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New Bill will boost Mental Health Care Law in India

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June 18, 2013: Last Thursday, the Union Cabinet cleared the Mental Health Care Bill. When it was first seen in 2012, the draft law was touted as the great hope for a rights-based approach to mental health care in India.

Generally, there is growing recognition of the burden of mental health problems and its massive economic costs. Apart from the direct costs of mental health care, there are massive indirect costs related to the loss of productivity of individuals who are unwell, the burden that is placed on families with mentally ill members, and the costs borne by justice systems and the wider social welfare systems outside of health care. It is said to constitute ten per cent of the global disease burden and there are also concerns that globalisation and natural disasters have led to an increase. Momentum behind the reform of mental health law, policy, and care has continued to grow around the world and the region in this context.

In May this year, China’s first ever mental health law came into effect, aiming to recognise the human rights of people with a mental illness. The legislation is expected to tackle issues such as the abuse of mentally ill people and unjustified compulsory hospitalisation. Work is also happening across the Asian region to develop partnerships and share best practices in the care of the mentally ill. India is an important part of Asia Australia Mental Health, an initiative that “partners academic, government, health sector community and peak bodies in Asia and Australia to improve mental health services and outcomes in the Asia Pacific region.” One of their projects is a partnership between the University of Melbourne and the Ministry of Health and Family Welfare, which has been running pilot community mental health projects around India since 2011.

Mental health is also receiving its share of attention in the Commonwealth. The theme of the Commonwealth Health Ministers Meeting held on May 19, the eve of the Sixty-Fifth World Health Assembly, was “Mental Health: Towards Economic and Social Inclusion”. The statement made by the Chair following that meeting underscored the need for increased mental health care and access to care in low and middle income countries (of which India is one), and the importance of continued reform in mental health care and policy. A key output of the seven-day World Health Assembly was a resolution about the “global burden of mental disorders and the need for a comprehensive, coordinated response from health and social sectors at the country level”, supporting the World Health Organisation’s comprehensive 2013-2020 Mental Health Action Plan.

One of the important aspects of WHO’s Mental Health Action Plan are the targets it proposes, as a way of measuring progress. These include “a 20% increase in service coverage for severe mental disorders and a 10% reduction of the suicide rate in countries by 2020”. Whilst both these indicators would represent impressive progress for India, an examination of the suicide rate in this country is enough to demonstrate the importance of the issues of mental health care and access.  India had a suicide rate of 11.2 per 100,000 in 2011, which amounts to over 135,500 people taking their own lives every year. This is above the world average and, disturbingly, has only been increasing since at least the mid-2000’s. If the WHO’s goal was to be achieved in India, the number of lives saved would be huge, not to mention the relief from the devastation and loss suffered by so many families.

Given its population and presence in the Asian region, India should step up and take a lead role in promoting best-practice mental health care and policy. The changes in approach and policy needed to start this are embodied in the Mental Health Care Bill. It would be ideal if India could go to the Commonwealth Heads of Government Meeting in November 2013 with this new law in the books.

(Tennille Duffy is part of the faculty on myLaw.net.)

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Our advice on SEBI’s Investment Advisers Regulations

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June 17, 2013: On January 21, 2013, the SEBI notified the Securities and Exchange Board of India (Investment Advisers) Regulations, 2013 (“IA Regulations”) to check the number of entities handing out advice to investors in an increasingly sophisticated financial market.

The IA Regulations require any person (bank, non-banking financial company, corporates, and individuals) who wants to act as an investment advisor to first obtain a certificate of registration from the SEBI. Once registered, an investment advisor must make various disclosures to the SEBI, including the fee received for advice and any conflicts of interest. To further address the issue of conflict, investment advisers will also have to separate their advisory services from other activities. An important provision of the IA Regulations is that an investment adviser cannot enter into transactions on its own account contrary to the advice given to clients for at least 15 days after the advice is given. The IA Regulations exempt a few individuals from registration including insurance agents giving investment advice solely on insurance products.

The IA Regulations are a step in the right direction, but there are still some key issues that need resolution, including the commission-based sales of financial products. The exclusion of insurance products from regulations that seek to protect investors is also a worrying loophole. Until there is an effective way of segregating the advisor end from the sales end, the regulator will also find it difficult to control mis-selling in an ever-increasing retail market. Advisors can be flippant, often failing to tailor the advice to the specific financial needs and abilities of a particular customer.

From an investor’s point of view, the best way of taking your financial future and security in your own hands is to take investment advice with a pinch of salt, without relying exclusively on regulatory protection. For now, self-education and attention to paperwork at the time of taking a particular financial product may be the best approach to any investment.

(Deeksha Singh is part of the faculty on myLaw.net.)

To learn more about SEBI Regulations, check out myLaw.net’s online learning programme on Securities Laws.

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FIPB says Jet-Etihad deal won’t fly

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June 15, 2013: The announcement allowing foreign airlines to invest in the Indian aviation sector was expected to boost domestic airlines, which — barring one — have shown losses every year because of skyrocketing oil prices and the global economic downturn. The Consolidated FDI Policy dated April 5, 2013, permitted foreign airlines to invest up to 49 per cent in the equity share capital of domestic carriers, provided certain conditions are met. One of these conditions was that substantial ownership and effective control of the Indian airline should vest in Indian nationals even after the investment.

