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The IBA’s response to the situation in Ukraine
This chapter is part of a series of educational resources aimed at raising awareness among legal practitioners about the different ways in which business enterprises can become involved in adverse impacts on human rights and the roles and responsibilities of legal practitioners in helping their corporate clients to:
In this chapter you will find a series of exercises and resources designed to help you develop your skills as a legal practitioner in identifying and addressing human rights risks.
This means that:
The ‘Getting Started’ section:
The ‘Practical Resources’ section:
The ‘Further reading and resources’ section provides links to further materials, information and resources relating to business and human rights that may be of interest to corporate/M&A lawyers.
In this chapter you will find a series of exercises and resources designed to help you develop your skills as a legal practitioner in identifying and addressing human rights risks.
This means that:
If you are acting for a company in relation to an acquisition of a shareholding in another company, you are able to:
If you are acting for a company in relation to an acquisition of assets of another person or company, you are able to:
The ‘Getting Started’ section:
Tells you more about how and why human rights issues can arise in corporate/M&A work; and provides some hypothetical case scenarios, discussion questions and model answers which you can use to develop your skills with respect to
The ‘Practical Resources’ section:
Outlines the different due diligence methodologies you could consider using to help you identify human rights risks arising from or connected to,
Shows how human rights risks can be relevant to the negotiation of key contract terms;
Offers suggestions as to the different ways in which parties to corporate/M&A transactions can respond to human rights risks contractually, including
provides ideas as to additional activities and/or services that you could discuss with your corporate clients in the course of and/or following completion of a transaction (depending on the nature and scope of your client’s business activities and your on-going lawyer-client relationships) relevant to the future identification, prevention and mitigation of human rights risks.
The ‘Further reading and resources’ section provides links to further materials, information and resources relating to business and human rights that may be of interest to corporate/M&A lawyers.
In order to comply with their professional and legal obligations, lawyers must carry out certain checks before they can accept instructions from clients. For instance, if you work as a lawyer in a law firm you will need to check for possible conflicts of interest between the work contemplated in the new instructions, any other work being carried on by the firm, and any other business interests of the firm or its lawyers. In many jurisdictions, it will be obligatory to carry out identity checks prior to accepting instructions from new clients, for instance under economic sanctions, anti-money laundering or anti-corruption regulations, so that you are in a position to identify potentially higher risk transactions and verify the client’s identity. You should be thoroughly familiar with the local professional and legal standards that apply to you as a practising lawyer, as well as the internal controls and compliance systems that your firm has put in place to help you to identify and minimise these risks.
Pre-engagement human rights screening can help you, at an early stage to:
However, this is no substitute for detailed transactional legal due diligence, discussed further below.
Important notes: The checklist below is illustrative only. It is not exhaustive and will not identify all of the human rights issues that may be relevant to your prospective client and/or the proposed transaction. Furthermore, not all of these questions will be relevant in a given context, and those that appear relevant will obviously need reviewing and adapting to suit the specific transaction and circumstances.
In light of the outcomes of pre-engagement screening for human rights issues (see example 1 above) you will want to discuss with your client the extent to which human rights issues will need to be covered in the transactional legal due diligence, and in any other project-related work (including follow up and supplemental legal services) and ensure that this is reflected in the “scope of work” provisions in the retainer agreement between you and your client.
For more complex corporate and commercial work, your engagement letter is likely to contain provisions relating to your access to information and documents relevant to the transaction. If the pre-engagement screening has highlighted possible human rights risks associated with the transaction, you may wish to tailor those provisions to ensure that information and documents relating to those specific risks come within the scope of what you will have access to.
Your engagement letter may set out, in general terms, your firm’s policies and aspirations as regards professional, ethical and business standards. In addition, it may record the expectation that your client operate to similarly high standards (particularly if the client has its own code of ethics or human rights policy which the law firm/lawyer may be required to adhere to) and will not request any services from the lawyers that would be disreputable or compromise the firm’s integrity or ability to comply with applicable professional standards or regulations. You may want to consider, in light of any pre-engagement screening checks, whether there is a need for any specific reference to human rights standards in these general terms.
In this section you will find a list of further reading and resources prepared by external sources that are relevant to the issues discussed in this chapter. This list will be updated from time to time. If you have any suggestions as to further materials that would be of interest to lawyers working in the corporate/M&A field please contact us.