M H C T I M E SISSUE 16

S O L I C I T O R S

If you ever go across the sea to Ireland...

Corporate Governance

Investment Funds

Full and Final Settlement??

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contents

EDITOR

Whilst new year resolutions of improved physical fitness, healthier diet, greaterefficiency and so on are still high on the aspirational agenda, may I, on behalf ofMHC, wish everyone a happy and healthy 2005. As Declan Moylan points out inhis regular diary, these are exciting times for the firm as we prepare to move to ournew headquarters. We will keep you closely informed of progress in the comingissues.

Amusing yet inoffensive jokes are hard to come by! At the risk of starting the yearoff on a politically incorrect note, I thought I would share this with you:- A womanwalked in to find her husband swatting flies. "What are you doing?" she asks,"hunting flies" he responds. "Get any?" she inquires, "yes, 3 males, 2 females" hereplies. Curious, she asks "how can you tell?" " 3 were on the a beer can, 2 were on the phone" he retorts.

• MANAGING PARTNER’S DIARY 1Declan Moylan

• IF YOU EVER GO ACROSS THE SEA TO IRELAND 2 Helen Noble

• CORPORATE GOVERNANCE IN IRELAND 4 Una Burke

• INVESTMENT FUNDS 6 Fionán Breathnach

• FULL AND FINAL SETTLEMENT?? 8Rory Kirrane

• LIFE SCIENCES 9Martin Kelleher

• MHC NEWS 10

• THE CLOSING ARGUMENT 13

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dmoylan@mhc.ie1

Ireland’s Economy

Economists forecast that Ireland's GDP growthfor the current year will be 5.3% and that GNPgrowth will be 4.8%. These figuresdemonstrate a real economic impetus puttingIreland at the top of the growth league in theeuro area. Ireland's labour force grew by 2.1%(or 40,000 people) in 2003. It seems likelythat the current year will see further growth of1.8% (or 33,000 people). These are indicatorsof a solid, well-managed economy, attractive toforeign investors.

Mason Hayes & Curran in 2005

The constant aspiration of MHC isintelligently to align itself and its services withthe economy and the market. Our currentjudgement is that Ireland's attractiveness as aninternational investment destination willpersist. Our New York-resident lawyer, DanWalsh, reports a stream of enquiries aboutIreland as a business location, a trendreplicated by enquiries we are receiving fromthe UK and elsewhere. We also judge that theIrish domestic market will continue to requirea widening range of sophisticated legalservices. In particular, we observe highdemand from the government and publicsectors, from participants in financial services,and also from those involved in infrastructuraldevelopment. MHC has positioned itselfaccordingly.

Shipping News

The Irish government recognises that thefurther development of the shipping industrycan be of appreciable economic benefit to thiscountry as an island nation. Significantinfrastructural development of ports hasoccurred, together with changes in legislation,to enhance Ireland's competitiveness in thesector. A particularly important change has

been the introduction of the Irish tonnage taxregime. This, coupled with our attractivecorporate tax rate of 12.5%, is set to makeIreland's shipping environment ultra-competitive. MHC is delighted to announcethe recent recruitment of shipping lawyer,Helen Noble. Previously based in London,Helen joins us from one of the world's leadinginternational shipping firms.

Infrastructure and Construction

Visitors to Ireland remark on the level ofactivity in highway and tunnel construction. Alot of work is underway, with seeminglyendless scope for future development, makingup for years of minimal infrastructuralinvestment. There is also huge activity inprivate development of office, industrial andresidential projects. Looking over Dublin, onesees a forest of cranes!

In response to the market, MHC has recruiteda new partner, Rory Kirrane, who is aspecialist construction lawyer with animpressive track record with a leading UK lawfirm in that sector. Rory is already immersedin serving a very active MHC client base inhis practice area.

Promotions

One of a managing partner's great pleasures isto facilitate and announce the promotion ofoutstanding lawyers. Last month, six of ourbrightest and best young lawyers achievedpromotion to the rank of senior associate, animportant stepping stone on the MHC careerpath. I again offer my personal ongratulationsto Will Carmody, Paul Convery, MelanieCrowley, Susan Frisby, James Moran andRonnie Neville. Our people are our currency,and these outstanding lawyers representprecisely what we are about.

