Breeze & Wyles Solicitors LLP nominated by Tikit TFB for two awards at its National User Conference

Breeze & Wyles Solicitors LLP is proud to announce that it has been nominated in two categories at the TIKIT TFB National User conference on 9 December 2010 being held at the Crowne Plaza in Birmingham City Centre. TFB has for the last 13 years supplied Breeze & Wyles with its case management system. The categories in which the firm is nominated are:

1. Most Innovative Use of Partner for Windows

2. Reference Site of the Year

Murray Fraser, Director of Volume Legal Service says:

"Once again our automation of legal services is being recognised, this time by the IT Supply market as providing leading solutions in the legal services industry for institutional clients. We are very proud of the systems that we have developed and are now looking both at further development and new sectors in which to implements these products to drive down cost to the client"

The OFT crosses the line into judicial territory

In a statement issued today by the Civil Court Users Association it slams the OFT for the action that it is taking against four lenders who have used charging orders.

The statement says: "concerned that the Office of Fair Trading (OFT) is now involving itself in what are judicial decisions"

It is the responsibility of the judiciary to ensure that the appropriate route to enforcement is used not the place of the regulator. If the law is unsound in this area it is then the place of Parliament to legislate on the issue.

We would welcome reader's views on this issue.

A Notice of Intention to Appoint Administrators not conclusive reason for refusing a Charging Order Final

If you are a creditor of a company with unfinished proceedings make sure you complete it getting judgment and enforcing. The following case suggests that dilatory behaviour on the part of the creditor will mean that they lose the preference rights that they had through the proceedings and then join with the other unsecured creditors in the limited dividend that this might produce.

The respondents brought proceedings in the High Court against the applicant property company for unpaid work to the value of £138,602, and applied for summary judgment. The master made a number of orders, pursuant to which the company had to pay the respondents the sum of £11,500 within a certain time. The payment was not made, but the respondents did not apply to enter judgment. The company made an unsuccessful application for permission to appeal against the orders. The respondents successfully applied for an interim charging order. Meanwhile, the company passed a resolution determining that it was in the best interest of the company and its creditors to appoint administrators. Under paras 43(2) and 44(4) of Sch B1 to the Insolvency Act 1986, there was a moratorium which provided that without an order of the court, no legal process could be continued or steps taken to enforce a security. The respondents applied to the court for a final charging order, on the basis that it was inconceivable that the company could be insolvent, and accordingly that the administration process was a sham. Allowing the application to make the charging order final, the master accepted that the administration process was a sham. On that basis, he decided to ignore the effect of the interim moratorium. The joint administrators applied for an order discharging the final charging order.
Consideration was given to s 3(5) of the Charging Orders Act 1979 which gave the court jurisdiction to vary or discharge the charging order.

The court ruled:

It was wrong to treat a notice of intention to appoint administrators as a conclusive reason for refusing to make a charging order final. Where it appeared, however, that the intended administration had been appropriately invoked, then it was plainly a powerful factor to be taken into consideration. Were that not so, a creditor with notice of the administration would be able to gain an advantage over the other creditors who would all be subject to the statutory scheme.

On the evidence, the company was insolvent on a balance sheet basis. If the charging order remained in place, there was a real risk that it would operate to the disadvantage of the creditors as a whole, as there would appear to be a shortfall of assets over liabilities. Had that position been clear to the master, he would not have come to the conclusion that the administration was a sham, but would rather have had regard to the moratorium, and declined to grant the respondents security.

Accordingly, the court would exercise its discretion under s 3(5) to set aside the charging order.

UK Government launches growth review

The Chancellor of the Exchequer, George Osborne and Business Secretary, Vince Cable today announced a fundamental review of what all parts of Government are doing to create the best conditions for private sector growth.

Building on the action already taken by Government and outlined in the paper, ‘the path to strong, sustainable and balanced growth’, business is being invited to take part in this work which will challenge every Government department on the measures being taken to tackle barriers to growth.

The growth review will start with an intensive programme of work, based on the evidence provided by business, to report by Budget 2011. Departments will be required to present Action Plans to a Ministerial Ad-Hoc Group chaired by the Chancellor and Business Secretary, on what contribution they will make to:

"reform structural barriers across the whole economy in planning, competition, trade and investment, regulation, access to finance and corporate governance remove barriers in sectors where there are clear opportunities for growth and where Government can make a difference – construction, retail, health and life sciences, professional and business services, manufacturing and digital and creative industries This is just the start. These specific sectors and structural areas have been identified as a priority for the Government; over the course of the review, the Government will need to take a forensic look at all sectors of the economy. The work will continue for the lifetime of this Parliament, ensuring all Government departments think first and foremost about the impact of their policies on growth. "

Chancellor of the Exchequer, George Osborne, said:

“Alongside the corporate tax reforms announced today, the growth review contributes to the Government’s drive to remove the barriers to growth and improve British competitiveness. "

“We have been clear that growth will be driven by the private sector. By working closely with business and industry in this intensive programme of work, Government can make sure that Britain is open for business.”

Business Secretary, Vince Cable, said:

“Growth is the primary focus of the Government, but this will not happen overnight. That’s why we’ve set out a long-term vision to create the right conditions for future economic prosperity."

“We cannot lay out plans for how the economy will grow – growth is delivered by the private sector. What we can do is provide the conditions to promote a new economic dynamism, harnessing our strengths, removing the barriers and putting the private sector first when it comes to decisions on tax, regulation and spending.”

R3 warns of rise in corporate insolvencies!

R3 is reporting that Corporate Insolvencies could rise by nearly eleven hundred cases over the next year as nearly a million businesses see their profits fall. Almost half of UK businesses, some 850,000, are currently experiencing falling profits, which is the most common form of current financial distress identified in new research carried out.

R3 president Steven Law issued a warning that corporate insolvencies could rise by 1100 cases over the longer term and in light of the patterns followed in previous recessions.

