Answering your questions

I understand that the Proceeds of Crime Act [2002] extends provisions about money laundering and crime proceeds in a way that could create practical issues for regulated financial firms. As an insurer what impact do these changes have on my systems?The Proceeds of Crime Act [2002], in force in February this year, applies to the proceeds of any "criminal conduct". This means that anyone entering into an arrangement which he knows, suspects or ought to suspect, involves criminal property could face up to 14 years' imprisonment and/or an unlimited fine.For those working in the regulated sector the Act creates a new negligence offence, which extends the existing offence of failing to report knowledge or suspicion of drug money laundering in two ways:

The revised offence will apply to the laundering of funds from any crime, wherever committed if it would be considered a crime in the UK, without minimum value involved

An offence will be committed if a person had reasonable grounds to know or suspect that somebody was engaged in money laundering, but failed to report it to the National Criminal Intelligence Service (NCIS).

Those working within the regulated financial sector are obliged to report any suspicions to the person nominated by their employer. Failure to do so is punishable by up to five years imprisonment and/or an unlimited fine.The Act does provide individuals in regulated firms with a statutory defence of "no training" by their employer. The alleged offender will have to prove that training was not given. Clearly it is important for firms to ensure a training strategy is in place. Accurate records of individuals' training must also be kept.Most regulated financial firms should appoint a money laundering reporting officer (MLRO), who must ensure that everyone understands these new requirements. All financial sector businesses have a clear obligation to ensure that:

Each relevant employee knows who to report suspicions to

There is a clear reporting chain under which those suspicions will be passed promptly to the MLRO.

To protect themselves, professionals should always make a suspicious activity report (SAR) to the NCIS, which then has seven working days to consent to or refuse a transaction continuing. These provisions may have an impact on a firm's service standards by causing potential delay in the completion of transactions. Firms need to consider seriously how to handle clients in these circumstances to ensure that they do not "tip-off" someone else that they are under suspicion of acquiring, retaining, using or controlling proceeds of crime. "Tipping off" is also a criminal offence under the Act and it applies regardless of whether or not any report has been made to NCIS. It would be prudent for regulated firms to maintain proper systems of controls and record keeping to support why disclosures were or were not made.

Ben Veerapen is a solicitor working within the life and health division in London. Contact Ben by emailing ben.veerapen@davies-lavery.co.uk . I am a travel insurance broker. A client recently returned from a holiday in Australia. He says the return flight was like spending 24 hours in a box. When he disembarked at Heathrow he collapsed and spent the next two weeks in hospital. He has been told he suffered a deep vein thrombosis. He doubts he will ever be able to return to work. Is he entitled to compensation?Many long haul travellers and their doctors think that deep vein thrombosis (DVT - sometimes called economy class syndrome) is caused by prolonged sitting in cramped conditions and is associated with intercontinental flights such as your customer's. In such conditions, blood clots form on the walls of the deep veins in the legs and when the legs are exercised the clot is released from the wall of the vein and travels through the body to the heart and lungs, where it causes obstruction and a heart attack or severe breathing difficulties. Airlines and tour operators do not accept that there is any causal connection between flying and DVT and point out that in Britain there are about 30,000 such medical incidents every year - and only 10% of those have any possible connection with flying. The number of people suffering DVT immediately after long-haul flights is great enough, however, to suggest there may be an association. Even if there is a link between flying and DVT, recovering compensation will not be easy. The High Court ruled in a group action just before Christmas 2002 that DVT was not an "accident" as understood by the Warsaw Convention on international travel by air and, as air travellers can only seek compensation under the convention, sufferers had no recourse against the airlines. For a claim to succeed it must be shown that a separate accident caused the flight-related DVT. If your customer wants to seek compensation for DVT against the airline that carried him, he will have to join in the DVT Group Action. He has two years from the date he returned home to bring his claim.He should check the small print in his holiday brochure. Most tour operators agree that all holiday facilities (including the flights) will be provided to a reasonable standard, and not all of them take advantage of the restrictions that the Warsaw Convention imposes. So, even if DVT is not an "accident" and your client can't claim against the airline he may still have a claim against his tour operator. Tour operators in turn do not appreciate that they are at risk in cases like yours if they don't have their contractual conditions right.

