Energy Trading to be Screened at EU Level

For the monitoring of wholesale energy markets, the Regulation on Wholesale Energy Markets Integrity and Transparency (REMIT) aims to establish a sector-specific legal structure to highlight and deter market manipulation.

This revolutionary step means that energy trading will be scrutinised at EU level to monitor for abuses and ill-discipline, and should lead to more trusted and effective energy markets – thus regaining the confidence of both consumers and participants. It is the first time that an EU-wide framework has been established to define, monitor and investigate market abuse.

Goals

ACER, the Agency for the Cooperation of Energy Regulators, will be involved at all levels once REMIT is in place and will follow the principles below:

1) ACER will be responsible for collating and analysing the wholesale markets and other essential information to try and pinpoint any possible abuses within those.

2) ACER will also keep the National Regulatory Authorities (NRAs) informed after an initial evaluation if there is believed to be any grounds to show that abuses have been committed.

Actions

Once the NRAs have been notified of an offence, the national authorities in member states will examine and investigate the issues and data in great detail and implement the requisite penalties to prevent these abuses or manipulations from occurring again in the future.

For these elaborate monitoring procedures to take effect, a careful and diplomatic stance needs to be endorsed because they involve intricate traded products and markets: these actions need to be followed in a circumspect method that will not overly encroach with the functions of energy markets.

Affected parties

REMIT concerns anyone and everyone who participates in or whose role directly impacts upon the wholesale energy markets within the EU – including non-EU residents. Non-EU and non EEA market participants might come under the scope of REMIT if they are involved with transactions in at least one wholesale energy market within the EU. This also means the registration of such involved bodies or firms under REMIT is essential, regardless of their location.

Sources:

http://www.acer.europa.eu/remit/Pages/Background.aspx

http://www.lseg.com/markets-products-and-services/post-trade-services/unavista/regulation/remit-regulation-wholesale-energy-markets-integrity-and-transparency

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Commercial Litigation: Guide to the Corporate Climate Change

Litigation, especially in the corporate field, has always been a costly activity. It is risk-riddled and pursuing claims for millions of pounds is a timely endeavour. In some cases, it can take several years to reach a verdict; that’s a long time to cover all the legal fees when there is the chance the case can flop.

Given present day economy, it is no surprise to hear that many businesses are sidestepping going to court, even when they have a strong case. The prospect is expensive and many in-house counsels choose not to risk tying up the cash flow.

Third party litigation funding was once an illegal, mistrusted practice but nowadays, more and more businesses are turning to independent funders to help with the costs of litigation. FTSE 100 companies and global businesses are consulting third party funding firms, like Vannin Capital, to fund their cases and spread the risks.

It has now become a respectable method of funding legal costs and achieving justice. As with most things in life, money unfortunately is at the heart of litigation and it always will be. It costs money to take a case to court and pay all the legal fees; and sadly money doesn’t grow on trees.

However, a judicial review by Lord Justice Jackson has led to the recent reforms of legal costs, with the Legal Aid, Sentencing and Punishment of Offenders Act (LASPO). The new law will hopefully give clients clarity on funding costs, give funding providers clear guidelines to follow, and encourage good practice within the industry.

As part of the reforms, cost budgeting at the start and during a trial has become compulsory, and After-the-Event Insurance (ATI) remains vital. Damage-Based Agreements (DBAs) have replaced Conditional Fee Agreements (CFAs) and will very much be a ‘wait and see’ component.

What else has changed? The industry has become self-regulated. The Association of Litigation Funders of England and Wales (ALF) was set up in 2011 and all members are fully vetted. They must follow a strict code of practice which ensures that they do not run out of money half way through a trial, or unduly interfere in the running of a case.

However, it must be noted that not all litigation funders in the UK have become affiliated, so we strongly advise you to only use a reputable member.

Overall, commercial litigation has evolved with the times and arguably, for the better. In this day and age, no credible funder will take your case on board if it is not likely to succeed which gives businesses and solicitors self-assurance when pursuing a claim.

As the economy fluctuates, it can only be predicted that more changes will come. However, one thing in the industry remains the same; commercial litigation funding via a third party provider will certainly give you the security that you need to take a case to court.

 

This article was written on behalf of Vannin Capital, leading specialists in litigation funding. The team has experience in cases from the jurisdictions of England and Wales, the EU, the Caribbean and international arbitration matters. Visit litigationfunding.com today to learn more.

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The Legal Cost Reforms Are Finally Here: But Are They a Good or Bad Thing?

By now everyone involved in the UK legal system should know that the much-anticipated legal costs reforms have arrived. The Legal Aid, Sentencing and Punishment of Offenders Act (LASPO) became law on 1st April 2013 which means new regulations for litigation funders, lawyers and insurers.

