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Publications � Summer 2016

Quarterly Commercial Update


Contents

1 ———— Foreword2 ———— A sign of the times4 ———— The rules of engagement - notification in warranty claims6 ———— Re-development works and lease assignments: landlords take note!8 ———— Immigration Act 201610 ———— Pension liberation fraud: liberating, but certainly not free12 ———— The importance of minuting board meetings

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ForewordWelcome to the Summer 2016 edition of Quarterly Commercial Update.

There has been much debate in the English courts about the interpretation of commercial contracts where there is some ambiguity in the drafting. Judges have at times seemed too keen to ditch the natural meaning of words and look at the context in which the contract was drafted and interpret provisions in light of their view of the underlying commercial common sense. The debate culminated in a Supreme Court case last year, Arnold v Britton, where the importance of the actual wording used triumphed over what, with hindsight, would be a more reasonable bargain. In our first article Benjamin Futerman looks at how the courts have recently interpreted variation clauses. Parties to a written agreement often wish to ensure that any variation to that agreement is only valid if it is executed with the same formality as the original contract and include an express clause stating that any variation must be in writing signed by all the parties. However, it is becoming clear that parties may need to be even more robust in their drafting in order to achieve this result.

Next we turn to another common contractual provision, the clause dealing with the giving of notices and more specifically the notification of a warranty claim under a sale and purchase agreement. Daniel Smith reflects on the recent flurry of cases on complying with warranty claim notification provisions. Generally the interpretation of these clauses is strict meaning that a buyer's warranty claim can be dismissed outright if they do not follow the requirements on notification meticulously.

Our third article also considers recent caselaw but this time with implications for landlords. Douglas Rhodes examines some

developments that will affect landlords wishing to redevelop their properties or assign leases.

Elsewhere Jay Moghal from our Private Wealth team outlines new measures in the Immigration Act 2016, which impact on employers and landlords; and Toyosi Ajimoko looks at a worrying scam involving pension liberation whereby people are duped into transferring their pensions to fraudsters in the mistaken belief they will get access to lump sums early. Most of these schemes are bogus and those aged under 55, who cannot as a general rule release their pension pots early, are being specifically targeted.

Finally, we review the law and practice relating to the recording of proceedings at board meetings. The Institute of Chartered Secretaries and Accountants has recently launched a consultation into the practice of minuting board meetings and will issue welcome guidance in due course.

As always, if you have any queries on the issues raised in this edition please do not hesitate to contact any of the writers or me at any time.

Michael PattinsonPartner � Corporate

t +44 (0)20 7423 8455e [email protected]

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A sign of the timesIt is often said that the law of contract is distinct because the parties have entered into a binding agreement with eyes wide open as to the possibilities that may occur. It is not uncommon to see construction contracts as hefty tomes and that would stand to reason: there is an awful lot that needs to be considered and could change on a construction project. Changes could be on the macro level and may affect a project's viability. For example the law could change, the market could alter, or Britain could vote to leave the European Union. There could also be significant micro changes, such as value engineering suggesting a cheaper design finish, or exceptionally adverse weather could distort a time frame for the project. Crucially, a construction contract will try to go to great lengths to dictate what should happen when circumstances change and where that risk should lie.

Perhaps because the parties have gone to such lengths to scope out the ramifications of any changes in their contract it is not uncommon to see a clause in contracts stating:

"Any variation of this Agreement shall not be effective unless made in writing and signed by or on behalf of each of the parties to this Agreement."

That is the exact wording from a contract in dispute in the recent case of C&S Associates UK Limited v Enterprise Insurance Company PLC. The case is between an insurance claims handler and an insurance company, but could easily apply to construction contracts.

In brief, the parties agreed to increase the fees that were payable under the contract. This was clearly a variation under the contract and the mechanism to effect such a variation was that this should have been documented "in writing signed by each of the parties".

Except, that's not what happened. The parties agreed to increase the fees via a

fairly informal e-mail exchange which, of course, does not contain the "signature" of the parties in the orthodox sense. This would probably not have mattered much except the parties fell out when C&S refused to provide 1,500 insurance files to Enterprise for review. Termination proceedings began and there was then an argument as to whether or not the fees had been increased or not.

Perhaps surprisingly, the Judge held that the fees had been effectively increased. Emails with standard signatures are sufficient to comply with the variation clause listed above. So long as the email intended to create legal relations (i.e it was intended by both parties that the email would effectively alter the fees payable under the contract) then the parties had varied the contract. The Judge held that a manuscript signature, paper documents or both parties "signing" the same document were not required to comply with the clause.

