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Lawfully Creative | Malcolm Gaskin, British advertising veteran

About the show

Magic MalikThe podcast ‟Lawfully Creative” is a series of intimate and honest conversations hosted by Annabelle Gauberti, the founding and managing partner of London and Paris-based law firm Crefovi, which focuses on advising the creative industries. Annabelle talks with artists, policy makers and professionals in the creative industries – to hear their stories, what inspires their creations, what decisions changed their careers, and what relationships influenced their work. Produced by Crefovi.

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Episode n. 18: Malcolm Gaskin, British advertising veteran

Malcolm GaskinMalcolm Gaskin has had a highly creative, and productive, career in advertising, by bringing about some of the most impactful, witty and memorable global advertising campaigns of the 80s and 90s, in his roles as art director or designer.

8 November 2021 – Malcolm Gaskin is one of the most original and highly-productive advertising veterans, out there, spanning a 40 years’ career in this industry. What inspired him to become an advertising expert? How did he make it to the top of his industry, which is known for being both hyper-aggressive and ultra-competitive? Where did he get his best ideas from? How did he make his clients happy? Hear Malcolm’s stories and anecdotes here, in his conversation with Crefovi’s founding and managing partner, Annabelle Gauberti.

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A global network

Clients praise Crefovi’s lawyers for their responsiveness & ability to understand the technical, business and legal aspects of each commercial transaction and come back, deal after deal, to be advised by them.

While London and Paris based, we routinely work across borders. The vast majority of our engagements are multi-jurisdictional. We are used to working in multinational teams, and rely on our network of specialist lawyers for support in other jurisdictions.

The team has therefore established an extensive international network of creative industries’ contacts and a close association with other specialist lawyers worldwide. Our history of successes in high profile, politically sensitive matters reflects an ability to act swiftly and with the utmost discretion.

Indeed, Crefovi’s lawyers are very well connected in the world of the creative industries, attending, and participating to discussion panels at, on a regular basis, each session of the professional trade shows such as CESWeb SummitDLD & SlushMidem, as well as the Cannes film festival and EFM and the Berlinale.

 

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    How to sell your US fashion products in Europe, at high margins?

    In the globalisation age, fashion and luxury brands aspire to doing business everywhere, servicing their retail clients on each continent.

    Yet, trade and geographical barriers are still in place, and even increased during the inward-looking Trump era, in the US, and Brexit transition, in the UK, making smooth and seamless fashion and luxury purchase transactions a challenge.

    So, what is the best approach, in the post-COVID, post-Trump, and post-Brexit world, to sell your fashion and luxury wares around the world, while making high margins?

    how to sell your US fashion products in Europe1. Selling fashion products between the US and Europe, via your own e-commerce sites, at a profit: ‟how to” guide

    In an age stricken by lockdowns and compulsory sanitary passes induced by COVID, online sales are a life saver. They took off during the pandemic and retail customers have now gotten used to shopping online.

    It is therefore time to make your ecommerce site, as well as social media accounts, as attractive, and user-friendly, as possible. This way, you may capitalise on this online shopping spree, provided that you offer free worldwide shipping and returns, 24/7 customer service and a faultless and enjoyable electronic buying experience.

    a. Consumer protection on distance-selling transactions

    One thing to bear in mind, though. While there is no singular or specific law governing e-commerce by retailers or any other seller of goods or services via the internet, in the US, it is a distribution channel which is tightly regulated in the European Union (‟EU”) and the UK.

    In particular, national laws transposing the EU directive 2011/83 on consumer rights, which aims at achieving a real business-to-consumer internal market, striking the right balance between a high level of consumer protection and the competitiveness of businesses, apply in the 27 EU member-states and in the UK, as ‟retained EU law” (i.e. a new type of UK law filling the gap where EU law used to be, pursuant to the EU withdrawal act 2018).

    Thanks to these EU and UK national laws, the withdrawal period during which a consumer may withdraw from the sale, has been extended from 7 to 14 days. They introduced the use of a standard form, that can be used by consumers to exercise their withdrawal rights. Such form must be made available to consumers online or sent to them before the contract is entered into. If a consumer exercises this withdrawal right, the business must refund the consumer for all amounts paid, including delivery costs, within a period of 14 calendar days.

    If your US fashion or luxury brand wants to sell, online, to European consumers, it must comply with those above-mentioned EU and UK national laws protecting consumers.

    So, your best bet is to adopt a best practice approach, offering the same level of consumer protection rights to all your clients, all over the world, which will be in compliance with the high standards imposed by the EU and UK national laws transposing the EU directive 2011/83 on consumer rights.

    b. General data protection regulation and privacy

    Also, Europeans are quite touchy with regards to their personal data and how businesses manage it.

    The General data protection regulation (‟GDPR”), adopted in April 2016, reflects these concerns and how they are addressed in the EU and the UK.

    As a result, e-commerce stores, which target the EU and UK markets, must have a data privacy policy, as well as a cookies policy, as well as some general terms and conditions of use of their e-commerce website, as well as some general terms and conditions of sale on their e-commerce website, which all comply with the GDPR and national data protection laws such as the French ‟loi informatique et libertés” and the UK data protection act 2018.

    In addition, companies offering products and services to EU and UK consumers must appoint a data protection officer, ensuring that they:

    • comply with such data protection legal framework,
    • have a systemic and quick process in place, should they suffer from a data breach or some hacking issues of their e-commerce website, and
    • have a designated point of contact, who will liaise with the EU or UK data protection authority, such as the ‟Commission informatiques et Libertés” (‟CNIL”) in France, or the Information Commissioner’s Office (‟ICO”) in the UK.

    Again, perhaps the best approach, for any fashion and luxury business with global ambitions, is to set up a data protection policy worldwide, which will apply to all its customers globally, and which will meet the high standards imposed by the GDPR.

    While it may be a steep learning curving, to bring your ecommerce website and business up to these standards, your fashion brand will only gain in reputation, coming across as a deeply respectful company, in tune with consumers’ needs and concerns with respect to data protection and privacy.

    c. Value added tax

    Online sales are taxed in the same way than sales in brick-and-mortar retail stores, in the EU and the UK: they are all subjected to a 20 percent value added tax (‟VAT”) rate. It is the standard VAT rate in France and the UK and is applicable on all fashion and luxury products.