New Headquarters

In the last issue of MHC Times, I reportedthat we would relocate to a brand new, state-of-the-art headquarters in Dublin's docklandsdistrict. Work has now commenced on ourbuilding, to be called South Bank House. Weaim to make this an outstanding, functionaland striking headquarters. It will symboliseour philosophy and our positioning, and willenhance our service to our market. It has beendesigned with our staff's welfare and comfortin mind, the better to serve our clients andconstantly to improve the quality andsophistication of our services and theirdelivery.

Declan Moylan

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Helen Noble

The economic revival of the Irish economy, the"Celtic Tiger", has secured Ireland'srecognition as a leading European location forfinancial services. Government plans haveprovided for large-scale investment ininfrastructural projects and the focuseddevelopment of Ireland as a base formultinational export-oriented companies.

The Irish Government recognise that thedevelopment of the shipping industry andattracting international shipping business isdesirable to an island where 99% of its importsand exports travel by sea. Under the auspicesof the Irish Maritime Development Office(“IMDO”), the aim is to develop Ireland as acompetitive location for international shippingand shipping service companies

Significant investment has already been madein the expansion and upgrade of Irish ports.€53.5 million will be invested over the nextfive years into the construction of a new andmodern container port facility at Foynes on theShannon estuary. A comprehensive overhaul ofthe Mercantile Marine Acts of 1955,spearheaded by the IMDO, has also receivedministerial approval. Further reforms aretherefore afoot to the Irish ship registry whichwill ensure its place amongst the most modernship registries in the world.

An important fundamental legislativedevelopment has been the introduction of theIrish tonnage tax regime. It, like other tonnagetax regimes, is based on a notional profit pertonnage. All qualifying income will be coveredby this notional profit figure as opposed to atax on the actual income of the company. Theadvantage Ireland has over its Europeanpartners is the unique corporate tax rate of12.5% applied to the notional profit. Irelandhas the lowest corporation tax rate in theEuropean Union (the UK has a corporation taxrate of 30%).

Some of the key points of the regime are:

• Qualifying Companies

Shipowners, Bareboat Charterers and ShipManagers can all avail themselves of theregime provided that they operate a"qualifying ship", they are a company subjectto Irish Corporation tax, and a company thatundertakes the strategic and commercialmanagement of those ships in Ireland.

Notably therefore, there is no ownershiprequirement under the regime for shipmanagement companies. They can elect tohave their profits taxed under the same criteriaas ship owners. Management will includeservices such as technical management,commercial management, crewing servicesand sale and purchase services.

• Qualifying Vessels

A qualifying vessel is defined in the relevantlegislation as a self propelled seagoing vessel(including a hovercraft) of 100 tons or moregross tonnage. Certain vessels are expresslyexcluded; for example fishing vessels,dredgers, recreational vessels, a harbour,estuary or river ferry, an off-shore installation,and tugs that are incapable of operatingoutside territorial waters.

• Qualifying Tonnage

All of a company's owned or bareboatchartered tonnage will qualify for the regimeprovided they are "qualifying vessels." Inaddition a company can charter-in up to threetimes its owned tonnage on a time-charterbasis. The income generated will be qualifyingincome.

• Flag

Unlike other tonnage tax regimes there is norequirement that the qualifying vessel beregistered in Ireland.

W hen Helen Noble, an establishedshipping litigation lawyer practisingat one of London's leading law firms,

recently decided to leave London to practice inDublin, many of her London colleaguesexpressed their surprise. What logical reasoncould one have to move from London (thecentre for shipping disputes) to Ireland, acounty not immediately associated withshipping litigation? Helen is pleased to reportthat there are sound business reasons for herdecision and outline these below.

• Qualifying Income

Direct income, income from shipping relatedservices and ancillary income are allqualifying incomes under the regime.

Direct income includes income from thecarriage of passengers and cargo, income fromtowage and salvage, and chartering incomewhere the company retains control over theoperation and crewing of the vessel. This willtherefore include time charter income asopposed to bareboat charter income, the latterbeing excluded and accordingly taxed at thestandard rate of Irish corporation tax of 12.5%if Irish income, or 25% if not.