If the parties had not wanted email to be a valid means of varying the contract then they should have expressly excluded email as a form of "writing" in the above clause or elsewhere in the contract. On a similar

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theme, the construction case of Jawaby Property Investment Limited v The Interiors Group Limited and Another considered whether a pay less notice sent by email was valid. Under this contract there was no reference to communication by email, simply a requirement that notices be "in writing". In this instance the Judge held that as email was not expressly excluded as a means of communication the serving of the pay less notice by email was valid. Additionally, as the parties had previously accepted notices sent by email they had waived any requirement for documents to be sent in hard copy.

It seems that there is a clear consensus that the courts will interpret emails as being a form of written communication and that our standard signature blocks will constitute a "signature". Of course, this could be a double edged sword. Many businesses will prefer the ability to make changes to contracts or issue documents electronically without the rigmarole of printing, signing and posting such documents. If the parties do not want email to be a valid means of communicating under a contract then they must make that express and be prepared for slower processes.

Before there is a rush to amend drafting in our contracts it is worth considering that the courts' decisions are actually rather positive, progressive and pro-commerce. With so much of our communication being carried out electronically it is probably a good thing that the courts view email as a form of "writing". Do we really want a business climate where the lack of a physical inked signature (despite the clear intentions of the parties) allows an agreed variation to a contract to unravel?

Benjamin FutermanSolicitor � Projects and Construction


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The rules of engagement - notification in warranty claimsDisputes between parties to a contract concerning notification provisions are a common occurrence in claims for breach of warranty and failure to comply with relevant contractual procedures can lead to the dismissal of a party's warranty claim. Three recent cases highlight the importance of carefully adhering to notification provisions contained in sale and purchase agreements. This article looks at the pitfalls to avoid when giving a letter notifying a warranty claim.

Failure to act promptly when making a claim

The importance of acting expeditiously when making a claim for breach of warranty was emphasised in the case of The Hut Group Ltd v Nobahar-Cookson & another [2014] (affirmed by the Court of Appeal) in which the question arose as to whether the buyer had complied with the notice provisions contained in the share purchase agreement (SPA). The clause required that the seller be notified of claims "as soon as reasonably practicable and in any event within 20 Business Days after becoming aware of the matter". The case actually turned on the meaning of the words "becoming aware of the matter" which were held to mean the buyer being aware that there was a proper basis for a warranty claim and not (as the seller argued) awareness of the facts relating to a breach of warranty.

The judge emphasised that in the context of contractual provisions for breach of warranty claims, just because a deadline is short does not mean the court will interpret any ambiguity in favour of the party making

the notification. Parties are entitled to negotiate strict limitations as breach of warranty claims can be vastly expensive.

Teoco UK Limited v Aircom Jersey 4 Limited and others [2015] reiterated the significance of punctuality in bringing claims for breach of warranty. The buyer's solicitor sought to notify the seller of various tax related warranty claims by way of a letter that made reference to "the existence of claims", "tax exposures [which] may exist" and "potential liabilities". This was followed by a further letter which detailed additional information on specific quantifiable tax claims. The buyer was obliged to notify the seller of a claim for breach of warranty "as soon as reasonably practicable" but had delayed whilst it considered if liability could be avoided through alternative means. Whilst every case will turn on its facts, in this instance the court held that a three month delay in notification was too long. The clock starts running when the buyer becomes aware it has a claim and not when it decides to pursue it.

Clear and unambiguous notification letters

The decision in Teoco also illustrates the importance of ensuring notification letters are clear about the fact that a claim is actually being pursued by the buyer.

Here, the judge noted that the buyer had simply notified the seller about the possibility of making claims in the future and had failed to be unequivocally certain that it was making a claim for breach of warranty. In addition, it was held that a reservation of rights accompanying a non-specific warranty reference was insufficient and the buyer had failed to identify which warranties had been breached by the seller. Accordingly, the court found that the seller could not be liable for breach of warranty.

In Ipsos S.A. v Dentus Aegis Network Limited [2015], the buyer sought to rely on its assertion that it had notified the seller of a breach of warranty claim by way of two

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letters that it had written to the seller, prior to the expiry of a two year contractual limitation period contained in the SPA. Neither letter referred to a claim notice or expressly stated that it was such (the first letter, in fact, stated expressly that is was not a claim notice). The judge concluded that "a reasonable recipient of the letter with knowledge of the previous correspondence and the business context in which it was written" would not have thought it was a notification under the claims provisions in the SPA.

