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Presentation for Chartered Secretaries 21 july 2010

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Presentation for Chartered Secretaries 21 july 2010

  1. 1. Legal risks of social networking 21 July 2010 <ul><ul><li>Malcolm Burrows B.Bus.,MBA, LL.B.,GDLP.,MQLS. Associate, Rostron Carlyle Solicitors </li></ul></ul><ul><ul><li>&quot;The information contained in this presentation is general in nature and cannot be regarded as anything more than general comment.  Viewers of this presentation should not act on the basis of this comment without consulting one of Rostron Carlyle's legal practitioners who will consider their particular circumstances in the context of the relevant law. This presentation is not legal advice.” </li></ul></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  2. 2. Presentation overview <ul><li>Legal risks </li></ul><ul><li>Developing a Social Media Policy - protection measures </li></ul><ul><ul><li>Introducing a legally binding social media policy; </li></ul></ul><ul><ul><li>Linking the use of social media to the minimisation of the legal risks; </li></ul></ul><ul><ul><li>Enforcement; </li></ul></ul><ul><ul><li>Crisis management </li></ul></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  3. 3. What are the legal risks? <ul><li>Legal foundations </li></ul><ul><li>Legal risks posed by: </li></ul><ul><ul><li>Employees </li></ul></ul><ul><ul><li>Third parties </li></ul></ul><ul><li>The Dominos viral video </li></ul><ul><li>Protection measures </li></ul><ul><li>Social media policy development process </li></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  4. 4. Legal foundations 23 July 2010 General rules (subject to exceptions): Blurred boundaries Employee must obey the lawful commands or directions of an employer Employee cannot be terminated because of their after hours conduct Employers own the work output of employees Employer has no right to control the activities of employees after work Employers may be vicariously liable for the actions of their employees Work life Personal life Old world legal principles are applied to a web 2.0 world  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  5. 5. <ul><li>Old world principles applied to Web 2.0 </li></ul><ul><ul><li>Ticket cases applied online </li></ul></ul>Legal foundations ... continued 23 July 2010 www.rostroncarlyle.com Goldstein v Jumbo Corporation Limited (Civil Claims) [2006] VCAT 2472 (28 November 2006), at 26 supports the premise that terms and conditions agreed to in a similar fashion are binding on the parties involved, however it is not a binding authority.
  6. 6. Legal risks <ul><li>Employers vicariously liable for authorised conduct </li></ul><ul><ul><li>The following elements need to be established: </li></ul></ul><ul><ul><ul><li>the existence of a relationship between the defendant and the tortfeasor; </li></ul></ul></ul><ul><ul><ul><li>whether the act of the tortfeasor was referrable to the defendant; </li></ul></ul></ul><ul><ul><ul><li>whether the employee was acting in the course of their employment at the time the tort was committed, or whether they were on a frolic at the time. </li></ul></ul></ul>23 July 2010 www.rostroncarlyle.com
  7. 7. Legal risks... continued 23 July 2010 www.rostroncarlyle.com Employees Third parties Legal risk Employees Third parties Confidential information – loss of and disclosure  - Trademark infringement   Copyright infringement   Privacy  - Discrimination  - Misleading and deceptive conduct  - Passing off (fairly remote)   Negligent misstatement  - Defamation   Occupation and industry specific risks  - Cyberbulling  - Termination of employees – risk to unfair dismissal  - Reputation Risk  