Income from shipping related services includesincome from ship management operations, forexample, income from the provision of crew. Italso will include income derived fromcommercial management for example thebooking of cargo or passengers, incomederived from loading and unloading of cargoand income from rental of containers.

A further advantage of the Irish Tonnage taxsystem and possibly a key feature of thesystem for ferry operators is the inclusion ofancillary income for example incomegenerated by bars, shops etc on boardpassenger ferries.

The tonnage tax regime combined with theother proposed reforms and investment createsthe right culture to ensure that the Irishshipping industry continues to experience itsrecent growth. The Bank of Ireland hasrecently set up its own ship financing division,a clear indication that there is a growthindustry. For international shipping companiesconsidering their fiscal position, Ireland mustbe a strong contender for their business.

There is an old Irish song that begins if youever go across the sea to Ireland… well, if youcross the sea now with your shipping businessin tow, and with the ballast of the Euro, ashipping company can reap the fiscal benefits.

As for the shipping lawyer the reason formoving to Ireland must be clear. If the Irishtonnage tax does not float your boat theGuinness is good and the shopping is better!

• No training requirements

The Irish regime does not contain any burdenswith regard to seafarer training unlike forexample the commitments to training imposedunder the UK regime. The Irish Governmenthas however invested considerable sums ofmoney in the establishment of state of the artmaritime training facilities.

• Period of time in regime

Qualifying companies must elect into theregime for a period of ten years. One of themost notable differences between the Irishtonnage tax regime and some of the Europeanregimes is that a company can elect to stay inthe Irish regime for a further 10 years at anytime whilst in the regime.

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3hnoble@mhc.ie

Helen Noble is a Senior Associate in theLitigation Department.

As a result of responses submitted by variousinterest groups and organisations as part of aconsultation process with the ODCE (Office ofDirector of Corporate Enforcement), thecommencement date for the ComplianceStatements has been postponed to and is nowexpected to be no earlier than 1 July 2005.

Synopsis of requirements

Section 45 of the Companies (Auditing andAccounting) Act 2003 will, when commenced,introduce new obligations on affected companydirectors to prepare a Compliance PolicyStatement and an Annual ComplianceStatement for inclusion in the Directors' Reportthat accompanies the company's auditedfinancial statements.

Compliance Policy Statement

Directors will be required to provide details of:

- the company's policies respectingcompliance with its 'relevant obligations';

- the company's 'internal financial and otherprocedures for securing compliance withits relevant obligations'; and

- the company's arrangements forimplementing and reviewing theeffectiveness of the company's policiesand procedures

- Relevant obligations will mean:- Company law- Tax law; and- Laws relevant to the business of the

company and which may have amaterial effect on the company'sfinancial statements.

Annual Compliance Statements

Directors will be required to:

- acknowledge that they are responsible forsecuring the company's compliance withits relevant obligations;

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Una Burke

Many companies already operate best practiceprocedures and have nothing to fear fromchanges in the law and the increased focus onenforcement. In saying that, however, allaffected directors should be aware of the newrequirements so that they are fully informedand can verify that they and their companiescontinue to comply with their legal obligations.Directors may wish to be reassured in theirapproach to these new regulations and bereassured that they will not fall foul of thelegislation, bringing with it the potential ofcriminal proceedings. This need forreassurance is not limited in its scope tomerely company directors and extends to theprofessional advisors who engage withdirectors. Going forward the company'sauditor, will now have to increase the scope oftheir duties when administering the annualaudit.

Of great practical assistance in this reviewprocess are the draft guidelines for directors inthe preparation of Annual ComplianceStatements and Compliance Policy Statements,launched as a consultative document by PaulAppleby, Director of Corporate Enforcementon 22 July 2004. An update of theseguidelines is due shortly.

Una Burke reviews developments in corporategovernance.

The continued success of Ireland as aninternational business location willrequire amongst other things, a clear

approach to company law and a culture forcorporate governance in the boardroom.Recent amendments to company law havesought to strengthen the culture of compliancein Ireland and to set down clear rules on how acorporation should govern itself.

Affected companies will include:

- all public limited companies (whetherlisted or not); and

- all private companies limited by shareswhose turnover exceeds €15.23 million,or whose balance sheet total exceeds €7.6million.