"Reasonable details" of the matter giving rise to the claim

Notification provisions usually require the party making a notification of a claim to give reasonable details of the matter giving rise to the claim. In Ipsos, the judge criticised the notification letter as being "largely a description of events" and (paraphrasing from Laminates Acquisitions v. BTR Australia Limited [2004]) that "no sufficient attempt to specify 'the underlying facts, events or circumstances, which constituted the factual basis upon which the claim was posited' ". The court stopped short of defining what "reasonable details" means as the judge

noted that each case would turn on its facts although it did state that it was not necessary to go into the level of detail that is expected in formal legal pleadings.

Practical application

For those looking to bring claims for breach of warranty, the judgments illustrate the importance of rigorously complying with both the substance and the form of any contractual notice provisions. Potential claimants should focus on ensuring that any notification procedures are strictly adhered to when notifying a seller of a breach of warranty claim. When setting out details of the claim, ensure that precise references are made to the relevant warranties in question and that all claims identified at the time are included in the notification letter, even if they are not ultimately pursued.

Dan Smith Associate � Corporate


6


Re-development works and lease assignments: landlords take note!Two recent cases have provided results which will affect landlords faced with the common scenarios of redevelopment works to occupied buildings and lease assignments.

Redevelopment works to occupied buildings

Timothy Taylor v Mayfair House Corporation and others [2016] considered the interplay between a landlord's right to redevelop with its covenant for quiet enjoyment. The tenant operated a high class art gallery from ground and basement premises in Mayfair under a 20 year lease paying an annual rent of £530,000. The lease contained an unqualified covenant for quiet enjoyment, as well as reservations permitting the landlord to alter or re-build the building and temporarily erect scaffolding.

In 2013 the landlord started works to create apartments from the first floor upwards which from 2014 involved wrapping the building in scaffolding obscuring the gallery. The tenant alleged that the works were in breach of the landlord's covenant for quiet enjoyment. The High Court held that:

● Although the landlord's re-development rights were widely drafted, the landlord still had to take all reasonable steps to minimise disruption.

● Relevant considerations included: the nature of the tenant's premises (high class art gallery); any prior notification to the tenant before lease completion (it had only been advised they were a possibility); compensation offers (an offer had been made to an adjoining gallery); and whether or not the tenant derived any benefit from the works (it did not).

● The way in which the scaffolding had

been erected and methods of delivering materials meant that the landlord had not exercised its rights reasonably. Having paid little or no attention to the tenant's interests when designing and erecting the scaffolding, the landlord had not complied with its obligation to minimise disruption caused by it.

The court awarded damages instead of an injunction assessed at a 20% reduction in the basic rent from the date of erection of the scaffolding up to the date of completion of the works. In addition the landlord's contractors had to adhere to a "two hours on/two hours off" policy regarding noisy works and observe "quiet times" during gallery events.

So what are the lessons for landlords?

● Ensure that tenants are aware of any re-development plans before the lease is signed.

● Check any lease obligations as to the method of erecting scaffolding and identify options avoiding obscuring premises; particularly if retail with signage.

● Before works start, pro-actively consult tenants as to how disruption can be minimised and take their views into account.

Assignments to guarantors

EMI Group Ltd v O&H Q1 Ltd [2016] has clarified that an assignment by a tenant of a "new" lease (i.e one entered into after 1 January 1996) to its guarantor is void and of no effect.

The Landlord and Tenant (Covenants) Act 1995 (LTCA) provides that where a "new" lease is assigned, the tenant and any guarantor must be released from their obligations under the lease. The only exception is where an authorised guarantee agreement (AGA) is entered into with the tenant guaranteeing the assignee's performance until any subsequent assignment.

In EMI Group v O&H, the High Court has

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ruled that on assignment the guarantor is released from the lease covenants by virtue of the LTCA 1995 and it would be contrary to the anti-avoidance provisions for the guarantor to re-assume precisely the same liabilities by taking the assignment.

This decision comes as an unwelcome development to the property industry because it means that a relatively common transaction is void. This has implications both for the structuring of assignments (particularly within company groups where such assignments are often commercially attractive) and for due diligence on acquiring a lease or on acquiring the freehold reversion of premises subject to new leases.

