The rising price of Access to Justice and how to try to avoid It

Despite opposition from the Law Society, fees payable to the Court to issue proceedings in respect of civil disputes went up considerably this year.

 

 In particular, there was introduced  fee charging as a percentage of the value of the claim for a Court issued claim of 5% for claims in excess of £10,000.00 up to £200,000.00.  At a time when the prices of almost everything else are steady or coming down, the 5% charge for admissions to the Courts means that the fee for a money claim of £50,000.00 has gone up from £310.00 to £2,500.00 an increase of in excess of 700%!

 

 Issuing Court proceedings has always been viewed as a last resort and there is now even more need to try and resolve a dispute without issuing Court proceedings.

 

 A few years ago Pre-Action Protocols for a number of different areas of disputes were introduced together with a Practice Direction (Pre-Action Conduct).  The aims of these are to enable the parties to settle claims before the start of Court proceedings.

 

 The Practice Direction on Pre-Action Conduct was replaced with a new one on 6 April.  This contains many provisions that apply in all cases whether or not a specific Pre-Action Protocol applies.

 

 The objectives include that there be early notification of a claim together with details of what is being claimed, to encourage the parties to exchange information and documentation, to discourage premature issue of Court proceedings when negotiations or a settlement are either in train or possible and to consider Alternative Dispute Resolution (ADR) to assist to a settlement.

 

 A Judge will expect the parties to have exchanged sufficient information and documentation so they understand each other’s position, make decisions about how to proceed and reduce the costs of resolving the dispute.  Only reasonable and proportionate steps should be taken by the parties to identify, narrow and resolve the legal, factual or expert issues.  The costs incurred should be proportionate and if a party incurs disproportionate costs, they will not be recoverable from the other party as part of the costs of the proceedings.

 

 Before issuing Court proceedings, the parties to the dispute should take a number of steps.  A letter should be sent setting out the details of the claim which should be replied to within a reasonable time (14 days to 3 months depending upon the complexity).  The parties should consider whether negotiation or some other form of ADR might enable them to settle their dispute without commencing Court proceedings including there being a mediation where a third party facilitates a resolution.  A parties’ silence in response to an invitation to participate (as well as a refusal to participate in ADR) might be considered unreasonable by the Court and so it could order that that party pay additional costs.  Parties are now required to review their respective positions if their dispute has not been resolved after they have taken the above steps.  In all cases, parties are now required to consider the papers and evidence to see if proceedings can be avoided and, at least, seek to narrow the issues in dispute before Court proceedings are commenced.

 

 We would therefore advise that if you have a dispute you instruct us at an early stage so we can ensure that you comply with what is required of you and try to resolve the dispute at a lower cost to you than if Court proceedings are commenced, taking into account the amount of the Court fee to issue proceedings.  If it is not possible to resolve the dispute without Court proceedings being issued, for example because there is no response form the other party, we will advise you in respect of that.  Please contact Keith Parr, Partner, on 01772 253841, kgp@bsglaw.co.uk or by post so you have somebody very experienced in these matters on your side.

 

The impact to you of the latest divorce case of Wyatt v Vince which hit the headlines last week

Always finalise your financial agreements following a divorce by way of a Consent or final Order to prevent your ex-spouse pursuing you in later years for a share of any after acquired assets and to prevent the expense of pursuing or contesting the proceedings.

In the recent Supreme Court case of Wyatt v Vince [2015] UKSC 14 the ex-wife pursued her claim for a financial settlement some 18 years after the Decree Absolute had been granted ending their marriage. Mr. Vince’s business subsequently took off and he became a multi-millionaire.

Mr. Vince made an application to the court to summarily strike out Ms. Wyatt’s claim on the basis that there were no reasonable grounds for bringing the application; and that the application was an abuse of the court's process or was otherwise likely to obstruct the just disposal of the proceedings.

Ms. Wyatt made an application for Mr. Vince to fund her legal costs.

On 14 December 2012 a deputy High Court judge dismissed Mr. Vince's strike-out application and ordered him to make interim periodical payments in respect of legal costs. Mr. Vince appealed, successfully, to the Court of Appeal to have the deputy judge's orders set aside. She appealed to the Supreme Court.

The Supreme Court upheld her appeal. The Judges held that “when an ex-spouse applies for a financial order, the court has a duty under section 25(1) of the Matrimonial Causes Act 1973 ("the 1973 Act") to determine that application having regard to all the circumstances, including the eight matters set out in subsection (2); this assessment is not apt for summary determination.”

