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Lawrence Stephens prepares source of funds reports for property bought at auction using crypto assets

Posted on: December 16th, 2024 by Natasha Cox

Despite cyptocurrencies becoming more mainstream, recent commentary suggests that investors are still finding it hard to utilise these to purchase property in the UK. A recent Financial Times article highlighted the low appetite for sellers to accept cryptocurrencies. As a result, if purchasers want to use their crypto investments towards a property purchase, this usually involves converting the cryptocurrency into traditional or fiat currency – legal tender established by government regulation.

Much of the reluctance to accept funds derived from  the disposal of cryptocurrency comes from its well-publicised association with criminal activity, in particular money laundering. Law firms have obligations imposed by the SRA in relation to checking sources of wealth and sources of funds for anti-money laundering (AML) purposes. Solicitors have a legal duty to ensure that any, and all, funds used within a property transaction have come from a legitimate source. They must therefore establish the original source of the funds, not the mere availability of funds in a bank account.

Establishing the legitimacy of funds generated through cryptoasset activity requires the instruction of an expert who is able to carry out a full report on the crypto proceeds being used. The content of this report includes documenting and reporting of the cryptoasset activity, including the initial ‘on-ramp’ into crypto (i.e. the exchange of traditional fiat money into cryptoassets), the purchase of cryptoassets, and the subsequent cryptoasset activity to the ultimate liquidation and ‘off-ramp’ from cryptoassets back into traditional fiat money which was then being used to make the purchase. This report can then form the basis on which the conveyancer can make a judgment as to whether it is safe to proceed with the proposed transaction.

There are currently few law firms with the required expertise to produce such reports. Buyers wishing to use crypto assets for property purchases should be especially aware of the need to establish legal source of funds when buying property at auction.

The Lawrence Stephens’ team was recently called in at short notice to assist a client who had purchased a property for £210,000 at auction. He had intended to fund the purchase by utilising proceeds mainly generated through investing and trading on cryptoassets. Our client had instructed solicitors in relation to the purchase. However, just two days before the notice to complete was due to expire, the client was informed that they did not have the necessary expertise and could not provide the required report on the source of funds coming by way of crypto. At this late stage, he was at risk of losing his 10% deposit.

The Lawrence Stephens’ team – comprised of Asim Arshad and Gunduz Misiri – were able to take on the instructions and were able to extend the notice to complete by three days. This gave the team enough time to complete a full crypto source of funds report to verify the funds coming by way of crypto and intended to be utilised for the purchase. We were pleased to effect the completion of the purchase within the agreed upon extended time.

 

A firm to watch: Lawrence Stephens features in The Lawyer podcast

Posted on: December 6th, 2024 by Natasha Cox

The Lawyer 200 celebrates its 20th anniversary this year and Editors Catrin Griffiths, Christian Smith and Richard Simmons have been sharing their views on their annual survey in their regular podcast which presents their take on the top stories, trends and views in the legal market.

In October they reviewed five firms from the Top 100 survey that they are watching in the coming years, for good and ill. In their latest episode they revealed the five firms outside of the Top 100 that they are also watching. These firms were selected for their “momentum, innovation, promise, growth…or not!” and we are delighted to report that Lawrence Stephens is featured in a very positive light. We were praised for our ‘twin engine’ focus for growth, working with challenger banks and similar institutions alongside owner managed businesses and the individuals who own and manage these.

The podcast is available via Spotify or Apple, please click on the relevant link to listen further.         

Lawrence Stephens advises LHV Bank on £7.4m refinancing of prominent retail parade

Posted on: December 4th, 2024 by Natasha Cox

The Lawrence Stephens Real Estate Finance team is pleased to have advised regular client LHV Bank on the £7.4m refinancing of a parade of shops located in a prominent Essex town, secured across multiple titles with more than 20 tenants and leases. The facility also refinanced a bridging loan, ensuring the client’s financial goals were met within a tight timeframe.

