So Kim Dotcom, (aka Kim Schmitz, Kimble) a co-founder of Megaupload has been arrested along with the other founder Mathias Ortmann and several employees.

This will change….nothing.

There are plenty of other websites that run the same “digital locker” services and make as much (possibly more than) Megaupload.

The creative industries, media, film, tv and music (in particular) have been under attack for years. They have been slow to adapt and remain trapped by the old glory days of records and then the “upgrade” to CDs. That sort of control over product release and margin is hard to let go of. It is much easier to keep fighting rear guard actions.

This is what people (paying consumers) really want:

1. Worldwide equal access, no territories and territory releases.

2. Films available to buy or rent no more than 1 month after their cinema release.

3. The price of digital downloads to reflect the vastly reduced production and shipping costs, as in none. Just charge for the product. (Apple may have to see a reduction in their margins on iTunes.)

4. No digital rights management (DRM). If I buy an item in one form or format I expect to be able to use it any where. It should “follow me around”.

In the end suing only makes lawyers happy. It does not solve the problem.

But do the above and people will pay for the service and convenience.
A lot of people will pay, so the price can come down more, so even more people will pay.

Even this concept appears alien to some, but in the end it means more money.

In may be time listen to those who want to pay.

The debate over online piracy stepped up a significant notch today when Rupert Murdoch attacked the Obama administration for supporting two bills currently going through the US Congress.

All the heat is being generated by the Stop Online Piracy Act (Sopa) and the Protect Intellectual Property Act (Pipa).

Both bills proposed tampering with the Domain Name System (DNS) to effectively take websites that breach intellectual property rights off the internet. DNS works a bit like postcodes. Every website has a distinct code associated with it, or rather with each domain name. So when you type in a domain name the system checks for the corresponding number code associated with the domain and then takes you there, all in a matter of seconds.

The bills proposed tampering with the system to remove or disable the domain name/number code link for websites hosting or promoting stolen content.

This is controversial because the internet was founded on the ideals that it is free from interference and not controlled by any government or one organisation.

Rupert Murdoch is annoyed because a lot of the content, (music, films and news) that he pays a lot to have created is readily stolen and made available for free on the internet. However, those that host or even just link to this content can earn significant revenue from indirect advertising on these offending websites.

Content may “want” to be free, but quality content is not – it takes time and money. Riding on the back of stolen work and profiting from it, when it’s creators lose from it is morally and legally wrong.

It is not often we agree with Rupert Murdoch, (and we promise it won’t happen again).

However, interfering with DNS is a step too far as it risks future government abuse or censorship, a dangerous precedent will be established.

This brings us on to the case of UK citizen Richard O’Dwyer whose website TVShack linked to pirated content and who allegedly made £15,000 per month from advertising on the website.

He faces extradition to the US for various copyright offences and a potential maximum sentence of 10 years, if convicted.

TVShack did not host any of the offending content, but it did link to websites that did.

Mr O’Dwyer is being extradited under the controversial US/UK extradition treaty the allows for the US to extradite swiftly, and without proving a case. However the treaty has not been reciprocated by the US, so all the traffic is one way.

Apparently the US Immigration and Customs Enforcement agency (ICE) have stated they have the jurisdictional power to request extradition because TVShack used a .com domain name and .com domains are controlled by Verisign a US based company.

Websites hosting or linking to pirated content might want to get a .co.uk domain name or basically any domain name that is not administered from the US.

Better still, they may want to create their own content and services and avoid being sued by Rupert Murdoch and others.

Recent figures point to 1 in 4 people heading for insolvency.

A large number of these people are students with large loans to pay back, and no work. 25 – 34 year olds are the single largest group resorting to Debt Relief Orders (DROs). Debt Relief Orders are a form of personal insolvency, which were introduced two years ago.

According to the Insolvency Service  44,000 DROs were granted in England & Wales since their launch in April 2009.

Debt Relief Orders cost just £90 to set up and do not involve going to court. However the following conditions apply:

1. There is a debt limit £15,000, the maximum that can be written off.

2. The person in debt cannot have a disposable income over £50 per month.

3. Their savings and assets cannot exceed £300.

4. They cannot own a property.

Given the current financial climate and level of personal debt in the UK, there will be a great many people who can meet these criteria, particularly young people with large debts built-up through undertaking a degree.

After 12 months the person is effectively discharged and the debt wiped out. The obvious downside is that the Debt Relief Order stays on their credit file for a number of years, and even after that lenders may well ask about previous debt issues.

While DROs are an “attractive” option for those with large debts, they will inevitably make it much harder to obtain credit in the future, (including mortgages). In the end the cost of future high credit may outweigh the immediate advantage of debt relief.

However, we expect that the rate of DROs will climb dramatically in the next 12 months, so much so that they will become almost commonplace.

The Office of Fair Trading reported last year that the so-called high-cost credit sector provides a useful service. We have to ask useful to whom exactly?

It has been reported that US credit firms have setup in the UK due to the lax or lack of controls. The most significant of which is the complete lack of a ceiling on the APR that can be charged.