  8. 8. <ul><li>Confidential information </li></ul><ul><ul><li>Customer database </li></ul></ul><ul><ul><ul><ul><li>Hays Specialist Recruitment (Holdings) Limited and Anor v Ions and Anor [2008] UK – LinkedIn </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Tek Systems, Inc v Hammernick – LinkedIn - US </li></ul></ul></ul></ul><ul><ul><ul><ul><li>NP Generations Pty Ltd v Feneley (2001) 52 IPR 563 </li></ul></ul></ul></ul><ul><ul><ul><ul><li>See: How to stop staff stealing your secrets and sales: </li></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>http://www.smartcompany.com.au/intellectual-property/20100420-how-to-prevent-staff-stealing-your-secrets-and-sales.html </li></ul></ul></ul></ul></ul>Legal risks... continued 23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  9. 9. Legal risks... continued 23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  10. 10. <ul><li>Confidential information ... Continued </li></ul><ul><ul><li>Disclosure by employees </li></ul></ul><ul><ul><ul><li>Inadvertent continuous disclosure breaches </li></ul></ul></ul><ul><ul><ul><ul><li>References where inferences could be made </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Location Tweets where inferences could be made </li></ul></ul></ul></ul>Legal risks... continued 23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  11. 11. <ul><li>Trademark infringement </li></ul><ul><ul><ul><li>Use of the organisations registered marks by others in other jurisdictions </li></ul></ul></ul>Legal risks... continued 23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  12. 12. <ul><li>Copyright infringement </li></ul><ul><ul><li>Employees uploading copyrighted material </li></ul></ul><ul><ul><li>Third parties infringing your copyright </li></ul></ul>Legal risks... continued 23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  13. 13. <ul><li>Information subject to the Privacy Act 1988 (Cth) </li></ul><ul><ul><li>Disclosure of improperly sanitised “sensitive information” </li></ul></ul>Legal risks... continued 23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  14. 14. <ul><li>Discrimination by employees </li></ul><ul><ul><li>Indiscriminate acceptance of “friend” requests </li></ul></ul><ul><ul><ul><li>Managers be warned about who you befriend online </li></ul></ul></ul><ul><ul><ul><ul><ul><li>http://www.rostroncarlyle.com/legalarticles/social-media-law-articles/adverse-action-claims-managers-warned-to-consider-who-they-befriend-online.html </li></ul></ul></ul></ul></ul><ul><ul><li>In recruitment </li></ul></ul><ul><ul><ul><li>Implications of reference checking candidates on social media websites </li></ul></ul></ul><ul><ul><ul><ul><ul><li>http://www.rostroncarlyle.com/legalarticles/social-media-law-articles/reference-checking-candidates-on-social-media-websites.html </li></ul></ul></ul></ul></ul>Legal risks... continued 23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  15. 15. <ul><li>Misleading and deceptive conduct </li></ul><ul><ul><li>In trade and commerce, Directors and Officers may be liable - Houghton v Arms HCA </li></ul></ul><ul><ul><li>Bloggers – unclear whether bloggers fall under exception to section 52 of the TPA by way of s65 because not in the business of providing information </li></ul></ul>Legal risks... continued 23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  16. 16. <ul><li>Passing off </li></ul><ul><ul><li>Seems fairly remote </li></ul></ul><ul><ul><li>Similar names (Twitter) </li></ul></ul>Legal risks... continued 23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  17. 17. <ul><li>Negligent misstatements </li></ul><ul><ul><li>Third party recommendations – use disclaimer </li></ul></ul><ul><ul><ul><li>See LinkedIn example </li></ul></ul></ul><ul><ul><li>References of former employees </li></ul></ul><ul><ul><ul><li>duty of care owed </li></ul></ul></ul>Legal risks... continued 23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  18. 18. <ul><li>Defamation </li></ul>Legal risks... continued 23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  19. 19. <ul><li>Defamation </li></ul>Legal risks... continued 23 July 2010 www.rostroncarlyle.com
  20. 20. <ul><li>Defamation </li></ul><ul><ul><li>Taking down defamatory material from Facebook </li></ul></ul><ul><ul><ul><li>http://www.rostroncarlyle.com/legalarticles/social-media-law-articles/taking-down-defamatory-material-from-facebook.html </li></ul></ul></ul>Legal risks... continued 23 July 2010 www.rostroncarlyle.com