On this basis, that it was a proper application to be heard substantively by the court, Mr. Vince also failed in his argument that it was an abuse of process. Subsequently, as Ms. Wyatt was unable to reasonably secure legal services by any other means and it would be unreasonable to expect her solicitors to continue to act without payment until the determination of her substantive application the test for interim periodical payments in respect of legal costs was made out and the original order upheld.

This does not mean that Ms. Wyatt will automatically achieve a final settlement from Mr. Vince but that the court must consider the application as it would any other, taking into consideration the s.25 factors but it does provide a timely reminder to all divorcees who don't have financial orders in place that they should do so to avoid later claims based on wealth acquired after the divorce.

If you feel you are not protected please contact Andie Brown head of our family team for professional advice “clear and simple” on 01524-386500

The Deed of Variation - A Tax Loophole or Not?

There has been a bit of a furore on the Solicitors for the Elderly discussion forum recently following press articles about Deeds of Variation and particularly the Daily Mail’s reference to it as a ‘controversial tax loophole’.  Although a deed of variation can save tax in certain situations, it is basically a device for a beneficiary to record the gift of some or all of his or her interest in a deceased’s estate in favour of another individual or a charity or a trust.  It will be used where the situation after someone’s death is not covered by the terms of the deceased’s will or intestacy and for all sorts of reasons, not necessarily related to tax, it is desirable to change the terms of the deceased’s will. 

The deed of variation sets out how the beneficiary is rearranging or redirecting his or her interest in the estate.  It can be preferable to the beneficiary’s other option of ‘disclaiming’ the gift (where they simply refuse to accept it) as it means that the original beneficiary can choose who (or what) receives it. 

A deed of variation can be helpful where the first to die of an unmarried couple has failed to make a will and the cohabitee would otherwise lose everything to the beneficiaries who were entitled under the intestacy rules.  In these circumstances, the beneficiaries of the intestacy would each have to come to the decision to ‘do the right thing’ as they cannot be made to gift their interest (the deed of variation has to be voluntarily) and the alternative is likely to be a difficult and probably expensive claim against the estate under the 1975 Inheritance Act for the family and dependants. 

It can also be helpful to make sense of the current inheritance tax regime where couples now have a transferable nil rate band.  Prior to the Finance Act of 2006 it was necessary for married couples and civil partners with an estate over the value of one nil rate band to pass some of it to a discretionary trust (if the survivor was likely to need it) or outright to their children or relatives (if the survivor did not) on the first death.  This was an artificial arrangement to avoid a higher inheritance tax bill when the survivor of them died and thankfully it is no longer needed.  However, where a couple have not updated their wills a deed of variation can be useful to pass the estate on to the survivor of them as the couple would have wished if only the tax regime had allowed them to.

The variation is essentially a gift by the original beneficiary under the will or intestacy.   If it is completed within 2 years of the deceased’s death, provisions in the Inheritance Tax Act 1984 and Taxation of Chargeable Gains Act 1992 mean that although the beneficiary is making a gift of his or her interest, that beneficiary will not be responsible for any tax payable as a result of the gift and instead the terms are ‘read back’ into the will. 

In relation to inheritance tax, the reading back provisions mean that the gift is considered as part of the distribution of the deceased’s estate overall.  So, if the total amount transferred to chargeable beneficiaries exceeds the deceased’s nil rate band then tax will be payable, but otherwise it will not.  

It would be rather unusual for a variation to trigger an inheritance tax charge, but it depends on the reasons for doing the variation in the first place.  In cases where the original beneficiary is re-organising the estate to make provision for dependants and relatives, inheritance tax considerations may be secondary to the needs of these individuals. 

I should add, for completeness, that it is only capital gains and inheritance tax that is covered by these reading back provisions.  For income tax purposes, the variation is only effective from the date the deed itself is executed.  Generally, the original beneficiary is assessed on any income produced up to the date of the variation and the new beneficiary after that. 

Hopefully, most people will not require a deed of variation as they will have an up to date will in place that reflects the current situation and includes everyone or everything that should be included.  It is obviously very important to keep checking the terms of your wills (or if you haven’t got one, to make one) to ensure it is up to date.  The deed of variation can be extremely useful and it will always be possible to make one, but whether or not the favourable rules for capital gains and inheritance tax will apply to the variation remains to be seen.  A change in the tax law could remove the advantages of the reading back provisions, so that although an estate can always be varied (or a beneficiary’s interest disclaimed) the ‘tax loophole’ is removed. 

