Man hit by pine cone sues San Francisco Maritime Park for US$5 million

Picture the scene. It’s a beautiful autumn day and you decide to take a walk through your local park.  The sun is shining, but there is a cool breeze as fall marks the transition from summer to winter. You sit underneath a tree to relax when suddenly, without warning, your tranquility is interrupted as a pine cone strikes you on the head.

Has the incident ruined your day?  No, but it probably startled you. Would the unwelcome pine cone cause you to suffer ongoing stress or anxiety? Of course not, it’s only a pine cone.  Should you file a lawsuit against those responsible for the park?  A lawsuit? That would be ridiculous, right?

Well, what if I told you that the pine cone weighed 16 pounds and was covered in spikes.  To put this into perspective, the average bowling ball weighs 15 pounds. Imagine a bowling ball falling from 20 foot and landing on your head. Yeah, that's going to be a problem!

"The pine cone weighed 16 pounds and was covered in spikes."

So how do you feel about those questions now? No doubt you would like to revise some of your answers and wish to hold someone responsible. The incident would almost certainly affect a lot more than your day.  It is highly likely it would have a huge impact on your ongoing quality of life and could pose a risk of death.

Sadly, this scenario is not a hypothetical. These are the facts that caused Sean Mace, a 55 year old military veteran, to sustain a serious brain injury.  Mace was visiting the San Francisco Maritime National Historic Park in October last year to find a spot to watch the Blue Angels air show.  He found what he thought was a peaceful place to rest under a coniferous 'araucaria bidwillii' tree, more commonly known as a ‘bunya pine’. Unfortunately for Mace, one of the pine's cones broke loose and landed on his head, crushing his skull and causing internal bleeding. 

Mace was rushed to San Francisco General Hospital, where he underwent emergency surgery to relieve the pressure on his brain. He required another surgery five days later to relieve further pressure that had built up inside his skull.  “This guy has an irreversible brain injury and he’s only in his mid-50s,” said Mace’s attorney. “He’s had two surgeries already and he is going to need a third.”

The law of negligence

These types of incidents are governed by an area of tort law known as 'negligence', which has previously been explored by the McGill Law Office in our earlier blog post on Auto Accidents. Negligence occurs when a person fails to exercise a level of care that a reasonable person would do in the same circumstances.  Individuals, companies, local authorities, states and even the federal government can all be held liable for a negligent act.

Every person, organisation and public authority you interact with owes you a duty of care, just as you owe them a duty of care.  From the person walking passed you down the street, to the hospital that provides you with medical treatment, to the cab driver who takes you home.

"Every person, organisation and public authority you interact with owes you a duty of care, just as you owe them a duty of care."

If the person walking down the street is not looking where she or he is going and knocks you to the ground, injuring your arm, this is negligence for failure to exercise the level of care one would expect from the reasonable pedestrian and you have a right to sue them.  If the doctor at the hospital you attend fails to identify that your x-rays clearly shows that you have fractured your arm, which causes you extended suffering, this is negligence for failure to exercise the level of care one would expect from a reasonable doctor and you have a right to sue.  If the cab driver who is taking you home from the hospital hits the back of a vehicle when puling up outside your house, the cab company is negligent as the driver failed to exercise the level of care one would expect from a reasonable cab driver and you have a right to sue. 

So is the National Park Service liable?

Let's consider Sean Mace's claim.  The National Park Service is responsible for the San Francisco Maritime National Historic Park. A key part of the test to establish negligence is what would 'a reasonable park service' have done to protect the public given the circumstances?

The answer to that question will largely depend on whether a jury finds that the park service knew or should have known that the bunya pine cones grows to a  weight of 16 pounds and has a tendency to fall from the trees.  If the answer is yes, then clearly the pine cones presented a foreseeable risk of injury to park users and the park should have taken reasonable measures to ensure the safety of all park users.

What is particularly damaging to the park is that court papers allege that park staff actually planted the bunya pine trees, which were from Eastern Australia and were not native to California.  If this is correct, it is reasonable to expect that the park should have researched any risks associated with the bunya pines at the time that they were planted. One can only assume that research was not carried out as the bunya pine is famous for its large, heavy prickly pine cones.  Even if proper checks were not carried out at the time the bunya pine was introduced, the court will consider whether the park's employees should have been aware of the fact that the tree's pine cones presented a foreseeable risk of injury. 

A further obstacle that National Park Service would need to overcome if it challenges liability is that various news reporting agencies interviewed local residents who claimed that they had witnessed the pine cones fall on numerous occasions and that it was obvious that they presented a risk to people walking through the park.  If accurate, this will certainly encourage a jury to conclude that the park should have been aware of the risks. Following the incident, the bunya pines were cornered off with a safety fence and warning signs were erected displaying the dangers posed by the giant pine cones.

What should we take from this incident?

This story highlights some valuable lessons.  From a social and safety perspective, always check to see what dangers you may be exposed to when you decide to rest, play or picnic underneath a tree. From a cultural perspective its yet another reminder that pretty much anything found in Australia can kill, even the trees.  From a legal perspective, it is a good example of the numerous duties of care that others owe you in everyday life. 

"... another reminder that pretty much anything found in Australia can kill, even their trees."

Sometimes accidents simply happen and no-one is to blame, but if you are ever personally injured, sustain damage to your property or suffer economic loss, always ask yourself whether an individual, a business, a state authority or the federal government owed you a duty to keep you or your property safe from harm.  If you are unsure, please do not hesitate to contact the McGill Law Office to explore whether you have a claim.

Content prepared by Richard Parry. © Richard Parry, 2015

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This message and the information presented here do not create or evidence an attorney-client relationship nor are they intended to convey legal advice or counsel.  You should not act upon this information without seeking advice from a qualified lawyer licensed in your own state or country who actually represents you. In this regard, you may contact The McGill Law Office and then representation and advice may be given if, and only if, attorney Edmond McGill agrees to do so in a written contract signed by him.

HOW TO ENFORCE A COURT JUDGMENT – PART TWO

In Part One we reviewed the steps that a successful party, the judgment creditor, needs to take in order to enforce their judgment should the losing party, the judgment debtor, fail to pay a judgment.  We considered how to obtain further information about the debtor’s assets, how to receive money from the debtor's employer and how to obtain money from the debtor’s bank account.

In Part Two, we will look at the process for securing a lien over a debtor’s real property before turning our attention to how we can enforce a judgment against a business debtor.  Finally we will consider how to recover the costs a successful party is forced to incur when enforcing a judgment.

Securing a lien over the losing’s party’s property

By placing a lien over any real property owned by the debtor, the debtor will not be able to sell or refinance property until the judgment is paid in full.  You do not have to provide the address of the property to impose a lien, nor do you even need to know for certain that the debtor owns property.  A lien will be placed on any property that is in the name of the debtor. The best approach is to record a lien in the county or counties where the debtor resides or does business.  The judgment is valid for ten years and the lien will stay in place for the duration of the judgment.  If need be, the judgment can be renewed before the end of the ten years.

If the debtor owns property in Marin County we will need to take an issued Abstract of Judgment to the County Recorder’s Office.  The lien will be recorded for a fee of $25.  If the debtor owns property in another county, we will also need to deliver the issued Abstract of Judgment to the Recorder’s office in that county (a further small fee will be required).

Seize money of a business ("till tap")

If the judgment debtor is a business which has a cash register, we can get the Sheriff to go to the business and take money out of the register to pay the judgment and the Sheriff’s fee.  This method of collection, known as a "till tap", is favored as it is relatively quick and is not as expensive as putting a Sheriff’s "keeper" in a business, which is discussed below.

To tap the debtor's till we will need to provide the Sheriff’s Office with an issued Writ of Execution as well as Sheriff’s Instructions, including the name and address of the business and the best time of day to do the "till tap."  The Sheriff will then go to the business address, take what money is in the cash register and serve the debtor with a Notice of Levy. 