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- confirm that the company has internalfinancial and other procedures in placedesigned to secure compliance with thecompany's relevant obligations or, if thisis not the case, specify the reasons;

- confirm that they have reviewed theeffectiveness of the company's proceduresduring the year or, if this is not the case,specify the reasons for this; and

- specify whether, based on the company'sprocedures and their review of thoseprocedures, they are of the opinion thatthey have used 'all reasonable endeavours'to secure the company's compliance withits relevant obligations or, if this is not thecase, specify the reasons.

Whilst the many changes to company law andthe increasing burdens on company directorsand their professional advisors may seem, atfirst glance, to be increasingly onerous, manycompanies already operate practices that meetthe standard of these new requirements.Company directors should, in the first instance,speak to their legal advisors regarding theircompliance with the law. Advisors with abreadth and depth of experience in matterssuch as these will be in a position to conduct alegal audit to identify areas of compliance,areas of risk and where a company and/ or its

Una is a partner in theCorporate Department and head of MHC’s Business Compliance Unit

uburke@mhc.ie

directors need to pay particular attention. Byundertaking a process such as this a companywill be in a much better position to completethe new Directors' Statements with confidenceand ensure that they are not at risk from thelaw. This in turn will have the knock on effectof reducing the burden on the auditor and willassist the sign off process on compliance withthe new statements.

In conclusion, it may therefore be seen that theduties and responsibilities of Directors' arebecoming increasingly more onerous andauditors will have an increasing role to play inensuring that companies are compliant. Theoutcome will be an increasing culture ofcompliance throughout corporate Ireland, which will in turn lead to Ireland being viewed

as an attractive business location formultinational corporations wishing to investoverseas. By taking stock of this andaddressing the issues up front, in a pragmaticmanner, Ireland can continue to succeed on theinternational stage and continue to attract highvalue foreign direct investment.

Guide to Sound Practices for Hedge FundAdministrators

The Alternative Investment ManagementAssociation ("AIMA"), the leading globalhedge fund and alternative investmentassociation, and the Dublin Funds IndustryAssociation ("DFIA"), the representative bodyfor the international investment community inIreland, recently launched a "Guide to SoundPractices for Hedge Fund Administrators" (the"Guide"). The Guide sets out the mainfunctions of a hedge fund administrator anddescribes the contribution that a hedge fundadministrator may make to the fund. Whilethe Guide seeks to identify the best practice asbefits an industry the size of the hedge fundadministration industry, there will bedifferences between practices described in theGuide and practices employed by individualadministrators. In this respect, the Guideshould not be seen as a "benchmark" orstandard against which to measure anadministrator's performance but, rather, as aneducational tool that describes what a typicalhedge fund administrator will do.

The Guide looks at key areas, includingagreements, anti-money laundering, NAVcalculation, other services and therelationships between all parties associatedwith the fund. In addition, it provides helpfulexamples of typical documentation as well asperformance fee equalisation.

The Guide is to be welcomed by everyoneinvolved in the global funds industry. Thephenomenal demand for hedge funds and

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Fionán reports on recent developments infunds in Ireland.

alterative investment products in recenttimes has necessitated the re-allocation ofresources in many of the service providers.This publication can assist in ensuring that aproper understanding of the key issuesinvolved in this important growth area.

Fund Authorisation Times to Reducefurther with new IFSRA Procedures

Over the past few months, the IrishFinancial Services Regulatory Authority("IFSRA") has implemented a number ofnew procedures aimed at streamlining boththe fund authorisation process and itsapproval functions generally. Theseprocedures should bring down fundauthorisation times and serve to furtherenhance the Irish regulator's reputation, as apro-business regulator that is responsive tothe changing dynamics of the global fundsindustry.

The department within IFSRA responsiblefor investment funds renamed the "FinancialInstitutions and Fund AuthorisationDepartment", issued the first set of newprocedures in respect of UCITS on 25 June2004. The new procedures, which tookimmediate effect, mean that IFSRA will nolonger review the memorandum and articlesof association, the administration andmanagement agreements, all of which arenow required to be filed in executed formimmediately prior to authorisation.However, the regulator will continue toreview the fund's prospectus and its trustdeed/custodian agreement as before.