He said: “Insolvency Practitioners are expecting corporate insolvency numbers to increase for 2011 to 27,500. In 2009 the figure was 26,400.

“It is worrying that the most common signs recorded in September this year are decreased profits and a reduction in sales volume, given we are now out of recession. Although corporate insolvency numbers have decreased over 2010, experience of past recessions tells us to expect them to continue rising as the recession finishes in an insolvency lag.”

Construction industry must undergo huge change to meet the low carbon challenge

The construction industry faces the largest change management programme since Victorian times if it is to meet the low carbon agenda, according to an industry report published today.
The Innovation and Growth Team (IGT), which is drawn from the construction industry, was tasked by the government to consider how the construction sector could meet the low carbon agenda and the IGT today published its report.

The report said the construction industry had engaged positively with the sustainability issue with many examples of cutting-edge practice.

But the Climate Change Act calls for the net UK carbon account in 2050 to at least 80% lower than the 1990 baseline, which will require a ‘quantum change’ in the industry’s response to this challenge, says the document.

The report highlights four themes that government and industry need to engage on to rise to the carbon challenge:

The potential size of the market – meeting the UK’s commitment to reducing carbon and other greenhouse gas emissions will affect every aspect of the built environment. The scale of the necessary change is considerable but there is much that could be done now, particularly with the existing building stock.

Opportunities for SMEs – transforming the built environment to low carbon could provide the industry with a 40 year programme of work and act as a springboard to growth for more than 200,000 small businesses in the sector.

The wider green economy benefits – the green economy represents an area of substantial potential growth for the UK. Creating a low carbon construction industry would develop skills and expertise that would be of great value to other sectors.

Stimulating demand – there would be little point in developing the necessary capacity and skills if the demand for low carbon was not there. Government and industry need to work closely together to identify the best ways to stimulate the market for low carbon and energy efficiency measures.

Paul Morrell, who led the IGT, said:

“Meeting the low carbon agenda is both a challenge and an opportunity for the construction industry.

“It will require radical change to the way we do business as well as government action to meet the scale of the challenge. There are no easy answers.

“I hope this report will mark the start of a detailed collaboration between industry and government to address this complex issue.”

The report will now be considered by the Government, which will respond to the recommendations next year.

Construction Minister Mark Prisk said:

“This report is a valuable contribution to the debate around how the construction industry can play its part in the UK meeting its low carbon responsibilities.

“We will carefully consider this important document and the government will respond to these detailed recommendations next year.

“As a former chartered surveyor I am very much aware of the importance of the construction industry and the opportunity for growth the low carbon agenda represents. Now we need to make the most of that opportunity.

“Success in moving to a low carbon construction industry would provide UK firms with the chance to grow overseas as other countries seek our expertise and skills in this area.”
The low carbon construction agenda is an issue that goes across Government and report addresses various Government departments.

Communities Minister Andrew Stunell said:

"I welcome this report from Paul Morrell and the IGT. As we look to make building regulations easier to understand and follow, his recommendations will certainly be worthy of serious consideration.

"The Government wants to make it easier for housebuilders to go green. That's why we're already scrapping a myriad of regulations so the construction industry has one simple and concise set of guidelines for environmental assessments, making it user friendly, removing excessive red tape while also ensuring that the environment can be protected."

Climate Change Minister Greg Barker said:

“The Green Deal will provide a massive opportunity for industry, as well as making Britain’s homes and businesses warmer and more environmentally friendly. The Green Deal could unlock several billion pounds of private sector investment per year and support up to 250,000 jobs. My department will shortly introduce a new Energy Bill into Parliament which will set the framework for industry to deliver this ambitious programme. We welcome today’s report which shows industry is already gearing up to the challenge.”

Breeze & Wyles Solicitors LLP achieves 3rd place in the Land Registry rankings

In the recently released figures from the Land Registry for October 2010 application of the 7300 firms who made application in that month Breeze & Wyles Solicitors LLP achieved its highest ranking of 3rd place. There is still some way to go to threaten second place but this is a significant step forward for the firm in its push to be one of the largest firms providing quality legal services to the property sector.

Murray Fraser Director of Volume Legal Services at Bishops Stortford says:

"In such difficult times for the UK Property Sector it is fantastic news for us that while most applicants numbers are heading south that we are heading upwards reflecting our ability to automate even the most technical of processes. There are plenty of opportunties in the market and Breeze and Wyles is very well placed to expand its market share. November applications are already higher and the trend is heading to new levels. Demonstrating automation is one thing but putting it into practice in a market leading product is another. This is why lending institutions are monitoring us for the future. Watch this space!"

No Additional Rights for Former Owner - now Occupier

In a recent case the Chancery Division has further defined the situations in which the lender can be protected against a former owner with a potential interest generated by actual occupation.(Governor and Company of the Bank of Scotland v Hussain and another)

The second defendant sold her home (the property) to the first defendant, at an undervalue in 2001. The first defendant had executed a charge over the property in favour of the claimant bank. The charge was as security for the loan which he had taken out to fund his acquisition of the property. Subsequently, the second defendant issued proceedings against the first defendant alleging that the sale of the property had been procured by undue influence and was an unconscionable bargain (the 2001 action). The 2001 action was later amended to include a declaration that the charge over the property in favour of the claimant was invalid. The court found that the sale should be set aside as having been procured by the first defendant's undue influence and as an unconscionable bargain. It found however that the second defendant's argument of non est factum in order to defeat the charge did not succeed and the claimant's charge remained valid (the 2001 judgment). The claimant revived an action seeking possession of the property and payment of sums owned under the charge by the first defendant (the 2002 action). The second defendant served a defence and counterclaim invoking, inter alia, s 70(1)(g) of the Land Registration Act 1925 (the Act) (the s 70 defence). That section stated to the effect that all registered land, unless expressed to the contrary, was subject to the rights of every person in actual occupation of the land. The claimant applied to have the s 70 defence struck out as an abuse of process. The master refused the strike out that application. That decision was upheld on appeal. The appeal judge concluded that the second defendant's conduct in not raising the issue in the 2001 action could not be regarded as an abuse of process as the 2001 proceedings had concentrated on the relationship between the first defendant and the second defendant and was not directed at the secondary question of what might happen if the transaction between the first and second defendant were set aside. In the instant proceedings the claimant sought a possession order over the property. The second defendant challenged the possession claim by contending that she was in 'actual occupation' when the charge was granted and, hence, that the claimant's rights under the charge were subject to her own rights in the property.