If there is not enough money in the register to pay the judgment on the day the Sheriff goes to the business address, you have the option of sending the Sheriff back on another day, although a fee will be due every time the Sheriff goes back.  The Sheriff’s fees are recoverable and can be added on to the judgment amount and other expenses.  However, there is no guarantee that a collection can be made and the Sheriff's fees will need to be paid by you regardless of the amount of money seized.

The judgment debtor may challenge the seizure of their personal property by filing a Claim of Exemption with the Sheriff.  We will then have to oppose the Claim of Exemption and a hearing date will be set for the court to consider the debtor’s objections.

Seize the money and personal property in the debtor’s business ("keeper")

If the judgment debtor is a business, we can get the Sheriff to place an individual called a "keeper" in the business for a certain period of time.  The keeper will collect money received by the business on the day or days you have paid for a keeper to be present at the business.

We can also ask the Sheriff to sell the inventory of the business. The Sheriff’s fees for a keeper can be expensive. The fees will be added to the amount that the Sheriff collects, but there is no guarantee of collection.

To appoint a keeper, we will need to provide the Sheriff’s Office with an issued Writ of Execution as well as Sheriff’s Instructions, including the name and address of the business and day that we want the keeper to be present at the business.  You will also have to pay the Sheriff’s fee.

Recovering the costs of enforcing your judgment

In the event that we have to use legal proceedings to collect the money awarded to you under a judgment, you will have to pay court fees, service fees and Sheriff’s fees.  You are entitled to add these costs to your original judgment amount provided you have not filed a Satisfaction of Judgment (see below).  You must seek the recovery of these costs within two years of the date they were incurred.  You can also claim interest at 10% annually from the date of the judgment. Lastly, you must acknowledge any payments that the judgment debtor has made on the judgment.

We will arrange for a Memorandum of Costs After Judgment, Acknowledgment of Credit, and Declaration of Accrued Interest to be delivered to the judgment debtor.  The person who delivers the Memorandum must complete the proof of service document on the back of the form, which we will then file the form with the court.  The debtor will have 10 days to file a motion to dispute some or all of the costs.  If no motion is filed, the clerk will add the costs to the judgment. If the debtor files a motion, we will get a notice of the time of the hearing at which the court will decide if you should get paid for the costs you have claimed.

What to do after a Judgment is paid

After you have been paid in full, you must file an Acknowledgment of Satisfaction of Judgment. If you recorded an Abstract of Judgment (to secure a lien over the debtor’s property), when you complete the Acknowledgment form you will have to name every county where you recorded the Abstract of Judgment and sign the form in front of a notary public. You must then record the Acknowledgment in each county where the Abstract of Judgment was recorded. The Recorder will charge a fee.

Recovering money awarded to you by the court can seem as a disheartening and sometimes painful process, but with a good understanding of the options available to you, the steps required and the assistance of reliable legal counsel where needed, the recovery and enforcement framework can be used effectively and efficiently. If you require advice or representation from the McGIll Law Office, please do not hesitate to contact us on 415 508 5323 or email us on inquiry@mcgill-lawoffice.com 

Content prepared by Richard Parry. © Richard Parry, 2015

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This message and the information presented here do not create or evidence an attorney-client relationship nor are they intended to convey legal advice or counsel.  You should not act upon this information without seeking advice from a qualified lawyer licensed in your own state or country who actually represents you. In this regard, you may contact The McGill Law Office and then representation and advice may be given if, and only if, attorney Edmond McGill agrees to do so in a written contract signed by him.

HOW TO ENFORCE A COURT JUDGMENT – PART ONE

There may come a time when you are forced to take legal proceedings against an individual or a business to recover money owed to you, or perhaps you will need to claim compensation for a loss you have suffered, either because of physically injury or damage to your property.  If you are successful at trial or if the other party does not defend the claim, the court will order judgment in your favor.  But obtaining a judgment from the court is only the first step.  It is often the enforcement of the judgment that can be the more challenging and frustrating stage.

The McGill Law office is committed to not only helping our clients achieve the best outcome in legal proceedings, but ensuring they are able to recover the money awarded to them by the court in the most practical and efficient way.  We want to share with our readers the steps that must be taken and the options they have available when enforcing a judgment. 

We have prepared a two-part guide that we hope our readers will find informative as well as providing them with the comfort that, if they are owed a debt or are entitled to compensation, the McGill Law Office has the knowledge and experience to best represent their interests.

Introduction

Under the terms of a judgment the court will order the losing party, the “judgment debtor”, to pay a sum of money to the successful party, the “judgment creditor”.  Once you have obtained a judgment, it is up to you to enforce it, the court will not assist in collecting the money on your behalf.  Below are the legal steps that need to be taken to collect your judgment.

Requirements before you begin enforcement

You must wait at least 30 days from the date of the Entry of Judgment to begin collection.  This period gives the judgment debtor time to pay the debt in full or explore payment arrangements.  If the debtor takes no action during the 30 days, you may take steps to enforce the judgment.

During this period we will write to the other party demanding that you be paid the judgment amount immediately.  If the debtor is unable to pay the full amount immediately, we will take your instructions as to whether you are willing to accept periodic payments.  If an acceptable payment plan can be agreed between you and the debtor, we will complete a form called a Stipulation for Time Payments and a copy will be filed at court.  If we cannot agree a payment arrangement with the debtor, we will proceed to enforce the judgment using one or more of the methods below.

Demanding the losing party to disclose their assets to the court

If we need more information about the debtor’s assets in order to levy them, we will request that the court order the debtor to attend a hearing to answer questions about the debtor's assets and income.  In order to compel a debtor to attend a hearing we would make an application to the court for an order for Appearance and Examination.  The application is issued with a hearing date by the clerk of the court and must then be served on the debtor.

If the debtor fails to pay the amount specified in the Appearance and Examination, they will have to attend a hearing.  At the hearing the judge will make the debtor answer questions we have prepared, which will typically consist of questions about the real estate they own, how much income they earn and the amount of money they have in the bank.  If the debtor fails to appear for the hearing, a bench warrant may be issued for their arrest.

Receiving money from the losing party’s employer

This method of enforcement is legally referred to as an Earnings Withholding Order or Wage Garnishment, as it was historically known.  An Earnings Withholding Order requires the debtor’s employer to send up to 25% of the debtor’s net (after tax) wages to the Sheriff, who then passes it on to us on your behalf.  If the employer has already been served with an Earnings Withholding Order for the debtor, the order for withholding may not be processed until the previous order is paid off. 

In order to take this course of enforcement we will need to know where the debtor works.  We may already know this information or we may have obtained in the court’s examination of the debtor.  If the debtor is self-employed, an Earnings Withholding Order is not an enforcement option that can be pursued and we will have to consider one of the alternative methods outlined below.

We then need to serve an issued Writ of Execution and Application for Earnings for Withholding Order on the debtor’s employer.  In Marin County these documents can be served by Sheriff’s office for $35.  We will also need to complete Sheriff's Instructions that provide details of the name and address of the place of business being served.  The employer must respond to the Sheriff within 15 days confirming that the debtor works there and how frequently they are paid.  The debtor may challenge the amount of the seizure of their wages if they can prove they need part or all of earnings withheld to support themselves or their family.

Receiving money from the losing party’s bank account

Under this enforcement process the debtor’s bank account will be frozen for 10 days, during which time the debtor is notified of the levy.  The bank is then required to give any money in the account at the time of the levy, up to the judgment amount plus costs, to the Sheriff’s office.  The Sheriff holds the funds for 20 days and releases the funds to us on your behalf.  You must know both the name of the judgment debtor’s bank and which branch the debtor uses.  It is very helpful to have the account number, however it is not necessary.  If needed, information can be obtained from the court’s examination of the debtor.

We will give the Sheriff's office a Writ of Execution and Sheriff’s Instructions.  When the Sheriff freezes the account, the judgment debtor will receive a Notice of Levy.  The judgment debtor may oppose the levy of bank funds by filing a Claim of Exemption with the Sheriff listed on the Notice of Levy.  We will then have to oppose the Claim of Exemption and a hearing date will be set for the court to hear the debtor’s objections.