For further information on any aspect of this article please contact Rebecca Lauder, a Partner in our Lancaster office on 01524 386500 or rl@bsglaw.co.uk

Negotiating a Commercial Lease

Commercial leases are complex lengthy documents with even short term lets running to multiple pages.  So, what are the important issues? 

 

This depends on whether you are a landlord or tenant however, remember you both want to create the lease and make it work.  There is undoubted pressure on landlords due to the current economic climate and the surplus of empty properties so it is increasingly important for a lease to be attractive to both parties.

Short term tenancies can be desirable.  Landlords want their properties occupied so a short lease ensures, at least for a while, that the property is making money not costing money and where the tenant is a start-up business there is opportunity to build a business in a particular location but without risky long term financial commitment.  This may also appeal to an older business where, for example, a new office is being established.

Whether a long or short term has been agreed, a break clause can be a useful negotiating tool.  A break clause in a commercial lease allows it to be ended before expiry of the term.  These clauses are usually subject to service of a notice and conditions, e.g.: the rent being paid up to date although it is becoming increasingly common for break clauses to  be subject only to the service of a notice.  Break clauses can be particularly important to a start-up where the viability and success of the business is untested.  A break clause allows a tenant (whether a start-up or established business) to terminate the lease should difficulties arise.

Rent under commercial leases has traditionally been payable on a quarterly basis.  Does it suit both parties better for rent to be payable monthly allowing a landlord more frequent, regular income and a tenant more manageable rent demands?  Would it work for the rent to be paid like Council Tax, i.e.: over 10 months of the year?  This leaves the tenant with, in effect, two ‘rent free’ months in January and February, which are often financially difficult times of the year. 

The economic down turn and the ending of empty property rate relief presents tenants with greater opportunities to negotiate rent free periods at the outset of the lease or to be used as arguments against rent increases where a review is due.  To offset requests for rent free periods, a landlord may be prepared to tidy up a property before a new lease starts as it may be a cheaper alternative.

Landlords should aim to keep their tenants and their properties occupied so if a business is struggling but still viable then flexibility is key.  Would variation of certain clauses in the lease ease pressure on the tenant and keep the property occupied and generating income?

Repairing obligations are also important.  A landlord will usually want a tenant to be responsible for all repairs but the tenant, particularly in a short let, will usually want its responsibility for repairs to be restricted or for internal repairs only.

If you need any help or assistance in this area then contact the Commercial team based in our Lancaster Office on 01524 386500 or email info@bsglaw.co.uk

 

 

MMR - Six Months On

Recent research has revealed that six months after its introduction, UK home buyers hold mixed feelings over the Mortgage Market Review (MMR), which was designed to halt reckless lending.

Potential borrowers were left feeling frustrated at thein-depth questioning process now employed by lenders although the vast majority of respondents felt that MMR was on the whole a ‘good thing for the economy and housing market’, as it would help to ensure a sensible approach to borrowing.

Myhomemove asked over 100 of its home moving clients to share their experiences of applying for a mortgage before and after the introduction of MMR in April 2014. Topping the list of findings was the frustration felt by post-MMR applicants at the level and depth of questions now asked by lenders.

Despite misgivings and since the introduction of MMR, however, successful first time applications resulting in a mortgage offer increased by 156% although the ease of obtaining a mortgage fell by 16%

Doug Crawford, CEO of myhomemove said, "Although people are frustrated at the level of information required by lenders, our survey shows that the majority see the stricter lending criteria as a good thing for the economy and housing market; citing it as a way of ensuring people don’t overstretch themselves, or face the horrible situation of having their home repossessed.”

Although it seems that the new MMR process can feel personal and intrusive, it does seem to suggest that it is robust and productive for many home movers, as the number of repeat applications fell substantially and successful first-time applications soared. BSG as a conveyancing provider, hopes the new system will assist with increasing the transactional process seeing less time spent waiting for a mortgage offer which can ultimately be one of the largest delays in the process.

Cancer Care Cross Bay Walk 2014

 

 

As part of BSG's commitment to supporting charity the staff and partners raised £560.00 through their sponsored walk across Morecambe Bay and office cake sale. Obviously the latter was a requirement after the former!!

Terms and Conditions-Consumer Contracts Regulations 2013

On Friday 13 June the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 came into force.

 

The Regulations regulate most contracts made between a “trader” and a “consumer”.  They will therefore apply to a wide range of contracts made between businesses  and their customers (as consumers) but whether they apply or not will depend upon the nature of the customer and the circumstances in which the contract is made.

