones, where she had established a Manchester family law practice. The client came over with Bever due to her skills in high-net-worth cases of this magnitude.

Gohil turned to Bever at the last stage of the appeals process when public funding was rejected for the Supreme Court hearing.

Judges’ comments

The judges say the two disputes were “significant cases on a significant issue” and Irwin Mitchell displayed “impressive use of funding and insurance arrangements”.

One judge adds: “Irwin Mitchell demonstrated an admirable appetite for fighting for what is right and enabling it through a flexible approach to fees.”

Burges Salmon
Real estate team of the year

Real Estate Team of the Year_BURGES SALMON_2016_101

Burges Salmon wins real estate team of the year at The Lawyer Awards for advising on the £271m disposal of Ahli United Bank’s UK student accommodation properties in June 2015. The team was led by real estate partner and client relationship partner Rick Read and corporate partner Chris Godfrey.

Although the transaction was not the largest in the accommodation sector last year, it had an interesting level of complexity. It was the first disposal of the Guernsey-based, sharia-compliant, Middle Eastern-owned UK property fund in the country to date.

The disposal involved the sale of Guernsey unit trusts owned by Middle East investors, which required restructuring the fund part-way through to preserve the anonymity of investors.

The fund required sharia-compliant financing to be completed and then collapsed during the sale process. This had potentially significant cash-flow and timing consequences, which changed over the course of the transaction, and all parties’ expectations had to be managed throughout to avoid misunderstandings.

To ensure the deal went through, and because traditional warranty protection was not available, Burges Salmon’s real estate team negotiated a bespoke warranty and indemnity (W&I) insurance policy.

The firm’s real estate team had to negotiate around the disagreements between sharia scholars on how to collapse sharia financing, which almost derailed the transaction at the crucial moment. “We had a pretty good idea about the complexity of the deal,” says Read.

The requirements of the sharia-compliant fund meant properties that were otherwise commercially viable were discarded because of the presence of non-sharia-compliant aspects, such as hoardings advertising alcohol.

Added to the mix was the fact that one of the assets being built during the sale process was in peril when both the contractor and the developer went into insolvency.

“That put into stark relief the robustness of the Burges Salmon construction documentation, which had been put in place on the original development,” says Read. “We had Berwin Leighton Paisner poring over that to check that it stood up to scrutiny. It did, I’m pleased to say.”

Despite all these challenges, the deal was completed on time and at its original price, thanks to careful transaction guidance, cutting-edge legal advice and innovative solutions, and the construction documentation stood up to intense scrutiny.

“We believe these policies will become market standard in large property transactions and this was one of the forerunners,” says Read.

Innovation

During the disposal process, Burges Salmon created a two-stage online sale platform. Stage one was available to multiple bidders and legal teams  around the world. Stage two was available only to the ultimate purchaser’s team.

Real-time data room use analysis of activity gave the seller more control over the process. Certain elements of work were priced to give clients price certainty; others by reference to deal value. Other work was charged on a time-cost basis.

“We drew on the experience of other deals we have done in the past that weren’t identical to this deal but had some similar elements,” says Read.

Screen Shot 2016-07-15 at 14.48.09The Burges Salmon real estate team created the ‘Due Diligence Hub’, a secure online tool that allows clients to identify risks clearly and quickly, enhancing the visibility of progress and translating legal due diligence into commercial actions.

The key benefits, the team says, are that clients are able to make informed decisions quickly, ensuring that transactions run smoothly, and the hub provides fully automated reporting, exportable in multiple formats depending on the client’s requirements.

“It’s a fantastic way to provide a client with a plain English determination of risk,”  says Read. “Also, it makes lawyers think about things a bit more objectively because they have to make a risk assessment on what they are working on.”

Client relationship

Burges Salmon has acted for AUB since 2010 on the acquisition, development, funding and management of a portfolio of UK-wide student accommodation property.

During this deal, Reader acted as first point of contact for the client, but relied on the work from other partners at Burges Salmon.

“It was a complete cross-firm effort,” says Read. “We had Chris Godfrey dealing with the funds, Nigel Popplewell on tax, Graham Soar
in banking led on the sharia finance aspects of the deal, and there were also contributions from Steven James in construction and planning.”

Judges’ comments

The Lawyer Awards judges say this entry “has it all”. The team worked on the restructuring of a fund to disguise ownership of the ultimate client, ensuring that the project complied with sharia law, had an insolvent developer, underwent scrutiny of structure, ownership and funding.

“They have clearly demonstrated their input, the need for high-quality leading advice and I, for one, am exceptionally impressed with how they have performed,” one judge says.

“They had great client feedback and solid new client leads,” adds another.

