Lawyers working in a toxic environment

Watching the cross-examination of lawyer witnesses at the Post Office Horizon IT Inquiry has been instructive. IP Draughts’ impression is that some have been incompetent, some have shown bad judgement, and some have made mistakes. Collectively, they have contributed to the worst miscarriages of justice that he has seen. Not caused. IP Draughts’ current view is that the injustices were primarily caused by:

• senior management and the Board of the Post Office, and the government as sole shareholder, for failing to provide ethical leadership
• senior management and the Board of the Post Office, for failing to create an effective management environment that enabled competent and ethical decision-making across all departments, including the legal and investigation functions
• the court system for not managing computer evidence effectively
• the legal system, for allowing the Post Office to conduct criminal prosecutions of its own (contracted) staff in circumstances where the PO had a conflict of interest and lacked the competence and integrity to perform a prosecution role

This does not excuse the actions of (some of the) Post Office lawyers, but it does help to explain them. The Inquiry is continuing, and we have still to hear from some lawyer witnesses, so a final verdict on the implications for the legal system should be deferred for now. Combining some of what he has heard with his past experience as a lawyer working with business clients (in both in-house and external roles), he has the following thoughts:

1. Written advice and opinions should be drafted with one eye out for how they might be misused, or used for a different purpose than intended. He wonders whether there should some kind of rule or best practice in industry that selectively quoting from a legal opinion should never be done unless the full opinion is made available. Perhaps there is a rule, but it has fallen into abeyance.
2. The Post Office has its origins in the Civil Service, and IP Draughts wonders whether there is still too much of the Civil Service about the way it operates. He has encountered a certain non-commercial mindset (seen sometimes in universities) where decisions are made by consensus without anyone taking ultimate responsibility for making or implementing the decision. Too many of the witness in the Inquiry (including the in-house lawyer supposedly responsible for criminal prosecutions) have claimed that they were merely a postbox for information, or a facilitator, rather than a decision-maker. Whether or not one accepts this defence, it does seem to IP Draughts that, without clear lines of authority and responsibility, it is too easy for an organisation to take bad decisions because no-one’s job is on the line for the decision.
3. Another effect of consensus-itis, as it appears to have operated in the Post Office, is that people have drifted in and drifted out of the decision-making process. Who decides whether a rigorous central record is to be kept of all meetings and documents relating to criminal prosecutions? The in-house criminal lawyer (who claimed he was not a decision-maker), the external criminal lawyers (who initiated the record, but on whose instructions?), the in-house investigators (who sent around an email about not keeping file notes), the in-house civil lawyers (who were concerned about having to disclose these records in civil proceedings), or the external civil lawyers (ditto)? The answer doesn’t seem to have been clear. Or take the example of a senior finance manager, cross-examined at the end of last week, who argued that he had no responsibility to update a note that he had written about the Horizon IT system being robust, once he knew (a few weeks after it was written) that a “substantial” part of it was no longer true. Yet the note was used as a reference source by the Post Office for many years. Again, no-one’s job was on the line for making sure that this important note was still up to date, either as author or as user of the note.

IP Draughts has long been an advocate for placing those who show quiet competence and decency in senior management roles, rather than the more flashy types who seem to dominate public life. In the case of the Post Office, many of the witnesses have come across as quietly incompetent, keeping their head below the parapet and not querying the toxic consensus that caused so much suffering to so many postmasters.

Who wants to be a saint in a room full of sinners?

Why I don’t want to be a General Counsel

This week has seen some extraordinary questioning of, and evidence from, in-house lawyers at the Post Office Horizon Inquiry. The Inquiry is being live-streamed, and more lawyers are due to appear next week. IP Draughts recommends that readers spend a few minutes watching the cross-examination of legal witnesses.

This seems a good time to re-post the attached blog article from five years ago. While not all of the lawyers in the Post Office case are General Counsel, the points made in the earlier blog apply most forcefully to GCs.

IP Transactions course: reflections on 2024 outing

Last week, at the UCL Faculty of Laws in London, IP Draughts (together with around 30 expert speakers) ran the 11th annual outing of a five-day course,  IP Transactions: Law and Practice.