The team worked closely with LHV Bank to review multiple cash flow scenarios across more than 20 leases while ensuring clarity on security positions across multiple titles. Collaboration across internal departments including credit, operations, and finance was vital to work to the tight deadline. Our team ensured that the entire process was completed ahead of schedule. Originally targeted for completion on 29 November, the deal was finalised two days early thanks to seamless collaboration between our team and the bank.

Conor McDermott, Director of SME Lending at LHV, commented: “The team worked tirelessly with Fine Mortgages to complete this on challenging timescales, with the transaction completed within eight working days of approval. Special thanks to the legal team at Lawrence Stephens led by Anna Christou, who worked on this over the weekend to ensure a successful refinance.”

Greg Palos, Head of Real Estate Finance at Lawrence Stephens responded: “Despite the complexity and speed of this transaction, our sector expertise and the strength and depth of our team contributed to an excellent outcome for our client.”

Matt Green to present expert evidence to House of Lords on Property (Digital Assets etc) Bill

Posted on: December 2nd, 2024 by Natasha Cox

Matt Green, Head of Blockchain and Digital Assets will be giving evidence to the House of Lords in the Property (Digital Assets etc) Bill this Thursday.

The bill is designed to ensure new asset classes aren’t prevented from being the subject of property rights if they do not fall neatly into the relevant two categories under common law.

As the Chair of techUK’s Digital Asset Working Group, Matt will be giving expert evidence on the impact of this legislation.

You can view the livestream of Matt’s appearance from 11.30am on Thursday 5 December by clicking here.

 

Lawrence Stephens advises Blue Shield Capital on £16.7m loan

Posted on: November 21st, 2024 by Hugh Dineen-Lees

We are pleased to report that Lawrence Stephens has advised regular client Blue Shield Capital on a £16.7 million loan for a UK landlord and BTR operator specialising in city centre rental living.

This 12-month facility, across two assets in Manchester and Leeds, will support their borrower in redeeming their existing debt and restructuring their portfolio. Blue Shield Capital is a fast-growing property lending firm who provides flexible financing solutions for property owners and investors. This deal is one of the largest they have completed to date and is the latest in a number of fast-moving deals they have undertaken supported by our team.

The team was led by Director and Head of Banking Ajoy Bose-Mallick, with support from Directors Ann Ebberson and Alex Edwards.

Ajoy commented: “We are delighted to have supported Blue Shield on one of their largest deals to date. Credit to the dynamic Lawrence Stephens’ team for delivering a fantastic outcome for our client”.

Lawrence Stephens advises the Compliance Group on the acquisition of Electrical Test Midlands

Posted on: November 18th, 2024 by Natasha Cox

Lawrence Stephens is delighted to have advised The Compliance Group on the acquisition of Electrical Test Midlands (ETM), a leading specialist in electrical testing and compliance with over two decades of expertise.

Established in 2019, the Compliance Group is a leading integrated provider of safety and regulatory compliance services across electrical, fire and water. They help their clients to reduce risk, improve safety and assure regulatory compliance in a wide range of sectors.

The Group, one of the Ansor portfolio of companies, has become one of the UK’s leading compliance businesses through a combination of organic growth and acquisition. This is the Group’s fourth acquisition in 2024, following the earlier acquisitions of CT Fire Protection, Fire Safe Services and Intersafe. Lawrence Stephens is proud to have advised on all these transactions.

The team was led by Managing Director Steven Bernstein, with assistance from solicitors Isobel Moran and Carla Bernstein.

Phil Campion, Managing Director of Compliance Group Electrical, said of the deal: “ETM brings an exceptional level of technical skill, a commitment to customer service, as well as shared values of responsibility and sustainability. We are excited to welcome them into Compliance Group’s Electrical Division and further strengthen our position in the electrical safety and testing space and offer more comprehensive services to our clients across multiple sectors.“

Lawrence Stephens appoints litigation and commercial fraud specialist Dominic Holden

Posted on: November 12th, 2024 by Natasha Cox

Leading full-service law firm Lawrence Stephens is pleased to announce the appointment of dispute resolution specialist Dominic Holden, who joins as a Director in its Dispute Resolution department.