The issues were, inter alia: (i) whether the 2001 decision meant that the second defendant was not entitled to challenge the charge in the instant proceedings on the basis of res judicata principles. The claimant relied not only on res judicata in the strict sense (encompassing cause of action estoppel and issue estoppel) but on merger and the extended doctrine of res judicate based on abuse of process; (ii) whether the second defendant was in actual occupation at the relevant time; and (iii) whether although the second defendant had been in actual occupation and had an overriding interest, she was to be taken as being bound by the mortgage or charge. In that regard the claimant submitted that as the second defendant knew of the charge and was therefore estopped from advancing such a case.

The claim would be allowed.

The principles relating to res judicata, cause of action estoppel, issue estoppel, the extended doctrine of res judicate based on abuse of process and merger, were established law.

In the instant case, the res judicata principles, including an abuse of process argument, did not preclude the second defendant from challenging the charge. In respect of cause of action estoppel, the cause of action which the second defendant was asserting against the claimant was not the same as any cause of action she had asserted as against the first defendant in the 2001 Action. Further, in respect of issue estoppel, the claims advanced by the first defendant had merely been advanced against the first defendant and not against the claimant. In respect of merger, the judgment obtained by the second defendant against the first defendant did not operate to extinguish the claim she was advancing against the claimant. Neither the claims or the remedies of the 2001 judgment represented an alternative to the second defendant's challenge to the charge. In respect of abuse of process, the judge's affirmation of the master's refusal to strike out the defence and counterclaim barred the bank from contending in the instant case that the defence and counter claim represented an abuse of process. It was precisely the same issue as was raised by the strike out application and the judge's decision was a final determination of the question of abuse of process.

(2) It was established law that once the imputed intention was that the actual occupier's rights were to be subject to the mortgage (or charge), there was nothing in s 70 of the Act which enlarged those rights into any greater rights.

hat principle was capable of applying even where there was no direct relationship between the person asserting rights and the mortgagee. The principle was not limited to merely precluding a representor from denying a statement of existing fact.

In the instant case, in all the circumstances, viewed objectively, the second defendant and the claimant had a shared assumption that the property would be bound by the charge or alternatively that the claimant had made such an assumption and the second defendant had acquiesced in it

A possession order would be made in favour of the claimant.

Beware the principal debtor guarantee

In a recent case the courts have been asked to identify when a guarantee can lead directly to bankruptcy of the guarantor without the need for proceedings against the principal debtor.

Section 267(2)(b) of the Insolvency Act 1986, so far as material, provides: '(2) Subject to the next three sections, a creditor's petition may be presented to the court in respect of a debt or debts only if, at the time the petition is presented -- ... (b) the debt, or each of the debts, is for a liquidated sum payable to the petitioning creditor, or one or more of the petitioning creditors, either immediately or at some certain, future time, and is unsecured ...'

The guarantor gave a guarantee and indemnity (the guarantee), dated 10 September 2008, to the creditor bank in respect of a sum of £1,223,883.26 in relation to the borrowing liabilities of his brother (the principal debtor). The guarantee was made on the creditor's standard form. Clause 2.3 of the guarantee provided for the guarantor to make payment on demand. Clause 4.2 of the guarantee provided that the guarantor's obligations were those of principal debtor, not merely those of a surety. The principal debtor defaulted on his obligations and the creditor thereafter demanded payment by the guarantor of the sum, pursuant to cl 2.3 of the guarantee. It was common ground that the liability of the principal debtor in respect of which the demand was made was a liquidated sum, rather than, by contrast, a liability to pay damages at large for some breach of the borrowing facility. On 24 February 2010, a bankruptcy order was made against the guarantor on a petition by the creditor in respect of the sum alleged to be due under the guarantee. The guarantor appealed against the bankruptcy order.

Issues arose as to the nature of a guarantor's liability to the creditor, and the consequences in terms of the creditor's ability to present a bankruptcy petition. In short, a question arose as to whether the sum in question was a liability 'for a liquidated sum' within the meaning of s 267(2)(b) of the Insolvency Act 1986, or only a liability to pay unliquidated damages. If the latter was the answer, then was the creditor disabled from presenting a bankruptcy petition without first obtaining judgment for a specific sum, even in a case where the liability was admitted, and the amount of the damages could be identified with mathematical precision.

The appeal would be dismissed.

Where a guarantee sounded in damages rather than debt the creditor might enforce against a mere surety without prior demand on the guarantor, precisely because the principal debtor's default gave rise to a simultaneous breach of the surety's obligations. The effect of a principal debtor provision was not to enable the creditor to proceed without first claiming against the principal debtor but that any debt due was immediately payable by the guarantor without prior demand upon him.

