New Zealand Parliament passes zero carbon bill

Lawmakers in New Zealand approved a bill on Thursday that aims to reduce the country’s non-biogenetic greenhouse emissions to zero by 2050. The Zero Carbon Bill provides a framework for limiting average global temperature increase to 1.5° Celsius above pre-industrial levels, as set forth in the Paris Agreement.

The bill establishes a Climate Change Commission, which will advise the government and monitor and review the government’s progress towards meeting the goal. The 2050 targets set forth are: gross emissions of biogenic methane to be reduced to at least between 24 percent and 47 percent below 2017 levels and net emissions of all other greenhouse gases to be reduced to zero. The separate targets for biogenic methane, the greenhouse gases released by livestock such as cattle and sheep, will make it easier for New Zealand to hit their zero emissions goal. Greenhouse gases from agriculture make up 48 percent of the countries total emissions.

The Minister for Climate Change, James Shaw praised the bill:

Climate change is the defining long-term issue of our generation that successive Governments have failed to address. Today we take a significant step forward in our plan to reduce New Zealand’s emissions. … We’ve led the world before in nuclear disarmament and in votes, now we are leading again…This Bill belongs to New Zealand, and together we have ensured law that ensures we shift towards a low emissions country that keeps us all safe.

New Zealand joins more than sixty other countries that have committed to zero carbon emissions by 2050. However, the countries with the largest greenhouse emissions—China, India, and the US—are not on that list. On Monday US Secretary of State Mike Pompeo announced on twitter:

Today we begin the formal process of withdrawing from the Paris Agreement. The U.S. is proud of our record as a world leader in reducing all emissions, fostering resilience, growing our economy, and ensuring energy for our citizens. Ours is a realistic and pragmatic model.

A number of US states have passed their own zero emissions goals including California, Washington and New Mexico.

How Will Plans to End Free Movement Affect EU Workforce?

The Home Office has recently issued a factsheet indicating that freedom of movement as it currently stands will end on 31 October 2019 and that arrangements for people coming to the UK for longer periods for work or study will change. What does this mean in practice and how should employers prepare?

A draft Immigration Bill drafted published by Theresa May’s government had already envisaged an end to free movement following a no-deal exit. However, to avoid a “cliff-edge” until a new immigration system could be put in place, the Home Office planned to introduce transitional arrangements for EU, EEA and Swiss citizens and their family members arriving in the UK between exit date and 31 December 2020. Those coming to the UK for short visits for any reason would be able to enter as they can now and stay for up to three months for each entry. Those wishing to stay in the UK for longer would need to apply to the Home Office for EU temporary leave to remain within three months of arrival (giving 36 months’ permission to live, work and study) after which they would need to apply under the UK’s future immigration system (expected to be introduced from January 2021).

The Home Office announcement and further reports now indicate the shelving of these transitional arrangements to be replaced by a new immigration system immediately applicable to new arrivals following a no-deal exit. There is very unlikely to be the time and resource to put in place such a system or the legislation which will underpin it. The Home Office is already stretched and the UK’s current Points Based System took nearly four years to design and implement. We may, therefore, still end up with some form of transitional registration system but the Government’s current direction of travel suggests this is likely to be more onerous than the EU temporary leave envisaged under Theresa May. Employers who had good reason to believe that they would be able to continue to recruit from the EU with relative ease until the end of 2020 (even in a no-deal scenario), should prepare for the possibility of new hires arriving the EU from 31 October 2019 needing some form of immigration permission prior to starting work. Exactly what this will entail, including the qualifying criteria, cost and application process, remains to be seen and we will providing updates as matters develop.