    Indeed, since July 2021, all e-commerce purchases, even those made by retailers based outside the EU or the UK, are subjected to VAT. While there used to be an exemption of VAT, for goods imported in the EU, and sold for less than 22 Euros, they are no longer exonerated of VAT.

    So, what does this mean, practically, for a US fashion business that sells its wares via e-commerce in Europe? It must register with the Import one-stop shop (‟IOSS”), to comply with its VAT e-commerce obligations on distance sales of imported goods. And it must charge VAT on all fashion goods imported to the EU.

    d. Import duties

    If the VAT and import duties (or trade tariffs) are not planned for, and paid promptly, when the imported fashion products enter the EU or UK, this will cause customs delays, slow your delivery time and negatively impact your customer’s experience.

    It is therefore essential to clarify from the outset, with your EU or UK customer, who is in charge of bearing those costs, and how. These additional costs, and the responsibility for paying these, must be clearly communicated on your e-commerce website and/or social channels, as well as at the checkout.

    Generally, the customs clearance process is more or less the same in all EU countries. As far as shipping documents go, a commercial invoice and air waybill are required for all international shipments.

    Personal shipments of low-value, unregulated goods can usually clear customs without any additional documentation.

    However, fashion brands in non-EU countries will need an Economic operators registration and identification number (‟EORI number”), if they will be making customs declarations for shipments to EU countries. Shippers based outside the EU can request the EORI number from the customs authority in the EU country where they first lodge a customs declaration.

    Customs duties will be charged for shipments valued over 150 Euros.

    As a US fashion or luxury brand keen to do business in the EU and the UK, you need to adapt your e-commerce website, by adding some information and checkout options relating to VAT and custom duties, and by adding appropriate terms and conditions’ webpages, compliant with the GDPR and EU laws on consumer protection during distance-selling transactions. This will be a winning recipe for your European conquest.

    2. Selling fashion products from the US to Europe, via third-party e-commerce sites: the holy grail

    When you sell your fashion wares via third party ecommerce websites, as a US business, you somehow delegate the above-mentioned EU and UK compliance issues to someone else.

    Indeed, it will be down to the mytheresa, net-a-porter, theoutnet and matchesfashion of this world to have all their ducks in a row, in order to comply with EU regulations.

    However, you still have to focus on two main points, when selling your products via third party ecommerce sites.

    Firstly, a working capital consideration: are you ready to accept consignment, or do you only do wholesale? In other words, will you get paid only if and when your product is sold by the e-commerce platform, or will you get paid for the product, by this third-party retailer, whether or not it sells on the online retail store?

    Secondly, are your products compliant with EU regulations relating to product safety rules and standards? This is especially true if you are selling high risk products such as jewellery (in direct contact with the skin) or children’s apparel and jewellery. For example, the EU REACH regulation limits the concentration of lead in jewellery and other articles, while US jewellery companies have no such limitations on their internal market. It is therefore essential for your US fashion and luxury brand to double-check, before exporting to the EU or the UK, that your products comply with these EU and UK product safety rules and standards, especially now that class action lawsuits are allowed in Europe.

    3. Selling US fashion products via European brick & mortar retailers and stockists: the traditional route

    During the European seasonal fashion trade shows, such as Pitti and White, in Italy, and Tranoi, Man/Woman and Premiere Classe in Paris, France, your US brand may meet some European stockists interested in selling your wares in their EU or UK brick-and-mortar retail stores.

    This is a great opportunity to showcase your US brand to European consumers and should be embraced with ‟cautious celebration”. Indeed, while the two above-mentioned considerations of consignment vs wholesale, and of compliance with EU product safety rules and standards, should be taken into account, a proper discussion about the retail channels of the EU or UK brick & mortar stores also needs to take place.

    Does the EU or UK stockist intend to sell solely in their physical store, or also online, on their e-commerce boutique? Under article 101 of the treaty on the Functioning of the European Union (‟TFEU”), luxury and fashion brands cannot ban their distributors from selling their products online, through ecommerce, as this would be a competition law breach, deemed to be an ‟anticompetitive restriction”. However, luxury and fashion brands may impose some criteria and conditions to their stockists, to be able to sell their products online, in order to preserve the luxury aura and prestige of their products sold online, via the terms of their distribution agreements.

    Indeed, these above-mentioned discussions and conditions could be the premises of setting up a selective distribution network for your US brand in Europe. Selective distribution is the most-used distribution technique for perfumes, cosmetics, leather accessories and ready-to-wear in Europe. It escapes the qualification of anti-competitive agreement, under article 101(3) of the TFEU, via a vertical agreement block exemption.

    If you decide to appoint an agent, or a distributor, for the EU and UK territories, so that they find more stockists for your products in their geographical territories, your fashion brand must have a clear distribution plan in place, which needs to be set out in their agency agreement or distribution agreement. This way, your agent or distributor will be able to implement this distribution strategy, according to your guidelines and its contractual undertakings, in the designated EU or UK territory.

    4. What’s in the works, with a global tax for digital platforms? How is that going to affect fashion and luxury brands worldwide?

    Earlier this year, after the election of Joe Biden, we have heard a lot about an agreement on the corporate taxation of multinationals, paving the way to create new rules for the imposition of levies on the world’s multinational enterprises (‟MNEs”).

    This is because European governments, and businesses, are fed up with US MNEs, such as Amazon, Google, Facebook, Starbucks and Apple, not paying corporate tax on their soil, but solely in the US and/or in European tax havens such as Ireland (which corporate tax rate is among the lowest in Europe at 12.5 percent).

    Also, transfer pricing (that is, what affiliated companies charge each other for finished goods, services, financing or use of intellectual property) has been a source of tax planning opportunity, and the largest single source of tax controversy for MNEs, in a wide variety of industries, including retail and consumer products companies.

    The French government went as far as setting up its own unilateral digital services tax, at a 3 percent rate, which applies to social networks, search engines, intermediaries such as online selling platforms, digital services, online retailers, since December 2020.