Nish Kanwar is partner for Davies Lavery's travel and personal injury divisions in London. Contact Nish by emailing nish.kanwar@davies-lavery.co.uk . I have noticed that consultation is now underway for new disciplinary and grievance provisions in the Employment Act [2002]. How are these likely to affect current procedures? The new provisions are intended to improve dispute resolution in the workplace and reduce the number of applications made to employment tribunals, which are time consuming and expensive for both employers and employees. Under the new provisions, current small business exemption from including details of disciplinary or grievance procedures is to be removed. This would make it compulsory for all employers to incorporate the standard form of disciplinary and grievance procedures into employment contracts by including these provisions in the written statements of the terms and conditions of employment issued to employees whose contracts last for one month or more. The procedures will require both employers and employees to follow a three-step process:

Step one: the employer sets down in writing the allegations, which may result in dismissal or disciplinary action. A copy of this statement is sent to the employee. The employer must inform the employee of the basis of the complaint, and allow the employee time to consider it

Step two: the employer invites the employee to a meeting to discuss the issues. After the meeting the employer informs the employee about any decision and offers the employee the right of appeal

Step three: the employee must inform the employer whether or not he wishes to appeal. The employer should then arrange a meeting to discuss the appeal with the employee.

This process may be modified in cases of gross misconduct. The employer, in setting out the nature of the alleged misconduct, will be required to set out the evidence in writing and provide the employee with the right to appeal. The employee will have to communicate to the employer his intention to appeal. Any dismissal that does not comply with the statutory procedures will automatically be unfair. Be aware that the proposals also seek to amend the way in which current penalties for unfair dismissal cases are calculated. The statutory grievance procedure is similar to the disciplinary procedure. However, an employee initiates the process by putting his grievance in writing to the employer. In response, the employer is required to arrange a meeting and provide an opportunity for the employee to appeal if the matter is not resolved. Again, any final decisions of meetings and appeals should be communicated to the employee.If an employee does not follow the minimum grievance procedure, in certain circumstances, they will not be allowed to bring a claim. Also, if an employee raises a grievance he cannot bring a claim before a 28-day cooling off period has elapsed. It is anticipated that these provisions will be in force in October 2004. Employers should therefore continue to follow their own written procedures. In the absence of these, employers should follow the guidelines set out in the ACAS code on disciplinary and grievance practices.

Krishna Santra is an associate at Davies Lavery and heads the employment law team. Contact Krishna by emailing krishna.santra@davies-lavery.co.uk . I heard that the ABI has released a revised statement of best practice on income protection insurance. As an insurer, must I adopt the model guidelines and what guidance are consumers given? How will the revised statement affect individual and group policies?The ABI published its revised Statement of Best Practice on Income Protection Insurance and the Model Consumer Guide on 7 August 2003. The model guide is a new concept. Insurers can adapt the guide and issue it to their customers. The purpose of the guide is to explain to consumers in layman's terms what income protection (IP) insurance is and how it works. It explains the different definitions of incapacity and it also outlines how a consumer can decide whether they need IP insurance. It suggests that consumers should calculate their income and their expenses and consider whether they would be able to cope if they were too ill to work. If the calculations reveal a probable shortfall, then the guide suggests that the consumer should seriously consider IP insurance. Guidance is also included on what considerations to bear in mind when purchasing IP insurance. For example, it points out that its "own occupation" cover is likely to be more expensive than "any occupation" cover. The deadline for implementing the revised statement and key features document is 1 January 2004. The revised statement concerns individual IP policies and is not intended for group policies. The Group Risk Insurance Development (GRID) is developing best practice for group IP. Its website is www.grouprisk.org.uk . The revised statement includes two new guidance notes, on the definition of incapacity (any occupation) and linked claims. Changes have been made to the model key features document and amendments have been made to the existing guidance notes. The revised statement and guide can be printed off the ABI website: http://www.abi.org.uk/public/consumer/codes.Mark Robinson is a solicitor for the life and health division of Davies Lavery in the London office. Contact Mark by emailing mark.robinson@davies-lavery.co.uk