In Part Two of Enforcing a Court Judgment we will look at securing a lien over property, seizing money of a business, seizing personal property of a business and recovering the costs of enforcing your judgment.

Content prepared by Richard Parry. © Richard Parry, 2015

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This message and the information presented here do not create or evidence an attorney-client relationship nor are they intended to convey legal advice or counsel.  You should not act upon this information without seeking advice from a qualified lawyer licensed in your own state or country who actually represents you. In this regard, you may contact The McGill Law Office and then representation and advice may be given if, and only if, attorney Edmond McGill agrees to do so in a written contract signed by him.

INTERNATIONAL LAW: THE INTRODUCTION OF THE FOREIGN ACCOUNT TAX COMPLIANCE ACT (FATCA) AND WHAT YOU NEED TO KNOW

The Foreign Account Tax Compliance Act, or FATCA as it is universally known, is the centerpiece of U.S. efforts to curb tax evasion everywhere.  It was introduced in 2010 as the revenue-raising portion of the domestic jobs stimulus bill, the Hiring Incentives to Restore Employment (HIRE) Act, but its impact is only now being felt.  Since being passed into federal law, the U.S. government has negotiated various agreements with foreign nations effectively extending the enforceable application of FATCA to the global stage.

The historic legislation has made significant waves internationally, particularly in offshore financial centers where local secrecy and confidentiality laws had often made it incredibly difficult for the U.S. authorities to identify and tackle tax evasion.

"The U.S. topped a list of countries most effected by tax evasion, with the nation projected to be losing approximately $337 billion a year."

In 2011, the Tax Justice Network estimated that tax evasion represented 5% of global GDP.  The U.S. topped a list of countries most effected by tax evasion, with the nation projected to be losing approximately $337 billion a year.  Given increasing global trade and growing international investment opportunities, it is a figure that was only going to spiral unless action was taken.  The U.S. government's response was FATCA.

Life before FATCA

Before the introduction of FATCA, the IRS was largely reliant on the honest and accurate reporting by individuals, corporations and trustees of their foreign assets and income.  International confidentiality and secrecy laws meant that the IRS could not undertake a review of foreign bank accounts and assets owned by U.S. citizens or corporations held abroad.  Although the U.S. Treasury could seek the assistance of foreign courts in cases where there was clear and compelling evidence of tax evasion, it could not gain access to financial accounts on suspicion alone.

The IRS’s inability to effectively investigate tax reporting created a culture of casual tax evasion. It should be noted that unlike tax avoidance, which is the legal application of loopholes in the law to minimize tax liability (as discussed on our previous blog on Offshore Financial Centers), tax evasion is a criminal offense punishable by hefty fines and prison sentences.  

"The IRS’s inability to effectively investigate tax reporting created a culture of casual tax evasion."

Shell companies would be set up offshore with a sole U.S. director and shareholder, but the income would either not be reported or would be inaccurately reported. Given that several offshore jurisdictions have legislation keeping directors' registers and shareholders' registers confidential, the IRS had no way of conducting compliance checks to see what interests U.S. citizens had in foreign companies.  Foreign trusts would be established to hold assets including corporations, real estate, stock and foreign currencies, but again the assets would not be properly reported as the assets of trusts are also protected by foreign confidentiality laws.  Furthermore, U.S. citizens and green card holders were living abroad, sometimes earning substantial tax-free wages, without ever declaring their foreign earned income to the IRS.

Collectively, this lax attitude towards accurate financial reporting, whether it be intentional, reckless or negligent, became alarmingly common, particularly as the movement of financial assets became easier and less expensive in an increasingly global economy.  The cost to the U.S. Treasury was massive.

"Countries with Largest Tax Evasion Amount v3" by Guest2625 - Own work. Licensed under CC BY-SA 3.0 via Commons

The Introduction of FATCA

In March 2010, FATCA became law and compelled all foreign financial institutions (FFIs) to search their records for suspected U.S. persons who held accounts with them and report their assets and identities to the U.S. Treasury.  FATCA’s stated objectives include: -

• FATCA targets tax non-compliance by U.S. taxpayers with foreign accounts.
• FATCA focuses on reporting:
  • By U.S. taxpayers about certain foreign financial accounts and offshore assets
  • By foreign financial institutions about financial accounts held by U.S. taxpayers or foreign entities in which U.S. taxpayers hold a substantial ownership interest
• The objective of FATCA is the reporting of foreign financial assets; withholding is the cost of not reporting.

The consequences under the law for FFIs’ non-compliance are severe.  If an FFI fails to enter into the necessary reporting arrangements with the IRS, a 30% withholding tax is imposed on U.S. source income and other U.S. related payments of the FFI.  This is not a position any FFI wants to find itself in.

Intergovernmental Agreements

The U.S. has learned over several decades that without the appropriate international compliance and enforcement regime, federal law is of limited value.  After all, FATCA has not introduced anything new in terms of taxation; U.S. citizens and residents have long been subject to reporting foreign financial interests and paying tax on their worldwide income.  What FATCA sought to change was compliance with the tax code that was so regularly ignored by corporations and individuals alike.

To make FATCA effective, the U.S. used its considerable trade and political leverage to enter into intergovernmental agreements with the majority of developed foreign nations, which implemented FATCA into local law and established tax information exchange protocols.  A full list of the countries that have already signed treaty agreement with the U.S. can viewed here - list of treaties.

Impact of FATCA

Despite being introduced into Federal law in 2010, most of the foreign reporting obligations did not come into force until 2013-14, following the introduction of the key filing and reporting dates contained in the intergovernmental agreements discussed above.  Now that FATCA has been adopted by local law around the world, meaning enforcement of non-compliance is a much less burdensome process, FFIs have become acutely aware of their reporting obligations.  The result is that the vast majority of FFIs have systematically reviewed their clients’ identities and their financial interests, ensuring they are ready to report to the IRS directly, or indirectly through their national tax authority, depending on the form of the intergovernmental treaty entered into.

"...the burden placed on FFIs has prompted several foreign financial institutions to turn away U.S. citizens or residents looking to open up a bank account."

For FFIs, the cost of opening a bank account, complying with the due diligence and reporting each year to the IRS, often makes it unprofitable to provide a banking service to U.S. citizens. So much so that the burden placed on FFIs has prompted several foreign financial institutions to turn away U.S. citizens looking to open up a bank account.   Furthermore, companies are reluctant to appoint U.S. citizens as directors or officers given the heightened reporting obligations which accompany their appointment.

What can we expect going forward?

The best way to look at what the future holds is to appreciate that for the first time the IRS will be able to cross reference the tax filings and foreign bank account reporting (FBAR) of each U.S. individual and corporation, with the information reported by FFIs.  The implications are massive and are expected to expose widespread tax evasion.

The reporting obligations of FFIs includes any interest in bank accounts, mutual funds, hedge funds, private equity, directors fees, pensions, annuities, real estate, beneficial interests in trust assets and much more.  If U.S. persons or corporations have not fully reported any interest they will be in breach of U.S. tax code.  Inaccurate reporting can now be identified with little effort. Even if U.S. individuals or corporations who have previously failed to report their foreign interests do begin to accurately report, it will not change the fact the IRS will have evidence of past negligent or fraudulent reporting.  For example, if an FFI reports an individual has had an investment account in the Bahamas for the last ten years, which they have never reported to the IRS and from which they receive annual dividends, that individual will be in hot water regardless of how he reports in the current tax year.

Over the next few years you can expect to hear about the IRS pursuing those individuals or companies that have avoided paying substantial tax liability through inaccurate tax reporting, which in most cases will be treated as tax evasion. Exactly how the IRS pursues more modest sums of money that have not been properly reported remains to be seen, but there is no question the IRS will have substantial evidence to pursue thousands of individuals and corporations should it choose to.

As legal advisers, we would strongly recommend that all U.S. citizens and green card holders, wherever they reside in the world and wherever their income is generated, to seriously consider the impact of FATCA and the fundamental change in culture that is unfolding.  The U.S. authorities now have the tools they has long been seeking to uncover a wide variety of tax fraud.  The IRS will treat any breaches of U.S. tax code far more favorably if the individual or company comes forward, as opposed to the IRS contacting them.  If you require advice on FATCA and the compliance regulations placed on FFIs, please contact the McGill Law Office.  If you believe you are in breach of U.S. tax code and require advice on exploring your options we recommend you contact your accountant or a specialist tax attorney.