    In July 2021, 130 countries and jurisdictions, representing more than 90 percent of global GDP, had joined a new plan to reform international taxation rules and ensure that MNEs pay a fair share of tax, wherever they operate, according to the OECD. If these reforms take place, taxing rights on more than USD100 billion of profit are expected to be reallocated to market jurisdictions each year, while the global minimum corporate tax will be at a rate of at least 15 percent and will generate around USD150 billion in additional global tax revenues annually.

    While these global tax reforms may not affect the P&L of most fashion and luxury brands directly, it will definitely impact the tax burden of their digital distributors, marketplaces and channels, around the world.

    These tax reforms will level the playing field, ensuring that wealth is redistributed more fairly, while globalisation and fashion distribution continue their ineluctable growth and expansion.

     

    Crefovi regularly updates its social media channels, such as LinkedinTwitterInstagramYouTube and Facebook. Check our latest news there!

     

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      How to enforce civil and commercial judgments after Brexit?

      As explained in our two previous articles relating to Brexit, ‟How to protect your creative business after Brexit?” and ‟Brexit legal implications: the road less travelled”, the European Union (‟EU”) regulations and conventions on the jurisdiction and the recognition and enforcement of judgments in civil and commercial matters, ceased to apply in the United Kingdom (‟UK”) once it no longer was a EU member-state. Therefore, since 1 January 2021 (the ‟Transition date”), no clear legal system is in place, to enforce civil and commercial judgments after Brexit, in a EU member-state, or in the UK. Creative businesses now have to rely on domestic recognition regimes in the UK and each EU member-state, if in existence. This introduces additional procedural steps before a foreign judgment is recognised, which makes the enforcement of EU civil and commercial judgments in the UK, and of UK civil and commercial judgments in the EU, more time-consuming, complex and expensive.

      How to enforce civil and commercial judgments after Brexit1. How things worked before Brexit, with respect to the enforcement of civil and commercial judgments between the EU and the UK

      a. The EU legal framework

      Before the Transition date on which the UK ceased to be a EU member-state, there were, and there still are between the 27 remaining EU member-states, four main regimes that are applicable to civil and commercial judgments obtained from EU member-states, depending on when, and where, the relevant proceedings were started.

      Each regime applies to civil and commercial matters, and therefore excludes matters relating to revenue, customs and administrative law. There are also separate EU regimes applicable to matrimonial relationships, wills, successions, bankruptcy and social security.

      The most recent enforcement regime applicable to civil and commercial judgments is EU regulation n. 1215/2012 of the European parliament and of the council dated 12 December 2012 on the jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the ‟Recast Brussels regulation). It applies to EU member-states’ judgments handed down in proceedings started on or after 10 January 2015.

      The original Council regulation n. 44/2001 dated 22 December 2000 on the jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the ‟Original Brussels regulation”), although no longer in force upon the implementation of the Recast Brussels regulation on 9 January 2015, still applies to EU member-states’ judgments handed down in proceedings started before 10 January 2015.

      Moreover, the Brussels convention dated 27 September 1968 on the jurisdiction and the enforcement of judgments in civil and commercial matters (the ‟Brussels convention”), also continues to apply in relation to civil and commercial judgments between the 15 pre-2004 EU member-states and certain territories of EU member-states which are located outside the EU, such as Aruba, Caribbean Netherlands, Curacao, the French overseas territories and Mayotte. Before the Transition date, the Brussels convention also applied to judgments handed down in Gibraltar, a British overseas territory.

      Finally, the Lugano convention dated 16 September 1988 on the jurisdiction and the enforcement of judgments in civil and commercial matters (the ‟Lugano convention”), which was replaced on 21 December 2007 by the Lugano convention dated 30 October 2007 on the jurisdiction and the recognition and enforcement of judgments in civil and commercial matters (the ‟2007 Lugano convention”), govern the recognition and enforcement of civil and commercial judgments between the EU and certain member-states of the European Free Trade Association (‟EFTA”), namely Iceland, Switzerland, Norway and Denmark but not Liechtenstein, which never signed the Lugano convention.

      The 2007 Lugano convention was intended to replace both the Lugano convention and the Brussels convention. As such it was open to signature to both EFTA members-states and to EU member-states on behalf of their extra-EU territories. While the former purpose was achieved in 2010 with the ratification of the 2007 Lugano convention by all EFTA member-states (except Liechtenstein, as explained above), no EU member-state has yet acceded to the 2007 Lugano convention on behalf of its extra-EU territories.

      The UK has applied to join the 2007 Lugano convention after the Transition date, as we will explain in more details in section 2 below.

      b. Enforceability of remedies ordered by a EU court

      Before Brexit, the Recast Brussels regulation, the Original Brussels regulation, the Brussels convention, the Lugano convention and the 2007 Lugano convention (together, the ‟EU instruments”) provided, and still provide with respect to the 27 remaining EU member-states, for the enforcement of any judgment in a civil or commercial matter given by a court of tribunal of a EU member-state, whatever it is called by the original court. For example, article 2(a) of the Recast Brussels regulation provides for the enforcement of any ‟decree, order, decision or writ of execution, as well as a decision on the determination of costs or expenses by an officer of the court”.

      The Original Brussels regulation also extends to interim, provisional or protective relief (including injunctions), when ordered by a court which has jurisdiction by virtue of this regulation.

      c. Competent courts

      Before the Transition date, proceedings seeking recognition and enforcement of EU foreign judgments in the UK should be brought before the high court in England and Wales, the court of session in Scotland and the high court of Northern Ireland.

      Article 32 of the Brussels convention provides that the proceedings seeking recognition and enforcement of EU foreign judgments in France should be brought before the president of the ‟tribunal judiciaire”. Therefore, before the Transition date, a UK judgment had to be brought before such president, in order to be recognised and enforced in France.

      d. Separation of recognition and enforcement

      Before the Transition date, and for judgments that fell within the EU instruments other than the Recast Brussels regulation, the process for obtaining recognition of a EU judgment was set out in detail in Part 74 of the UK civil procedure rules (‟CPR”). The process involved applying to a high court master with the support of written evidence. The application should include, among other things, a verified or certified copy of the EU judgment and a certified translation (if necessary). The judgment debtor then had an opportunity to oppose appeal registration on certain limited grounds. Assuming the judgment debtor did not successfully oppose appeal registration, the judgment creditor could then take steps to enforce the judgment.

