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Following the result in the United Kingdom's EU referendum, Walkers has created a Brexit page dedicated to providing our clients relevant information about the jurisdictions in which we practise.

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We are pleased to announce that Dajsha Samuels and Abigail Drummond have completed their legal training and have both been called to the Cayman Islands Bar.

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Checklist for Guernsey employers for incoming discrimination law

Although the Guernsey Discrimination Law is still taking shape and is unlikely to be in force until 2021, there are steps that Island employers should be considering at this early stage.

All employers need a plan for how they will prepare for and respond to the law and ensure that they are complying with it – for some businesses that plan might only need to be a few lines long, for others, it will be a more detailed document.

Here is a practical checklist of some of the key points for consideration:

  • Training – start thinking ahead for what kind of training your teams might need, based on their different roles and responsibilities. It might be that simple handouts are enough to do the job, but some team members might need in-person training from professionals on key elements of the legislation that are relevant to their jobs. Training in equal opportunities, anti-bullying and harassment and anti-discrimination will benefit all staff.
  • Review - examine your employment contracts (including your benefit offerings) to ensure compliance with the new legislation.
  • Check - ensure your job descriptions are accurate. These will be key to protecting your business from successful discrimination claims and also as a defence to equal pay for work of equal value claims.
  • Rewrite – your business doubtless has handbooks, policies and procedures to cover various elements of operations, including recruitment, appraisals, conduct, and sickness absence management. They will need to be reviewed to ensure compliance with the law.
  • Premises – for some employers offering services to the wider public (or even to a smaller group of prospective clients) some physical changes to premises may be needed to ensure accessibility – do you need to start planning to be able to demonstrate that you have taken reasonable steps to ensure access?
  • Hiring – one of the key areas where discrimination issues manifest is in decisions about recruitment, and for that reason it is critical that HR professionals (and others involved in recruitment decisions) understand how to demonstrate compliance with the law.
  • Leadership – these issues are not just at the operational level – directors and senior leadership need to be engaged and alive to the questions that the discrimination law raises, if only from a risk perspective. You should consider some training for board members and senior leadership to be able to demonstrate that they have considered discrimination issues.

Walkers has partnered with the States of Guernsey on raising awareness for the Island's employers of the proposed discrimination legislation as part of their Equality Awareness Series and run a session for employers on the current Discrimination Legislation Consultation. We will continue to update clients with relevant information and training events as the law crystallises.

Walkers' Guernsey employment team includes senior counsel Sarah Ash, one of the few employment lawyers practising in Guernsey with first-hand recent experience of advising on the English discrimination legislation – and with employment specialists in Jersey and Ireland, we are well-placed to advise on the practical issues that the law presents, as well as in implementation from the perspective of employers with operations in more than one jurisdiction.

Bermuda: Alternative Investment Funds 2019

Bermuda partner Sarah Demerling and senior associate Nathalie West have teamed up with Global Legal Group to provide a detailed legal guide on the Bermuda alternative investment fund industry. Discussing the regulatory framework, fund structures, marketing, investments, disclosures, taxation and reforms, Jonathan uses his in-depth knowledge to provide readers with actionable intelligence.

 

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Beddoe applications: Beddoe relief for appeals

The Grand Court of the Cayman Islands and the High Court in England and Wales have recently considered two unusual applications for Beddoe relief: an application by a trustee for retrospective Beddoe relief after the conclusion of proceedings, and an application for a trustee for Beddoe relief in respect of bringing an appeal in the Supreme Court of England and Wales. In this article we consider the latter it having been considered earlier this year in Airways Pension Scheme Trustee Limited v (1) Mark Owen Fielder and (2) British Airways Plc [2019] EWHC 29 (CH) and it being well established that whilst decisions of the Cayman and English Courts will not be not binding in Guernsey the Royal Court may look to them for guidance in the absence of Guernsey precedent. Application for retrospective Beddoe relief is considered in our article "Beddoe applications: What happens if a trustee forgets to apply?"

What is Beddoe relief?