News of Dominic’s appointment was published in Commercial Dispute Resolution here and The Legal Diary here

Dominic specialises in substantial civil fraud claims, as well as complex data and hacking claims and multi-national, investigatory, enforcement and asset tracing work.

Prior to joining Lawrence Stephens, Dominic was Head of Litigation at Burlingtons in Mayfair.

Dominic advises on a broad range of commercial disputes and has particular expertise in matters involving complex and cross-border elements. Notable highlights include acting for aviation magnate Farhad Azima in his long-running and high-profile litigation against Ras-Al Khaimah’s sovereign wealth fund and its advisers, international law firm Dechert LLP and former partner Neil Gerrard.

Dominic also advises on breach of trust, professional negligence, contentious insolvency and director, shareholder and/or partnership disputes.

With a wealth of experience in litigation and disputes, Dominic’s appointment reflects the continued and exciting growth of Lawrence Stephens in recent years, while bolstering both the firm’s existing Dispute Resolution offering and cross-practice expertise.

Commenting on his appointment, Dominic said: “I am excited to begin the next chapter of my career with Lawrence Stephens. It is a pleasure to be working alongside a dynamic team of leading practitioners across a range of sectors, helping clients to navigate a range of high-profile and complex international disputes.”

Lawrence Kelly, Director in the Dispute Resolution department at Lawrence Stephens, commented: “We are delighted to welcome Dominic to the Lawrence Stephens team. His experience and tenacity complement our Dispute Resolution offering and broaden our cross-departmental expertise – allowing us to continue to offer our clients bespoke and integrated legal advice.”

Matt Green, Director and Head of Blockchain and Digital Assets and Technology Disputes at Lawrence Stephens, commented: “Dominic is a truly first-class litigator with a wealth of experience in technology disputes including litigation relating to hacking and data issues, I look forward to working with Dominic closely on a range of technology related matters at Lawrence Stephens.”

Lawrence Stephens appointed to LendInvest Bridging panel

Posted on: October 14th, 2024 by Hugh Dineen-Lees

We are delighted to share that Lawrence Stephens has been appointed to LendInvest’s Bridging panel.

Launched in 2008, LendInvest has grown to be a leading platform for property finance, offering short-term, development and buy-to-let mortgages to intermediaries, landlords and developers across the UK. Since then, they have lent more than £3 billion of mortgages and have helped to put thousands of new or improved homes into the UK housing market.

Leanne Ardron, Director of Bridging Finance at LendInvest said: “Lawrence Stephens will play an important role in supporting our growth objectives. With a commitment to excellence and responsiveness, there is good alignment with LendInvest’s ambition to ‘getting things done’”.

Arnold Enefé, Bridging Operations Change Manager at LendInvest added: “As our business continues to grow, it’s important for us to extend the range of advisers with the skillset and experience of bridging specialists such as Lawrence Stephens”Director and Head of Real Estate Finance, Gregory Palos, commented: “Ambitious organisations like LendInvest are core to our focus on Financial Institutions. We have enjoyed working with them since being appointed to their Development Panel in 2019 and we are delighted to formally extend what is already a very good relationship”.

Lawrence Stephens looks forward to this further collaboration with LendInvest in helping their clients achieve their objectives.

Lawrence Stephens’ teams ranked by Legal 500 UK 2025

Posted on: October 2nd, 2024 by Hugh Dineen-Lees

Lawrence Stephens is proud to have been recognised in the 2025 edition of the Legal 500 UK directory. Our Real Estate Finance and Banking teams have been ranked as Tier 7 in the Property Finance category, and our Sports and Entertainment team has achieved a Tier 5 ranking in the Sport category within the TMT (Technology, Media and Telecoms) section.

We were also delighted to learn that Angélique Richardson, an Associate in our Sports and Entertainment team, has been recognised as a ‘Leading Associate’ for her exceptional contribution and commitment to providing top-tier legal and career management advice to elite athletes.