In any event, the Government has made clear that an immediate end to free movement following a no-deal exit will not affect the ability of EU, EEA and Swiss citizens and their families already resident in the UK by 31 October 2019 to continue living and working here, as long as they apply for status under the EU Settlement Scheme before 31 December 2020. Nonetheless, as a precaution, employers should support their affected employees to obtain (or apply for) pre-settled or settled status under the Scheme before 31 October 2019 (or at least prior to their next trip outside the UK) to reduce difficulties on re-entry by having to prove their prior UK residence by some other means. Current average processing times under the Scheme are reasonably quick – between one and four days. Those travelling outside the UK after 31 October and before they have been granted status would be well-advised to take with them some proof that they are already resident in the UK (ideally in line with the documentary evidence recommended by the Home Office when applying under the Scheme such as recent UK payslips, an employer letter or utility bill).

Record numbers of UK lawyers register in Ireland

UK law firms have ramped up preparation for Brexit by registering a record number of solicitors in Ireland but confusion remains about how many of them will be able to practise in Ireland and the wider EU after Britain leaves.

The Law Society of Ireland said its solicitors roll had received 1,560 applications in the year to date — more than 31 times the average annual rate in the years before the 2016 EU referendum.

Some 3,706 lawyers from England, Wales, Scotland and Northern Ireland have been registered since the beginning of 2016 as City firms scrabble to insulate themselves from Brexit’s effects.

Those include UK lawyers potentially losing rights of audience in European courts and seeing their ability to advise on European legal matters curtailed.

In August the Law Society of England and Wales warned that the legal sector in the UK could face a £3.5bn hit as a result of a no-deal Brexit.

“Typically, major international commercial law firms are the source of these transfers, in some cases hundreds from one firm,” said Ken Murphy, director-general of the Law Society of Ireland. “It is an extraordinary development.”

Elite UK firms Allen & Overy and Linklaters have among the largest numbers of lawyers signed up to the Irish roll, according to the Irish Law Society, with 287 and 250 respectively. Latham & Watkins has registered 155.

However, only 981 UK lawyers hold a “practising certificate” which allows them to work in Ireland, according to the Law Society. Firms said they were waiting for the outcome of Brexit to determine whether to pay the annual cost of £2,650 per person required to take the final test.

One top-tier UK law firm said only a “handful” of the hundreds of lawyers registered in Ireland had practising certificates, because of the cost and “the lack of clarity as to whether this will actually function as a workaround in a no-deal Brexit scenario.”

In March the Law Commission in Ireland announced new hurdles for lawyers hoping to rely on Irish practising certificates after Brexit, including requiring firms to have a base in Ireland and indemnity insurance issued within the country.

Catherine Hudson, head of risk at Fieldfisher, said: “This was a surprise. A lot of people applied to be on the register in Ireland because they thought it would be a good plan B. But then the Irish Law Society published a note putting constraints on their practising certificates, suggesting they were concerned not to be used as a flag of convenience for people with no real professional connection to the republic.”

A number of firms including DLA Piper, Covington & Burling and Simmons & Simmons have opened offices in Dublin, and avoided those issues. Others, such as Fieldfisher, have merged with Irish firms to gain a permanent foothold.

DLA Piper launched a Dublin office in May and has so far recruited 11 partners, many poached from top-tier Irish firms.

Lawyers said the shift would create a more active transfer market and potential pay inflation in the traditionally conservative Irish legal market.

However Barry Devereux, managing partner of Irish firm McCann FitzGerald, said: “The large Irish law firms have always competed fiercely with each other, both for talent and for clients, so I don’t expect the entrance of US or UK law firms to have an enormous impact.”

Christina Blacklaws

KPMG hires ex-Law Society president

Former president of the Law Society Christina Blacklaws has been appointed as legal services ambassador at Big Four accountancy KPMG as it steps up its legal services offering.

Blacklaws, Law Society president from July 2018 to July 2019, will take up a part-time ‘strategic advisory role’ at the firm, helping to develop its legal practice.

Joining a team of 120, she will work on client solutions, talent engagement initiatives and legal innovation strategies, KPMG said. She will also focus on supporting women in law and leadership.