Content prepared by Richard Parry. © Richard Parry, 2015

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This message and the information presented here do not create or evidence an attorney-client relationship nor are they intended to convey legal advice or counsel.  You should not act upon this information without seeking advice from a qualified lawyer licensed in your own state or country who actually represents you. In this regard, you may contact The McGill Law Office and then representation and advice may be given if, and only if, attorney Edmond McGill agrees to do so in a written contract signed by him.

INTERNATIONAL LAW - OFFSHORE FINANCIAL CENTERS: WHAT ARE THEY AND WHAT DO THEY OFFER?

In business, people often talk about offshore ventures and the advantages associated within offshore investment.  But what exactly is meant by doing business ‘offshore’ and why do so many businesses and individuals invest money, move assets and incorporate companies in these foreign jurisdictions? 

Over the last decade the media and political spotlight has begun to focus heavily on the hoards of cash that U.S. corporations are stockpiling offshore.  In 2014, a securities filings review by Bloomberg revealed that U.S. multinationals had stockpiled $2,100,000,000 ($2.10 trillion) in profits overseas to avoid taxes.  Tax avoidance is the legal usage of tax regimes to reduce the amount of tax payable.  Several loopholes exist both domestically and internationally that hundreds of U.S. corporations take advantage of to great effect.

"U.S. multinationals have stockpiled $2,100,000,000,000 (2.10 trillion) in profits overseas to avoid taxes"

In a world where global trade and investment is expanding at a rapid rate, it is important to understand these issues.  Businesses and individuals are looking at how offshore financial centers can benefit them and lawyers are increasingly being asked to advise on the advantages that can be gained from such opportunities.

So what is an offshore financial center?

There is no agreed definition of what constitutes an offshore financial center.  Tolleys, a leading global tax guide, has sought to define them as the politically correct term for what used to be known as tax havens.  An IRS publication in 1981 famously stated that "a country is a tax haven if it looks like one and if it is considered to be one by those who care".  These are not particularly helpful definitions and impart connotations of money laundering and tax evasion.  They are also somewhat misleading in the modern day in light of increased regulation in the offshore world as well as extensive mutual assistance treaties and intergovernmental agreements that have enhanced transparency and compelled tax reporting from foreign financial institutions. 

Generally speaking, it is accepted that an offshore financial center is a country that satisfies the following criteria. 

• Relatively small jurisdiction
• Low or no tax
• Specializes in commercial and corporate services
• Offers those services to non-residents
• Focuses on investment and asset protection

These countries also share common characteristics that have been important factors in their recognition as leading offshore financial centers.  They usually have politically stability, a respected legal and judicial system, low regulation and experienced professionals.  It is for this reason that several offshore financial centers are British Crown dependancies, British overseas territories or former parts of the British empire. 

Where are these financial centers?

The most common offshore financial centers include Bermuda, Cayman Islands, British Virgin Islands, Bahamas, Hong Kong, Singapore, Luxembourg, Switzerland and Panama.  Ireland and New Zealand are also becoming more prominent in the offshore market, despite traditionally being regarded as primary jurisdictions.  Even the U.S. state of Delaware is regularly seen as an offshore financial center given the disproportionate number of companies that are incorporated in the state.

"The Cayman Islands has no income tax, no corporation tax, no inheritance tax and no capital gains tax."

Each of these jurisdictions is prominent in one or more of the major offshore markets.  The Cayman Islands has no income tax, no corporation tax, no inheritance tax and no capital gains tax.  It leads the collective investment market thanks to its accommodating mutual funds legislation.  It is estimated to house about 75% of the world’s hedge funds and nearly half the industry's projected $1.1 trillion of assets under management.  It is also a major player in the captive insurance market.  The Bahamas and Panama lead the market in registered vessels while the British Virgin Islands is the registered home to the largest number of offshore companies in the world (roughly 600,000).  The British Virgin Islands has approximately 30 registered companies per capita, which is the highest ratio of any country.

Switzerland has more recently focused on tax exemptions and Singapore is rapidly becoming a leader in private banking, hedge funds and wealth management. Bermuda leads the captive insurance market and has established a growing presence in the primary insurance market, an industry not traditionally associated with offshore centers, becoming the third largest in the world.  It is also popular for fund management and aircraft registration.  Ireland offers a competitive 12.5% corporate tax rate and provides attractive legislation that allows companies incorporated there to obtain an effective tax rate closer to 2% by utilizing its territorial tax regime.

"The British Virgin Islands has approximately 30 registered companies per capita, which is the highest ratio of any country."

The management of subsidiaries, or shell companies as they are often referred to, is well illustrated by Ugland House, a five-story office building in the Cayman Islands that is the registered office for 18,857 companies.  Like many other offshore jurisdictions, the Cayman Islands levies no income taxes on companies incorporated in the country.  Simply by registering subsidiaries in the Cayman Islands, U.S. companies can take advantage of the Cayman Islands' tax regime and pay no tax on their foreign earned income.  They may also be able to utilize accounting loopholes so that portions of U.S. earned income can be recorded as being earned in the Caymans.

Can U.S. businesses legally avoid or reduce their taxes by setting up companies offshore?

The U.S. worldwide system of corporate taxation requires multinational corporations to pay taxes twice, first to the foreign country in which they do business and then to the IRS once they repatriate their profits.  U.S. businesses are required to pay the 35% federal corporate tax rate on their income no matter where it is earned - domestically or abroad.

Corporations operating in foreign countries pay income taxes to the country in which those profits were earned. For example, if a subsidiary of a U.S. company earns $100 million in profits in Singapore, it pays the Singapore corporate income tax rate of 17% (or $17 million) on those profits.  When those profits are brought back to the U.S., an additional tax equal to the difference between the U.S. tax rate of 35% and the Singapore corporate rate of 17% ($18 million in this case) is collected by the IRS. Between the two nations, the U.S. company will have paid a total of $35 million, or 35%, in taxes on its foreign profits.  If a U.S. company that was incorporated in the Cayman Islands earned $100 million, it would not pay any corporate tax to the Cayman Government, as there is no corporation tax in the jurisdiction.  The company would however be liable for the full 35% federal corporate tax when it brings the funds into the U.S.

U.S. companies can delay paying U.S. tax on their foreign profits choosing instead to pay the additional tax when the profits are eventually repatriated.  If the business does not need to bring the profits of its foreign business back in to the U.S., it is able to defer its tax liability until such time that is chooses to repatriate the money and can instead utilize the funds offshore, paying no or nominal tax to a foreign government.  Large companies can reinvest the money to expand their global business and some are said to have used sophisticated methods of exploiting tax code to invest the money held by offshore subsidiaries in U.S. assets and securities.

General Electric leads the long list of U.S. corporations that store cash offshore, currently holding $119 billion overseas. However, in terms of recent performance, it was Microsoft and Apple that stacked up the most foreign profits offshore in 2014.  The eight largest tech companies, including Microsoft Corp., Apple Inc., Google Inc., and IBM Corp. account for more than a fifth of the $2.1 trillion currently being stockpiled offshore by U.S. corporations.  Last year alone saw the eight largest tech giants amass $69 billion in offshore profits.

Bloomberg has reported that Apple generated $23.3 billion in offshore profit during 2014, the vast majority of which is held by Irish subsidiaries.  That amounts to the entire annual budget for both the Department of Transportation and the Social Security Administration.  Microsoft generated even more foreign profit, raking in $29 billion, all of which is stockpiled offshore.  

Last year President Obama proposed applying a 14% mandatory tax on the stockpiled profits and a 19% minimum tax on foreign earnings going forward. The one-time tax would generate $268 billion over six years, which Obama wants to use for infrastructure.  Obama’s plan hasn’t advanced in Congress, amid Republican objections, and it appears that the current tax loopholes are here to stay, at least for the short-term future.