The Legal 500 UK edition provides a comprehensive overview of the top law firms in the United Kingdom. It includes detailed qualitative reviews from many law firms, barristers’ chambers, and individual lawyers. The rankings are based on feedback from law firm clients which helps firms benchmark their expertise and performance in various areas.

Managing Director Steven Bernstein said: “It is fantastic to see the firm recognised in this way. While it is no surprise, we are delighted to see the firm listed amongst the best in the country and shows just how far we have come. We look forward to building on these foundations and seeing more of our people and teams achieving this distinction.”

 

Lawrence Stephens advises Genuine Dining on its acquisition by WSH

Posted on: September 26th, 2024 by Hugh Dineen-Lees

Lawrence Stephens advised workplace caterer Genuine Dining and its shareholders, including investor Luke Johnson and CEO Chris Mitchell, on its acquisition by WSH, a leading food and hospitality company.

This acquisition by WSH will support Genuine Dining’s growth and development in partnership with an industry-leading business.

The team was led by Director James Lyons and Managing Director Steven Bernstein, with assistance from Solicitors Lucy Cadley, Carla Bernstein, and Avni Patel from our Corporate and Commercial team. Employment advice was provided by Senior Associate Joanne Leach and Solicitor Becci Collins.

CEO of Genuine Dining, Chris Mitchell, commented: “The excellent advice and personal attention of the team at Lawrence Stephens were a huge help in making this transaction as smooth as possible.”

Director James Lyons added: “We are delighted to have advised the selling shareholders of Genuine Dining on this significant transaction – Lawrence Stephens has worked alongside Luke, Chris and the rest of the Genuine Dining team for a number of years and the sale to WSH marks an exciting moment in the continued growth ambitions of the business.”

If you need assistance with a corporate transaction or need advice on the drafting of employment agreements, please contact a member of our Corporate and Commercial or Employment teams.

Matt Green interviewed by The Law Society Gazette

Posted on: September 23rd, 2024 by Hugh Dineen-Lees

Head of Blockchain and Digital Assets, Matt Green, discusses his path into law and his role in some of the most complex and high-profile crypto cases, in The Law Society Gazette’s ‘My Legal Life’.

Matt’s interview was published in The Law Society Gazette, 13 September 2024.

‘My path to law was inspired by experience. As with most lawyers, studying English and history as an undergraduate set me up to appreciate constructing arguments, so this training was at its core. Plus, and entirely separately, my dad went through a divorce when I was younger and seeing the influence respective legal teams had on outcomes was astounding. Separately again, I worked at a record label (Anjunabeats) for a short stint and the legal element was always the most interesting.

My journey to blockchain and digital assets started with an inherent focus on intellectual property law and technology. With law school friend Anand Pandya, we set up legal news platform IPHarbour, writing about media, data, soft intellectual property, and technology disputes and cases. I was learning about blockchain, machine learning, cloud computing and artificial intelligence which was where intellectual property and technology broadly met at the time. In 2019, I was given the opportunity to work on a unique case, with the firm asking if anyone knew anything about blockchain and bitcoin. I volunteered.

The case was AA v Persons Unknown, Re: Bitcoin. Counsel Darragh Connell and I were in court just before Christmas that year applying for a proprietary injunction over bitcoin paid by an insurer following a ransomware attack on a Canadian hospital. The UK Jurisdiction Taskforce had just published its legal statement on crypto-assets and smart contracts, concluding crypto-assets ‘have all the indicia of property’. This case resulted in crypto-assets at large attracting property rights at common law, a point ratified in the Court of Appeal shortly afterwards. Following thorough work from the Law Commission, including iterative reports on the treatment of digital assets, cryptocurrencies (described as ‘things’ including those digital or electronic in nature that do not fall neatly into traditional definitions of property) become property at law via legislation, with the introduction of the Property (Digital Assets etc.) Bill on 11 September.