An application for Beddoe relief (Re Beddoe [1893] 1 Ch 547) enables a trustee to obtain directions from the Court approving its participation in litigation in its capacity as trustee and ordering that the trustee will be indemnified in respect of the costs of the litigation from the trust funds. The relief is a discretionary one.

Airways Pension Scheme Trustee Limited v (1) Mark Owen Fielder and (2) British Airways Plc: the background

In 2013, British Airways Plc brought a claim against the then trustees of the Airways Pension Scheme (the "Scheme") challenging two trustee decisions to:

  1. exercise a unilateral power of amendment to provide trustees with the power to augment the members' benefits by award of discretionary increases; and
  2. use this power to make a discretionary increase of 0.2%.


The challenges to the decisions were dismissed at first instance. On appeal, it was held that the first decision above was invalid on the basis that the amendment had been made for an improper purpose. It therefore followed that the second decision was invalid. The decision is to be appealed to the Supreme Court of England and Wales and the trustees of the Scheme applied for Beddoe relief in relation to that appeal. The substantive appeal is due to be heard in July 2019.

The applications for Beddoe relief

In relation to the proceedings at first instance, the Court had given directions that the trustee was entitled to Beddoe relief in relation to disclosure and inspection and British Airways had subsequently conceded liability under the indemnity in the trust deed. The Beddoe proceedings were stayed and a consent order made. Then, after the decision in the first instance proceedings, the Beddoe order was extended to cover the trustee's response to the British Airways appeal. A separate application was then made by the trustee seeking directions to approve pursuing an appeal to the Supreme Court and an indemnity in respect of costs of such appeal from the Scheme.

Decision of the High Court: application for Beddoe relief in respect of appeal to the Supreme Court

The High Court approved the trustee's pursuit of the appeal and held that it was entitled to an indemnity in relation to its reasonable costs from the Scheme funds. Arnold J found that that there was no inflexible rule against awarding Beddoe relief in such circumstances and said that the trustee would be entitled to such relief if the trustee was acting in the best interests of the trust as a whole. Significant factors in determining whether the trustee would be acting in the best interests of the Scheme as a whole included that:

  • the appeal had a good prospect of success;
  • the appeal would benefit the vast majority of members of the Scheme;
  • the costs of the appeal would be a small fraction of the amount at issue as a result of decisions (i) and (ii) above;
  • the decision of the Court of Appeal had not clarified the circumstances in which the trustees could properly use their power of amendment under the Scheme and it would be for the benefit of the Scheme for the Supreme Court to clarify this;
  • the trustee was the only party practically capable of bringing the appeal; and
  • the order sought by the trustee may result in significant costs to British Airways as it may be required to make contributions to the scheme but these costs were justified.

The Judge was not prepared to provide a limitless indemnity to the trustee against costs of the appeal due to the significant costs already incurred in relation to the appeal by all parties and the large cost estimate for the appeal. The costs that the trustee is entitled to by way of indemnity from the Scheme were therefore capped.

Conclusion

The Airways Pension Scheme Trustee Limited v (1) Mark Owen Fielder and (2) British Airways Plc case demonstrates the courts are willing to be flexible in granting Beddoe relief to trustees as long as trustees are acting in the best interests of the trust as a whole when taking steps in litigation. However, trustees should not assume that they will always be entitled to indemnity costs from the trust and should take detailed legal advice before taking any steps in litigation.

Beddoe applications: What happens if a trustee forgets to apply?

The Grand Court of the Cayman Islands and the High Court in England and Wales have recently considered two unusual applications for Beddoe relief respectively: an application by a trustee for retrospective Beddoe relief after the conclusion of proceedings, and an application for a trustee for Beddoe relief in respect of bringing an appeal in the Supreme Court of England and Wales. In this article we consider the former which was considered in In the matter of the Stingray Trust (Grand Court, Cayman Islands) in January 2019 (it being well established that while decisions of the Cayman and English Courts will not be not binding in Guernsey the Royal Court may look to them for guidance in the absence of Guernsey precedent). We refer to our article "Beddoe applications: Beddoe relief for appeals" in which the latter application is considered.