      Before the Transition date, and for judgments that fell within the Recast Brussels regulation, the position was different. Under article 36 of the Recast Brussels regulation, judgments from EU member-states are automatically recognised as if they were a judgment of a court in the state in which the judgment is being enforced; no special procedure is required for the judgment to be recognised. Therefore, prior to Brexit, all EU judgments that fell within the Recast Brussels regulation were automatically recognised as if they were UK judgments, by the high court in England and Wales, the court of session in Scotland and the high court of Northern Ireland. Similarly, all UK judgments that fell within the Recast Brussels regulation were automatically recognised as if they were French judgments, by the presidents of the French ‟tribunal judiciaires”.

      Under the EU instruments, any judgment handed down by a court or tribunal from a EU member-state can be recognised. There is no requirement that the judgment must be final and conclusive, and both monetary and non-monetary judgments are eligible to be recognised. Therefore, neither the UK courts, nor the French courts, are entitled to investigate the jurisdiction of the originating EU court. Such foreign judgments shall be recognised without any special procedures, subject to the grounds for non-recognition set out in article 45 of the Recast Brussels regulation, article 34 of the Original Brussels regulation and article 34 of the Lugano convention, as discussed in paragraph e. (Defences) below.

      For the EU judgment to be enforced in the UK, prior to the Transition date, and pursuant to article 42 of the Recast Brussels regulation and Part 74.4A of the CPR, the applicant had to provide the documents set out in above-mentioned article 42 to the UK court, i.e.

      • a copy of the judgment which satisfies the conditions necessary to establish its authenticity;
      • the certificate issued pursuant to article 53 of the Recast Brussels regulation, certifying that the above-mentioned judgment is enforceable and containing an extract of the judgment as well as, where appropriate, relevant information on the recoverable costs of the proceedings and the calculation of interest, and
      • if required by the court, a translation of the certificate and judgment.

      It was incumbent on the party resisting enforcement to apply for refusal of recognition of the EU judgment, pursuant to article 45 of the Recast Brussels regulation.

      Similarly, for UK judgments to be enforced in France, prior to the Transition date, the applicant had to provide the documents set out in above-mentioned article 42 to the French court, which would trigger the automatic enforcement of the UK judgment, in compliance with the principle of direct enforcement.

      e. Defences

      While a UK defendant may have raised merits-based defences to liability or to the scope of the award entered in the EU jurisdiction, the EU instruments contain express prohibitions on the review of the merits of a judgment from another EU member-state. Consequently, while a judgment debtor may have objected to the registration of a judgment under the EU instruments (or, in the case of the Recast Brussels regulation, which does not require such registration, appeal the recognition or enforcement of the foreign judgment), he or she could have done so only on strictly limited grounds.

      In the case of the Recast Brussels regulation, there are set out in above-mentioned article 45 and include:

      • if recognition of the judgment would be manifestly contrary to public policy;
      • if the judgment debtor was not served with proceedings in time to enable the preparation of a proper defence, or
      • if conflicting judgments exist in the UK or other EU member-states.

      Equivalent defences are set out in articles 34 to 35 of the Original Brussels regulation and the 2007 Lugano convention, respectively. The court may not have refused a declaration of enforceability on any other grounds.

      Another ground for challenging the recognition and enforcement of EU judgments is the breach of article 6 of the European Convention on Human Rights (‟ECHR”), which is the right to a fair trial. However, since a fundamental objective underlying the EU regime is to facilitate the free movement of judgments by providing a simple and rapid procedure, and since it was established in Maronier v Larmer [2003] QB 620 that this objective would be frustrated if EU courts of an enforcing EU member-state could be required to carry out a detailed review of whether the procedures that resulted in the judgment had complied with article 6 of the ECHR, there is a strong presumption that the EU court procedures of other signatories of the ECHR are compliant with article 6. Nonetheless, the presumption can be rebutted, in which case it would be contrary to public policy to enforce the judgment.

      To conclude, pre-Brexit, the EU regime (and, predominantly, the Recast Brussels regulation) was an integral part of the system of recognition and enforcement of judgments in the UK. However, after the Transition date, the UK left the EU regime as found in the Recast Brussels regulation, the Original Brussels regulation and the Brussels convention, since these instruments are only available to EU member-states.

      So what happens now?

      2. How things work after Brexit, with respect to the enforcement of civil and commercial judgments between the EU and the UK

      In an attempt to prepare the inevitable, the EU commission published on 27 August 2020 a revised notice setting out its views on how various conflicts of laws issues will be determined post-Brexit, including jurisdiction and the enforcement of judgments (the ‟EU notice”), while the UK ministry of justice published on 30 September 2020 Cross-border civil and commercial legal cases: guidance for legal professionals from 1 January 2021” (the ‟MoJ guidance”).

      a. The UK accessing the 2007 Lugano convention

      As mentioned above, the UK applied to join the 2007 Lugano convention on 8 April 2020, as this is the UK’s preferred regime for governing questions of jurisdiction and enforcement of judgments with the 27 remaining EU member-states, after the Transition date.

      However, accessing the 2007 Lugano convention is a four-step process and the UK has not executed those four stages in full yet.

      While step one was accomplished on 8 April 2020 when the UK applied to join, step two requires the EU (along with the other contracting parties, ie the EFTA member-states Iceland, Switzerland, Norway and Denmark) to approve the UK’s application to join, followed in step three by the UK depositing the instrument of accession. Step four is a three-month period, during which the EU (or any other contracting state) may object, in which case the 2007 Lugano convention will not enter into force between the UK and that party. Only after that three-month period has expired, does the 2007 Lugano convention enter into force in the UK.

      Therefore, in order for the 2007 Lugano convention to have entered into force by the Transition date, the UK had to have received the EU’s approval and deposited its instrument of accession by 1 October 2020. Neither have occured.