"General Electric currently leads the long list of U.S. corporations that store cash offshore, currently holding $119 billion overseas."

As most small and medium sized businesses rely on the profits of foreign earned income, they do not have the luxury of keeping the profits offshore.  Such an arrangement also prevents companies from using the funds to pay dividends to its shareholders.

Despite not being able to reduce their tax liability per se, large U.S. multinationals regularly structure their businesses so that they may take advantage of offshore tax regimes, allowing them to avoid U.S. tax and reinvest the funds to further global business expansion. It would seem that the U.S. corporations with offshore stockpiles are waiting for a government incentive to repatriate their cash, as was the case in 2004 when a law was passed that gave companies a voluntary repatriation holiday with a 5.25% tax rate.  President Obama and top Republicans on the tax-writing committee have stated there would not be a repeat of the 2004 law, but it would not be surprising to see some form of incentive to be tendered to attract large multinationals to bring home some of the $2.1 trillion currently sitting offshore.

So what are the benefits of incorporating, registering or investing in an offshore financial center?

With tax reduction being a benefit that can only truly be enjoyed by corporations with substantial foreign profits, why would businesses or individuals look to set up a company, fund or trust offshore?

Asset Protection - Wealthy individuals who live in politically unstable countries utilize offshore companies or set up foreign trusts to hold family wealth to avoid potential expropriation in the country in which they live. Trusts are also widely used by many, including U.S. citizens, to prevent their assets from being seized by creditors or becoming subject to lawsuits.  Given that U.S. courts can assert jurisdiction over assets located within the U.S., it is wise to ensure that any assets an investor is looking to protect by utilizing offshore laws are not physically held within U.S borders.

Avoidance of forced heirship provisions - Many countries from France to Saudi Arabia (and the U.S. State of Louisiana) continue to employ forced heirship provisions in their succession law, limiting the testator's freedom to distribute assets upon death. By placing assets into an offshore corporation, and then having probate of the shares determined by the laws of the offshore jurisdiction (usually in accordance with a specific will or codicil sworn for that purpose), the testator can sometimes avoid such restrictions.

Collective Investment Vehicles - Mutual funds, hedge funds and private equity funds are formed offshore to facilitate international distribution. By being domiciled in a low tax jurisdiction, investors from around the world only have to consider the tax implications of their own domicile or residency.  This makes the management and distribution of these funds significantly easier and more cost effective.

"High-profile investors do not want rivals or the public knowing what stocks they're investing in."

Confidentiality - Most offshore financial centers give the benefit of secrecy legislation or a form of conditional relationship law. These laws provide investors and shareholders with the privacy protection afforded under strict corporate and banking confidentiality. Breaching these laws can have serious consequences for the offending party. Disclosing information in relation to an account holder is a breach of banking confidentiality and disclosing information about shareholders is a breach of corporate confidentiality.  It is often wrongly perceived that those corporations and individuals who rely on these banking secrecy and confidentiality laws are criminals seeking to hide their actions. But the reality is that many high-profile investors can gain a substantial economic advantage keeping their identity secret while accumulating shares of a public company.  High-profile investors do not want rivals or the public knowing what stocks they're investing in. If they did, they could lose a significant commercial advantage as smaller investors buy the same stocks that they have targeted for large volume share purchases, which drives up the price.  Despite the strict enforcement of these confidentiality laws, where there is clear evidence of drug trafficking, money laundering or other illegal activities, the regulators and judicial systems will not serve to protect offending parties.

The Sao Paulo Stock Exchange (Bovespa) by Rafael Matsunaga, CC

Diversification of Investment – Regulators in some countries, including the U.S., restrict the investment methods and opportunities of citizens, much to the frustration of investors who are seeking to diversify their investments and manage them in such a way that allows them to take advantage of market conditions without regulatory interference. Funds and accounts registered offshore are much more flexible, in many cases allowing investors unlimited access to international markets and to all major exchanges.  There are no restrictions on investment objectives or trading strategies.  Importantly, investors are free to take advantage of opportunities in developing nations, particularly those that are privatizing industries previously run by the state.  China's decision to privatize some sectors has investors lining up to invest in the world's largest consumer market.  Africa is also attracting substantial foreign investment in its private sectors (technology, retail and business services) and its former state-run industries.

In conclusion, as global trade and investment increases, there is a greater need to understand the services, key legislation and opportunities available in offshore financial centers.  The offshore world does not necessarily present the direct tax reductions with which they are often associated (at least not for U.S. citizens and U.S. corporation), but they do offer significant benefits.  Most notably, more and more U.S. corporations are engaging in offshore corporate restructuring to increase net profit margins and develop their global operations, while growing numbers of investors are turning to offshore registered funds to benefit from the greater opportunities available in global markets, free from the burdensome U.S. regulatory framework and protected by confidentiality laws.

Content prepared by Richard Parry. © Richard Parry, 2015

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This message and the information presented here do not create or evidence an attorney-client relationship nor are they intended to convey legal advice or counsel.  You should not act upon this information without seeking advice from a qualified lawyer licensed in your own state or country who actually represents you. In this regard, you may contact The McGill Law Office and then representation and advice may be given if, and only if, attorney Edmond McGill agrees to do so in a written contract signed by him.

AUTO ACCIDENTS - PART IV: SUBMITTING A CLAIM & NEGOTIATING A SETTLEMENT

Your attorney will build a case around the evidence to prove liability (discussed in Part One) and seek the maximum amount of compensation owed to you under the law.  The objective is to demonstrate that you have acquired excellent legal representation, to show that your claim is well supported and that you will press your claim as far as necessary in the courts to achieve just compensation.

I. Obtaining the evidence needed

Your attorney will obtain the police report, statements from witnesses, all relevant medical records and evidence from the scene of the accident.

Your attorney will also engage forensic experts, including medical experts, to report and to testify regarding:

• The nature and extent of your injuries,
• The pain and suffering caused by your injuries,
• The reasonableness of medical expenses, including treatment and prescriptions,
• Other financial losses such as loss of income, lost or damaged property,
• The impact of the accident on your life and
• Any claim for future care if your injuries will continue to affect you.

II. Submitting a demand for compensation

After considering the evidence, and assuming it supports a claim for compensation, your attorney will ordinarily prepare a demand letter to the insurance company of the driver responsible and invite the insurance company to make an offer to settle the claim. Your attorney may give the insurance company a time period for admitting liability and/or making an acceptable offer for compensation. Alternatively, your attorney may proceed to file a lawsuit in the appropriate court at once.

III. Negotiations

The objective of any dispute is to achieve the best possible resolution without the need to try the case in court. The best settlements are achieved when the attorney is ready, willing and able to try the case to a jury. This will demonstrate to the insurance company that your case should be taken seriously. Where an insurance company knows that a plaintiff has a strong case and a lawyer who is experienced and ready to take the case before a jury, that insurance company is far more prepared to settle on the plaintiff’s terms without going before a jury.

For four decades Edmond McGill has used his experience representing victims of all sorts of wrongs, to their property, to their businesses and to their persons, to enforce their rights and to assist them in receiving the compensation they deserve. If you would like to discuss a case with Edmond, please contact the McGill Law Office at enquiry@mcgill-lawoffice.com or call 415 508 5323.

Content prepared by Edmond McGill and Richard Parry.

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This message and the information presented here do not create or evidence an attorney-client relationship nor are they intended to convey legal advice or counsel.  You should not act upon this information without seeking advice from a qualified lawyer licensed in your own state or country who actually represents you. In this regard, you may contact The McGill Law Office and then representation and advice may be given if, and only if, attorney Edmond McGill agrees to do so in a written contract signed by him.

AUTO ACCIDENTS - PART III: DO I NEED AN ATTORNEY?

PART THREE - DO I NEED AN ATTORNEY?

I have known cases where the award for damages has increased by 10 times the amount first offered by an insurer once an experienced attorney has taken conduct of the lawsuit.  While it is possible, in cases of minor accidents with property damage only, for an unrepresented person to achieve a reasonable settlement of a claim, cases with major property damage or injuries to the person should be handled by an attorney.