The guarantee contained both a provision for payment by the guarantor on demand at cl 2.3, and a provision that the guarantor's obligations were those of principal debtor not merely those of a surety at cl 4.2. The guarantee did not state in terms that the guarantor's obligation was to see to it that the principal debtor himself paid all amounts due. Rather, it was neutral on the question by whom the guarantor promised that those debts would be paid. The guarantee did not speak in terms of payment of outstanding debts of the principal debtor, but rather of payment of any amount claimed under the guarantee by the creditor. The guarantee was therefore silent as to whether the creditor's claim was to be for damages or for a liquidated sum. In the instant case, the issue was not necessarily an either/or question as between debt and damages. The critical question was whether the guarantee included, rather than necessairly consisted of a debt obligation. The guarantee did include a debt obligation. Under the terms of the guarantee the guarantor had made the principal debtor's debts his own. Accordingly, the creditor was entitled to demand payment of the very debt which by cl 4.2 the guarantor had made his own. It was a liquidated sum within the meaning of s 267(2)(b) of the Act.

SMEs will drive the economic recovery: Barclays Business

In a recent report produced by Barclays Business in conjunction with Kingston University Small Business Research Centre Barclays have stated that SMEs will drive the economic recovery.

Discarding the statistics, and for a moment looking at the drive of the report, it would seem that the assumptions about how this is to be achieved in the long term is with the catalyst of banking support for funded growth. Deny all they like but banks are not lending. In order to obtain this long term growth risk attitudes must be relaxed. Note that the author does not say return to normal which he suspects that most people assume is 2007 normal.

The Government really needs to address this issue. The point of bankers bonuses is going to become a very serious issue over the coming months as the next round is disclosed to the public at large and more people are failing to see any change at the banks. Most people understand that in the short term SMEs will be the largest employer in the country collectively and as a result the economy's very stability is at jeopardy. Fine words Barclays but now the action!

Original Tenant loses right to break after assignment

In 1986, the claimant Norwich Union (NU), who bore the reversionary interest in two 99 year leases made in 1972, gave permission for them both to be assigned to the first defendant, L. The assignment was made on the basis of a licence from NU (the 1986 licence). Clause 5 of the 1986 licence contained a break clause giving L the option to determine the leases on 1 December 2010 subject to certain conditions. In 2005, another lease was granted by NU to L with the same break options as the 1986 licence. At the same time the conditions of the break clause, cl 5, in the 1986 licence were varied to include a condition that the 1972 leases had to be determined simultaneously with the 2005 lease. Clause 6.5 of the 2005 lease defined 'tenant' to mean 'L as original tenant'. In 2005, the three leases were assigned by L with NU's consent to an associated company, Automotive. That company became a separate entity to L and changed its name to Ecomold, the second defendant. Ecomold went into administration and ceased paying the rents. In 2009, Ecomold sought NU's consent to the re-assignment of the three leases to L. NU refused consent on the basis that an assignment would create a risk that L would seek to terminate the 1972 leases to NU's disadvantage and that it was reasonable to refuse consent. Nothwithstanding the refusal, in 2009, Ecomold executed a transfer of the three leases to L. L purported to give notice to NU to determine the leases in accordance with cl 5. NU commenced proceedings claiming, inter alia, declarations that its refusal of consent was reasonable and that the notices served by L were of no effect. L counterclaimed for a declaration that the three leases would determine. The High Court made two declarations first, that the refusal of consent by NU had been reasonable, and, secondly, that L's right to break under the three leases had been irretrievably lost when it had assigned them to Ecomold in 2005. L appealed the second declaration.

The principal issue was whether the contractual right to break was limited to the exercise of the right by L during such time as it was a tenant or was it lost on assignment of the lease. L submitted, inter alia: (i) that the 1986 licence made it clear that L was only willing to take assignment of the leases with the benefit of a right to break them; (ii) that although another assignee was in place it was still possible for vacant possession to be given; and (iii) that as assignor L remained liable on the covenants and had a continuing and important interest in the break clause as there was continuing privity of contract. NU submitted, inter alia, that cl 6.5 of the 2005 lease against the commercial and legal background meant that the right was to vest in L only so long as it remained tenant.

The appeal would be dismissed.

A tenant's right to utilise a break clause was limited to the original tenant. At no time had a court interpreted a contractual provision as conferring on a person a right to break a lease at a time when they were neither the landlord nor the tenant. Competent property advisors needed to take particular care to make unambiguously clear, if intended, that a person would be entitled to break a lease not only when they were a tenant, but even after they had assigned the lease. Although the object of all interpretation was to identify the intention of the parties to the particular document in question, it was undesirable that the courts should reach radically different interpretations of break clauses in commercial leases based on slight differences in language which were not obviously intended to achieve different objectives.

In the instant case, the terms of cl 6.5, read fairly and naturally in a manner consistent with the conventional approach, made it clear that L was only able to exercise the right to determine the 2005 lease 'as original tenant', that was to say in its capacity as and so long as it was the tenant. It was impossible to argue that the words 'as original tenant' were terms of art which denoted L, whether or not it remained the tenant. L's right to break was restricted to the time when it was the tenant under the 2005 lease. It was therefore not possible for L to operate the right to break the 1972 leases as it could not satisfy varied conditions of the 1986 licence.

It should be made clear to a tenant that when they assign the lease they will not be able to operate the break clause for instance where the assignee is not paying and the Landlord pursues the original tenant for the unpaid rent. If you are unclear on these issues please contact Hannah Collins on 01992 558411 and hannah.collins@breezeandwyles.co.uk

Restated: Time is of the essence in break clauses

The defendant landlord was the owner of the whole of a building in west London (the building), which it held as trustee for the Schroder Exempt Property Unit Trust (SEPUT), one of the largest unit trusts in the United Kingdom. Schroder Property Investment Management Ltd (SPRIM) was the property manager of SEPUT in respect of the properties in the SEPUT portfolio and had responsibility for the management of the property. By a lease dated 22 July 2005 (the lease), the landlord demised to the claimant tenant commercial premises on parts of two floors of the building (the property) for a term of ten years from 4 July 2005, but subject to a break clause (set out in para 1 of Pt 2 of Sch 2 to the lease) permitting the tenant to terminate the lease on 3 July 2010 after five years, upon giving not less than nine months' prior notice to the landlord. Clause 14.2 of the lease provided that no notice would be deemed to be validly served on the landlord unless a copy of the notice was also served on SPRIM. The tenant sought to terminate the lease pursuant to the break clause. Although actual service on the landlord took place on 14 September 2009, no service took place on SPRIM. It was not suggested that the tenant ever sent a copy of the break notice to SPRIM prior to 19 November. However, a formal copy was sent on 3 December. As the last day for the exercise of the break clause was 3 October 2009, the landlord contended that the purported exercise of the break clause was ineffective. The tenant commenced proceedings, seeking declarations that the break notice was effective. The defendant sought declarations that it was not.