The new procedures also involve thesubmission of a number of detailedapplication forms, relating to each of theprincipal fund documents, which contain aseries of confirmations from a fund's legalrepresentatives that the documentation is incompliance with IFSRA's requirements.Draft documentation being submitted forreview should be at an advanced stage andshould not be subject to any furtheramendments from the parties to the fund.

In addition to this, IFSRA haveimplemented new procedures including newforms in respect of:

- changes in service providers;- the appointment of

Fionán Breathnach

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Fionán is a partner in the CorporateDepartment and head of MHC’s Investment

Funds Group

OTC derivatives, once that the risk exposure tothat counterparty does not exceed 20% (30%in the case of certain credit institutions) of netasset value and that the counterparty has aminimum credit rating of A2/P2.

QIFs may enter into arrangements with othercounterparties without limit, subject to thecounterparty having a minimum credit ratingof A2/P2. However, where the exposure toany single counterparty exceeds 40% of netasset value, the QIF must comply with therules applicable to the appointment of primebrokers.

TRUSTEE ROLE

The trustee has responsibility for monitoringcompliance with the requirements. This willinvolve confirmation from the trustee that itwill, as a minimum, carry out certain functionsincluding: receiving daily reports on assetsheld by the prime broker outside the custodynetwork; reconciling assets on each valuationpoint; reporting discrepancies to themanagement of the fund; requestingconfirmation that the prime broker does nothold assets other than in compliance with therequirements.

PRIME BROKER AGREEMENT

These agreements will not be reviewed byIFSRA, if confirmation is received from thefund's legal advisers that the conditionsrelating to exposure limits are contained in theagreement, and that the agreement does notconflict with the Guidance Note.

The DFIA has issued a response to the draftGuidance Note on behalf of the industry,pointing out a number of technical issues aswell as highlighting the resistance amongtrustees to the additional responsibilitiesoutlined above. A final Guidance Note isexpected shortly, but in the meantime, theprovisions of the draft Guidance Note willapply to these arrangements.

fbreathnach@mhc.ie

distribution/paying/transfer agents;- revocation of fund authorisations; and- approval of investment managers and

investment advisers.

Finally, IFSRA has implemented a fast trackapproval procedure when a fund is simplyupdating its prospectus to incorporate existingsupplements/addenda, or when a fund issimply re-formatting the layout of itsprospectus.

IFSRA Draft Guidance on Prime Brokers

In June 2004, IFSRA issued a further draftGuidance Note on the "Appointment of primebrokers and related issues" (the "GuidanceNote"), in respect of funds marketed tosophisticated investors, namely ProfessionalInvestor Funds (PIFs) and Qualifying InvestorFunds (QIFs). The points worth noting are asfollows:

EXPOSURE LIMITS

The appointment of a prime broker by a PIF isconditional upon the assets being passed to theprime broker not exceeding 140% of the PIF'sindebtedness to the prime broker; or

Where a prime broker is appointed by a QIFthere is no limit to the level of assets whichmay be passed to the prime broker. However,the extent to which the assets of the QIF areavailable to the prime broker must be fullydisclosed in the prospectus.

PRIME BROKER ELIGIBILITY

The prime broker must be regulated by arecognised regulatory authority and it, or itsparent, must have shareholders funds in excessof €200 million as well as having a minimumcredit rating of A1/P1.

OTHER COUNTERPARTIES

PIFs may enter into arrangements with othercounterparties, including counterparties to

There is no doubt that these new procedureswill improve the timing of fund authorisationsand the approval process generally and willhelp to further enhance Ireland's reputation asa well regulated fund domicile, responsive toindustry demands for a time and cost efficientfund authorisation process.

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Rory Kirrane

The approach in the United States is strict, theuse, or retention of a cheque by a creditor, withknowledge that it was sent in full and finalsettlement, is regarded as acceptance of thecounteroffer. The English approach is to decideeach case on its facts and that the party who madethe counteroffer must establish that there was anagreement between the parties. The Irish courtsdo not appear to have decided a case on thisprecise issue but it is likely that they would followthe English approach.