This year we had 33 students; like them, IP Draughts is still processing information from the course. Here are a few of the points that stood out for him:

1. The next generation of speakers. IP Draughts counted 11 new partners, counsel and associates speaking on the course. To pick out a couple, Hayley Gow and Maria McAlister, both senior associates from Ashurst LLP, gave us an interesting talk on Tuesday, on what corporate lawyers want from their IP colleagues in M&A deals. All the new speakers did a great job in terms of lively and informative content.  If he were being picky (which he is), a minor quibble is that one or two of the week’s speakers might practise projecting their voices more across a large room.
2. A diverse group of students. This year, we had many more students from in-house roles than in previous years, and fewer students from private practice firms (perhaps because IP Draughts had neglected to remind speakers to send their juniors on the course). The students provided interesting insights on what happened in their practices, from a professional mediator to an in-house lawyer at a leading AI firm, as well as several people from universities in the UK and overseas. A part of the course that IP Draughts doesn’t always see is the opportunity for new entrants to the world of transactional IP to network with each other. It helps when the vast majority of students attend in person, rather than online.
3. New content. We were instructed and entertained by a new session on Artificial Intelligence, given by Vik Khurana, a partner at Bristows. This session formed part of the day on IT contracts (Thursday), led by the excellent double act of Sam de Silva of CMS and Toby Crick of Bristows.
4. Developments in existing law and practice. IP Draughts noted (from John Hull’s Monday talk) that there were recent, reported cases on confidentiality issues where counsel presented alternative arguments based on EU trade secrets law and English case law on confidentiality. He was also interested to hear Edmund Forey’s insights (on Wednesday) on how English competition law might diverge from EU law over time.
5. Old faithfuls. The sessions on media law, on Friday morning, are always interesting. Sam Oustayiannis has been helping to run these sessions for several years as part of John Enser’s CMS team, and this time he came back as a new partner at that firm (are these two facts connected?). Each year, it is interesting to hear how the commercial landscape for broadcasting continues to change, from terrestrial TV to new business models for subscription services. Some things remain unchanged. IP Draughts was pleased to hear John’s explanation of why saying “all rights reserved” on your copyright statements is of marginal value.

IP Draughts has left this year’s course with the impression that it is more than the sum of its parts. He and the other speakers can and do provide useful information on law and practice, and they help to facilitate workshops where the information is “contextualised” (to use a piece of jargon that he has heard many times recently). But it is the students who bring the course to life.

A big thank you from IP Draughts to all of this year’s speakers and students.

New template clinical trial agreement is a mess

On 28 March 2024, the UK National Health Service’s Health Research Authority published a draft of a new template agreement. See https://www.hra.nhs.uk/about-us/news-updates/call-for-comments-on-new-study-agreement-template/

That webpage explains the purpose of the new agreement in the following terms:

The draft Investigator Initiated Study Agreement is proposed for future use between non-commercial sponsors and commercial organisations providing support for investigator-initiated trials.

These are research studies where the research idea comes from a non-commercial sponsor but that also receive commercial support.

Although non-commercial sponsors already work with commercial companies in this way, it can take a long time to get agreement because there isn’t a standard contract available.

The Investigator Initiated Study Agreement provides a standard contract agreement template for this type of research.

Unlike many clinical trial agreements where a pharmaceutical or medical device company acts as sponsor of the trial, and commissions a hospital to test the company’s product on the hospital’s patients, in this case the hospital is both acting as sponsor and performing the trial. The company’s role may be to supply free quantities of its products for use in the trial and/or to provide financial support for the trial. But an important difference from “commercial” trials is that the company is not taking on the regulatory responsibilities of being the sponsor of the trial.