 

The Regulations have increased the time a consumer has to cancel their contract with you and there are serious consequences of not complying with the new Regulations. For example it is a criminal offence to fail to inform consumers of the right to cancel, punishable by a fine. Also, if you did not give the customer the time limit and procedures for cancelling, the cancellation period is extended and you will not be able to enforce the contract until you either give the consumer the relevant information or a considerable period has elapsed. This would mean for example that, you would not be able to issue Court proceedings under the contract for payment until the cancellation period has elapsed but the contract will not be void so your customer will still be able to enforce it against you.

 

We  would therefore advise that businesses  instruct the firm to update their paperwork including their terms of Business to ensure that they fully comply. If you would like us to assist you with this process, please contact Keith Parr,  Partner, on 01772 253841, kgp@bsglaw.co.uk or by post.

 

'Largest Family Justice Reform For a Generation' comes into effect

 

The Children and Families Act 2014 came in to force on 22^nd April 2014, ringing the changes for family practitioners in England and Wales.  The Minister for Justice has heralded the reforms as ‘the largest for a generation’.

 

The purpose of the new legislation, according the Justice Minster Simon Hughes is to put children firmly at the heart of the Family law system, and to shift to focus towards Children’s needs, as opposed to what parents perceive as their ‘right’s

The reforms implemented on 22 April will see:

·        The introduction of the new Family Court in England and Wales with a simpler single system and a network of single application points.

·        Justices’ clerks and their assistants authorised to assist all judges across the Family Court (including on undefended divorce cases).

·        The introduction of a 26 week time limit for care proceedings.

·        New child arrangements orders will replace Residence and Contact Orders.

·        Expert evidence in family proceedings concerning children only permitted when unecessary to resolve the case justly, taking account of factors including the impact on the welfare of the child.

·        Compulsory family mediation information meetings so separating couples must consider alternatives to court when resolving financial matters and arrangements for child contact.

 

At BSG solicitors, we pride ourselves on remaining up to date with the most recent changes in legislation and case law, so that we are able to continue to provide a first class service to our clients.

 

 

Early Conciliation through ACAS in respect of Employment Disputes

April 2014

 

Early Conciliation through ACAS in respect of Employment Disputes

 

On 6 April 2014 a new ACAS Early Conciliation Scheme will operate on a voluntary basis for a month before becoming a mandatory part of the Employment Tribunal application process.

 

From 6 May 2014 it will be compulsory for most potential claimants to the Employment Tribunal to contact ACAS and make at least some attempt to reach a settlement before applying to the Employment Tribunal.

 

The pre-claim conciliation gives potential claimants the opportunity to explore a resolution of their claim before they have to pay a fee to the tribunal to issue proceedings.  It will also force the parties to think about settlement at the outset.  It is an attempt to facilitate employers and employees to sort out their differences at a very early stage.

 

The procedure is relatively straightforward. 

 

Before lodging a claim with the Employment Tribunal a potential claimant must send ACAS an Early Conciliation (EC) form either online or by hard copy.

 

ACAS is under a duty to make reasonable attempts to contact the prospective claimant within 2 working days to find out the nature of the claim and establish if a claimant wishes to conciliate.  If the claimant consents, ACAS must make reasonable attempts to contact the respondent and conciliate a settlement.

 

The conciliator has up to a calendar month from the date on which ACAS receives the EC form to facilitate a settlement.  However, that period can be extended by up to 2 weeks if the ACAS officer is of the opinion that there is a reasonable prospect of achieving a settlement.

 

If settlement is reached, the terms will be set out in writing by ACAS for the potential claimant and respondent to sign.

 

If a settlement is not reached, or if either prospective party does not wish to take part in conciliation, ACAS will issue an EC certificate to record that conciliation has come to an end.  When the claimant receives an EC certificate they are free to lodge a claim with the Tribunal.

 

Where the allegation is unfair dismissal, the ACAS officer has a particular duty to explore whether re-instatement or re-engagement can be achieved and can only promote a settlement involving compensation being paid if they are of the view that it is not possible or where the claimant does not wish to be re-instated or re-engaged.

 

The new regime provides for an extension of the time limit for lodging a claim with the Tribunal (which is usually 3 months) to allow for any conciliation period.  The clock stops the day after the claimant contacts ACAS and restarts on the day after the claimant receives the EC certificate.  If a claimant contacts ACAS when there is less than one month of the time limit for lodging a claim with the Tribunal to go, they get some extra time, namely a calendar month from the day they receive the EC certificate.