’Matters have included pursuing North Korean hackers following a $100m loss at a crypto custodian, to scams involving blackmail through dating apps, and fake investment scams with too-good-to-be-true profits’

I was hugely fortunate to work on that initial AA case. Since then, there has been a career pivot, relying on intellectual property and an understanding of technology to deal with complex issues involving blockchain. Also, the treatment of digital assets, utilising distributed ledger technology analytics to retrieve, release or help deal with assets such as bitcoin, ether and tether, using expert evidence and court processes where needed.  

I am typically instructed to assist with the recovery of digital assets, although in other cases I help release digital assets from freezers and advise generally where blockchain technology and or digital assets are at play. Unfortunately, because people do not know who scammed or hacked them, and because there is a pretence that assets disappear into the ether, there is a strong but false narrative that there are no routes to recovery. Under the right circumstances, recovery is very real. Matters have included pursuing North Korean hackers following a $100m loss at a crypto custodian, to scams involving blackmail through dating apps, and fake investment scams with too-good-to-be-true profits.

I was instructed by an individual who claimed to be the inventor of bitcoin, Satoshi Nakamoto, and sought to exercise his copyrights over bitcoin-related content. He was put to proof in the High Court earlier this year and was unsuccessful. If he had won, the functionality and future of bitcoin would look very different. The separate (but linked) case of Tulip Trading involved the loss of assets which purported to give access to billions of pounds worth of bitcoin, and under previous advisers, looked to form a new duty of care of software developers.

It is important to remember that everything is a learning opportunity. Those cases were both academically and procedurally interesting, and I have some excellent war stories (subject to the usual privilege rules). I am very lucky to have worked on some of the leading crypto-asset cases (with talented counsel and opposition). From the early days, this involved convincing a judge that these assets could be property, to now working with specialists in resolving complex issues deriving from continuously developing technology.’

Tesco loses its Supreme Court ‘fire and rehire’ fight

Posted on: September 19th, 2024 by Hugh Dineen-Lees

The practice of terminating an individual’s employment to re-employ them on new terms (known as ‘fire and re-hire’) has always been controversial. This is because it is typically used to implement unfavourable changes to employees’ contracts.

The Government is tightening up on such practices, and in July, issued a fire and re-hire code of practice which made it clear fire and re-hire should only be used in very limited circumstances. Now, the Supreme Court has granted an injunction to prevent Tesco from firing and re-engaging employees on lower compensation.

In 2007, Tesco inserted a clause into its contracts which provided for retention payment awards as an incentive for employees to relocate to other sites following the closure of distribution centres. In 2021, Tesco attempted to remove this clause and threatened anyone who did not agree with the termination of their employment. Consequently, the Union of Shop, Distributive and Allied Workers (USDAW) brought action against Tesco seeking an injunction to prevent the termination of the contracts, arguing the 2007 change was intended to be permanent. USDAW won an injunction in 2022 which stopped Tesco from carrying out its plans, but Tesco got that ruling overturned on appeal.

On 12 September 2024, the Supreme Court reversed that decision. Commenting that the individuals had been induced to make significant and permanent changes to their lives by relocating, the Judges made it clear that any limitation to the change should have been negotiated in 2007.

Employers may be concerned that this decision significantly narrows when fire and re-hire can be used. They may also be concerned that it sets a precedent for injunctive relief to be granted to protect employees from dismissal, which is rare. However, cases like these are fact-specific: the injunction was granted in a case where the affected individuals made a life-changing move in return for compensation during the performance of the contract – and it was not specified at the relevant time that the additional compensation could be taken away.

The Government has previously indicated that it intends to ban fire and re-hire, and following this judgment, the Department for Business and Trade has stated that new legislation shall be brought in soon. In the meantime, there are occasions where the use of fire and re-hire could still be appropriate, particularly if the alternatives are for employees to be retained on terms which significantly damage the business, or risks mass redundancies, or even for a business to cease trading entirely. The Tesco matter was different and was a situation which was said to be “unrealistic” and “flouting industrial common sense”.  However, it does highlight how careful employers must be when agreeing contractual variations, and, in particular, how employers ought to carefully consider the duration of any proposed changes.

If you have any question about the drafting or varying of employment terms and any related issues, please contact a member of our Employment team.