Rule of law, Brexit, Boohoo, the “worst deal in history”: your commercial news round-up

The business world is underpinned by the ‘rule of law’, whose protections enable firms to trade or resolve disputes with confidence about their rights and protections. This is why hostile comments about the legal profession by senior members of the government – criticised this week by retiring Supreme Court judge Lord Kerr – will be as unwelcome to many business leaders as they are to the legal sector. Responding to criticisms by Prime Minister Boris Johnson and Home Secretary Priti Patel of “activist” and “lefty human rights” lawyers alleged to be obstructing justice, Kerr said: “Lawyers are not activists, they are re-activists. People bring problems to lawyers and lawyers decide whether they can be fitted into some sort of legal framework in which a legitimate challenge can be taken.

“I can understand the government is less than pleased when challenges are made to decisions they have taken frequently after very considerable deliberations … But it doesn’t seem to me that attacking lawyers who provide the services that allow those challenges to be made … is particularly profitable.”

Kerr has joined other senior legal figures, including former Supreme Court President Lord Neuberger and Law Society President Simon Davis, in pointing to the dangerous nature of attacking the lawyers responsible for representing individuals and businesses within the independent framework of the rule of law.

Turning to this week’s commercial news:

• The Chancellor, Rishi Sunak, has announced that he is making the coronavirus Job Support Scheme “more generous to employers” in response to the tough restrictions imposed on large swathes of the country as part of the government’s three-tiered system of coronavirus alert levels. In tier three areas (those under the highest level of restrictions) the government will cover the full cost of employers paying two-thirds of people's salaries where they cannot work for a week or more. In tier two areas, the government will now fund 62% of employees’ wages for hours not worked. But local leaders headed by Greater Manchester Mayor Andy Burnham are among those insisting that cutting wages by a third will drive huge numbers of people into hardship and poverty. Meanwhile, business grants of up to £2,100 a month are to be extended to businesses in any tier, including those not forced to close by law, due to the “profound economic uncertainty” of the pandemic. 

• The EU’s chief Brexit negotiator, Michel Barnier, has arrived in London to continue talks with the UK’s chief negotiator David Frost. The government had previously told Barnier to cancel the trip unless the EU was prepared to make concessions, but seasoned Brexit watchers were unconcerned by this show of political theatre, arguing that both sides know that now is the time for serious compromise on key issues including state aid rules and fishing rights.

• The UK element of Viagogo’s attempted takeover of rival ticket resale site StubHub has been blocked by the Competition and Markets Authority (CMA). The competition watchdog’s chair, Stuart McIntosh, said: “The evidence we’ve seen so far consistently points in the same direction – that Viagogo and StubHub have a market share of more than 90% combined and compete closely with each other. We are therefore concerned that their merger could lead to secondary ticketing customers facing higher fees and lower quality services.” The takeover has already been described as the “worst deal in history” after it was completed shortly before the pandemic shut down the vast majority of live events around the world, and now the CMA says that Viagogo must address its concerns, potentially by selling all or part of StubHub.

• Big four accountancy firm PwC has resigned as Boohoo’s auditor after the fast-fashion retailer became the focus of allegations of widespread exploitation at its suppliers’ factories in Leicester. Shares in Boohoo fell sharply after the auditor confirmed its resignation. After reports in July of rights violations and illegally low pay at some Leicester clothing manufacturers, Boohoo commissioned a top QC, Alison Levitt, to investigate. Her findings reported “serious” and “endemic” issues related to poor working conditions, low pay and neglect of workers’ rights. Meanwhile, the National Crime Agency is investigating some of Boohoo’s suppliers for VAT fraud and money laundering. There is no suggestion that Boohoo knew about any alleged wrongdoing.

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