  21. 21. <ul><li>Occupation and industry specific risk examples: </li></ul><ul><ul><li>Obligations imposed by Australian Prudential Regulation Authority (APRA) ; </li></ul></ul><ul><ul><li>Personal information under the Privacy Act </li></ul></ul><ul><ul><li>Legal Profession Act 2007 (QLD) – must not bring the profession into disrepute; </li></ul></ul><ul><ul><li>ASX Listed Entities – ASX Principal 7 – Risk Management </li></ul></ul>Legal risks... continued 23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  22. 22. <ul><li>Cyber-bullying: </li></ul><ul><ul><li>Workplace Health and Safety Act 1995 (Qld). s29(a) of the Act - employers must &quot;provide and maintain a safe and healthy work environment&quot;. </li></ul></ul><ul><ul><ul><li>an extension of the bullying concept that includes conduct on social networking sites that includes unwanted or unreasonable harassing or exclusionary comments about a colleague that a reasonable person would expect to victimise, humiliate, undermine or threaten. </li></ul></ul></ul>Legal risks... continued 23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438 -
  23. 23. Legal risks... continued <ul><li>Termination generally: </li></ul><ul><ul><li>In order to terminate an employee for their afterhours conduct, an employer must establish that the conduct complained of: </li></ul></ul><ul><ul><ul><li>is sufficiently connected with the relationship of employment; and gives rise to vicarious liability and therefore justifies termination;  </li></ul></ul></ul><ul><ul><ul><li>Sufficient connection with the relationship of employment; </li></ul></ul></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  24. 24. Legal risks... continued <ul><li>Termination generally.. </li></ul><ul><ul><li>An Australian Court will generally not allow an employer to terminate an employee because of their after hours activities unless: &quot; the conduct complained of... is of such gravity or importance as to indicate a rejection or repudiation of the employment contract by the employee &quot; </li></ul></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  25. 25. Legal risks... continued <ul><li>Termination generally.. </li></ul><ul><ul><li>In B. Rose v Telstra Corporation Limited (1998) (Rose), Ross VP said at 51 that: “It is clear that in certain circumstances an employee’s employment may be validly terminated because of out of hours conduct.  But such circumstances are limited: </li></ul></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  26. 26. Legal risks... continued <ul><li>Termination generally.. </li></ul><ul><ul><li>the conduct must be such that, viewed objectively, it is likely to cause serious damage to the relationship between the employer and employee ; </li></ul></ul><ul><ul><li>or the conduct damages the employer’s interests; or the conduct is incompatible with the employee’s duty as an employee. </li></ul></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  27. 27. Legal risks... continued <ul><li>Reputation risk - The Dominos Disaster </li></ul>23 July 2010 Dominos Viral Video Disaster  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  28. 28. Protection measures <ul><ul><li>Revised contracts – social media clauses; </li></ul></ul><ul><ul><li>Social Media Policy; </li></ul></ul><ul><ul><li>Disclaimers; </li></ul></ul><ul><ul><li>Proactive protection for your brands; </li></ul></ul><ul><ul><li>Social media monitoring; </li></ul></ul><ul><ul><li>Network monitoring; </li></ul></ul><ul><ul><li>Immediate response – take down orders; </li></ul></ul><ul><ul><li>Crisis management. </li></ul></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  29. 29. Developing a Social Media Policy <ul><ul><li>Malcolm Burrows B.Bus.,MBA, LL.B.,GDLP.,MQLS. Associate, Rostron Carlyle Solicitors </li></ul></ul><ul><ul><li>&quot;The information contained in this presentation is general in nature and cannot be regarded as anything more than general comment.  Viewers of this presentation should not act on the basis of this comment without consulting one of Rostron Carlyle's legal practitioners who will consider their particular circumstances in the context of the relevant law. This presentation is not legal advice.” </li></ul></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  30. 30. Definition: <ul><li>Social Media Policy (SMP) means: </li></ul><ul><ul><li>a document, communicated to an organisation's employees so as to be legally binding, setting out the way in which they are to participate on social networking sites and the rules that the organisation wants to apply; </li></ul></ul><ul><ul><ul><li>An SMP is not the Social Media Marketing Strategy; </li></ul></ul></ul><ul><ul><ul><li>Consider use of revised employment contracts for Incidental staff; </li></ul></ul></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  31. 