What will an attorney add?

The benefits, if you select the right lawyer, will include: -

• A quick and accurate assessment of whether your claim is likely to be successful
• An accurate valuation of your case
• Advice on time-frames and procedures
• Identification of all losses that you can claim (some of which you might not consider)
• Removal of the stress of dealing with the insurance company and the court
• Your case will be taken more seriously by the insurance company
• You will have someone who can aggressively challenge the insurance company to ensure that you get fair compensation

Insurance companies are known to make low offers and to attempt to get claimants to sign releases quickly, whilst insisting it is a final offer, in an effort to eliminate potentially costly lawsuits, and remove legal exposure.  A victim’s case can often be worth 5 times, or sometimes 10 times many of the amounts first offered by some insurance companies.  An experienced attorney will know what compensation you should be entitled to given the facts and evidence. 

It is also important to remember that if you accept a low offer in settlement of your case, say $20,000, and later speak to an attorney who advises that your case was in fact worth $100,000, you will generally have lost your right to pursue the culpable driver and his or her insurance company for any further compensation.  Use patience, care and the help of a good attorney to insure that you are justly compensated. It is therefore important that any settlement award you accept accurately reflects the compensation you are entitled to.

Here are a few questions that  I would recommend you should consider when deciding whether you need an attorney to represent you: -

• Is blame for the accident being disputed by the other driver’s insurance company?
• Are you likely to have ongoing pain and suffering or need corrective surgery / treatment?
• Did you suffer loss of earnings (past or future) because of the accident?
• Did you incur expenses as a result of the accident?
• Do you need assistance with understanding your legal rights for recovering compensation?
• Do you know the full extent of your injuries?
• Are you certain of the fair amount of compensation owed to for your injuries and loses?

If you answer yes to any of the above questions then you should consider instructing an attorney.  If you do decide to obtain professional representation it is important that you identify an attorney whom you trust to competently and aggressively pursue your claim.  If you don’t have faith in the attorney you hire, the claims process can be a frustrating one.  I would be happy to provide a free 20 minute consultation to discuss your case so that we can identify determine if I am the right lawyer for you.

Content prepared by Edmond McGill and Richard Parry.

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This message and the information presented here do not create or evidence an attorney-client relationship nor are they intended to convey legal advice or counsel.  You should not act upon this information without seeking advice from a qualified lawyer licensed in your own state or country who actually represents you. In this regard, you may contact The McGill Law Office and then representation and advice may be given if, and only if, attorney Edmond McGill agrees to do so in a written contract signed by him.

AUTO ACCIDENTS - PART II: STEPS TO TAKE AFTER AN ACCIDENT

A promotion of the McGill Law Office.

PART TWO – STEPS TO TAKE AFTER AN ACCIDENT

I. Pull over and call 911

You should always call the police once you have moved your vehicle to a safe area and put your hazard lights on.  If anyone has sustained serious injuries, your first call should be to 911 to seek immediate medical assistance.  However, even if no one is injured you should always call 911 for police assistance.  If there is damage to your vehicle, your insurance company will soon be engaging with the at-fault driver’s insurers. Having a police officer attend the scene ensures a neutral accident report will be prepared based on the facts and witness statements.

II. Exchange information with the other driver

If you sustain any damage to your vehicle or suffer any injuries, your ability to recover compensation from the at-fault driver is dependent on being able to identify the individual(s) responsible.  You should always insist on getting the at-fault driver’s insurance information.

While the exchange of information is required by law, I would advise that you do not make any statement regarding the accident to the other driver, particularly one that could be deemed as accepting any portion of the blame.  Often you do not know all of the facts.  For example, it may later be revealed that the other driver was speeding, was on the phone or went through a red light.  Always be honest with an investigating police officer but be sure not to admit fault when you are not at fault.

III. Make notes, obtain witness details and take photos

Remember an insurance provider will review the relevant documentation supplied by the parties, normally several months (sometimes years) after the accident occurred.  If you are able to submit notes made at the time of the accident, contemporaneously made witness statements from neutral parties and photographs from the scene of the accident, which support your version of events, it is far more likely that the insurance company will agree to pay a fair settlement of compensation rather than proceed to trial. 

You should record the time of the accident, the direction each vehicle was travelling, the approximate speed of the vehicles and any other details when fresh in your mind.  You should also ensure that you and the police take the full name and contact information of anyone who witnessed the accident.

IV. Seek medical assistance

If you have sustained serious injuries you will be taken by ambulance to receive immediate medical attention.  If, however, your injuries appear to be moderate to minor, it is strongly recommended that you seek medical assistance at the very earliest opportunity.  Obtaining a contemporary record of the extent and severity of your injuries is key to producing evidence to support your claim.

Those victims who do not wish to incur the cost of seeking medical attention or hope to recover from injuries without treatment often find it more difficult to prove the true extent of their injuries as there is no objective record. 

Injuries caused by sudden impact can often have long-lasting effects, particularly whiplash injuries.  Whiplash is a sudden strain to the muscles, bones and nerves in the neck.  It is important that these and similar injuries be properly diagnosed.  If the injuries are left untreated they can become very serious and permanently restrict movement.  The extent of the injuries should be recorded by a medical professional, who can also advise on the best course of treatment to obtain the most complete recovery possible. Sometimes the full extent of injuries, which may appear minor at the time of the accident, do not emerge until long after the accident.  It is important to persist in treatment to be sure that injuries are fully diagnosed and properly treated.

You have a legal obligation to ‘mitigate your losses’, which requires you to take reasonable steps to prevent your injuries or expenses from escalating.  This means that if you let your injuries become more severe by failing to seek reasonable medical assistance, the compensation you will be entitled to may be limited. 

You should maintain a detailed journal recording the degree of pain, restrictions of movement, limitations of activities, incidental expenses and treatment you receive.

In my next blog I will focus on whether you need legal representation for an accident - 'Auto Accidents - Part III - Do I need an attorney?'

Content prepared by Edmond McGill and Richard Parry.

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This message and the information presented here do not create or evidence an attorney-client relationship nor are they intended to convey legal advice or counsel.  You should not act upon this information without seeking advice from a qualified lawyer licensed in your own state or country who actually represents you. In this regard, you may contact The McGill Law Office and then representation and advice may be given if, and only if, attorney Edmond McGill agrees to do so in a written contract signed by him.

NFL CONCUSSION LAWSUIT SETTLEMENT TO REACH $1 BILLION

A promotion of the McGill Law Office.

On April 22nd, 2015, a federal judge approved a settlement agreement that is expected to cost the NFL $1 billion over 65 years to resolve thousands of concussion lawsuits.  The NFL will welcome the court’s approval, coming a week before the NFL draft, allowing it to draw a line under a four-year litigation and re-focus on growing its global brand and revenue stream.

Background

On January 31, 2012, several individual lawsuits against the NFL were consolidated into one master case known as In re National Football League Players’ Concussion Litigation.  The master lawsuit claimed negligent conduct and fraudulent concelament on the part of the NFL, resulting in neuro-degenerative disease and injury to professional football players.  In the amended complaint the players' claimed that “the NFL has been aware of the growing body of scientific evidence and its compelling conclusions that professional football players who sustain repetitive MTBI (Mild Traumatic Brain Injury) during their careers are at greater risk for chronic neurocognitive illness and disabilities both during their football careers and later in life. “

Approximately 6,000 of the league’s 20,000 retired players were a part of the master lawsuit against the NFL.  The alleged breach of the NFL’s duty of care to its players concerned the NFL’s failure to disclose the known risks of repeated concussions to players who returned to the field.

Among the plaintiffs were star footballs, unknown players and the spouses of retired and deceased athletes.  Each of them claimed compensation for pain, suffering and related expenses (primarily medical), which was argued they would have never incurred had the NFL acted responsibly and revealed the information it possessed.