The landlord contended that pursuant to cl 14.2, service on the landlord was ineffective unless service was effected on SPRIM, with the result that unless SPRIM was served by 3 October, there was never timeous service on the landlord.

The claim would be dismissed.

It was well established that time was of the essence in relation to compliance with the break clause.

The commercial purpose of cl 14.2 was to ensure that a notice came to the attention of the person with the actual responsibility for the management of the property. That clause was not drafted as an obligation breach of which sounded in damages. The words 'no notice will be deemed to be validly served unless' made it clear that the requirement had to be complied with for the notice to be effective.

In the instance case, the landlord had held the reversionary interest in the lease as trustee for SEPUT, and SEPUT had entrusted responsibility for the management of the property to SPRIM. The words 'no notice will be deemed to be validly served unless' in cl 14.2, on their face, provided that a notice served on the landlord was not to be treated as an effective notice unless a copy of the notice was also served on SPRIM. The notice did not have to be served on SPRIM simultaneously. However, on 3 October 2009, the last date for service, the question was whether notice had been validly served. At that date, no notice had been validly served on the basis that no notice had been served on SPRIM at that date.

The landlord was entitled to a declaration that the break clause option had not been complied with.

It is essential that when drafting or concluding a commercial lease with break clauses that you ensure that the terms are clearly drafted and that you understand them. If you are concerned about your ability break or how this will be done please contact Hannah Collins on 01992 558411 or by e mail at hannah.collins@breezeandwyles.co.uk

Shock Supreme Court decision on meaning of de facto Director

The outcome of the decision in the Supreme Court in the case of Holland v Revenue and Customs Commissioners and another has caught most practitioners by surprise. It was felt that the Court of Appeal decision would be overturned given that there seems to be very real issues in relation to the meaning of de facto Directors.

The facts of the case are basic. HMRC had a significant debt owed to them by an insolvent company of which another company was a corporate director. The Defendant was the director of this second company. A claim was brought under section 212 of the Insolvency Act 1986 and the court was asked to determine whether the respondent was a de facto director of composite companies. This would mean that he was liable to contribute to the debt owed to HMRC.

In essence, the first issue to be determined was when a person should be considered to be a de facto director of a company so that he could be held responsible for the payment of unlawful dividends as if he had been formally appointed as a director. It was common ground that if the taxpayer succeeded on that issue the other issues would become academic.

It was held that:

"It was clear from established authority that the circumstances in which a person could be held to be a de facto director for the purposes of the remedy provided for by s 212 of the 1986 Act varied widely from case to case, and was very much a question of fact and degree. All the relevant factors had to be taken into account. The purpose of the section was to impose liability on those who had been in a position to prevent damage to creditors by taking proper steps to protect their interests. Those who assumed to act as directors and who thereby exercised the powers and discharged the functions of a director, whether validly appointed or not, had to accept the responsibilities of the office. Accordingly, one had to look at what the person had actually done to see whether he had assumed those responsibilities in relation to the subject company.

A company was at law a different person from its directors and it was the intention of the enactment that that distinction should be recognised. That distinction could not be overcome by pointing simply to the quality of the acts done by the director and asking whether he was the guiding spirit of the subject company or had a real influence over its affairs. As a test, that would create far too much uncertainty. Those who acted as directors were entitled to know what it was that they could and could not do when they were procuring acts by the corporate director. That was true of the case where the affairs of the corporate director were effectively in the hands of one individual, as it was where there was a board comprised of several directors who had always acted collectively. The question was one of law and it was a question of principle. The guiding principle could be expressed in that way, unless and until Parliament provided otherwise. So long as the relevant acts had been done by the individual entirely within the ambit of the discharge of his duties and responsibilities as a director of the corporate director, it was to that capacity that his acts had to be attributed.

In the instant case, the respondent had been doing no more than discharging his duties as the director of the corporate director of the composite companies. Everything that he had done had been done under that umbrella. The Revenue had been unable to point to anything that he had done which could not be said to have been done by him in his capacity as a director of the corporate director. On the facts, it had not been shown that the respondent had been acting as de facto director of the composite companies so as to make him responsible for the misuse of their assets."

However, you look at this case the corporate veil becomes a problem in a composite company arrangement. Until relatively recently corporate directors were allowed. This has now changed. As mentioned elsewhere in this blog:

"Under the Companies Act 2006 this is no longer allowed; every company must have at least one director who is a “natural person” - that is, an individual human being, not a corporate entity."

Accordingly, whilst this provision deals with the future many situations of this type have existed in companies that have failed and the director(s) of the Topco must feel freed of some of their responsibility. The author suggests that the best outcome was that suggested by Lord Walker and Lord Clarke.

Legal Aid Consultation: Solicitors to fund public funded legal services

In a consultation paper published by the Lord Chancellor and Secretary of State for Justice Ken Clarke it is proposed that Solicitors (I refer the reader to paragraph 9.4) will be required to account to central government for the interest that it accrues on client monies held in its general clients account.