Akin Gump Strauss Hauer & Feld
Restructuring team of the year

Restructuring Team of the Year_AKIN GUMP STRAUSS HAUER & FELD_2016_102

Akin Gump’s award-winning team has been at the heart of pivotal deals emanating from debt bail-outs in Europe. More than 95 per cent of the London-based team’s work comes from direct instructions and its practice focuses on restructurings and debt or equity financings for troubled companies. The team has experience restructuring complex corporate debt and structured finance arrangements.

As a result of the Icelandic banking collapse, Glitnir, Landsbanki and Kaupthing were placed in winding-up proceedings. Under Icelandic law, the only ways to exit such proceedings and distribute value to unsecured creditors are by “composition” (effectively, a consensual reorganisation) or bankruptcy proceedings (a liquidation).

Screen Shot 2016-07-15 at 14.48.54From the outset, Akin Gump’s team was closely involved in the formation of the informal creditors’ committees (ICCs) of the three banks and represented its clients on those committees. In that capacity, the firm analysed the impact of Iceland’s 2008 emergency banking legislation, which created a “new bank” for each failed bank and, in each case, transferred domestic assets and liabilities in exchange for compensation. Akin Gump’s team was closely involved in negotiating these complex compensation agreements.

After this initial phase, Akin Gump oversaw a complex claims filing and dispute process, and led challenges to the 2008 emergency banking legislation in Iceland. A key issue at that time was to determine the priority to be given to certain classes of creditors, including the UK government and a number of UK local authorities.

During the process, the team, led by London-based partner Barry Russell, designed and put in place a co-ordinated cross-border strategy to protect the interests of creditors in the event that the consensual discussions failed. Litigation partner Mark Dawkins devised the litigation strategy that was a hugely important factor in influencing the consensual outcome of the restructurings.

This multi-dimensional matter required the firm to develop a thorough understanding of the business landscape, culture and political situation in Iceland. “Everything was poured into it, years of understanding comparative legal systems and how restructurings are negotiated, as well as building relationships of trust with people and making sure everything was followed through and not brought into doubt,” says Russell. “It was also a massive project and case management exercise.”

Innovation

This was a unique case. Never before had Iceland – a country with fewer than 350,000 inhabitants – experienced such a financial collapse. Its laws were not well suited to facilitate a consensual restructuring of the failed bank estates, its practitioners were not familiar with international restructurings of this magnitude, successive governments were impacted significantly by the collapse, and the economic issues presented by the proposed restructurings were unprecedented.

Icelandic law did not provide any means for creditors to interact meaningfully with the failed bank estates. Akin Gump advocated and helped create the ICCs, which were supported by representatives of the government after its lobbying. This facilitated an invaluable means of communication with creditors over the past seven years.

“This process required many trips to Iceland over the years and extensive interaction with representatives in the central bank, the government, old bank estates, local counsel, local political advisers and local economists,” says Russell. “In some respects, although it wasn’t a sovereign restructuring, you felt like you were effectively restructuring the economy, given the impact the banks’ failures had on the local economy”

The firm developed a multi-jurisdictional litigation strategy to protect the interests of creditors in the event that the Icelandic government took hostile action targeting the assets of the failed bank estates. This strategy included devising novel legal arguments under EU/EEA law, Icelandic law and the laws of various other jurisdictions.

Akin Gump was at the forefront of structuring the composition agreements, which had unprecedented scope under Icelandic law. This required in-depth knowledge of Icelandic legislation and a fusion with international restructuring principles.

The firm’s restructuring team advocated successfully to make three extensive sets of legislative changes to facilitate the compositions. This would have been impossible without the team’s unique understanding of the relevant legislation (assisted by local counsel) and its extensive experience in international restructurings.

“Not only were you trying to craft these deals within international restructuring norms, you had to turn around and advocate changes to the legal system to allow the deals to happen,” says Russell. “We got to a point in this deal where I lost count of how many trips I took out there.”

Akin Gump lawyers were extensively involved in devising the framework for voluntary “stability contributions” – the negotiated alternative to the threatened stability tax. Russell adds: “It gives you a great feeling that what you have done has helped that economy turn around and come back.”

Client relationships and key deals

The firm was first instructed in this matter in October 2008, just after the banks’ collapse. Initially, its clients consisted of original institutional investors in the debt of the three failed banks, but the group quickly grew to include secondary investors who purchased claims in those banks.

Judges’ comments

A number of this year’s award entries featured Icelandic banks, but Akin Gump stood out.

“This was a hugely impressive restructuring of three Icelandic banks by Akin Gump’s remarkable team in the face of uncertainty and Icelandic capital controls,” a judge says. “Their role in setting up a structure and in successfully co-ordinating the diverse stakeholders is hugely impressive.”

Another judge says: “They had to learn the law and then teach the law. That is very impressive.”