IP Draughts has helped universities and hospitals to negotiate agreements of this kind over many years, and recognises the value of having a template agreement. He suspects it will be more of a starting point for negotiations rather than a “take it or leave it” non-negotiable document, given the variety of factual situations where an agreement of this kind may be used. But he is puzzled. The website linked above talks of “non-commercial sponsors” which presumably would include universities. But the draft template agreement is clearly focused only on the situation where an NHS Trust sponsors the trial, and there are no optional clauses to make it suitable for universities. For example, a clause headed insurance states “Institution confirms that it is a member of and throughout the duration of this Study shall maintain its membership of the NHS Resolution Clinical Negligence Scheme for Trusts.” There is no alternative clause stating that the university sponsor will maintain a clinical trials insurance policy. This may reflect the fact that the template has been drafted by “the R&D Forum contracts group, who are NHS contract managers, with support from the UK Four Nations contracts leads, who are responsible for maintaining the UK model research agreements…” Perhaps in the next round of the document we will see more alternative clauses that enable it to be used with non-NHS-Trust non-commercial sponsors.

IP Draughts has read through the draft template agreement. As an exercise in drafting, it is not impressive. IP Draughts has seen many templates that have been “drafted by committee” and end up being sub-optimal. He feels strongly that where a group works on a draft agreement, there needs to be a “scribe” who can take the group’s decisions on principles and convert them into a coherent and well-thought-through text. This is an important part of developing a robust, long-term template agreement.

IP Draughts suspects this has not happened in this case. Perhaps there was no budget. To do a decent job and be involved in discussions and iterations, a specialist contract lawyer would likely charge at least £15,000 to £20,000.

For whatever reason, in places the text of this draft template agreement is unclear, inaccurate, wordy and inconsistent. This makes it less likely that a major pharmaceutical company would find the terms acceptable. IP Draughts noted too many problems to mention them all here, but here are a few:

1. Legal mistakes. Imposing obligations on someone who is not a party to the agreement, eg CI in clause 3.5, auditor in clause 6.2, or Company Indemnitee in clause 12.4. These errors could be fixed with more skillful drafting.
2. Drafting inconsistencies. Several inconsistencies between the detailed wording of the three indemnities in clause 12, which appear to be due to use of clauses from different sources (e.g reference to ex gratia payments in one of the indemnities but not the others). This is lazy and needs to be cleaned up. More importantly, it is not stated whether the caps and exclusions of liability in clause 12 apply to the indemnities.
3. Inadequate obligations, e.g. clause 10.6 states that the Company warrants that the Product will be “fit for its intended purpose”. This is fairly meaningless without further detail on what that purpose is, and is likely to be resisted by a large pharma company.
4. Confused and questionable statements, eg as to whether Company is receiving personal data when it gets pseudonymised data without the key (see differences in clause 11.13, where second sentence says no, third sentence says likely no but question of fact). Make your mind up!
5. Defined terms that are not defined (eg Location in clause 3.8.2). All capitalised terms should be checked to see if there is a definition.
6. Inconsisent usages, eg the agreement can’t decide whether to say “Institution” or “the Institution” or whether a party “shall”, “will” or “agrees to” perform obligations, or whether to say “6 months” or “six (6) months”. While these inconsistencies may not prejudice the meaning, they show a lack of care and attention to detail. They should be cleaned up.
7. US-style legalese that, in IP Draughts’ view, has no place in an English/Scots/Northern Ireland law agreement, eg “in consideration of the above premises and subject to the terms and conditions stated herein…” and “This Agreement shall inure to the benefit of and be binding upon each Party, its successors and assigns.”
8. Focusing on some legal issues but not others, e.g. clause 10.3 headed “Fair Market Value”, which reads: “Each Party acknowledges that this Agreement has been negotiated in an arm’s-length transaction and has not been determined in any manner with regard to any implicit or explicit agreement to provide favourable procurement decisions with regard to Company’s products, or to the value or volume of any business or referrals generated between the Parties.” This clause focuses on procurement policy, whereas IP Draughts would have been more concerned about fair market value in relation to compliance with subsidy control law in the grant of IP licences, which is not addressed.

All of these errors can be fixed but together they provide a case study in poor technical drafting. The draft template is out for consultation, so hopefully the drafting will be improved in a subsequent round.