      Since the EU’s negotiating position, throughout Brexit, has always been ‟nothing is agreed until everything is agreed”, and in light of the recent collision course between the EU and the UK relating to trade in Northern Ireland, it is unlikely that the UK’s request to join the 2007 Lugano convention will be approved by the EU any time soon.

      b. The UK accessing the Hague convention

      Without the 2007 Lugano convention, the default position after the Transition date is that jurisdiction and enforcement of judgments for new cases issued in the UK will be determined by the domestic law of each UK jurisdiction (i.e. the common law of England and Wales, the common law of Scotland and the common law of Northern Ireland), supplemented by the Hague convention dated 30 June 2005 on choice of court agreements (‟The Hague convention”).

      I. At common law rules

      The common law relating to recognition and enforcement of judgments applies where the jurisdiction from which the judgment relates does not have an applicable treaty in place with the UK, or in the absence of any applicable UK statute. Prominent examples include judgments of the courts of the United States, China, Russia and Brazil. And now of the EU and its 27 remaining EU member-states.

      At common law, a foreign judgment is not directly enforceable in the UK, but instead will be treated as if it creates a contract debt between the parties. The foreign judgment must be final and conclusive, as well as for a specific monetary sum, and on the merits of the action. The creditor will then need to bring an action in the relevant UK jurisdiction for a simple debt, to obtain judicial recognition in accordance with Part 7 CPR, and an English judgment.

      Once the judgment creditor has obtained an English judgment in respect of the foreign judgment, that English judgment will be enforceable in the same way as any other judgment of a court in England.

      However, courts in the UK will not give judgment on such a debt, where the original court lacked jurisdiction according to the relevant UK conflict of law rules, if it was obtained by fraud, or is contrary to public policy or the requirements of natural justice.

      With such blurry and vague contours to the UK common law rules, no wonder that many lawyers and legal academics, on both sides of the Channel, decry the ‟mess” and ‟legal void” left by Brexit, as far as the enforcement and recognition of civil and commercial judgments in the UK are concerned.

      II. The Hague convention

      As mentioned above, from the Transition date onwards, the jurisdiction and enforcement of judgments for new cases issued in England and Wales will be determined by its common law, supplemented by the Hague convention.

      The Hague convention gives effect to exclusive choice of court clauses, and provides for judgments given by courts that are designated by such clauses to be recognised and enforced in other contracting states. The contracting states include the EU, Singapore, Mexico and Montenegro. The USA, China and Ukraine have signed the Hague convention but not ratified or acceded to it, and it therefore does not currently apply in those countries.

      Prior to the Transition date, the UK was a contracting party to the Hague convention because it continued to benefit from the EU’s status as a contracting party. The EU acceded on 1 October 2015. By re-depositing the instrument of accession on 28 September 2020, the UK acceded in its own right to the Hague convention on 1 January 2021, thereby ensuring that the Hague convention would continue to apply seamlessly from 1 January 2021.

      As far as types of enforceable orders are concerned, under the Hague convention, the convention applies to final decisions on the merits, but not interim, provisional or protective relief (article 7). Under article 8(3) of the Hague convention, if a foreign judgment is enforceable in the country of origin, it may be enforced in England. However, article 8(3) of the Hague convention allows an English court to postpone or refuse recognition if the foreign judgment is subject to appeal in the country of origin.

      However, there are two major contentious issues with regards to the material and temporal scope of the Hague convention, and the EU’s and UK’s positions differ on those issues. They are likely to provoke litigation in the near future.

      The first area of contention relates to the material scope of the Hague convention: more specifically, what is an ‟exclusive choice of court agreement”?

      Article 1 of the Hague convention provides that the convention only applies to exclusive choice of courts agreements, so the issue of whether a choice of court agreement is ‟exclusive” or not is critical as to whether such convention applies.

      Exclusive choice of court agreements are defined in article 3(a) of the Hague convention as those that designate ‟for the purpose of deciding disputes which have arisen or may arise in connection with a particular legal relationship, the courts of one Contracting state or one or more specific courts of one Contracting state, to the exclusion of the jurisdiction of any other courts”.

      Non-exclusive choice of court agreements are defined in article 22(1) of the The Hague convention as choice of court agreements which designate ‟a court or courts of one or more Contracting states”.

      Although this is a fairly clear distinction for ‟simple” choice of court agreements, ‟asymmetric” or ‟unilateral” agreements are not so easily categorised. These types of jurisdiction agreements are a common feature of English law-governed finance documents, such as the Loan Market Association standard forms. They generally give one contracting party (the lender) the choice of a range of courts in which to sue, while limiting the other party (the borrower) to the courts of a single state (usually, the lender’s home state).

      There are divergent views as to whether asymmetric choice of court agreements are exclusive or non-exclusive for the purposes of the Hague convention. While two English high court judges have expressed the view that choice of court agreements should be regarded as exclusive, within the scope of the Hague convention, the explanatory report accompanying the Hague convention, case law in EU member-states and academic commentary all suggest the opposite.

      This issue will probably be resolved in court, if and when the time comes to decide whether asymmetric or unilateral agreements are deemed to be exclusive choice of court agreements, susceptible to fall within the remit of the Hague convention.

      The second area of contention relates to the temporal scope of the Hague convention: more specifically, when did the Hague convention ‟enter into force” in the UK?

      Pursuant to article 16 of the Hague convention, such convention only applies to exclusive choice of court agreements concluded ‟after its entry into force, for the State of the chosen court”.

      There is a difference of opinion as to the application of the Hague convention to exclusive jurisdiction clauses in favour of UK courts entered into between 1 October 2015 and 1 January 2021, when the UK was a party to the Hague convention by virtue of its EU membership.

      Indeed, while the EU notice states that the Hague convention will only apply between the EU and UK to exclusive choice of court agreements ‟concluded after the convention enters into force in the UK as a party in its own right to the convention” – i.e. from the Transition date; the MoJ guidance sets out that the Hague convention ‟will continue to apply to the UK (without interruption) from its original entry into force date of 1 October 2015”, which is when the EU became a signatory to the convention, at which time the convention also entered into force in the UK by virtue of the UK being a EU member-state.