 

If you would like us to assist you with this process, please contact Keith Parr, Employment Partner, on 01772 253841, kgp@bsglaw.co.uk or by post.

Conveyancing Quality Scheme

BSG Solicitors secures Law Society's new quality mark

 

BSG Solicitors who have offices in both Lancaster and Preston have secured membership to the Law Society's Conveyancing Quality Scheme - the mark of excellence for the home buying process.

 

BSG Solicitors underwent rigorous assessment by the Law Society in order to secure CQS status, which marks the firm out as meeting high standards in the residential conveyancing process.

 

Law Society President Lucy Scott-Moncrieff said that the Law Society introduced CQS to promote high standards in the home buying process.

 

"CQS has established itself as the quality mark of the home-buying sector and enables consumers to identify practices that provide a quality residential conveyancing service. With so many different conveyancing service providers out there CQS helps home-buyers and sellers seek out those that can provide a safe and efficient level of service."

 

Tom O’Neill, Partner says: BSG Solicitors is delighted to have secured CQS status. Buying and selling a home can be a stressful time. Choosing a solicitor to help in that process just got easier. By looking for a CQS firm like BSG Solicitors the public can seek out a firm that has proved its commitment to quality.

 

“The overall beneficiaries will be clients who use BSG Solicitors when buying a home. They will receive a reliable, efficient service as recognised by the CQS standard."

 

The scheme requires practices to undergo a strict assessment, compulsory training, self reporting, random audits and annual reviews in order to maintain CQS status. It is open only to members of the Law Society who meet the demanding standards set by the scheme and has the support of the Council of Mortgage Lenders, the Building Societies Association, Legal Ombudsman and the Association of British Insurers.

 

For more information on the Law Society's Conveyancing Quality Scheme visit www.lawsociety.org.uk/cqs

 

Or contact the CQS Unit on 020 7316 5550 or CQS@lawsociety.org.uk

 

BSG Solicitors 3& 4 Aalborg Square, Lancaster LA1 1BJ Tel: 01524 386500

 

www.bsglaw.co.uk

 

Email:ton@bsglaw.co.uk

New Partner for BSG

BSG Solicitors are delighted to announce the recent promotion of Rebecca Lauder to Partner.  Rebecca started her new role within the firm on the 1^st July.

 

Rebecca joined the firm in 2006 as a Trainee and is now a key member of the firms Wills, Probate and Estate Planning department.  As a member of Solicitors for the Elderly and an affiliate member of the Society of Trusts and Estates Practitioners, Rebecca provides specialist advice on all aspects of estate planning, wills and probate, intestacy, Court of Protection applications and Lasting Powers of Attorney.

 

Rebecca said, “I am absolutely delighted to become a partner at BSG Solicitors, the firm continues to act for generation after generation of the same families which is testament to it’s caring outlook, excellent advice and service. We are more than just a solicitor to so many of our clients and I look forward to continuing to drive that ethos and continue to build on our 300 years of heritage and success”.

 

Tom O’Neill (Partner) commented “we believe that Rebecca is a great asset to the firm and will bring enormous benefits to the business in many different ways. Her enthusiasm, hard work, dedication and loyalty are obvious to all who know her and we are very pleased to have her as a member of the Partnership.”

 

To contact Rebecca email rfl@bsglaw.co.uk, or phone 01524 386500.

UNFAIR DISMISSAL-POTENTIALLY FAIR REASONS FOR DISMISSING AN EMPLOYEE

 

The EAT has decided that an employer who dismissed a senior employee following a dispute over a profit share and a failure to agree on the terms of employment could not rely on "some other substantial reason" (SOSR) to justify the dismissal. Although a breakdown in relations can amount to "some other substantial reason", it did not in this case.

An employer should not be permitted to rely on SOSR when dismissing an employee following a breakdown in negotiations or a failure to agree terms over pay. Otherwise, this would allow employers undue power in negotiations and could be a significant deterrent to employees to raising concerns.

The following highlights some common examples of SOSR in the context of dismissing an employee as well as the other potentially fair reasons for dismissing and employee.

Potentially fair reasons for dismissing an employee

There are five potentially fair reasons for dismissing an employee:

• Conduct.
• Capability.
• Redundancy.
• Breach of a statutory restriction.
• Some other substantial reason (SOSR).

What is some other substantial reason?