Application for Beddoe relief

An application for Beddoe relief (Re Beddoe [1893] 1 Ch 547) enables a trustee to obtain directions from the Court approving its participation in litigation in its capacity as trustee and ordering that the trustee will be indemnified in respect of the costs of the litigation from the trust fund. The relief is a discretionary one.

In the matter of the Stingray Trust: the facts

The Stingray Trust (the "Trust") was settled on 5 July 2005 by two Italian citizens: "CDF" and his sister "IDF". The beneficiaries of the Stingray Trust were CDF, IDF and MF (a charity).

CDF died and IDF began to suffer from ill health and so a public guardian was appointed on behalf of IDF. The public guardian issued proceedings against the trustee in Switzerland alleging that the Trust was not valid. She sought delivery up of the trust assets to IDF and an order preventing the trustee from making any decisions in relation to the Trust. The proceedings included a claim for urgent injunctive relief. The trustee did not seek Beddoe relief prior to embarking on the litigation.

The case was dismissed at first instance and on appeal. Retrospective Beddoe relief was sought. Before the application for Beddoe relief could be determined, the public guardian issued similar claims in the Court of Milan. This time, an application was first made for Beddoe relief in respect of those proceedings.

Decision of the Grand Court in Cayman

The Grand Court heard both of the Beddoe relief applications together and granted the relief sought in both instances.

  • Swiss proceedings - the Court found that it was reasonable for the trustee to have decided to defend the proceedings. The Court took into account the fact that MF was not a party to the proceedings and so there was a substantial risk that the trust assets would have been transferred to the public guardian had the trustee decided not to defend the claims. The Court made an order that the trustee be indemnified against the reasonable costs of defending the litigation. As to the timing of the application, the Court considered that although it was unusual for a trustee to make an application for Beddoe relief after proceedings had been concluded the trustee had acted in a reasonable manner due to the urgency of the injunctive relief sought by the public guardian. Accordingly, the Court made an order for Beddoe relief in favour of the trustee.

  • Milan proceedings - the Court found that there was a significant risk of the trust assets being transferred to the public guardian if the trustee did not defend the claims and made an order for Beddoe relief accordingly. However, the relief was limited to cover permission to pursue, and claim costs for, a jurisdictional challenge in the Milan Court. The Court directed that if that jurisdictional challenge should fail then the trustee may make a further application for directions.


Conclusion

In the matter of the Stingray Trust demonstrates that the courts are willing to be flexible in granting Beddoe relief to trustees as long as trustees are acting in the best interests of the trust as a whole when taking steps in litigation. However, trustees should not assume that they will always be entitled to indemnity costs from the trust and should take detailed legal advice before taking any steps in litigation.

Technology: the new zone for ILS

Bermuda partner Peter Dunlop discusses, in the summer edition of Bermuda: Re + ILS, new opportunities and challenges on the horizon as the ILS sector looks to help manage everything from cyber risk to cryptocurrency and intangible assets.

Insurance Amendment Act 2008 and the introduction of the light-touch regulated Special Purpose Insurer ("SPI"), Bermuda embraced third party capital convergence and launched itself in to pole position as the world’s leading Insurance-Linked Securities ("ILS") marketplace.

More recently, to meet the rising tide of Insurtech initiatives, Bermuda's regulator, the Bermuda Monetary Authority ("BMA"), launched in 2018 a temporary license, "Innovative Insurer" class for both general business and long-term business and created the Insurtech Regulatory Sandbox and Innovation Hub. Presently, we in Bermuda await the implementation of the BMA's Guidance Note #20 on SPIs and the outcome of the consultation period for proposals made by the BMA for a new permanent license, non-Sandbox innovative insurer class and a new collateralized insurer class, with permanent capital requirements and the ability to fully-fund its liabilities via outwards reinsurance.

 

Originally published by Bermuda: Re + ILS.

 

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