So what are the likely consequences?

● When acting for a tenant wishing to assign to its guarantor, the arrangement will need to be structured in such a way that the guarantor is (at least for a short period) actually released from its obligations before taking the assignment of the lease.

● Where a "new lease" has been assigned to the guarantor, it will be void and the previous tenant and the guarantor will remain the tenant and guarantor under the lease. This has an impact on property management and the precise position is likely to be uncertain where a guarantor has purported to take an assignment several years previously and further

transactions have taken place in the belief that such an assignment was valid.

● Even when dealing with apparently "old" (i.e pre-1996) leases, it will be important to check whether any post-1 January 1996 deeds of variation could have taken effect as a surrender and re-grant (e.g by increasing the term or extent of the demise), as this would mean the lease is likely to be categorised as a "new" lease.

● Applying this decision to another common transaction, where an existing tenant assigns the lease to itself and a third party, this might be void because otherwise the tenant is not being released from its obligations under the lease.

Douglas Rhodes Senior Associate � Dispute Resolution and Litigation


8


Immigration Act 2016Immigration is a constantly changing area that has seen several bills and tens of thousands of changes to the immigration rules in the last five years.

The Immigration Act 2016 introduces a series of further reforms to crackdown on illegal immigration. Although the intention of the Act is to restrict the ability of illegal immigrants to work, live, drive and have a bank account, it creates onerous requirements on employers, landlords and banks etc to carry out immigration checks.

The Immigration Act received Royal Assent on 12 May 2016. It:

● introduces new sanctions on illegal workers and rogue employers

● provides better co-ordination of regulators that enforce workers’ rights

● prevents illegal migrants in the UK from accessing housing, driving licences and bank accounts

● introduces new measures to make it easier to enforce immigration laws and remove illegal migrants.

Measures in the Act will be implemented over the coming months but for the purposes of this article we focus on two areas.

Right to work checks

The main provisions relating to illegal working which came into effect on 12 July 2016 include:

● a broader definition of what constitutes a criminal offence for employers employing illegal workers

● increased financial penalties for employing illegal workers

● the creation of a criminal offence for employees working illegally.

Perhaps of most significance is the broader

definition of what constitutes a criminal offence for an employer hiring an illegal worker. Whereas previously an employer had to have known that an employee did not have permission to work in the UK, the offence may now be committed by an employer who knows or has reasonable cause to know that a person is working without leave.

This essentially means that employers will have to take active steps to ensure that all employees undoubtedly have permission to work in the UK and will probably be most relevant where employees, for example, have an application to extend their visas pending at the Home Office. Employers in such instances must ensure applications were sent before the visas expired, make regular (at least weekly) checks with the employer checking service or even consider suspending employees pending confirmation of right to work.

Tips

These new changes mean that employers and HR teams must ensure that they review their recruitment and record keeping procedures to ensure that they remain compliant with the law.

Employers that hire foreign workers should consider the following:

● ask for the original passport and take copies

● ask for the original biometric ID card and take copies

● make a record of when this check was undertaken

● the biometric ID card will state the permission to work as well as any restrictions

● if in doubt check with the Employer Checking Service (https://www.gov.uk/employee-immigration-employment-status)

● always maintain a system to remind you of visa expiry dates

● keep a written trail of reminders to staff about the renewal of their visas and whilst

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visa extension applications are pending continue to check eligibility to work on the checking service.

Right to rent checks

The second point is how the Act affects landlords.

Right to rent was introduced in the Immigration Act 2014 and went live on 1 February 2016. The changes being introduced are intended to build on the existing provisions to increase pressure on illegal immigrants.

Most landlords will already be aware of the "right to rent" checks that they have to carry out before letting out a property. Landlords and letting agents were always required to check the documents of tenants and prospective tenants to make sure they had the right to live in the UK and they still do.

The new Act introduces a series of criminal offences and increased powers to evict persons who do not have the right to rent.

The Act creates a criminal offence for landlords who knowingly let their property to illegal immigrants.

The offence is committed where a landlord knows or has reasonable cause to know that the person does have the permission to remain in the UK.

Where a landlord similar to an employer has justifiably maintained a statutory excuse there is no offence committed.

Similarly where "Right to Rent" checks are to be carried out by agents, the offences mirror those for landlords.

The new penalties for offenders exist alongside the existing fine structure (£3000 per illegal tenant) and include an unlimited fine or imprisonment of up to five years.