Nick Roome, UK head of legal services, said: ‘Our team is a fast-growing specialism within KPMG, with clients more frequently requiring integrated advisory solutions. We currently have a broad range of expertise across the legal spectrum but having Christina on board will give us another dimension. Her knowledge, expertise and ear-to-the-ground approach when it comes to the issues impacting our sector will help give us an additional edge in the market.’

Blacklaws added: ‘We’re operating in an increasingly challenging business environment, but, equally, it is an exciting time of growing enlightenment: we all know our sector needs to evolve to best support our clients and our colleagues alike.’

Empowering women in the legal profession was one of Blacklaws’ chief priorities as Law Society president. She also focused on social mobility and innovative and sustainable legal practice. The family specialist previously practised at TV Edwards and Co-Operative Legal Services.

‘Stubborn, wrongheaded’ approach to family law will fail

The federal government’s approach to family law will see it advocate again for a “bad law” to be passed by parliament, which it failed to pass in the last term, argues the Law Council president.

Speaking on Monday night at the Newcastle Law Society’s Annual Members’ Dinner, LCA president Arthur Moses SC said that we are “on the eve” of the government reintroducing the “fundamentally flawed merger bill”, which will see the abolition of the specialist Family Court.

“The government’s stubborn and wrongheaded approach to family law will see it advocate again for a bad law to be passed by parliament – a law which it failed to pass in the last parliament. This approach is not only irrational but is extremely disrespectful to the views of the significant stakeholders in the family violence services sector,” Mr Moses said.

“These dedicated professionals who understand this area better than any member of the government have made it clear that this policy will hurt children and families. As lawyers and members of our community, we all have a stake in this, regardless of where and what we practice.”

He reiterated that “specialisation matters” when it comes to addressing the inherent issues with the family law system.

“There is a dire need to resource and reform the family law system. We do not accept, though, that the way the government has sought to go about this would deliver meaningful reform,” he said.

“Last year, the Attorney-General announced in May a proposal to merge the specialist Family Court into the generalist Federal Circuit Court. There was no consultation with the community or the profession over the proposal – only with three heads of jurisdiction.

“The Law Council vehemently opposed the merger last year, and we will continue to oppose it because we do not support bad policy that will hurt children and families. With or without further amendment, we remain concerned that the merger will result in the loss of a standalone, dedicated Family Court as we know it, to the detriment of those in need of specialist family law assistance.

“Further, we do not accept the purported efficiencies it has been claimed the merger will produce. Rather, we are concerned it will further increase cost, time and stress for families.”

The merger fails, Mr Moses continued to alleviate the “fundamental problems plaguing the system”, including the risk of victims of family violence falling through the cracks.

“Abolishing a standalone specialist family court, whether directly or by abeyance, is no fix. Refusing to inject desperately needed funds and resources into a crippled system unless the parliament votes for the government’s plan is certainly no fix,” he argued.

“We are not alone in holding these concerns – they are shared by stakeholders and family violence support providers including Women’s Legal Services Australia, Rape and Domestic Violence NSW and Community Legal Centres.

Instead, the profession needs to retain a specialist, standlone family court, there must be “alternative holistic structural reform of the system”, and the government must adequately consult with stakeholders and carefully consider their recommendations.

“To suggest any one of these propositions is ‘radical’ is a fake argument. There should be nothing radical about the concept that critical social justice infrastructure should not be irrevocably altered without informed consultation and discussion with those who use the court, work in the court, or whose lives are irreversibly shaped by its decisions,” Mr Moses said.

Disparity warning as solicitors react to prosecution fee increase

Criminal defence practitioners may have to take direct action if the government fails to fix a pay disparity that will be made worse by revised fees announced for prosecution advocates, a practitioner group chief has warned.

On Friday the CPS unveiled a package of revised fees for prosecution advocates which it believes addresses concerns over unused material and trials involving multiple defendants. However, the news received a cool reception from the defence community.