       

      To conclude, the new regime of enforcement and recognition of EU judgments in the UK, and vice versa, is uncertain and fraught with possible litigation with respect to the scope of application of the Hague convention, at best.

      Therefore, and since these legal issues relating to how to enforce civil and commercial judgments after Brexit are here to stay for the medium term, it is high time for the creative industries to ensure that any dispute arising out of their new contractual agreements are resolved through arbitration.

      Indeed, as explained in our article ‟Alternative dispute resolution in the creative industries, arbitral awards are recognised and enforced by the Convention on the recognition and enforcement of foreign arbitral awards 1958 (the ‟New York convention”). Such convention is unaffected by Brexit and London, the UK capital, is one of the most popular and trusted arbitral seats in the world.

      Until the dust settles, with respect to the recognition and enforcement of EU judgments in the UK, and vice versa, it is wise to resolve any civil or commercial dispute by way of arbitration, to obtain swift, time-effective and cost-effective resolution of matters, while preserving the cross-border relationships, established with your trade partners, between the UK and the European continent.



       

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        Why the UK TuneIn judgments are a return to the dark ages

        What happens when you let some old farts from the UK judiciary, fueled by a doomed Brexit, single-handedly decide the technological future, advances and boon to which UK users should have access to? Well, stupid business choices justified by perfectly elegant and intellectually stimulating legal decisions handed down by old timers on a rampage to make ‟Britain great again”. I am sorry that TuneIn had to pay such a hefty price, on the UK market but, oh boy, it did.

        TuneInAs a daily jogger, I am an early adopter, and fervent user, of radio apps, such as Radio Garden and TuneIn, in order to listen to, in particular, Los Angeles’ radio stations such as KCRW Eclectic 24 and KPFK, while I am practising my daily and morning sport exercises. While at home, I listen to French radio stations such as FIP or Nova, or to LA channels, via Tunein which is accessible on my Sonos home sound systems, software (installed on my two iphones) and speakers.

        However, over the last year or so, I could not help but notice that European radio stations, such as FIP or France Inter, were no longer accessible from either TuneIn station or Sonos Radio station, while I am in the United Kingdom (‟UK”).

        Well, now I know why. Indeed, I read today the 3 latest issues from Music Confidential published by Susan Butler on the ‟TuneIn appellate decision” (sic).

        Intrigued, I decided to delve deeper into this case and gulped (there is no other word) the 47 pages of the Warner Music UK Ltd and Sony Music Entertainment UK Ltd versus TuneIn Inc decision handed down by the High court of justice of England & Wales on 1 November 2019, as well as the 56 pages of the TuneIn Inc versus Warner Music UK Limited and Sony Music Entertainment UK Limited judgment handed down by the Court of appeal on 26 March 2021.

        Whilst I admire the intellectual virtuosity of the first degree judge, Justice Birss, displayed in the above-mentioned first degree decision, as well as the ‟strong hand in a velvet glove” approach favoured by the appeal judge, Justice Arnold, in the appellate judgment, I can only conclude that this exercise in intellectual masturbation by the judiciary has led, yet again, to another castration of a technological product full of creativity, advancement, connectivity to the world and fantastic ubiquity.

        Am I therefore pissed off?

        Yes. Here is why.

        Are you actually saying that TuneIn should ditch internet radio stations which are unlicensed in the UK?

        The ‟modus operandi” of TuneIn is to operate an online platform, website and apps, which provide a service enabling users to access radio stations around the world. The service is called TuneIn Radio.

        It is now available on over 200 platform connected devices, including smart phones, tablets, televisions, car audio systems, smart speakers such as Sonos, and wearable technologies.

        TuneIn Radio has links to over 100,000 radio stations, broadcast by third parties from many different geographic locations around the world. It is monetised through advertising and subscriptions, although the subscription is free for many users of hardware products such as Sonos and Bose sound systems.

        TuneIn Radio is awesome because, like Radio Garden, it allows users to save some radio channels as favourites, offers some curation services as well as some search functions, which a new user may use when he or she does not know what radio stations he or she may like. In addition, TuneIn Radio provides perks such as personalisation of content, collation of station information presented on individual station pages, and artist information set out on dedicated artist pages.

        Even better, until a few years ago, TuneIn Radio offered a recording device, through its Pro app, which also included a curated repertoire of a large number of music internet radio stations.

        As a user, you are therefore blissfully entertained, and your every musical needs catered for, when using the full gamut of TuneIn Radio’s perks and services.

        Well, such users’ bliss was short-lived, however, since the High court decision, confirmed by the 2021 appellate judgment, found that by including internet radio stations which are either unlicensed, such as Capital FM Bangladesh and Urban 96.5 Nigeria, or not compliant with the local neighbouring rights regime, such as Kazakhstan station Gakku FM and Montenegro’s City Radio, TuneIn Radio was infringing under section 20 of the 1988 Copyright, designs and patents act (the ‟Act”) which provides:

        20. Infringement by communication to the public
        (1) The communication to the public of the work is an act restricted by the copyright in—
        (a) a literary, dramatic, musical or artistic work,
        (b) a sound recording or film, or
        (c) a broadcast.

        (2) References in this Part to communication to the public are to communication to the public by electronic transmission, and in relation to a work include—
        (a) the broadcasting of the work;
        (b) the making available to the public of the work by electronic transmission in such a way that members of the public may access it from a place and at a time individually chosen by them.

        So not only those unlicensed and non-compliant internet radio stations are in breach of the right to communicate to the public, but TuneIn Radio is too, since it provides links to those streams.

        Had TuneIn Radio not obtained a warranty from those internet radio stations that they operated lawfully in their home state? God forbid, TuneIn Radio could not rely on such warranty, of course, and the onus was on TuneIn Radio to double-check that such internet radio stations were either licensed or compliant with their local neighbouring rights regime.

        So what is the direct consequence of such stance, taken by the UK High court and Court of appeal? Well, all those internet radio stations become unavailable to the public, in the UK but also probably in other European countries such as the 27 member-states of the European Union (‟EU”), via the TuneIn Radio platforms, websites and apps.