The Government is again falling into the trap of labelling the ordinary law firm as a cash rich business when this is seen in only the 'magic circle' firms. Mosts of the 10,000 or so solicitors practices in England and Wales are utterly dependent on the client account interest they are not required to pay back to clients as perhaps the only reason that they are in profit. Moreover the use of terminology is extremely poor. If subsequent legislation is drafted in the format of papragraph 9 once again the uneven playing field between licensed conveyancers and solicitors will be made more uneven.

In these uncertain times this Government needs all the friends it can get in order to ensure that it pushes through its austerity program. By sending out a document, even if it is a consultation, in this poorly drafted state it wins no friends and alienates people. Clearly it sets out the Government's direction but leaves everyone in an uncertain position.

At one point in the document it states that lawyers working on public funding matters have been unable to manage their practices as a result of constant change. The proposals will pass this uncertainty onto the wider profession who have negotiated long term pricing structures with larger institutional clients based on the current regime of retention of client account interest as a funding source.

Rather than having to increase prices or reduce staffing levels leading to further unemployment but perhaps more cogently in the skilled employment market we say 'Ken, get your house in order!".

Mortgage Company Aldermore and Snowdon part company

In a shock statement Aldermore, the recent entrant to the mortgage market has today announced that it is parting company with its Chief Executive and recognised mortgage industry heavyweight Colin Snowdon by 'mutual consent'.

In the announcement carried on the website of Mortgage Introducer no further comment was made on the split. However, Aldermore stated that it was undergoing come changes internally to better fit with its customer base.

House sellers warned how to deal with gazundering

House sellers are being warned to watch out for “gazundering” in the current tough conditions of the residential property market.
Gazundering is where the buyer drops his offer for the property just before contracts are exchanged. It’s the opposite of gazumping, where the seller hikes up the price or accepts a higher offer from another buyer just before contracts are exchanged. Gazundering occurs in a buyer’s market, while gazumping tends to arise when it’s a seller’s market.
Both practices are perfectly legal; there is no binding agreement as to the price or any other term of the bargain until contracts are exchanged - which usually only happens four to six weeks after the prospective buyer’s offer has been accepted and the conveyancing process begins.
“Although it’s legal, these practices are generally a buyer exploiting his bargaining strength in a tough market, and they tend to undermine the smooth running and stability of the conveyancing system,” said John Appleton, residential conveyancing Director and Head of Department with Hertfordshire-based firm Breeze & Wyles Solicitors LLP.
Theoretically it would be possible for the buyer and seller to enter into an agreement to enter into a contract, but in practice buyers are unlikely to enter into such an agreement if sanctions, such as the loss of a substantial pre-contract deposit if the buyer backs out, are included.
Some have called for a French-style conveyancing system, where the buyer and seller enter into a contract at the outset; but opponents say that this sort of system, where a contract is entered into at the outset, is bound to be so full of escape routes that it provides no more certainty than the English system. Even if the buyer decides not to go ahead for a completely frivolous reason they will often be released by the seller because the seller cannot keep the deposit without going to court, and, in the meantime, the house cannot be sold.
John added: “The English system is far from perfect but other systems that might replace it have their own problems and frustrations. My advice to sellers is don’t just accept the highest offer as a matter of course; instead listen to their estate agent’s advice as to whether a prospective buyer appears genuine and is in a position to go ahead.
“In the current buyer’s market, sellers might like to think about instructing their solicitors to state at the outset, when they send out the draft contract and supporting papers, that if the buyer attempts to negotiate a lower price, they will immediately insist on the contract papers being returned, which can act as a psychological deterrent to the buyer.
“They may still get challenged for a price reduction, but it can help to even the balance in current markets.”

First monetary penalties served for serious data protection breaches

If you have not turned your mind to Data Protection and the recent increases in the penalties the Information Commissioners Office can apply against you, we suggest that you read the following press release carrying a number of salutary tales that any of us might be the subject.

The Information Commissioner [24 November 2010] today served two organisations with the first monetary penalties for serious breaches of the Data Protection Act.

The first penalty, of £100,000, was issued to Hertfordshire County Council for two serious incidents where council employees faxed highly sensitive personal information to the wrong recipients. The first case, involving child sexual abuse, was before the courts, and the second involved details of care proceedings.

The second monetary penalty, of £60,000, was issued to employment services company A4e for the loss of an unencrypted laptop which contained personal information relating to 24,000 people who had used community legal advice centres in Hull and Leicester.

The Hertfordshire County Council breaches occurred in June 2010 when employees in the council’s childcare litigation unit accidentally sent two faxes to the wrong recipients on two separate occasions. The council reported both breaches to the Information Commissioner’s Office (ICO).

The first misdirected fax was meant for barristers’ chambers and was sent to a member of the public. The council subsequently obtained a court injunction prohibiting any disclosure of the facts of the court case or circumstances of the data breach.

The second misdirected fax, sent 13 days later by another member of the council’s childcare litigation unit, contained information relating to the care proceedings of three children, the previous convictions of two individuals, domestic violence records and care professionals’ opinions. The fax was mistakenly sent to barristers’ chambers unconnected with the case. The intended recipient was Watford County Court.

The Commissioner ruled that a monetary penalty of £100,000 was appropriate, given that the Council’s procedures failed to stop two serious breaches taking place where access to the data could have caused substantial damage and distress. After the first breach occurred, the council did not take sufficient steps to reduce the likelihood of another breach occurring.

The A4e data breach also occurred in June 2010 following the company issuing an unencrypted laptop to an employee for the purposes of working at home. The laptop contained sensitive personal information when it was stolen from the employee’s house.

The laptop contained personal information relating to 24,000 people who had used community legal advice centres in Hull and Leicester. An unsuccessful attempt to access the data was made shortly after the laptop was stolen. Personal details recorded on the system included full names, dates of birth, postcodes, employment status, income level, information about alleged criminal activity and whether an individual had been a victim of violence.

A4e reported the incident to the ICO. The company subsequently notified the people whose data could have been accessed.