Given the popularity of the NFL, the lawsuits sparked national interest, which led to debate and research about the health dangers of football-related head injuries.  Many felt the NFL litigation had the potential to reach the scale of the tobacco litigation of the 1990’s, with which it shares many similarities.  Like the tobacco litigation, there can be no dispute the players knew playing football was dangerous, but the plaintiffs questioned what exactly the NFL knew.  The litigation had such wide implications it placed huge uncertainty over the future of the NFL. 

The NFL responded to the lawsuits by filing a motion to dismiss the claims, relying on a federal employment pre-emption defense.  The argument being that the plaintiffs’ action “is a labor dispute, the resolution of which depends upon an interpretation of the terms of the applicable CBAs (Collective Bargaining Agreements)”.  The CBAs require arbitration to resolve an employment dispute, which is a significantly less costly process.  The NFL also argued that the plaintiffs had failed to properly state a claim and that the suits were time-barred (not filed within the appropriate time limit).

The NFL’s defenses were strong enough to make many independent legal commentators feel that the plaintiffs’ case would fail, which of course gave the NFL significant bargaining power.

The settlement

Under the terms of the settlement, awards could reach $1 million to $5 million for those diagnosed in their 30s and 40s with Parkinson’s disease or Lou Gehrig’s disease, or for deaths involving chronic brain trauma.  NFL representatives say the average individual award is likely to be about $190,000.

U.S. District Judge Anita B. Brody approved the settlement after twice sending it back to lawyers after reservations the proposed fund of $765 million might run out. Those negotiating the settlement did not increase the original $765 million proposal, but agreed to remove that figure as a cap.  NFL general counsel Jeff Pash said that Judge Brody’s approval of the settlement “powerfully underscores the fairness and propriety” of the landmark agreement.

The settlement means the NFL does not have to disclose what it knew about the risks and treatment of concussions, so the public may never find out just how culpable the league was in ignoring the consequences of head injuries.  However, the NFL has committed to addressing the concussion epidemic publicly, agreeing to changing protocols for evaluating injured players during games and launching an advertising and social media campaign to promote safe play at all levels of football.

Is this a fair settlement?

Despite the size of the settlement, critics believe the NFL is getting off lightly given that the league generates annual revenues of approximately $10 billion.   To put the NFL’s revenues in perspective, the league generates more money than the annual GDP of 54 countries (as reported by the IMF in 2014).  But should a company’s annual revenue be a factor in establishing a fair amount of compensation?

Many feel that the NFL’s decision not to disclose the damaging effect the game had on its players should have resulted in a far heavier penalty, whether in terms of additional compensatory awards to the players or a fine for the NFL.  $1 billion over a 65-year period is unquestionably small change to the league, but it is the figure that both parties to this dispute have negotiated and agreed.

The NFL was able to use the delay of a trial as leverage during its negotiations.  The league and the retired players knew that a failed settlement would lead to a trial, delaying financial awards and medical treatment for several years.  With many of the retired players, and their families, requiring financial support and urgent medical testing, there was great incentive for them to reach a settlement with the NFL.

That said, like most lawsuits of this scale, a trial would represent years of costly litigation and even Justice Brody made reference to the fact that the ex-players’ lawsuit faced an uncertain prospect of success.  With this in mind, and the fact that several of the players may not have much time left, given the nature of the diseases from which the suffer, the settlement is seen by some as a positive and sensible outcome.  Ex-players can receive the treatment they need immediately and can enjoy their remaining years with their families without the stress of litigation.

Has the lawsuit hurt the NFL?

Amazingly, despite the several years of media and legal focus on the health risks and inadequate safety protocols, the NFL, and football as a sport, remain as popular as ever.  Statistics show that there has only been a slight decline in the number of high school students playing football.  Perhaps more surprising is that only 5 percent of parents polled last summer by Associated Press-GfK (public opinion polling) said they have discouraged their child from playing in the last two years as concern over head injuries has increased.

According to Forbes, the NFL is the highest-grossing sport league in the world.  In 2010, NFL Commissioner Roger Goodells set the ambitious goal of the league generating $25 million by 2027. This was seen as fanciful at the time, but with talks of expanded playoffs, larger television deals and an NFL franchise in London, record making profits look set to continue.

What can we learn from this high-profile litigation? 

From a legal perspective, the dispute highlights the responsibility of companies, associations or private individuals, to carefully consider the duties of care they owe and the steps they need to take in order to discharge that duty.  In the case of the NFL, it concerned the disclosure of information highly relevant to the health and safety of professional athletes to whom they owed a legal responsibility.  But the importance of the disclosure of information in any industry could be just as damaging.  For example, there may be significant liability for failure to disclose the potential negative effects of a new drug in the pharmaceuticals industry or failing to disclose the risks associated with a financial investment scheme within the banking industry.

This is a landmark lawsuit in which the NFL ultimately chose to remove the risk and uncertainty of litigation that had the potential to not only result in a substantial damages award, but could have led to irreparable harm to a brand that generates billions.  By ensuring that it does not have to disclose what it actually knew about the effect head injuries had on the league’s players, the NFL has protected itself and its image from further media scrutiny, the potential backlash of it’s worldwide fan base and most importantly its commercial sponsors.  

Despite the apparent strength of the NFL's defenses, credit should be given to the NFL's legal and PR team for managing and disposing of a lawsuit that could have had catastrophic consequences.  This should be a lesson to other defendants who find themselves in high value and high profile lawsuits; where there is an exit route, even a very costly one, you should always look to preserve the future success of a marketable brand or product.

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This message and the information presented here do not create or evidence an attorney-client relationship nor are they intended to convey legal advice or counsel.  You should not act upon this information without seeking advice from a qualified lawyer licensed in your own state or country who actually represents you. In this regard, you may contact The McGill Law Office and then representation and advice may be given if, and only if, attorney Edmond McGill agrees to do so in a written contract signed by him.

'BE KIND TO LAWYERS DAY' - ORIGIN AND PERCEPTION

A promotion of the McGill Law Office.

NON SEQUITUR BY WILEY MILLER, September 1993

It's hardly one of the more common national days of celebration.  In fact, the majority of lawyers are not aware that April 14th is National Be Kind to Lawyers Day.  However, the celebration itself should be embraced by a profession that has at times struggled with its image.

Origin of the day

The celebration was established in 2008 by Steve Hughes, a Public Speaking professional who worked closely with lawyers.  Steve believed that lawyers did not deserve the public contempt and negative publicity that they regularly received. He therefore proposed a celebration in between April Fool's Day and the US Tax Filing day to be held each year to show appreciation to those who make it their responsibility to handle the nation's legal matters.

The celebration has gathered interest and support abroad, which has led to a movement seeking to change it into the 'International Be Kind to Lawyers Day'.

Is the negative public perception unwarranted?

For centuries public satire has targeted the integrity of lawyers.  Since Shakespeare, practitioners of the law have often been portrayed as dubious characters.  There is a tombstone in Surrey, England, of a lawyer who died in 1772 that reads "God works wonders now and then—here lies a lawyer, an honest man".

Recent times have seen the legal profession thrust into the public arena in the form of high profile trials (O.J. Simpson and Michael Jackson spring to mind) as well as network television and Hollywood's dramatization of the legal industry.  Tom Cruise famously played the starring role as Mitch McDeere in John Grisham's 'The Firm', which focused on the sinister side of a prestigious law firm.  Paul Newman in 'The Verdict' played a drunk that deceives clients into thinking he has their best interests at heart, while 'Michael Clayton' sees a major corporate law firm engage George Clooney's services as a fixer to do its dirty work.  This fictional world has played a powerful role in presenting firms and attorneys as heartless sharks greedy for their next pay-day.

The reality is that for every dishonest or shady attorney there are hundreds who have the utmost respect for the profession, their ethical obligations and most importantly the duties they owe to their clients. However, what does differ is the experience, personality and dedication with which attorneys progress their clients' matters.  I have worked with many lawyers over the years and I am proud to be part of a profession that for the vast majority is made up of men and women of integrity and respect for the rule of law.  My advice to any individual or business looking for an attorney would be to take some time to satisfy yourself you have found competent legal representation that fits your needs.