Bill Waddington, chair of the Criminal Law Solicitors Association, said he was pleased to see money dripping into the severely underfunded criminal justice system.

‘However, this payment is for prosecution work and does nothing to assist the publicly funded defence system which has been cut to the bone over years with slice after slice being imposed by respective governments. It is now time for politicians to take the crisis in the criminal justice system seriously before it is completely destroyed,’ he said.

He said: ‘This exacerbates a pre-existing problem. For instance CPS costs are recovered according to a notional rate of £69 per hour whereas defenders do so against a benchmark rate of only £45 per hour, less than a CPS paralegal. If a local authority prosecutes the case they can recover as much as £110 per hour.’

Troman, a solicitor and higher courts advocate at London firm Powell Spencer & Partners, said there is ‘ample evidence’ of a recruitment and retention crisis in criminal defence work. ‘Many solicitors train in private defence practices but, once they have gained experience, look to secure a position at the CPS or else leave the profession. This trend will increase.’

LCCSA members ‘are growing impatient with the inertia surrounding the criminal legal aid review and will note that this fee increase only came out following direct action‘, Troman said. ‘If that is the only language the Ministry of Justice understands then the message to this side of the profession is clear’.

The ministry is reviewing criminal legal aid fee schemes. Work has been accelerated on five areas, including unused material – however, the review will not be finished until late 2020.

Murray Energy files for bankruptcy as U.S. coal decline continues

Murray Energy Corp, one of the largest privately-held U.S. coal miners, whose founder is an outspoken supporter of President Donald Trump, became the latest in a string of coal companies to file for bankruptcy on Tuesday as generators shift to cleaner-burning natural gas and renewable energy.

As part of a restructuring, founder Robert Murray, a Trump ally and climate change denier, will step down as chief executive and a lender group will take on more than 60% of about $1.7 billion in claims.

“Although a bankruptcy filing is not an easy decision, it became necessary to access liquidity and best position Murray Energy and its affiliates for the future of our employees and customers and our long-term success,” Robert Murray said in a statement.

The bankruptcy comes even after the Trump administration weakened or eliminated dozens of environmental regulations that Murray and other executives had called burdensome for the coal industry.

Early in the Trump presidency, Murray presented the administration with a wish list of environmental regulations he wanted slashed as coal companies have struggled due to growing use of renewables and cheap natural gas.

Eight other coal companies have filed for bankruptcy over the last two years as natural gas has taken over as the primary fuel for U.S. power plants, while coal’s share of generation has collapsed.

The United Mine Workers of America said its members are preparing to fight for their wages and benefits should Murray seek relief from its obligations during reorganization.

“We have seen this sad act too many times before,” said UMWA President Cecil Roberts. “But that does not mean we will sit idly by and let the company and the court dictate what happens to our members and our retirees.”

West Virginia’s Democratic Senator Joe Manchin said an additional 14,000 miners were at risk of losing their healthcare benefits and 82,000 pensions are under threat, which “underscores the urgent need” for Congress to pass legislation to protect miners’ benefits.

Coal’s share of U.S. power generation is expected to fall to 22% in 2020, compared with roughly 25% this year. As recently as 2003, coal accounted for half of the country’s electricity generation, according to the U.S. Energy Information Administration (EIA).

Wynne Lawrence

Climate change: A City lawyer’s perspective

After Thursday’s event, ‘Climate change and the law’, senior associate Wynne Lawrence explains how Clyde & Co is helping its clients prepare for a greener future

“Corporate clients are increasingly aware of the risks climate change poses to the way their businesses operate, as well as the opportunities for whole new areas of business to open up, as we move towards a more climate-resilient and low-carbon economy,” says Wynne Lawrence, a senior associate in Clyde & Co’s London office. “A growing body of international regulations and national laws, fuelled, in part, by changing attitudes toward climate science and policy, is presenting new opportunities for lawyers in assisting clients navigate the rapidly changing risk landscape.”