A very recent case in England, Bracken vBillinghurst (2003), presented the followingscenario. A contractor, against whom there wasan award to the tune of Stg£45,000, received anoffer of settlement from the employer. Theemployer wished to settle the dispute and waswilling to accept Stg£6,000 in full and finalsettlement. Most contractors would jump at thechance. However, the contractor decided to tryand ride his luck and his solicitors forwarded acheque for Stg£5,000 to the employer. Thecovering letter stated that this cheque was beingoffered in full and final settlement of all issuesbetween the parties which "...will be deemed tohave been accepted by you and therefore becontractually binding if it is presented to yourbank and cleared for payment."

An important point is that the letter madeprovision for the employer to return the cheque ifhe was not willing to accept the counteroffer. Theemployer presented the cheque after two weeksfor payment. He then wrote to the contractorwithdrawing his previous offer of compromise

and indicating he was now seeking satisfaction ofthe entire amount of the adjudicators award minusthe Stg£5,000 already paid by the contractor andwould pursue the matter in the courts.

The employer was unsuccessful in his applicationfor summary judgment against the contractor, andthe court found that the retention and subsequentcashing of the cheque amounted to acceptance ofthe contractor's compromise of Stg£5,000.

In making its decision the Court looked to anumber of judgements where similar issues hadbeen decided. In Day v McLea (1889) it was heldthat it was a question of fact as to whether or notthere was accord between the parties that thesmaller amount tendered was indeed insatisfaction of a larger claim.

In the English case of Stour Valley Builders vStuart (1993) it was held that you must look towhether a reasonable person would have believedthat the offer was final. The Court in Stour Valleyalso held that the cashing of a cheque or theretention of a cheque is always strong evidence ofacceptance of a settlement offer especially whereit is not followed by an immediate rejection.However the cashing or retention of a cheque isnever conclusive proof of acceptance.

In Billinghurst the Judge stressed that theemployer had held on to the cheque for two weekswithout informing the contractor of the basis uponwhich the cheque was being held. That combinedwith the very clear intention of the contractor'ssolicitor's letter, which the employer himselfadmitted was clear to him when he received it,sounded the death knell for the employer's claim.

It is therefore wise to bear in mind that thecashing, or retention of a cheque received in fulland final settlement, which is less than the sumdue, is a dangerous manoeuvre, it may prevent theinjured party from pursuing the balance of theirclaim. The flip side of this is that where you areconsidering making a counteroffer by way of acheque, to discharge a liability you owe, it isvitally important that you are clear and precise instating that such an offer is made in full and finalsettlement of the dispute and that retention of thecheque, or presentation of the cheque for paymentwould amount to acceptance of your counteroffer,otherwise you could be faced with a claim fromthe other side for the balance owed.

rkirrane@mhc.ie

Rory is a partner in the Litigation Departmentspecialising in Construction Law.

Does the retention and/or cashing of acheque, tendered in satisfaction of aclaim, amount to full and final

settlement, where such a cheque is made out fora smaller amount than your claim and isaccompanied by a letter stating that it is insatisfaction of any liability owed to you?

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Martin is a senior associate in the CorporateDepartment and head of life sciences.

mkelleher@mhc.ie

Martin Kelleher

Through a range of State initiatives, Irelandhas successfully established itself as aleading global location for life science

companies. At present, over 170 companiesoperate in this sector in Ireland, including 13 ofthe world's top 15 pharmaceutical companies and15 of the world's top 25 medical devicescompanies. Given the importance of this sector tothe economy, the Government continues topromote research and development (R&D) by thelife sciences sector in Ireland, by maintainingforeign direct investment and encouraging theestablishment of indigenous biotechnologycompanies.

Patent Royalty Exemption

Since 1973, Irish tax law provides for anexemption from tax for income derived from"qualifying patents". A "qualifying patent"includes a patent in relation to which the research,planning, developing or similar activity leading tothe invention, the subject of the patent, was[substantially] carried out in Ireland. It is notnecessary that the patent itself be an Irish patent.However, the company or individual claiming therelief must be resident in Ireland for tax purposes. Royalties received by companies from a"qualifying patent" are exempt from corporationtax. In addition, full relief is also available, incertain circumstances to shareholders ondividends which are made by companies out ofincome from patents which has been disregardedfor corporation tax purposes.