        Indeed, all the reasoning made by Justice Birss, in the first degree case, as well as Justice Arnold, in the appellate case, revolved around article 3 of the EU Information Society Directive (the ‟Directive”), which was transposed into the above-mentioned section 20 of the Act, and the abondant, eye-wateringly complex and excruciatingly intricate related case-law of the Court of Justice of the European Union (‟CJEU”) on the right of communication to the public.

        So, yeah, you bet, this TuneIn case is valid both for the UK (which has now exited the EU via its unwitty Brexit), and the 27 remaining member-states of the EU.

        Therefore, users and customers lose because they cannot listen to all worldwide internet radio streams via TuneIn anymore, as a direct consequence of the UK decisions.

        And it does not stop there! Perish the thought.

        What about those music radio stations which are licensed for a local territory other than the UK, such as VRT Studio Brussel in Belgium, Mix Megapol in Sweden and MavRadio in the USA?

        For these radio stations outside the USA, the countries operate various kinds of remuneration rights regimes and these stations are paying remuneration under these local schemes. The USA operates a statutory licence scheme conditional on paying royalties and the sample radio MavRadio pays those royalties. However, in all of these cases, the relevant body has not granted geographical rights for the UK.

        Ahhh, the UK first degree judgement, confirmed in appeal says, that’s not my problem, my dear sir: TuneIn’s act of communication in relation to those sample radio streams which pay royalties to a body that does not grant geographical rights for the UK, is unlawful, unless licensed by the UK rights holder. Since it is currently not, TuneIn’s actions amount to infringement under above-mentioned section 20 of the Act.

        Therefore, TuneIn has to now remove all this pool of internet radio stations from its platforms, apps and websites too, until it has figured out how to strike a deal with the UK rights holders.

        Probably, TuneIn’s best call is to reach out to the UK neighbouring rights collecting society, PPL, and start the licensing negotiations from there, immediately. Also, TuneIn better cooperate directly with labels Warner and Sony, to strike those licences, now that the UK first degree decision has been confirmed in appeal and since these two claimants ‟account for more than half the market for digital sales of recorded music in the UK and about 43 percent globally” (sic).

        While I can understand that the UK courts would slam TuneIn for not proactively getting a UK neighbouring rights’ licence for its own premium radio stations, made available exclusively to TuneIn’s subscribers, I found it profoundly castrating to make TuneIn’s liable for primary infringement of the right of communication to the public for merely providing streams to unlicensed and non-compliant third party internet radio stations and to third party internet radio stations which do not pay royalties in the UK.

        What about the right of UK and EU users to have access to as much culture, musical experience and knowhow, as possible, even in a geopolitical context where most countries in the world do not care about, and probably don’t even know what are, neighbouring rights?

        This is directly discriminating UK and, probably, all EU listeners and users, because TuneIn will now have to geoblock all its links to non-compliant and unruly streams, which probably constitute at least 50 percent of the 100,000 internet radio stations available on its apps, platforms and websites.

        So Justice Birss and Justice Arnold can now breathe a sigh of relief, at the thought of having saved European neighbouring rights in the face or barbarian non-British cultural invasion, but I am sure that most UK users of TuneIn only have a ‟fuck you” to respond in return, for their ill-advised, technologically-stiffling and Brexitist stance on the matter.

        Now, by using TuneIn Radio, a UK user will only have access to music radio stations which are licensed in the UK by PPL, such as BBC Radio 2, Heart London, Classic FM and Jazz FM. Thank you very much, but we can already access those radio channels on our terrestrial radio sets or on their respective online platforms, from the UK, so what is the added value of TuneIn Radio in the UK now, pray tell?

        So I can’t use the recording service on TuneIn anymore?

        Of course, Justice Birss, and then Justice Arnold, went for the jugular with respect to the recording option by users of TuneIn’s Pro app.

        Indeed, in terms of a user’s use of the recording function, the claimants contended that the Pro app was not just a recording device. It also included a curated repertoire of a large number of music internet radio stations. The purchaser of the Pro app would, reasonably, understand that TuneIne had sold them the Pro app (with its built in recording function) in order to allow them to record audio content offered by the TuneIn Radio service. There was also a point on the degree of control exercised by TuneIn. Only internet radio stations provided by TuneIn could be recorded and TuneIn could disable the record function at a station-by-station level.

        While this TuneIn recording function was a very original, and unique, offered feature, in the competitive world of radio aggregators, the High court decision, confirmed in appeal, swiftly killed it, by finding that ‟TuneIn had authorised the infringements carried out by its users by recording using the Pro app” and therefore ‟TuneIn’s service via the Pro app when the recording function was enabled infringed the claimants’ copyrights under Section 20 of the Act”.

        Even if Justice Arnold allowed the appeal, in his appellant judgment, against the conclusion drawn by the first degree judge, that TuneIn was liable for infringement by communication to the public in relation to the ‟category 1” stations (i.e. the internet radio stations which already are licensed in the UK via PPL) by virtue of providing the Pro app to UK users with the record function enabled, the outcome is the same: off with its head, with respect to the great recording function offered by TuneIn’s Pro app.

        As Susan Butler wisely wrote, in her Music Confidential’s last three issues, ‟in my view, however, that does not mean that (intellectual property) must be disruptive to digital innovation across national borders”. ‟(…) the bad kind of disruption – the costly and destructive kind – seems to occur most often when anyone tries to drag old business models or entities built around old business models into new multi-national digital marketplace. (…) Everyone must become more pliable to truly reshape the market to support true innovation”.

        Well, Susan, with the old farts who handed down the 2019 and then 2021 decisions (check them out on the audio-video recorded hearings here!), count on it.

        Another example of UK splendid and backward looking isolation, my friends: where is my visa to move to Los Angeles asap, please?