As well as increasing the penalties the Act also makes it easier for landlords to evict illegal migrant tenants, sometimes without a court order. Once the Home Office has confirmed that a tenant is not allowed to rent in the UK, the landlord is expected to take steps to get them out of the property. The landlord may terminate the tenancy by giving a notice in writing and the notice is enforceable as if it were an order of the High Court.

Jay MoghalSenior Associate � Corporate


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Pension liberation fraud: liberating, but certainly not freePension liberation is a transfer of a scheme member's pension savings to an arrangement that will allow them to access their funds before the age 55. Some of these schemes technically operate within the confines of the law, albeit they are unlikely to achieve the best outcome. However, many are operated by fraudsters and may result in serious tax consequences and the loss of part or all of their pension pot for members, as well as exposure for legitimate pension providers and intermediaries who unwittingly facilitate the fraud.

How pension liberation schemes work

A range of misleading tactics are used to persuade members to "liberate" their pensions. Members of the public are typically contacted out of the blue by rogue companies who represent that there are legal loopholes which will enable members to release funds from their pension. Interested members respond in the mistaken belief that they will be able to transfer their pensions, often to a qualified recognised overseas pension scheme (QROPS), and obtain a loan or a lump sum from their pension quickly and without adverse tax consequences. In exchange for providing this service, high administration fees are deducted from their pension pot.

After the transfer, members will be left with a less valuable pension, if the funds can be traced at all, and the lump sum and cash incentives promised often do not materialise. In addition, the transfer may be found to be an "unauthorised transfer" by HMRC and therefore the member will be liable to pay tax at punitive rates, notwithstanding the fact that their pension may have been dissipated by fraudsters. Members of the public are at risk of losing up to 85% of the value of their pension by seeking to liberate funds without taking advice.

Individuals and companies offering pension deals are engaged in a regulated activity, and must therefore be authorised by the Financial Conduct Authority (FCA). Companies engaged in pension liberation schemes are unlikely to be authorised, however they may try to use legitimate pension providers and/or administrators to unknowingly operate part of the liberation scheme.

The use of legitimate and familiar pension providers and/or administrators, such as SIPP providers, will often provide comfort to members and they may be more inclined to engage in the process if they know that an FCA authorised individual/company is involved.

Pension providers are under a legal duty to transfer a pension when they receive a valid transfer request if the receiving scheme meets the relevant statutory requirements. Fines of up to £5,000 for individuals and £50,000 for corporate trustees can be imposed for failing to carry out such a request. However, legitimate providers, administrators and IFAs must be wary and avoid being used to facilitate pension liberation fraud. They should put in place adequate processes to identify transfers and investments that may attract onerous tax charges for members and carry out sufficient due diligence to ensure that they are not being used to perpetrate fraud. Any evidence that a transfer request may be to a liberation scheme must be retained as it will be taken into account by the Pensions Regulator in deciding whether or not to impose fines.

The pension provider should also contact the member to raise their concerns with them directly, alerting them to the potential risks and seeking legal advice where they are concerned about the nature of a potential transfer.

What are the warning signs?

A variety of schemes have been devised by fraudsters operating as pension liberation companies to encourage and enable members of the public to engage in pension liberation. However there are tell-tale signs

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that should lead members and pension providers to exercise caution. In particular, be wary of:

● Companies offering access to your pension before age 55, tax free.

● Unsolicited text messages or phone calls.

● Companies claiming to be able to take advantage of legal loopholes by transferring pensions to overseas funds or other "new" or "innovative" investments.

● Very little paperwork and copies of documentation not provided.

● Being forced to rush decisions without the opportunity to take independent advice.

● Promises of cash bonuses or other incentives.

● Promises of direct or indirect loans.

The clampdown

Project Bloom, a multi-agency campaign involving HMRC, the Pensions Regulator, the Financial Conduct Authority and the Serious Fraud Office, has been established with the aim of helping to prevent and combat pension liberation fraud. HMRC has been reviewing the activity of all SIPP providers and is preparing to deregister up to 500 "dubious" pension providers as part of its clampdown on pension liberation schemes. However, such action from HMRC comes too late for many individuals who have already transferred their pensions and

are facing a future of uncertain tax liability, as appeals go through the Tax Tribunals, as well as wholesale lack of information about what has happened to the value of their pension scheme.