Intellectual Property ( IP ) Stamp DutyExemption

In order to make Ireland a more attractive locationfor IP, instruments affecting the sale, transfer ordisposition of intellectual property are exempt

from stamp duty from 1st April 2004. Previously,such instruments may have attracted up to a 9%stamp duty tax charge and discouraged companiesfrom transferring valuable IP to Ireland.

Research & Development ( R&D ) Tax Credit

Ireland has introduced a new R&D tax crediteffective from 1 January 2004, which is designedto encourage foreign and indigenous companies toundertake new and/or additional R&D activity inIreland and is available to Irish tax-residentcompanies engaged in qualifying R&Dundertaken within the European Economic Area.The new incentive provides for a corporation taxcredit of 20% for incremental qualifying R&Dexpenditure beginging with 2003 as the base year.This credit is in addition to any exisitingdeduction or capital allowances for R&Dexpenditure. However, certain expenditure isexcluded from qualifying R&D expenditure and amaximum of 5% of the total R&D spend may beoutsourced.

Chief Scientific Advisor

The Government has recently appointed Dr. BarryMcSweeney as the first Chief Scientific Advisorin Ireland. His primary role will be to advise theGovernment on all major policy proposals in thearea of science, technology and innovation. Hewill also counsel the Government on anyproposed replacement to the current €2.54 billionresearch spending which was committed under theNational Development Plan, 2000-2006.

National Institute for Bioprocessing Researchand Training

In collaboration with a number of academicinstitutions, the Industrial Development Authority(IDA) in Ireland is currently evaluating proposalsto establish a National Institute for BioprocessingResearch and Training. The Institute will be astate of the art national facility and give Ireland acompetitive advantage to act as a magnet forattracting further significant investment in thebiopharmaceutical industry.

Ireland continues to promote itself as a leadinglocation for research, development andmanufacturing by companies operating in the lifesciences sector. Combined with Ireland's businessfriendly environment and low corporate tax rate, itis envisaged that recent developments willstrengthen Ireland's position in attracting lifescience companies.

Martin reviews Irish initiatives in life sciences.

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S APPOINTMENTSMHC welcomes our new arrivals

Helen Noble Rory Kirrane

John Hogg

Helen is a senior associate practising withinthe litigation group, her focus being onshipping/off-shore litigation and internationalcommercial dispute resolution. Helen regularlyadvises and represents Shipowners,Shipmanagers, Operators, Charterers, and theleading P&I and Defence Clubs in relation toall types of shipping disputes includingcharterparty, bills of lading, contract ofaffreightment, and shipbuilding disputes.

Rory is a partner practising in construction lawand is head of MHC’s contentious constructiongroup. Rory advises and representscontractors, developers, engineers, and otherconstruction professionals on all aspectsconstruction contracts, including RIAI, GDLA,IEI and bespoke forms, with particularemphasis on dispute avoidance andmanagement.

John, a Business Studies graduate from theUniversity of Ulster, has been appointed asDirector of Marketing and BusinessDevelopment in an industry move, which seesMHC stepping up the pressure on other largecorporate law firms. John's experience spansover 10 years in Marketing, including time inboth Hong Kong and London. Latterly, heheaded up Marketing forPricewaterhouseCoopers, Northern Ireland.

Judith is a solicitor in the litigation group,specialising in commercial litigation andinsolvency. She has been involved in a rangeof commercial disputes and advises insolvencyoffice holders, secured and unsecured creditorsand employees in a wide range of insolvencysituations. Recently she has acted extensivelyfor both directors facing section 150 restrictionapplications, and for liquidators bringing suchapplications.

Judith Riordan

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From Left to Right: Will Carmody (Banking), Ronnie Neville (Litigation), Melanie Crowley(Human Resources), Paul Convery (Litigation), Declan Moylan (Managing Partner), SusanFrisby (Litigation) and James Moran (Commercial Recoveries)

MHC congratulates our senior associates on their recent promotion

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Mr. Peter Doyle, Director of the EuropeanCommission in Ireland has launched "EuropeanUnion Securities Legislation" on behalf ofMHC. The new publication will aid Europeanmarket participants and advisors in preparing forthe new EU securities law environment.