         

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          Why getting an agent is critical, to make it in the creative industries

          In the creative industries, the talent is often represented by middle men, who reach out to end customers, and find avenues whereby, and marketplaces on which, the products and/or services and skillset of the talent they represent are marketed, sold, distributed, licensed, etc. So, in the art world, these middle men are art galleries and auction houses. In the book publishing sector, these middle men are called literary agents, while in the film industry, those representing the above-the-line talent (actors, directors, writers) are called acting agents and agencies. Even music composers have their own composer agents, with a handful of players in this niche, in France and the United Kingdom (‟UK”). So, why do you need an agent, as a creative? How do you find an agent? How will your relationship with the agent work?

          agent1. Why do you need an agent, as a creative?

          As a creative, as a talent, you have mostly honed your creative skills, be it your painting skills, your sculpting skills, your acting skills, your writing and literary skills, your fashion design skills, etc.

          This is a completely different skill set than the one needed to:

          • getting substantial work in your creative field, relying on smooth marketing tactics, social media and public relations skills;
          • networking with the major players in your creative field, be it the most bankable film directors, the most skilled film producers, the stalwart book publishers, the most wealthy art collectors, the largest fashion brands who will hire you as a model for their catwalk presentations, etc.
          • negotiating sales, licensing, distribution agreements;
          • negotiating service providers agreement to act in a film or write the musical composition and soundtrack to a film;
          • negotiating publishing agreements of a literary work with books publishers and online content providers;
          • managing, in a strategical and optimal manner, the career of the talent, and
          • doing some reputation management work, when and if the career and image of a talent is getting tarnished for some reason.

          Well, in a nutshell, you have the required job description of an agent, set out above!

          This is why you need an agent: because he or she will do all the things mentioned above, for you, in order to enhance your career as a talent, and get you some jobs, some bookings or some sales, depending on what you have to offer.

          Also, there are very low barriers to entry to most creative fields, since everyone can become a player in that field without having to obtain a particular practising license or authorisation from one’s government to become an artist, a book author, a painter, an actor, a film director, etc.

          Indeed, unlike regulated industries, such as the legal profession, the medical profession, the accountancy profession, the banking and finance profession, creatives do not need to pass any stringent test or exam to be granted the right to work their creative jobs.

          Therefore, the gatekeepers in the creative industries are the agents: since it is in their interest to only work with the best talent, they will pick and choose only the most successful and skilled gamers, designers, artists, painters, actors, film directors, writers, models, music composers, etc. to represent.

          So, if you want to be part of the club, in your creative field, and land those big fat contracts, you must find yourself a good agent.

          2. How do you find an agent?

          Most of the time, it is by word of mouth, or through connections that one finds an agent.

          Of course, being an alumni from a prestigious creative school, such as the National Film and Television School (‟NFTS”), in the UK, or the Royal Academy of Dramatic Art (‟RADA”) helps tremendously, especially since agents love mingling with young graduates there, attending their final and graduation presentations and reviewing their final graduation projects, to assess the amount of talent such graduates may have.

          Think Alexander McQueen, the famed, and now deceased, fashion designer who was immediately spotted as a major player among top fashion designers, by the most elitist fashion press, when he presented his MA graduation collection, at his college Saint Martin’s in 1992.

          Having a family member or friend in the business also helps, and there are countless examples of film actors who gave a major push to their offsprings, in France, the UK and the United States (‟US”) by ‟connecting them” to their agents.

          If you are not one for nepotism, then you could also approach and cold-call the best agents for your particular creative field, and present them with your portfolio of works and CV, in the hopes that they will retain you as their client. However, this route is the toughest one, and you will probably get a lot of rejections, if and when you get picked by an agent.

          The web is an excellent source of information to find the best agents in your creative field, in France, the UK and the US.

          For example, on the best articles I have ever read on the highly-secretive agenting business is ‟Le fascinant business des agents de stars”, which dissects the rarified group of famous acting agents in Paris, France.

          3. How will your relationship with the agent work?

          The agenting business is mostly an unregulated one, although France, ever the formalistic one, has put in place some rules and regulations relating to the agenting profession in its labour code and a decree on the remuneration of artistic agents, which caps the agents’ earnings at 10 percent of the gross remunerations paid to the talent.

          The excellent French streaming series, ‟10 pour cent (‟Call my agent” on English streaming channels) gives a great example of what acting agents do, for a mere 10 percent of the actors’ earnings.

          In the UK and the US, there is way more of a ‟laissez-faire” approach to the agenting business, although the UK has some statutory regulations set out in the Employment Agencies Act 1973 and the Employment Businesses Regulations 2003, which set some standards in terms of:

          • providing relevant information and advice to the agents’ clients (i.e. the talent);
          • conducting all affairs on behalf of the agents’ clients, and
          • keeping records, in particular of the contracts and visa application processes, entered into by the agents’ clients during the course of the creative activities.

          UK and US agents usually get 15 percent commissions, although I have seen percentage rates going as high as 50 percent, in the case of art galleries selling consigned art works on behalf of artists they represent.

          These discrepancies in the commission rates, and the various obligations owed by the agent to the talent, are caused by the variance in the provisions set out in the representation agreements entered into between the talent and his or her agent. Since the ‟freedom to contract” principle applies, the terms of the contractual agreements entered into between the parties are left mostly to the freedom of those parties, except for the rare statutory points mentioned above.

          Very often, at our law firm Crefovi, we get approached by creatives who signed very poorly drafted, and very unbalanced, representation agreements with their agents in the past. Therefore, we support them in terminating such agenting agreements, while attempting to recover any earning unpaid to them by these agents.

          Therefore, as a talent, it is always advisable to instruct an entertainment lawyer, in order to review, amend and negotiate the terms of any draft representation agreement sent by the agent, before such talent signs it.

          Also, it is useful to become a member of a trade union for creative practitioners, such as Equity, which may provide you with ongoing career, business and legal advice, along the way.

          If you want to be successful in the arts, you need a top agent in your creative field to represent you. However, an agent is not your friend, but your future business partner, so you need to establish some clear, transparent and fair working conditions with him or her, from the outset. The best way to achieve this is to instruct a seasoned entertainment lawyer, like us at Crefovi, to negotiate such representation agreement for you. Then, it should be plain sailing, a lot of hard work and, hopefully, success and recognition at the end of the line, in your creative field!



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