Soon after this announcement, the Abu Dhabi-based Etihad Airways announced that it would pick up a 24 per cent equity stake in Jet Airways, a domestic carrier. The deal however, has constantly faced opposition from the Government of India, the Competition Commission of India, and the Department of Industrial Policy and Promotion (“DIPP”). The latest hurdle is whether “effective control” of Jet Airways will remain with Indian nationals after the investment. This was discussed at the meeting of the Foreign Investment Promotion Board (“FIPB”) held on Friday.

While the Consolidated FDI Policy states that effective control of a domestic carrier must remain with Indian nationals, there is no definition of the term “effective control” in the policy and the DIPP has not issued any clarification. The Government fears that Etihad may try to seek indirect control of Jet Airways with a mere 24 per cent stake, thereby undermining the policy.

On Friday, the FIPB deferred the deal saying that it required further information about the ownership and control of the domestic carrier after the investment. It appears that the FIPB is not satisfied with the structure of the deal and the information provided so far. Company officials have however stated that the deal is in line with Government regulations, as the share purchase agreement does not contain any provisions that transfer effective control to Etihad.

Under the Jet-Etihad deal, after the regulatory authorities clear the transactions, Naresh Goyal will directly own 51 per cent while Etihad will own 24 per cent. Etihad would not have veto rights or special representation on the Board of Directors and would only have received seats on the Board proportional to its stake. Additionally, Naresh Goyal, the majority shareholder holding 75 per cent stake in the airlines, is an Indian citizen and after the acquisition, it would have been the Indian owners who would have had the rights to nominate persons to the Board. At this stage however, it appears that the FIPB is not convinced with the argument and that a clear definition of “effective control” is awaited from the DIPP. Note that even if the FIPB clears the deal, the Cabinet Committee on Economic Affairs must then approve the proposal as the size of the deal is over Rupees 1,200 crore. Two other regulators, the Competition Commission of India and the Securities and Exchange Board of India, have raised the same issue.

Given the current regulatory environment, there seems to be some way to go before the deal is approved and the domestic carrier receives the much need cash infusion!

(Deepa Mookerjee is part of the faculty on myLaw.net.)

 

To learn more about cross-border M&A, check out myLaw.net’s online learning programme on Mergers and Acquisitions Law.

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SCOTUS says NO to patenting human genes

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June 14, 2013: Yesterday, the Supreme Court of the United States unanimously decided that human genes could not be patented. In Association for Molecular Pathology et al. v.  Myriad Genetics, Inc., et. al., 569 U. S. (2013), accessed at http://www.supremecourt.gov/opinions/12pdf/12-398_8njq.pdf, the Court stated that “naturally occurring” human genes cannot be patented because they were a “product of nature” and not a human invention.

Myriad Genetics, Inc. (“Myriad”) had obtained several patents after discovering the gene location and sequence of the BRCA1 and BRCA2 genes (“the Genes”). The mutation of the Genes had the potential of increasing the risk of breast and ovarian cancer. The knowledge of the mutation of the Genes allowed Myriad to develop tests to assess a patient’s cancer risk. If the Court had allowed the patenting of human genes, Myriad would have held a monopoly in the market for genetic testing for the early detection of cancer. Myriad was charging USD 3340 for its genetic tests. The immediate impact of this judgment on public health is that it will significantly reduce the cost of genetic testing by allowing other companies and laboratories to enter the market.

(Samar Jha is part of the faculty on myLaw.net.)

 

To learn more about Patent Law, check out myLaw.net’s online learning programme on Intellectual Property Law.

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The Story of Miranda Rights

MirandaRights_FacebookOn June 13, 1966, the Supreme Court of the United States, in a landmark 5:4 ruling, upheld the fundamental right of a human being to be reminded of the right to silence and effective legal counsel when charged with an offence. The case of Ernersto Miranda v. Arizona altered the criminal justice system in the U.S. forever.

Ernesto Miranda was arrested on March 13, 1963, by the Phoenix Police Department on charges of the kidnap and rape of a 17-year-old girl. The charges were based on circumstantial evidence and after two hours of interrogation, Mr. Miranda signed a statement confessing to the charge of rape and stating further that he had signed the confession voluntarily, without coercion, and after a full understanding of his legal rights.

During trial however, the defence attorney argued that at no point of time had Mr. Miranda been made aware of his right to remain silent or to have an attorney present during interrogation, both of which are part of the Fifth Amendment to the American Constitution. Mr. Miranda was convicted on the basis of the signed confession. He then appealed the trial court’s decision to include the confession as evidence, before the Supreme Court of Arizona. The Court dismissed the appeal, emphasising that Mr. Miranda never specifically asked for legal representation.

By this time, the publicity generated in this case had reached the far corners of the country. When the Supreme Court of the United States of America heard the case, it was obvious that the matter was more important than the charge of kidnapping and rape. The future of civil liberties, as espoused by the American Bill of Rights, was to be secured through the judgment that followed.

The Supreme Court held that “the prosecution may not use statements, whether exculpatory or inculpatory, stemming from questioning initiated by law enforcement officers after a person has been taken into custody or otherwise deprived of his freedom of action in any significant way, unless it demonstrates the use of procedural safeguards effective to secure the Fifth Amendment’s privilege against self-incrimination.”

Miranda’s conviction was overturned and ever since that day, to be “Mirandi-zed”, is a fundamental right of every person charged of an offence on American soil.

(Suhasini Rao Kashyap is part of the faculty on myLaw.net.)