31. Why you need a team based approach 23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438 <ul><li>Marketing & PR </li></ul><ul><li>Fun new tool </li></ul><ul><li>How good will this look on my CV </li></ul><ul><li>Gen Y Staff </li></ul><ul><li>Don’t interrupt my Facebook session! </li></ul><ul><li>Human Resources </li></ul><ul><li>- Don’t give me any more problems </li></ul><ul><li>Legal </li></ul><ul><li>Ban it! </li></ul><ul><li>Company Secretaries </li></ul><ul><li>- I’ve read about this! </li></ul><ul><li>CEO </li></ul><ul><li>Make it go away! </li></ul><ul><li>IT </li></ul><ul><li>- 101 reasons to make this go away! </li></ul>Effectiveness of social media policy Sustainable competitive advantage or malaise? Organisations use of social media
  32. 32. Introducing a legally binding social media policy... <ul><li>Key points </li></ul><ul><ul><li>Peter Willis v Health Communications Network Ltd (No 2) [2008] NSWCA 2 (8 February 2008) ( HCNL ) </li></ul></ul><ul><ul><ul><li>ensure employment contracts make reference to binding organisational policies; </li></ul></ul></ul><ul><ul><ul><li>ensure policies are brought to the attention of the employee in a plain and unambiguous; </li></ul></ul></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  33. 33. Introducing a legally binding social media policy... continued <ul><ul><li>ensure that the employees have read and understood the policy or ideally agreed to its terms; </li></ul></ul><ul><ul><ul><li>widely distributing or disseminating a policy and making it readily accessible for employees in places such as an employee intranet (or notice board) is likely to incorporate the policy into the contract of employment by way of custom or usage; </li></ul></ul></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  34. 34. Introducing a legally binding social media policy... continued <ul><ul><li>employees must be contemporaneously alerted to changes in policies; </li></ul></ul><ul><ul><li>considerable care needs to be taken in the case where an employer wishes to apply policies at their discretion or based on indeterminate criteria such as ‘economic circumstances. </li></ul></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  35. 35. Linking the use of social media to the minimisation of the legal risks <ul><li>Incorporate an understanding of the legal risks in the policy development process; </li></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  36. 36. Legal risks... (Revisited) 23 July 2010 www.rostroncarlyle.com Employees Third parties Legal risk Employees Third parties Confidential information – loss of and disclosure  - Trademark infringement   Copyright infringement   Privacy  - Discrimination  - Misleading and deceptive conduct  - Passing off (fairly remote)   Negligent misstatement  - Defamation   Occupation and industry specific risks  - Cyberbulling  - Reputation risk   Employee dismissal for unsuitable conduct  -
  37. 37. Policy development process 23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438 <ul><li>Draft, circulate and gain acceptance of final form of policy </li></ul><ul><li>Adopt so as to be legally binding; </li></ul><ul><li>Train incidental employees; </li></ul><ul><li>Sanctions for non compliance; </li></ul><ul><li>Consistency with other policies and processes </li></ul>Legally binding policy <ul><li>Listen </li></ul><ul><li>Communications strategy </li></ul><ul><li>Brand essence </li></ul><ul><li>Engage with customers </li></ul><ul><li>Incorporate into tactical campaigns </li></ul><ul><li>New element to the marketing mix? </li></ul>Social media marketing strategy <ul><li>Consider legislative environment </li></ul><ul><li>Outline the full gamut of legal risks </li></ul><ul><li>Balance legal risks with benefits and possible strategic advantage </li></ul><ul><li>Staff and third party risk </li></ul>Legal risks education <ul><li>Permitted social media </li></ul><ul><li>activities; </li></ul><ul><li>Define roles of incidental and </li></ul><ul><li>non-incidental activities </li></ul><ul><li>Align with organisational risk tolerance </li></ul>Social media activities Monitoring <ul><ul><li>Radian 6 (staff and others) </li></ul></ul><ul><ul><li>Netbox Blue (Staff on network) </li></ul></ul><ul><ul><li>Adapt for new technologies </li></ul></ul>Crisis Management <ul><ul><li>Pre prepared plan </li></ul></ul><ul><ul><li>Integrate into existing crisis plan </li></ul></ul>Legal Enforcement <ul><ul><li>Discipline </li></ul></ul><ul><ul><li>Actions against staff and third parties </li></ul></ul><ul><ul><li>Plan for immediate response </li></ul></ul>