In response to this shift in focus, Clyde & Co launched a cross-practice area climate change resilience initiative to help advise clients on the new challenges they face. The group, headed up by Clyde & Co partner Nigel Brook, spans sectors including insurance & reinsurance, shipping, aviation, tech, energy & natural resources and global trade.

“I got involved in 2016 following a speech by the Governor of the Bank of England, Mark Carney, to the insurance market Lloyd’s of London”, insurance & reinsurance specialist Lawrence explains. “Carney highlighted, among other things, the severe threats posed by climate change to the financial sector. So, with this in mind, we started working to build our knowledge around the potential issues, particularity with regards to the insurance sector. Clyde & Co’s climate risk and resilience group has grown and expanded internationally and across practice areas.”

The group’s focus over the past two years or so has been to provide guidance on climate-related risk management and regulatory issues, including through the firm’s online ‘Resilience’ hub, which hosts firm reports, articles, explainers and even a podcast featuring Lawrence and Brook.

Lawrence, who will be speaking at Thursday’s panel event, ‘Climate change and the law — with Clyde & Co’, continues:

“Through our climate risk consultancy, we assist clients in identifying risks posed by climate change to their businesses, supply chains, assets and infrastructure. This includes risks and opportunities associated with the shift towards a low carbon economy, as well as liability risks, the prospect of legal claims by those suffering losses due to climate change.”

The heightened awareness, which stems, in part, from a societal shift to combat the growing threat of climate change, will likely result in other big legal players launching similar initiatives, predicts Lawrence. “It’s inevitable that others will follow. Climate change, unfortunately, isn’t a problem which is going to go away — so there will continue to be a need for legal guidance,” she says.

There’s also been an upturn in climate-related litigation, notes Canadian-born Lawrence, who studied International Relations at the University of Toronto before relocating to London to complete a masters at the London School of Economics.

Find out more about training at Clyde & Co

A recent Clyde & Co report, ‘Climate change: Liability risks, a rising tide of litigation’, describes how over 1,200 climate change cases have been filed in more than 30 jurisdictions to date. The first wave of legal action, Lawrence explains, is targeted predominantly at governments and municipalities over their alleged failure to comply with their international environmental commitments.

One such example of this can be found in Pakistan, where a Karachi farmer challenged the government’s alleged failure to control air pollution. The High Court later ruled that the government must disclose details of what it was doing to address the problem in the country, which in turn led to Pakistan’s environmental protection agency installing air quality monitors and warning factories to add air cleaning filters to smoke-emitting chimneys.

This upturn in action is also partly in response to the way the courts, particularly in the US, are now looking at environmental issues as a legal problem as opposed to a political one, according to Lawrence. “This coupled with a greater understanding of climate risk through advancements in science has seen more and more cases come before the courts,” she explains.

Climate work aside, Lawrence was first attracted to Clyde & Co due to its strong international presence. Since joining as a trainee in 2012, she’s had the opportunity to spend time in the firm’s offices in Johannesburg, Cape Town as part of Clyde & Co’s Global Associate Programme — an international secondment initiative for its associates, and Toronto, as well as a six-month stint in Hong Kong as a trainee.

Away from the cut and thrust of corporate law, Lawrence likes to indulge in a spot of martial arts. “I did Kung Fu at school and Judo during my time at college. I am in the process of training towards my black belt in Aikido — it’s a great way to unwind at the end of the day,” she tells Legal Cheek Careers.

So what advice does Lawrence have for readers looking to follow in her footsteps and work for an international law firm? She tells us:

“Think carefully about the firms you’re applying to. Taking a focused, tailored approach to your training contract applications will be far more effective than a scattergun one. Ask yourself, ‘why do I want to work for this firm?’ and be sure you know the answer. It will be easy to spot — even at the application stage — if you’re not genuinely interested in or serious about the firm.”

Wynne Lawrence will be speaking alongside other Clyde & Co lawyers at Thursday’s ‘Climate change and the law’ event. The event is fully booked, however you can still apply to the waiting list.