Containing all of the principal new EUDirectives and regulations emerging from the EUFinancial Services Action Plan (FSAP), the bookalso contains an overview of the FSAP to date.Central among the FSAP measures is the new EUProspectus Directive, which although not due tobe implemented across the European Union until1 July 2005, has already begun to affect non-EUcompanies. The Directive is seen as of particularimportance to issuers of securities from non-EUcountries.

Jordans Irish Company Secretarial Precedents, anew book authored by the Business Compliancegroup of MHC was launched on 31st May, 2004jointly by Paul Appleby, Director of CorporateEnforcement and Paul Farrell, the Registrar ofCompanies.

A prerequisite for Irish company secretaries andtheir directors, the book consists of hundreds ofprofessionally drafted precedents, minutes,statutory and practice forms, which areaccompanied by clear and concise explanationson their use and application, in company law andpractice. This new revised and updated 3rdedition takes into account all the importantchanges to company law procedures in Irelandfollowing the introduction of the CompaniesActs of 1999, 2001 and 2003.

From Left to Right: PaulAppleby, Paula Phelan(MHC) and Paul Farrell

From Left to Right: FionánBreathnach (MHC), PeterDoyle and Paul Egan (MHC)

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From Left to Right: Brendan Mooney (MHC),John Power (Chief Executive, Irish HotelFederation) and Paul Convery (MHC) picturedwith a model of the new MHC headquarters.

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Mason Hayes & Curran andTreasury Holdings Limited recentlyannounced a prelet of an office block to bebuilt at Barrow Street, Dublin 4. This is thefirst pre letting agreement in the Barrow Streetarea. Developed by Treasury Holdings, thesite will become the new headquarters forMason Hayes & Curran and is due forcompletion in 2006. The nine-storey buildingwill have a net floor area of approximately5,575 sq. metres with a distinctive glazedfaçade and an atrium through the centre.Architects Anthony Reddy Associatesdesigned the building.

The immediate vicinity of the site has becomea focus for development activity since the newGrand Canal Dock DART station opened afew years ago. Immediately adjoining thestation is the existing Grand Canal Plazascheme with three buildings currentlyoccupied by Pfizer, BT Esat and Accenture.

From Left to Right: Vanessa Hogan, Peter McInnes, Emer Gilvarry (Head of Litigation), DickWoulfe, Melanie Crowley and Elizabeth Ryan

The Mock Employment Appeals Tribunal (EAT) was jointly organised by Mason Hayes &Curran and Sanders & Sidney/O’Shea, Career Change and Outplacement Specialists. This wasthe first time the event has been held in Limerick, affording the opportunity to mid-west HumanResource practitioners and people managers to attend.

The subject matter of the hearing was “Stress Related Absence – grounds for Dismissal?”

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MORE COURTROOM HUMOUR

Judge: Is there any reason you could not serve as a juror in this case?Juror: I don't want to be away from my job that long.

Judge: Can't they do without you at work?Juror: Yes, but I don't want them to know it.

Defendant (after being sentenced to 90 days in jail): Can I address the court?Judge: Of course.

Defendant: If I called you a son of a bitch, what would you do?Judge: I'd hold you in contempt and additional five days in jail.

Defendant: What if I thought you were a son of a bitch?Judge: I can't do anything about that. There's no law against thinking.

Defendant: In that case, I think you're a son of a bitch.

Prosecutor:- Are you currently employed?Accused:- No

Prosecutor: When was the last time you were employed?Accused:- I was self-employed

Prosecutor:- Can you tell the court the nature of such employment?Accused:- I was a thief.

Judge:- How do you plead - guilty or not guilty?Accused:- Don't know, I haven't heard the evidence yet.

Foreman of the Jury - My Lord, we find that the man who stole the car is not guilty.

Judge: has the accused any previous convictions, Sergeant?Sergeant:- not yet, your honour.

Counsel:- Tell the jury where you were on the night of the trial?Accused:- I'll tell them no lie for I never told one in my life. I was nowhere at all on that evening.

EXTRA TIME

"my knees are on their last legs"

"sometimes the deciding frame is always the toughest to win"

"that performance would have won him Olympic Gold in the championship four years ago,which he won anyway"

" the Baggio brothers, of course, are not related"

"when they first installed all-seater stadia, everyone predicted that the fans wouldn't stand for it"

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USA

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