Many have been speculating what effect LASPO will have on the industry, especially since Lord Justice Jackson’s review in 2009 and his published report in 2010. The changes have caused uncertainty as much of the details remain hazy. Some parties, who have been trying to understand the new rules, are still unsure what the law means on a practical level.

So, here is a breakdown to what the reforms entail. On one hand it can be argued that the reforms bring positive changes to the industry however; on the other hand it can be claimed that it will only cause obstacles.

  • Reform 1: Damage-Based Agreements (DBAs)

It has to be said that this is the biggest change to come about. DBAs replace Conditional Fee Agreements (CFAs) and involve the client paying their lawyer a percentage of the damages. This is in return for the professional taking the risk of being paid nothing if the cases loses.

The problem is that the fee is dependent on the amount of damages awarded and there is confusion on the exact figure to pay including disbursements, counsel’s fees and VAT. It has been predicted that fewer commercial law firms will take these cases on board because there is danger of no fee at all.

The Legal Services Board (LSB), which regulates both the Bar Standard Board and the Solicitors’ Regulation Authority (SRA), has warned that consumers may need protecting against the mis-selling of DBAs.

What matters is that clients are fully aware of what they are signing up for and at what cost.

  • Reform 2: Cost budgeting

As part of the new law, all costs must be budgeted at the start of the trial as well as throughout proceedings. This safeguards the client against any nasty, unexpected legal fees and they can learn what costs are proportional to the claim to understand if the case is financially viable to pursue.

New disclosure rules will also improve collaborations between parties and this should make the case more cost-effective to run. What’s essential is that it is clearly stated what costs are not recoverable from the losing party i.e. ATE (After-the-Event Insurance) and lawyers’ success fees. This will make costs more transparent.

The reforms will be accompanied by new financing packages from third party funders that will be given to clients. In anticipation of the Act, the number of litigation finding companies has increased in the last three years. From a positive point of view, this gives lawyers and businesses a better choice of funding opportunities and legal insurance products.

However, when choosing a third party funder it is imperative that they fully assess the risk involved and create a budget before agreeing to find your case.

Whether you think LASPO is a good or a bad influence on litigation is regardless because it is here to stay. You can dwell on the negative views or you can embrace the reforms and move forward with an industry that has greater transparency and better budgeting.

Surely that is best for both the business and the third party funding provider?

This article was provided by litigationfunding.com, the UK’s leading experts in litigation funding.

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Legal Matters: What Funding Options Are Available?

Taking a legal case to court can end up costing a lot of money, and if you haven’t the funds available at to begin with you may be interested in seeking funding. This could help you to finance your legal battle and, should you win, you will then be able to repay the loan while still retaining a good percentage of the damages.

There have been many different funding methods available over the years, and while some of them are no longer used today they have helped the legal system to evolve.

Some of these methods have included:

1)     Consumer Credit Agreements (CCA)

This is a historic funding method that is no longer used due to the risks that are involved.

Individuals could take out a CCA when taking a case to court. They would apply to a funding house and, if approved, would receive a loan with a repayment term or around three years or less. They would then withdraw money in order to pay for solicitor disbursements and other legal fees. Their loan would be protected with After the Event (ATE) insurance in case their case failed.

The main problem with this funding method was that the loan agreements can with very high interest fees, meaning some people struggled to repay them. They were no longer used when the claims companies used within this method went bust and left ATE insurance companies with huge losses.

2)     Direct lending

This method was somewhat better than CCAs and was certainly easier for law firms, but it too was rejected after some time. The method involved the law firm taking on the loan, which solicitors could then use to pay for legal fees directly. This came with high risk though.

3)     Damages Based Agreements (DBAs)

This is a funding method which has been introduced very recently. It is a contract between an individual and a solicitor that is used to set out the payment terms for the legal case. It is variant of the ‘no win, no fee’ arrangement and was introduced in an attempt to ensure solicitors had a vested interest in cases. The contract stipulates how much the individual will pay to the lawyer should they win their case and a specific percentage of the damages is decided upon beforehand.

At the moment CFAs are used in ‘no win, no fee’ cases, but the government hopes to implement DBAs across the board.

4)     Litigation funding

This funding option is only available to larger businesses fighting legal battles of a very high value. This is because there is no real market for funding smaller cases. Litigation funding companies can provide businesses and law firms with the funds required to complete the case, after which the third party funder can recoup its loan. This includes the original investment plus a Return on Investment (ROI).

Those seeking funding for legal cases, whether they’re big or small, may be able to use some of these options.

 

This article was written by Aurora Johnson on behalf of Vannin Capital, a corporate litigation funding specialist. Click here to visit the official website if you’d like to find out more.

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