Almost any reason that does not fall within the other four potentially fair reasons for dismissal may amount to SOSR, if it is not an insignificant or frivolous reason that justifies the dismissal of an employee carrying out a particular role. This business briefing highlights some common examples of SOSR when dismissing an employee.

Business re-organisation

• If the business is undergoing a restructuring, but is not making any redundancies, SOSR may be relied on as a potentially fair reason for dismissal.
• Business re-organisations often include making changes to employees’ terms and conditions. Dismissing an employee for their refusal to accept the proposed changes (either within the context of a business re-organisation or not) can also amount to SOSR.

Refusal to accept changes to terms and conditions

• An employment contract can only be varied in accordance with its terms or with the parties’ agreement. If an employee refuses to accept a change to their terms and conditions and the business dismisses them for that reason, the reason may constitute SOSR.
• However, these cases are unlikely to be straightforward because an employee is contractually entitled to resist unilateral changes to their terms. In some instances, where the change amounts to a breach of contract, the employee may be able to resign and claim unfair constructive dismissal. 
• For a unilateral change to amount to SOSR, the business must be able to demonstrate that the changes were not imposed arbitrarily but were for a “sound business reason”. There is no need for to prove that the re-organisation was crucial to the survival of the business. However, the business must provide evidence to demonstrate its reasons for the change and show that they were not trivial.
• Where the overwhelming majority of employees accept the change, or where unions have been involved and have accepted the changes, individual employees may struggle to show that their dismissal for refusing to accept the change was unfair.

 

Conflicts of interest

• The business may be able to dismiss an employee for SOSR if the employee is in a situation that creates a potential conflict with the business’s interests.
• The business must be able to provide evidence demonstrating that the employee posed a risk to its interests. The business will need to show that:
• the employee had access to commercial information;
• the employee had close connections with a competitor (or an employee of a competitor); and
• there was a genuine fear that the employee may leak confidential information.
• To rely on SOSR, the business must be able to show that continuing to employ the employee would create a real commercial risk.

Personality clashes

Personality clashes or irreconcilable differences between colleagues can amount to SOSR. However, to do so, the conflict would have to be causing substantial disruption to the business. An employment tribunal will expect a business to take reasonable steps to solve the problem without resorting to dismissal, for example, by:

• Re-deploying one of the workers.
• Changing work patterns.
• Attempting to mediate.

Pressure from third parties

• Where a third party (for example, a customer or supplier) requires an employee’s dismissal, the dismissal can be regarded as fair for SOSR.
• The business should consider the:
• importance of the third party’s business to its own business; and
• seriousness of the third party’s threat to leave.
• For example, if a major client is adamant that it will never contract with the business again unless the business dismisses an employee, this is more likely to be regarded as fair than where a minor client simply requests removal of an employee, but does not threaten cessation of business.

Breakdown in trust and confidence

Businesses sometimes maintain that they must dismiss an employee because of a breakdown in trust and confidence. In some cases, SOSR can be relied on in these circumstances as a potentially fair reason for dismissal.

 

if you would like us to assist you at any time with any such matter please contact Keith Parr, employment partner, on 01772 253841, kgp@bsglaw.co.uk or by post.

UNFAIR DISMISSAL AND THE ACAS CODE OF PRACTICE ON DISCIPLINE AND GRIEVANCE

Employers will welcome an Employment Appeal Tribunal (EAT) decision that provides further guidance on how an employment tribunal will apply the procedural requirements of the Acas Code in unfair dismissal cases. The EAT held that an employer's decision to dismiss was fair following a number of acts of misconduct and a final written warning. This was despite the employer's failure to formally notify the employee of the potential consequences of the disciplinary hearing, or the written warning, in accordance with the Acas Code.

Despite this decision, employers should be aware of the risks connected with non-compliance with the Acas Code, and ensure that they follow the best practice procedures set out in it, to reduce the scope for procedural unfairness claims. It also highlights the importance for employers of having clearly drafted policies and procedures, which can be relied upon in the event that their actions are challenged and if you would like us to assist you with this please contact Keith Parr, employment partner, on 01772 253841, kgp@bsglaw.co.uk or by post.

Set out below are the key issues a business should consider when conducting a disciplinary procedure connected with misconduct or poor performance.

The Acas Code of Practice (Acas Code) was introduced in 2009 to replace the statutory disciplinary procedures. Employers are required to follow the code in disciplinary situations.

Why is it important to follow the Acas Code?