City lawyers need to embrace their inner entrepreneur

Ahead of tomorrow’s event, ‘Life on the frontline of the global economy’, White & Case counsel Catherine Andrews looks back on her career in capital markets

Despite fears that global economic growth is slowing, investment into emerging infrastructure markets remains buoyant. According to White & Case counsel Catherine Andrews, the demand for increased spending on roads, ports and energy facilities often follows a so-called “infrastructure funding gap”, where governments look to institutional investors to enable them to realise their extensive energy and infrastructure requirements. Bridging this funding gap, however, is costly and requires external advice and structuring, as Catherine explains:

“There’s only so much funding a government can give for an energy or infrastructure project. So, there’s always a need for private investment and financing — regardless of the state of the global economy.”

As a capital markets lawyer specialising in infrastructure, Catherine advises government entities and corporations on accessing the international capital markets to raise the required funds by way of a bond issuance (effectively a form of debt security). This type of transaction gives investors a steady return of interest and principal over a prescribed period of time, and provides government entities and corporations with a viable and cost effective way of funding large projects as an alternative or complementary source of funding to traditional bank loans. Catherine, along with her team, help prepare the underlying legal documentation, including a bond prospectus which “drills down into the detail” of the project and explains the transaction to investors.

In the past year, London-based Catherine has represented a number of high-profile oil and gas and infrastructure clients from the Middle East issue bonds worth billions of dollars. Africa’s capital markets, too, are seeing heightened activity. “Africa is a key area of focus for White & Case — huge infrastructure is on the agenda,” says Catherine, who’s currently advising a Nigerian oil and gas company on its debut capital markets issuance.

But this buoyant practice area remains “extremely sensitive” to shifting geopolitics and market confidence Catherine explains. “The difficulty is that when you’re having to access the markets at a time where there is underlying turbulence or uncertainty, a number of uncontrollable external factors can have an immediate negative impact on market conditions on any given day. This means that ultimately, issuers can be forced to agree to a higher rate of interest on the bonds to be issued in order to successfully close a deal with investors, or risk waiting for market conditions to improve before closing that can cause an unlimited amount of delay.”

Amid ongoing US-China trade tensions, and an increasing use of economic sanctions by governments worldwide, capital markets lawyers must remain aware of what is going on in the world and where the introduction or expansion of sanctions legislation could impact a transaction. “Sanctions were hardly mentioned when I qualified but are now a big part of every transaction we do,” says Catherine, who studied modern history at the University of Oxford.

Being proactive in advising clients aligns with the entrepreneurial mindset typical of lawyers at leading US law firms, such as White & Case. Catherine explains: “It’s about being able to pre-empt challenges and offer advice before market developments hit news headlines, so you can immediately ring up your client and say, ‘I don’t know if you’ve seen this, but it may impact you. Would you like me to prepare some advice for you on this?’”

This readiness to act stems in part from Catherine’s experience of the 2008 financial crash. “I qualified in September 2008 — Lehman Brothers collapsed two months later. The international credit markets were effectively frozen. For us lawyers, it was an extremely difficult time,” recalls Catherine.

The crash signalled an end to the economic boom and the seemingly endless supply of work for City lawyers. “When I entered law, I saw it as a job for life. You could go in, train at a big firm and then you’re set up with a ‘guaranteed’ job. But the economic crisis was a big wake up call to everybody. Work is not guaranteed; you can’t take it for granted.”

Fortunately, Catherine qualified at a magic circle law firm in Dubai, whose economy remained relatively robust during the crisis. “In the fall-out from Lehman, the Middle East, which was traditionally seen as a risky commercial environment, was now regarded as a safe haven for bond investors, and was somewhat shielded from the financial crisis. So, while my colleagues were twiddling their thumbs back in London, I was extremely busy and cutting my teeth on some really interesting and novel deals,” she tells us.