The Commissioner ruled that a monetary penalty of £60,000 was appropriate, given that access to the data could have caused substantial distress. A4e also did not take reasonable steps to avoid the loss of the data when it issued the employee with an unencrypted laptop, despite knowing the amount and type of data that would be processed on it.

Information Commissioner, Christopher Graham, said:

"It is difficult to imagine information more sensitive than that relating to a child sex abuse case. I am concerned at this breach – not least because the local authority allowed it to happen twice within two weeks. The laptop theft, while less shocking, also warranted nothing less than a monetary penalty as thousands of people’s privacy was potentially compromised by the company’s failure to take the simple step of encrypting the data".

"These first monetary penalties send a strong message to all organisations handling personal information. Get it wrong and you do substantial harm to individuals and the reputation of your business. You could also be fined up to half a million pounds."

If you have concerns about the storage of personal data and need a review please contact Brendan O'Brien on 01279 715333 or brendan.obrien@breezeandwyles.co.uk

OFT takes action against unfair debt recovery practices

The OFT has imposed requirements on debt recovery company Aktiv Kapital to secure improvements to its debt collection and communication practices.

An OFT investigation found that Aktiv Kapital had been chasing people for disputed debts without properly investigating the issues in dispute, in breach of the OFT's debt collection guidance. The investigation also found that those being chased felt unreasonably pressurised by Aktiv Kapital.

Although Aktiv Kapital has taken action to address the practices that concerned the OFT, requirements have been imposed to ensure that future conduct of the same or a similar kind does not occur.

The wrong person being pursued for a debt is a common theme in complaints about the debt collection industry received by the OFT. This is often rooted in inaccurate or incomplete data being passed on by the owner of the debt when a debt is sold or its collection is sub-contracted.

The requirements imposed set out that Aktiv Kapital must:

not pursue debts where it has been notified in writing that the debt is disputed until the dispute has been properly investigated - this includes cases where the person being chased for payment says that they are not the debtor in question ensure that its communications are not, or do not appear to be, threatening or to constitute unreasonable pressure deal sensitively with particularly vulnerable customers.

Ray Watson, Director of the OFT's Consumer Credit Group, said:

'We have taken action against Aktiv Kapital to address unsatisfactory practices and protect vulnerable consumers. Requirements have been imposed to ensure that these practices are not repeated'.

Mark Prisk MP develops Local Enterprise Partnerships

Minister for Business and Enterprise Mark Prisk today hosted a networking event with representatives of local enterprise partnerships to acknowledge the progress made so far and discuss the way ahead for the new partnerships.
Attendees included representatives from recently formed partnerships; the Department for Business, Innovation and Skills; Department for Communities and Local Government; Department for Work and Pensions; Department of Energy and Climate Change; Department for Environment, Farming and Rural Affairs; and Department for Transport.
The groups discussed the recent White Paper on Local Growth and how local enterprise partnerships can get started on delivering their priorities for local economic development. They also discussed the relationship between Government and the partnerships going forward.
Speaking after the meeting, Mark Prisk said:
“It’s crucial that partnerships and potential partnerships are given opportunities to speak to the Government about the future and how the new local support system will work.
“A lot of hard work has gone in to the creation of the partnerships and I want to acknowledge everybody’s contribution so far. I was encouraged by the conversations taking place today between local councillors, business leaders and the Government about what the future will look like.
“It is important that this kind of work continues to make sure that the people who will be responsible for delivering our structural reforms are given the support they need to realise their vision for a strong economic future.“
Since the first 24 successful local enterprise partnerships were announced, there has been interest from the partnerships, BIS and other Government departments in setting up meetings to talk and work with each other. Today’s event is likely to be the first in a series, as the first partnerships begin establishing their boards.

Further Guidance on when to use Statutory Demands

Statutory Demands are the nuclear option in debt recovery systems and should always be used with caution. Given that the potential outcome of the service of a statutory demand is the recipients bankruptcy the indiscriminate use can have a damaging impact. With this in mind there are a number of rules in place to ensure that the creditor is reminded of the consequences of incorrect or wrongful use.

In the case of White and Davenham Trust rule 6.5(4) of the Insolvency Rules 1986 was considered. The rule sets out the circumstances in which the court may set aside the demand on application by the 'debtor':

"the court may grant the application if-
(a) the debtor appears to have a counterclaim, set-off or cross demand which equals or exceeds the amount of the debt or debts specified in the statutory demand; or
(b) the debt is disputed on grounds which appear to the court to be substantial;
(c) it appears that the creditor holds some security in respect of the debt claimed by the demand, and either rule 6.1(5) is not complied with in respect of it, or the court is satisfied that the value of the security equals or exceeds the full amount of the debt;
(d) the court is satisfied, on other grounds, that the demand ought to be set aside."

The case is relevant to the fourth ground: where 'the court is satisfied, on other grounds, that the demand ought to be set aside'. On the face of the clause this seems extremely wide to the general reader and creates the potential for arbitrary use of the discretion.

It has been the test since 2009 that:

"The discretion to set aside a statutory demand under r 6.5(4)(d) is a residual discretion which will normally be exercised in "circumstances which would make it unjust for the statutory demand to give rise to bankruptcy consequences in the particular case."

Injustice can take many forms and the Bankruptcy Court should not be restricted as to how it should use its discretion when determining whether a Statutory Demand should or should not be set aside. Accordingly it is fair to say that each case will turn on its facts.

Decree Absolute does not prevent financial claims!

A lottery winner who divorced in 2000 has paid £2million pounds in an out of Court settlement. It is understood that the parties, whilst reaching agreement in relation to the finances at the time of their divorce, did not include “a clean break” clause providing for the termination of further claims in the future. The ex husband who it is understood won £56million on the Euro Millions Jackpot this year, had wanted to avoid going through a lengthy court process. The ex wife had wanted £8million out of the lottery win and the parties agreed an out of Court sum of £2million.