Celebrate National Be Kind To Lawyers Day

If you have an attorney or are friends with an attorney you should know that their working day is usually long, stressful and tiring.  They are committed to getting their clients the best outcome possible and invest a lot of time and energy to achieve that.  Most good lawyers regularly work evenings and weekends to stay on top of a case, and are on-hand to step in whenever you need them to protect your interests and defend your rights.

I encourage marking the day by letting attorneys know its National Be Kind to Lawyers Day. The attorney in question will almost certainly appreciate the comment.  Plus, being on good terms with an attorney can only be a good thing. In tribute to the day I recommend watching 'A Few Good Men', to restore any doubts in the profession... and to watch Jack Nicholson give one of the best court room scenes on movie history!

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This message and the information presented here do not create or evidence an attorney-client relationship nor are they intended to convey legal advice or counsel.  You should not act upon this information without seeking advice from a qualified lawyer licensed in your own state or country who actually represents you. In this regard, you may contact The McGill Law Office and then representation and advice may be given if, and only if, attorney Edmond McGill agrees to do so in a written contract signed by him.

AUTO ACCIDENTS - PART I: WHAT THE LAW SAYS

A promotion of the McGill Law Office.

PART I - THE LAW

I. Proving liability in an auto accident

California is a "fault state" when it comes to car accidents, meaning a plaintiff (the injured party) is required to prove fault and liability before he or she can receive compensation.  There are no minimum requirements in California, in terms of the seriousness of the injury or the likely compensation recovery, as there are in several other states.  To prove liability, a Plaintiff must show that the driver at fault was 'negligent', which caused the plaintiff to suffer damage (physical injury or financial loss).  The four elements that a Plaintiff must prove are: - 

1.  A legal duty was owed - drivers owe a legal duty to all foreseeable victims, being other drivers, passengers, pedestrians and cyclists, to operate their vehicle with a reasonable standard of care.

2. The duty was breached - the duty is breached where a driver fails to operate a car to the standard of a reasonable prudent driver.  A reasonable prudent driver is deemed to drive at an appropriate speed, concentrate on the road and obey the laws of the highway.  

3. Causation – means showing that the breach of duty has led to injuries.  The driver's action or inaction has caused injury to someone who was owed a duty of care (a foreseeable victim).  In other words, had the driver been operating the vehicle in a reasonably prudent manner, the accident would not have occurred.

4. Damage - the driver's actions must have caused injury (physical harm or economic loss).

II. Who is responsible for the accident?

The driver at fault is generally responsible for the damage caused by the accident.  Assuming the driver is insured, which is a legal requirement of using a vehicle on the road, the at-fault driver’s insurance company will be responsible for paying out compensation for all injuries and loss.

In certain circumstances insurance companies might attempt to withdraw or limit insurance coverage if there is evidence of a breach of the policy by the driver at fault.  For example, some insurance policies exclude coverage if the driver has an out-of-date driver’s license.  Insurers may also attempt to exclude or limit coverage when the driver at fault tests over the limit for alcohol.  However, this would usually concern the driver at fault's insurance coverage and possibly his passengers, if they knew the driver was under the influence.  It is unlikely this would affect insurance coverage in a claim by an injured third party.

If it transpires the driver did not have a current insurance policy (which is illegal) or insurance coverage is successfully denied or withdrawn by an insurance company, then your claim will be against your own insurer pursuant to your uninsured motorist coverage or against the individual who personally caused the accident.  Before investing time, energy and money seeking compensation directly from the driver at fault, it is advisable to explore whether the individual has the means to pay any compensation.  You could spend a lot of time and money obtaining a court judgment for compensation, only to find the defendant has no money or assets from which you can recover compensation.

III. What compensation may you receive?

The law holds the at-fault driver responsible for two types of damage caused, ‘general’ damages and ‘special’ damages.  General damage assesses the ‘pain, suffering and loss amenity’ caused by the accident.  There is substantial case-law in California, and the wider U.S., that has quantified and created guidelines as to the amount of compensation a victim can receive from anything ranging from minor whiplash or a sprained wrist, to more serious injuries including brain damage or the loss of a limb. 

Special damages assess the out-of-pocket expenses that are reasonably incurred by the victim as a result of the accident.  Common special damages include: -

• Medical treatment (surgery, rehabilitation treatment, medication etc.)
• Care and assistance while you recover (this can be claimed for both professional care and assistance provided by friends and family)
• Lost earnings (Past and future earnings if you are unable to work as a result of the accident)
• Repair or replacements costs for damage sustained to your vehicle or personal items

IV. Shared fault

If you are deemed to share some of the blame for causing the accident this will affect the amount of compensation you can recover.  California is a ‘pure comparative fault State’, which means the amount of compensation an injured person can recover following an accident will be reduced in proportion to their percentage of fault.  For example, if you were 20% at fault for the accident, and damages were agreed or awarded at $50,000, you would receive $40,000 in compensation (with the agreed or awarded amount being reduced by $10,000 to reflect your proportion of blame).

V. Time limits for bringing a lawsuit

Any lawsuit seeking damages (compensation) from an accident must be filed within a certain time limit from the date of the accident or the injured person's legal claim will be 'time barred' and their right to sue will be lost.  In California, pursuant to Cal. Code of Civ. Proc. Sec. 335.1, the statute of limitations for filing a personal injury claim is generally two years.  

However, where the suit is against a federal, state or local government entity a 'notice of claim' must be filed within six months of the accident.  It is therefore crucial that you assess the correct party to sue and file a lawsuit within the appropriate time-frame.  The statute of limitations is strictly applied and those who fail to file a lawsuit within the necessary period will lose their right to claim, regardless of how compelling the evidence is against the at-fault driver.

In my next blog I will focus on what you should do if you are ever involved in an auto accident - 'Auto Accidents - Part III - Steps to take after an accident?'

Content prepared by Edmond McGill and Richard Parry.

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This message and the information presented here do not create or evidence an attorney-client relationship nor are they intended to convey legal advice or counsel.  You should not act upon this information without seeking advice from a qualified lawyer licensed in your own state or country who actually represents you. In this regard, you may contact The McGill Law Office and then representation and advice may be given if, and only if, attorney Edmond McGill agrees to do so in a written contract signed by him.

AUTO ACCIDENTS - INTRO: WHAT YOU NEED TO KNOW

A promotion of the McGill Law Office.

WHAT YOU NEED TO KNOW ABOUT AUTO ACCIDENTS

Being involved in a car accident is a traumatic experience, but being aware of your rights at this stressful time and having good legal representation is often the difference between receiving fair compensation for your injuries and not.  The steps you take after an accident will determined your ability to pursue a successful claim and the amount of compensation you are likely to recover.

I have prepared a 4-part mini series of publications addressing the things you need to know if you are involved in an auto accident.  These publications will teach you about: -

1.       The law concerning auto accident claims;

2.       Steps to should take after an accident;

3.     Whether you need at attorney; and

4.       Building a case and negotiating a settlement.

The publication summaries are designed to help educate people about how the compensation process works and what they can do to ensure they receive fair compensation for the injuries and losses they have suffered as a result of another driver's carelessness. The legislation in California and the practices of insurance companies contain several hurdles that injured parties need to overcome to successful recover compensation to which they are entitled.  I want to share with you the main obstacles victims face and the steps you can take to preserve your claim.

I will be publishing Part 1 - "What the law says" on my blog later today.  The remaining parts of the series will be published each week.

I hope you find these legal summaries helpful. Please do not hesitate to contact me if you wish to discuss a claim for compensation or any other area of law that my law practice offers.

In my next blog I will focus on the federal and state legislation that affects auto accident claims - 'Auto Accident - Part I - What the law says'

Content prepared by Edmond McGill and Richard Parry.

....................................................

This message and the information presented here do not create or evidence an attorney-client relationship nor are they intended to convey legal advice or counsel.  You should not act upon this information without seeking advice from a qualified lawyer licensed in your own state or country who actually represents you. In this regard, you may contact The McGill Law Office and then representation and advice may be given if, and only if, attorney Edmond McGill agrees to do so in a written contract signed by him.