All the other major countries in the EU have limits on the amount of APR that can be charged. It is blindingly obvious why – to stop extortionate credit charges.

Extortionate credit charges generate huge income for loan companies and make it harder for those in debt to get out of debt. This is what these loan companies want, they are seeking repeated or perpetual debt from their customers.

Their customers are overwhelmingly those who cannot obtain credit from conventional banks.

The government argument is that by providing this service people do not have to resort to loan sharks. What kind of justification is that?

The government needs to regulate this sector today, and introduce a proper cap on APR. Given that interests rates are at a historic low there is no justification for charging APRs of 4,000% or more. (There is not even a justification for charging APR of 30% on some store cards.)

Given the government is a coalition the junior partners in this odd marriage need to show what they are made of. The Lib Dems know what they stand for, now they must show it.

Pay day loan companies are at the loan-sharking end of financial services. They pray on the poor and lock them into a persistent cycle of debt.

If the Labour Party is looking to really show they care about voters being squeezed this and the overall cost of credit is that cause.

Personal debt is not personal at all – it drags down the entire economy.

It is time to stop feeding the sharks.

The chief executive of the technology services company Atos has decreed that internal emails will be banned from completely from 2014.

Though the use of email for external communication will obviously remain.

Atos is also seeking to rely more upon instant messaging within the organisation, which has staff in 42 countries and clients such as Boots, Fiat, Philips, Reuters and even the Olympic Games.

The move is apparently to enhance the working conditions for their 80,000 employees.

The company also found that new young recruits did not use email, and many had never used Outlook. This is the way communication is going – quick and instant, though it does feel odd for email to be seen as old-fashioned.

The company studied their internal email and found the average employee received 100 internal emails a day, every day. And that only 15% of them were actually useful. This obviously equates to a very significant waste of time, 15-20 hours a week. Time that was non-productive and not billable.

However, probably as much (if not more) time is wasted on the internet by employees, particularly leading up to the Christmas period. It is so easy and tempting to shop online, that most employees with internet access do it. Also many organisations are removing restrictions and filters on internet use, now that internet access has become central to so many jobs.

However, with freer access and use the need for clear internet and email policies has grown even more.

With that in mind we would recommend our Staff Handbook product – the CompactLaw Employers Pack.

Incidentally if Atos sounds like the sort of company you would like to work for, see their careers page.

You could even email them.

A new report, (which has not been made public, but has been widely leaked) has recommended that unfair dismissal regulations should be radically revised or scrapped.

The report by venture capitalist and Conservative party donor Adrian Beecroft has stated that employers should be able to dismiss unproductive workers. The report states that current unfair dismissal law makes it much harder for employers to get rid of employees who “coast along”.

It is argued that the change would boost the economy and encourage employers to take on new staff.

The current law states that an employee must have 12 months continuous employment to qualify for unfair dismissal protection. However, the government has already stated that in April 2012 an employee will need 24 months employment with an employer to rely upon unfair dismissal protection.

The report states that employers are finding the process of dismissing unproductive workers too difficult and that the problem of poor workers is particularly serious in the public sector.

It is difficult to say how much of this report is driven by political dogma, though targetting the public sector does hint at political views informing the report. The author also clearly has his own personal views and this is therefore a highly partial report, or even a manifesto dressed up as a report.

However, that said a great many employers do find it hard to dismiss employees, and not just those who do not work properly. There are a significant number of employers who wrestle with dismissing employees who have committed acts of gross misconduct, such as theft or even violence.

There are clearly defined steps that an employer must take when disciplining or dismissing an employee, these must be followed. Furthermore employees have a right of appeal against dismissal. Every employer should have a written Grievance & Disciplinary Policy.

We would argue that following these procedures can be time consuming and stressful for employers – particularly small and medium sized organisations. These are the very organisations that will fuel an economic recovery and are our real economic future. (Large multi-national companies by the way they operate will contribute less and less back into our economy as they shift to lower tax, lower regulation and cheaper labour territories.)

Large companies also have their own HR departments and can use their experience and economic muscle to tackle any employment law related issue.

The current regulations could be simplified, though this may not be the only issue here.

A significant issue is the threat of defending expensive employment tribunal claims. As we have become a more litigious society there has been a rise in spurious claims driven by “no win no fee” litigation. No win no fee was originally brought in to allow greater access to justice as legal aid was effectively withdrawn.

However, there has been a rise in what we call “drive-by law”. We see frequent examples of employers following all the procedures required and dismissing employees correctly. These employers then receive letters from a no win no fee operator threatening to bring an employment tribunal claim. These letters are purely intended to force a quick “settlement”. There is no intention of bringing a claim, the letter is intended to rattle an employer and see what can be extracted from them. This ploy frequently works.

The introduction of fees from April 2013 for bringing an employment tribunal claim will help to reduce the number of spurious claims being threatened or brought. We would argue that the fees should be introduced much sooner – as in Jaunary 2012.