It can avoid a finding of unfair dismissal

The Acas Code was introduced to help businesses and employees deal effectively with issues of alleged misconduct or poor performance. When deciding whether an employee has been unfairly dismissed for misconduct or poor performance, an employment tribunal will consider whether the business has followed a fair procedure, and must take the Acas Code into account when considering whether an employer has reasonably or not.

It can affect the level of compensation

If an employee’s claim is successful, but either the business or the employee has failed to follow the Acas Code, the level of compensation awarded can be affected:

• If the business unreasonably failed to follow the Code, the employment tribunal may increase the employee’s compensation by up to 25%.
• If the employee unreasonably failed to follow the Code, the employment tribunal may reduce their compensation by up to 25%.

How should misconduct or poor performance be handled?

Investigate the issues

• The business must carry out a reasonable investigation of the issue (for example, by conducting an investigatory meeting with the employee under investigation). Any investigatory meeting should not result in disciplinary action without a disciplinary hearing taking place first.
• If paid suspension is necessary during the investigation it should be as brief as possible and kept under review. The business should clarify that this is not in itself a form of disciplinary action.  

Inform the employee of the issues in writing

• If, following the investigation, it is found that there is a case to answer, the business should notify the employee in writing of the alleged misconduct or poor performance and its possible consequences in sufficient detail to enable them to respond at a disciplinary hearing.
• The notification should set out details of the disciplinary hearing, for example, the time and place of the disciplinary hearing.
• The disciplinary hearing should be held without unreasonable delay. However, the business must ensure the employee has reasonable time to prepare their case.
• Any written evidence (for example, witness statements) should be provided to the employee.

There must be a disciplinary meeting or hearing

• The business should not make a decision to dismiss or take other disciplinary action without a disciplinary hearing or meeting taking place first.
• If the employee is persistently unable or unwilling to attend, without good reason, the business is entitled to hold the meeting or hearing in their absence and make a decision on the available evidence.
• Either side should give advance notice of any witnesses they intend to call.
• At the hearing, the :

• business should explain the allegations and go through the evidence;
• employee should be allowed to set out their case and answer the allegations; and
• employee should have a reasonable opportunity to ask questions, present evidence, call relevant witnesses and raise points about any information provided by the business’ witnesses.

Inform the employee of the decision in writing

After the hearing, the decision should be sent to the employee in writing without unreasonable delay. Written warnings should set out:

• The nature of the misconduct or poor performance.
• The improvement required.
• The timescale for improvement.
• How long the warnings will remain current.
• The consequences of further misconduct (or failure to improve) within that period.
• The employee’s right to appeal the decision and the procedure they need to follow to do so.

The employee has a right of appeal

• If the employee feels the disciplinary action against them is unjust, they should appeal in writing, specifying the grounds of their appeal.
• If they bring a tribunal claim without appealing, any compensation they are awarded may be reduced.

Practical steps for businesses to take to improve their disciplinary procedures

• Involve employees in developing workplace procedures, and make sure those procedures are transparent and accessible to employees.
• Encourage managers to manage conduct and performance issues quickly and informally before they get to a formal disciplinary stage.
• Investigate issues thoroughly. Even if the employee has attended an investigatory interview, always hold a disciplinary hearing once all the evidence is available, and allow the employee to put their side of the story before making any decision.
• Keep written records, including minutes of meetings.
• Communicate decisions effectively and promptly, setting out reasons.

 

 

For further information or help with any employment law related matters please contact Keith Parr Partner BSG Solicitors 10 Chapel Street, Preston, PR1 8AY

Tel: 01772 253841

Fax: 01772 201713

E-mail: kgp@bsglaw.co.uk

Web: http://www.bsglaw.co.uk

Late Payment of Commercial Debts Regulations 2013

 

 

Summary. The Late Payment of Commercial Debts Regulations 2013  came into force on 16 March 2013.

Background. The 2013 Regulations implement the changes set out in the Late Payments Directive  and amend the Late Payments of Commercial Debts (Interest) Act 1998.

Facts. The aim of the 2013 Regulations is to encourage prompt payment of invoices, in particular to protect small suppliers from suffering cash flow problems due to late payment of their invoices.

The 2013 Regulations will apply to the supply of goods and services and impose new time limits to pay invoices in addition to the existing statutory rate of interest for overdue payments set out in the 1998 Act. The amendments made by the 2013 Regulations will only apply to contracts made after 16 March 2013.

The 2013 Regulations introduce new time limits to pay invoices for the following types of contract:

         Business-to-business contracts.