The Serious Fraud Office has a number of ongoing investigations and the Serious Organised Crime Agency is also dismantling a number of pension liberation websites. Groups such as Pension Life have also sprung up, giving victims of pension liberation fraud a combined voice and the ability to take legal action to redress their losses. However, given the potential consequences of pension liberation to members of legitimate pension providers, awareness of the issue is key and prevention is certainly better than cure.

Toyosi AjimokoSenior Associate � Dispute Resolution and Litigation


12


The importance of minuting board meetingsThe board of directors is the primary decision-making body of a company and the directors predominantly exercise their powers and make decisions at board meetings. Despite a raft of statutory and common law provisions on directors' duties, there is surprisingly little law or regulation about board meetings and how the proceedings of directors at board meetings are documented.

In this article we look at the practice which has arisen around minuting board meetings and how this may be changing in the aftermath of the financial crisis.

The statutory provisions

The Companies Act 2006 (Companies Act) requires every company to record minutes of all directors' meetings and to retain such minutes for at least ten years. Non-compliance is an offence committed by every officer of the company in default punishable by a fine.

Further provisions of the Companies Act provide that minutes are evidence of proceedings at board meetings unless the contrary is proven. Minutes may be kept in hard copy or electronic form, and be arranged in such manner as the directors see fit.

A company’s articles of association will usually detail the procedure for holding board meetings and may also contain provisions regarding how the company should record or keep board minutes.

Function and content of board minutes

Traditionally board minutes have served an internal record-keeping function to provide evidence that a board meeting was held and act as a reminder of what decisions were

taken. They also enable existing or incoming directors who did not attend the meeting to understand what was discussed.

Board minutes may summarise the main points of any board discussion and where they are required to be disclosed to third parties, for example, to lawyers acting for another party to a major transaction they may include wording to the effect that, after due and careful consideration, the directors consider that the proposal would promote the success of the company for the benefit of its members as a whole. This echoes the wording in one of the directors' general duties in the Companies Act.

In the wake of the codification of directors' general duties and the changes to the procedure for derivative actions in the Companies Act, there was concern that board minutes would become lengthy documents recording directors' deliberations in exhaustive detail. Directors were worried that in order to protect themselves from possible claims by shareholders, they would need to record verbatim how they had considered their directors' duties in coming to a decision.

The GC 100, a body comprising senior legal officers from FTSE 100 companies, was strongly opposed to this approach believing it to be harmful to business efficiency. In their paper on directors' duties published back in 2007, they stated that board minutes are only a summary and will never be prepared with the thoroughness of a board paper. The GC 100 recommended that board minutes should not be used as the main medium for recording the extent to which the relevant factors to a decision were discussed. There may be a requirement to keep board minutes brief and avoid references to legal advice received to ensure that privilege is not lost. Accordingly, the minimum requirement for minutes should only be that they clearly state the decision reached.

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What the future holds

However, the pendulum may be swinging the other way. More recently, one of the findings of the House of Commons' Treasury Select Committee report into the collapse of HBOS plc was that the board and committee minutes of HBOS plc were frequently "not sufficiently full to provide a definitive record of what happened, and in some cases missing altogether". The chairman of the Committee stressed the importance of ensuring that clear and accurate minutes are taken at board meetings. He compared board minutes to "black boxes" from which information can be garnered when companies fail, to help prevent the same errors being made. He also thought that minutes should record areas of substantive disagreement among directors.

This prompted the Institute of Chartered Secretaries and Administrators (ICSA) to launch a consultation into the practice of minuting board meetings with a view to producing guidance. The consultation document notes that the level of detail in board minutes will reflect the size, business and sector of the company. Increased regulation in certain sectors, such as financial services, dictates that minutes for some companies are more detailed and prescriptive.

Respondents to the ICSA consultation are asked to give their opinion on, amongst other things, the level of detail in minutes, whether

dissenting views should be recorded, editing minutes and access to minutes by third parties.

Final thoughts

The recent economic turmoil has focused the spotlight ever more on directors' decision making processes. Minutes can enable a director to have their views on a matter recorded which can be useful if questions of wrongdoing ever arise in the future. Minutes can also demonstrate what factors were taken into account by the board when reaching a decision.

It remains to be seen what conclusions will be drawn by ICSA in its guidance and whether these will result in more comprehensive board minutes being prepared. What is clear is that directors should have in place robust procedures for making decisions whether or not it becomes best practice to record those decisions in more detail.

Ayda HabboushSenior Associate � Corporate


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