In 2012 Catherine joined White & Case’s Abu Dhabi office, which offered greater opportunities to specialise in government-led project financing. Three years later, she transferred to the firm’s London office.

Despite the long hours and the challenge of overseeing several deals at once, Catherine enjoys the “thrill” of building new client relationships. “When you represent a client on a bond transaction, you have the ability to become their trusted legal advisor. Walking them through the steps of issuing a bond also means you get a real insight into their business, which offers up plenty of opportunities to cross-sell other legal services to them.”

So, what does it take to make it at a big US law firm? Well, according to Catherine, it’s showing that you’re a team player:

“It doesn’t matter how much you know about a practice area; always remember that you are a vital part of a team. Regardless how mundane the work you are set, a whole team of partners and associates deeply rely on you carrying out those tasks extremely well. We can teach you how documents can be drafted, but what we can’t teach is good work ethic.”

Demonstrating such diligence from the get-go is vital. “Trainees should view each seat on a training contract as a six month job interview. By the end of your seat, you should be regarded as someone that’s indispensable in the team and ultimately a safe pair of hands who can be relied on to execute at the highest level,” Catherine advises.

 

Breach-of-Contract Lawsuit Against Global Payments

Global Payments Inc. may be on the hook for more than $135 million following a jury verdict in a breach-of-contract lawsuit filed by an independent sales organization against the Atlanta-based processor.

A jury in the Superior Court of DeKalb County in Georgia found that Global Payments breached parts of its merchant-service agreement with Frontline Processing Corp., a Bozeman, Mont.-based ISO. The jury on Sept. 23 awarded the ISO more than $24 million in direct damages and $109.8 million in consequential damages. It also awarded Frontline more than $1 million to cover its costs and attorney fees. Judge Linda W. Hunter signed the judgment Sept. 30.

Global Payments intends to appeal the decision. “We believe this case is completely without merit and will appeal it immediately,” says a statement from the processor to Digital Transactions News. “The outcome is inconsistent with the facts and well-settled law, and we fully expect to prevail on appeal. We will not stop until this gross miscarriage of justice is reversed.”

Frontline filed the suit in 2015 after Global Payments withheld funds to cover its legal costs in a lawsuit the Consumer Financial Protection Bureau brought against the processor and two ISOs, Frontline and Pathfinder Payment Solutions Inc., for allegedly providing payment services to malicious merchants. That case was dismissed in 2017.

Pathfinder was dismissed by the DeKalb County court as a plaintiff in 2018 when it could not provide an attorney to represent it, says Joe Gleason, Frontline co-counsel and partner at Atlanta-based Gleason Law LLC.

The dispute between Frontline and Global Payments actually preceded the CFPB action, Gleason tells Digital Transactions News. In 2013, Frontline and Global Payments were negotiating to extend their contract, but Global Payments wanted to add terms that Frontline was not willing to agree to, Gleason says.

In 2014, after shopping around, Frontline agreed to a similar deal with First Data Corp. and told Global Payments it would stay if it could match First Data’s pricing. “Global did not match the pricing,” Gleason says.

Under Frontline’s agreement with Global Payments, merchants that Frontline refers to the processor are portable. Global Payments would not allow that, Gleason says, making it one of the breach claims.

“Then the CFPB case comes along and becomes a convenient excuse to destroy Frontline by withholding Frontline’s funds, by withholding merchant-reserve funds, by locking Frontline out of Global’s computer systems,” Gleason says. That effectively cut Frontline out of the picture, he says, placing Global in direct dealings with the referred merchants, another breach allegation.

“In our view, the breach-of-contract cases did not start with the CFPB lawsuit,” Gleason says. “Instead, it was just one more step.”

Frontline contended that neither the merchant-services agreement nor referral agreement the ISOs had with Global Payments allowed the processor to “deduct as expense or withhold from compensation owed to Pathfinder or Frontline Global’s legal fees incurred in defending itself in the CFPB action.”