If the contract is silent on the payment term, payment must be made within 30 calendar     days after the latest of the customer receiving the supplier's invoice, receiving the good or services, or verifying or accepting the goods or services. If the contract contains an express payment term, the parties can agree payment up to 60 days from the date of invoice, receipt of goods or services or verification or acceptance of the goods or services. The parties can agree an extension to this limit and go above 60 days as long as this is in writing and not "grossly unfair". The 2013 Regulations define "grossly unfair" as anything that is a gross deviation from good commercial practice and contrary to good faith and fair dealing, taking into account the goods and services in question, and whether the buyer has any objective reason to deviate from the standard 60-day period.

                 Business-to-public authority contracts.

If the contract is silent on the payment term, payment must be made within 30 calendar days after the latest of the   customer receiving the supplier's invoice, receiving the good or services, or verifying or accepting the goods or services. Public authorities must pay more quickly than businesses. If the contract contains an express payment term, public authorities must pay within 30 days from the date of invoice, receipt of goods or services, or verification or acceptance of the goods or services. There is no possibility to extend this period.

The 2013 Regulations do not change the statutory rate of interest that applies to late payments not made within the prescribed payment period. This remains at the current level of 8% over the Bank of England base rate (which is used as the base reference rate fixed on 1 January for the following six months and then on 1 July for the following six months).

Parties may contract out of the statutory interest rate and negotiate their own more commercially acceptable interest rate as long as it provides a substantial remedy for late payment.

The supplier can claim a fixed charge for recovering the debt (£40, £70 or £100 depending on the size of the debt) plus any other reasonable costs of recovery.

 Comment. Clients should review their standard terms and conditions of purchase to see if they include a payment period that exceeds 60 days, as a customer will be required to justify that such a longer term is not grossly unfair to the supplier. Note that any term that completely excludes the right to claim interest will always be considered grossly unfair.

 Contact Keith Parr, Head of the Litigation Department of Blackhurst Swainson Goodier LLP , by telephoning 01772 253841. kgp@bsglaw.co.uk.

Restrictive Covenants in Contracts of Employment

A High Court case underlines the importance of the need for regular review of contractual restrictions to ensure they reflect the current position. The court decided that an employee was entitled to an equity share that had been offered to him on joining, despite the employer's argument that he had forfeited it by acting in breach of post-termination restrictive covenants in his employment contract.

The claimant successfully argued that he was not in breach of his non-compete restriction, because the alleged competitive activities (high-level conference moderation) were outside the scope of the restriction. The court also found that, once the claimant had left, there was no one else in the company who carried out these activities, and so the employee could not be acting "in competition" with his former employer.

The decision is likely to be particularly relevant to small companies, where there is greater scope for individuals to be solely responsible for specific activities.

Contact Keith Parr on 01772 253841 kgp@bsglaw.co.uk

Losing the Right to Light?

 

 

The Law Commission last month began a consultation examining the current law relating to “rights of light”. This is seen as key in establishing a mutually beneficial balance between landowners who currently enjoy such a right and developers keen to build.

 

Quite often a landowner will be unaware of the existence or use of a right to light. Unless specifically referred to in a conveyance, a landowner can acquire a right of light simply by long and continuous use. If a property enjoys the natural light flowing through its windows, a neighbouring landowner may be prevented from interfering with this right, for example where a proposed development would restrict this light. This is regardless and independent of any planning permission conditions.

 

The consultation process intends to look at the link between existing rights to light and the planning process and if the remedies currently available to the Courts require alteration. At present, along with damages, a court may award an injunction against a development if a neighbouring landowner can show this materially affects the right of light they have acquired and enjoyed for a 20 year period. This can obviously cause a developer substantial headaches and case law shows development has been ceased and in some cases demolished where a neighbouring property has successfully proven their right to light.

 

It will therefore be part of the consultation process to look at matters such as preventing the creation of ‘long user’ rights of light, where damages may be more desirable than demolishment and a form of notice procedure whereby those with the benefit of a right to light are forced at an early stage to disclose if they intend to seek an injunction.

 

Clearly, as greater emphasis is placed on development and the desire to remove any obstacles to its path, it will be of particular interest to developers keen for greater certainty on right to light issues. Please be aware that during the consultation process the current law remains unchanged and should you have any queries (either from the landowner or developer perspective), please do not hesitate to contact Alex Walsh al@bsglaw.co.uk (01772 253 841) or Mark Burrow mwb@bsglaw.co.uk (01524 386500) here at BSG.