Unfortunately there are a significant number of employers who treat their staff badly, and employees must have proper redress in these circumstances. Likewise regulations must be made easier to comply with, but they should for the most part remain in place.

For every public sector worker who coasts there are probably three others who undertake unpaid overtime, mainly to take up the slack caused by the other employee.

Regarding reduced productivity this may be made worse by poor management not tackling the issue early on. Employers need simple and swift procedures to follow and if necessary training to follow them.

If we can make employer and employees rights and responsibilities more clear it can only help both parties.

This report does add to the debate, just not a lot.

Related: Employer’s Staff Handbook

A clerk at Redbridge Magistrates Court has become the first person to be successfully prosecuted under the Bribery Act 2010.

The clerk, (now former clerk) Munir Yakub Patel was caught in a sting run by the Sun newspaper. Mr Patel has secretly filmed taking a bribe of £500 to remove or avoid putting details of a traffic summons on the court database – effectively the summons would disappear and would never be processed.

Mr Patel was filmed showing his HM Court Service identity card and admitting to carrying out similar previous offences. The court ordered that seven other charges be kept on file.

Mr Patel has been granted bail pending sentencing on 11th November. However, he has been warned that he could face a custodial sentence. Given that this is the first prosecution under the Bribery Act it is likely that he will receive a custodial sentence.

Gaon Hart of the Crown Prosecution Service stated, “Public servants are required to act with integrity, honesty, objectivity and impartiality but Patel’s actions could not have been further from each of these.”

The CPS will want to show that it is using the Act.

However, this could be seen as the Bribery Act being used in a relatively minor case. The public may have to wait a while to see the Act enforced against an individual or body in a significant case.

After all the Act was introduced to prosecute significant cases of bribery, particularly corporate bribery both here and abroad.

A bung for a driving offence falls short.

The Government has announced plans to increase the period before an employee can make an unfair dismissal claim against their employer – the “qualifying period” from the current one year, to two years. This change will come in from April 2012.

The Government has also announced the introduction of fees for those bringing a claim against an employer at an Employment Tribunal. Litigants will only receive their fee back if they win their case.

These new measures were announced by George Osborne at the Conservative Party Conference as part of a package of measures to make employing people easier and reduce litigation, associated costs and red-tape. The aim of which is to encourage much-needed economic growth.

See this link for the current position relating to qualifying for unfair dismissal.

Business Secretary Vince Cable has stated that shareholders should have a bigger say on executive pay to ensure there are “no rewards for failure”.

Mr Cable has said there is a “real problem” with pay rising while share prices stay flat or actually declined.

He said he did not want “state control of pay”, but was “well-disposed” to shareholders having a veto. “People accept capitalism but they want responsible capitalism”.

He has also set out proposals aimed at reining in multi-million-pound packages, including requiring companies to set out the criteria used to determine pay and perks. These include putting employee representatives on remuneration committees.

Mr Cable has gone on to say his big regret this year was not securing tighter controls on bank pay and bonuses, allowing the message to go out that unrestrained greed is acceptable.

400% Increase
“Executive pay has increased by over 400% over the last decade at a time when share prices haven’t increased at all and basic pay of most employees hasn’t increased at all. “There is a real problem here and what we’re looking at in this proposed discussion paper is different ways in which shareholders can have a more effective voice.” “What I want to see is rewards for success not rewards for failure. “We don’t want to go down the direction of state control of pay, that’s completely wrong. What we do want to see is shareholders being more active in exercising discipline over the companies they own.”

Mr Cable is in favour of shareholders being able to block pay awards they felt were unreasonable, but discussions were needed with the business community before any such move was implemented.

Mr Cable’s Department for Business, Innovation and Skills will publish a discussion paper on the proposals in October.

Pay Reporting
Changes to the reporting requirements for all stock exchange-quoted companies are due to come into force in October 2012, following a three-month consultation. At present, the details of each executive board member’s salary, pension, bonuses, and shareholdings are recorded but in separate parts of the annual report.

Under the new system they will be brought together in one table – with a total figure given to shareholders for the first time.

An explanation of how the package was arrived at will also have to be included, as well as projections of the minimum and maximum each executive could expect the next year.

Pay Rises Since 1998
The median total remuneration for FTSE 100 chief executives had risen from £1m a year in 1998 to £4.2m a year in 2010.

Pension Holders
Anyone with a pension also has a vested interest, not just in the actual pay rewards, but in the performance of chief executives. Executives should receive outstanding pay for outstanding performance. However, simply being the chief executive does not entitle a person to outstanding rewards.

UBS
UBS is a much more extreme example, chief executive Oswald Gruebel has stated that he will not resign, despite £1.5 billion in losses caused by fraudulent trader Kweku Adoboli. If Mr Gruebel does not see his ultimate responsibility for this, is he entitled to his generous pay?

Even though UBS is a Swiss bank, British pension funds and pension holders have investments in it.

Class Action
If boards do not act they risk class actions brought by aggrieved shareholders. Legal action will harm company share prices and compound any losses suffered. This applies to UBS today, but could easily apply to other companies in the future. Better to act, than react.