  38. 38. Link your policy to enforcement <ul><li>Ensure SMP doesn’t overlap with other policies: </li></ul><ul><ul><li>Internet usage; </li></ul></ul><ul><ul><li>Email usage; </li></ul></ul><ul><ul><li>Dismissal. </li></ul></ul><ul><li>Termination or discipline inappropriate conduct; </li></ul><ul><li>Consider social media monitoring and network monitoring. </li></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  39. 39. Link your policy to enforcement ... continued <ul><li>Compliance with the Small Business Fair Dismissal Code (if applicable): </li></ul><ul><ul><li>http://www.fairwork.gov.au/Termination-of-employment/Documents/Small-Business-Fair-Dismissal-Code.pdf ; </li></ul></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  40. 40. Link your policy to enforcement ... continued <ul><li>Termination generally: </li></ul><ul><li>In order to terminate an employee for their afterhours conduct, an employer must establish that the conduct complained of: </li></ul><ul><ul><li>is sufficiently connected with the relationship of employment; and gives rise to vicarious liability and therefore justifies termination;  </li></ul></ul><ul><ul><li>Sufficient connection with the relationship of employment; </li></ul></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  41. 41. Link your policy to enforcement ... continued <ul><li>Termination generally.. </li></ul><ul><ul><li>An Australian Court will generally not allow an employer to terminate an employee because of their after hours activities unless: &quot; the conduct complained of... is of such gravity or importance as to indicate a rejection or repudiation of the employment contract by the employee &quot; </li></ul></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  42. 42. Link your policy to enforcement ... continued <ul><li>Termination generally.. </li></ul><ul><ul><li>In B. Rose v Telstra Corporation Limited (1998) (Rose), Ross VP said at 51 that: “It is clear that in certain circumstances an employee’s employment may be validly terminated because of out of hours conduct.  But such circumstances are limited: </li></ul></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  43. 43. Link your policy to enforcement ... continued <ul><li>Termination generally.. </li></ul><ul><ul><li>the conduct must be such that, viewed objectively, it is likely to cause serious damage to the relationship between the employer and employee ; </li></ul></ul><ul><ul><li>or the conduct damages the employer’s interests; or the conduct is incompatible with the employee’s duty as an employee. </li></ul></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  44. 44. Link your policy to enforcement ... continued <ul><li>Termination generally.. </li></ul><ul><ul><li>Disclosure or misuse of confidential information: </li></ul></ul><ul><ul><li>Breach of obligations of fidelity: </li></ul></ul><ul><ul><ul><li>Joy Reid v Hendrik Swanepoel [2007] WAIRC 00966 </li></ul></ul></ul><ul><ul><li>Statements by employee on Facebook that they were “Pissed Off” </li></ul></ul><ul><ul><ul><li>Lukazsewski v Capones Pizzeria Kyneton [2009] AIRC 280 (Note it was not determined whether this conduct would amount to lawful termination). </li></ul></ul></ul>23 July 2010  Rostron Carlyle Solicitors | www.rostroncarlyle.com | Malcolm Burrows (07) 3009 8438
  45. 45. Questions? <ul><ul><li>Malcolm Burrows B.Bus.,MBA, LL.B.,GDLP.,MQLS. </li></ul></ul><ul><ul><li>Associate, Rostron Carlyle Solicitors </li></ul></ul><ul><ul><li>LinkedIn | ITCorporatelaw </li></ul></ul><ul><ul><li>Google me: </li></ul></ul><ul><ul><li>“ Social media lawyer” or </li></ul></ul><ul><ul><li>“ Malcolm Burrows Lawyer” </li></ul></ul>23 July 2010 www.rostroncarlyle.com

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