It is believed that this is the first time a divorced lottery winner has been successfully pursued for a share of their winnings.

This case highlights the importance of having specialist advice at the time of divorce in terms of obtaining a full and comprehensive financial agreement where possible including a clean break in relation to future asset acquisition.

Are you divorced and have no financial agreement? If yes you should immediately get in touch with one of our specialist family solicitors.



Olive McCarthy
Breeze and Wyles Solicitors LLP

Is it time for preventative law?

Olive McCarthy, Director of the Family and Matrimonial asks the question, should we now be looking at advising our clients at the outset of a relationship to seek legal advice before; purchasing property together, cohabiting, about to marry or have married.

On the 20th October 2010, the Supreme Court provided Judgment in the long awaited and eagerly anticipated case of Radmacher –v- Granatino 2010 UKSC 42. This case has been widely publicised for its indication that pre and post -nuptial agreements will now be recognized subject to certain criteria.

Essentially the Supreme Court agreed with the Court of Appeal and dismissed the Husband’s appeal. Whilst the facts of this case have become increasingly well known due to the press coverage, in summary; the French Husband and the German Wife married in the UK. In Germany an ante-nuptial agreement (akin to pre-nuptial) was entered into, neither party were to have any claim on the other’s property during the marriage on its termination. The parties had had two children, separating after 8 years. The Wife was considerably wealthy, the Husband, who did not take legal advice before entering into the ante-nuptial in Germany was, at the time of entering the agreement, a banker but upon the parties’ separation was a student. The Husband applied for financial relief and was awarded a substantial lump sum with the Judge attaching limited weight to the ante-nuptial agreement because of the circumstances in which it had been signed.

The Court of Appeal held that the agreement should have been given decisive weight, the Husband appealed against his decision and the Husband lost. The Supreme Court endorsed the Court of Appeal’s approach, despite what it has been suggested in the press, the Supreme Court’s decision as a matter of law, pre-nuptial agreements will not always be binding. However it is because of the decision of the majority of the members of the Court, that there has been a significant move towards and recognition of, the weight to be attached to such agreements. The principle now established at paragraph 75 of the Judgment which has been described as the “test” to be followed; the Court should give effect to a nuptial agreement that is freely entered into by each party with a full appreciation of its implications, unless in the circumstances prevailing it would not be fair to hold the parties to their agreement.

It has been suggested that this sounds like a principle that will stand unless; either the agreement was not entered into freely or its implications were not fully appreciated or the agreement was entered into voluntarily and understood but it would not be fair to hold the parties to it in the circumstances.

Olive McCarthy has commented that whilst this decision does not provide absolute certainty that pre and post nuptial agreements will be legally binding, it does go someway in clarifying parties’ intentions and allowing a couple in the good times to make provision for their separation, avoiding later distress and uncertainty by having to resolve such matters through litigation with the added burden of spiraling legal fees attracted by such litigation. Nuptial agreements are certainly unromantic but their importance and impact is clearly increasing.

Preventative law does have its place especially if you are one of the following; you should consider a pre-nuptial and post-nuptial agreement;

1) You have inherited property or wealth and your future spouse is unlikely to match that cohabitation.
2) You have been married before and received financial settlement which you wish to safeguard for your future
3) You have been married before your spouse has died, leaving you with capital which you want to safeguard for yourself in the future.
4) You have been married before and you have children that you want to be sure will inherit your assets.
5) You are likely to benefit from a Trust in the future.

The best advise at present must be if you have assets that you want to protect in the event of a divorce, a pre-nuptial and post-nuptial must be the starting point.

For specialist advice in this ever increasing complicated area, please speak to a member of the family department at Breeze and Wyles Solicitors LLP

Olive McCarthy
Breeze and Wyles Solicitors LLP

Cohabitants-Court of Appeal overturns decision of the High Court

One of the most significant cohabitation dispute cases this year: Jones –v- Kernott (2010) EWCA CIV 57

The Court of Appeal has overturned the decision of the High Court that had held the beneficial interest in a property as to 90/10 in favour of Ms Jones and found on appeal that the beneficial interest was held 50/50. In summary, the facts of this case were that the parties had purchased a property in their joint names in the 1980’s. It was occupied for approximately 9 years when the relationship broke down. The purchase price was initially funded by Ms Jones and the balance by an interest only mortgage supported by an endowment policy. A further loan was taken out the following year for an extension which was built and paid for mainly by Mr Kernott. It is said that this enhanced the value of the property. The parties, whilst together shared the household bills including mortgage repayments. After the parties’ relationship broke down, Ms Jones made all of the payments due under the mortgage and the premiums for the endowment policy along with everything else that was needed to maintain the property. In addition she supported the parties’ two children.

At trial, the equity was agreed at £218,000.00, whilst the earlier decision at the High Court had sought to consider how the parties’ beneficial interest had been varied after their separation, the shares were assessed on the basis of what was “fair and just” and had fixed the beneficial interest as to 90% in favour of Ms Jones and 10% to Mr Kernott. On appeal by Mr Kernott, it was acknowledged that this was an unusual case because of the long period of separation before resolving the parties’ financial ties. Mr Kernott made no contribution towards the property either by way of improvement, outgoings or mortgage payments during that lengthy period of separation but it was considered that this was insufficient to depart from an equal division of the equity. This is a cautionary tale to all unmarried couples who contemplate purchasing a property without the benefit of a cohabitation deed or upon the breakdown of a relationship without considering their shares in the property and having any agreement reached documented within a ‘Deed of Separation for Separating Cohabitants’.

The Court of Appeal have given credence to situations where the parties buy in joint names that to justify departing from an equal decision will be rare. Olive McCarthy, the Director of the Family and Matrimonial Department of Breeze and Wyles Solicitors LLP is an accredited specialist with Resolution, specialising in cohabitation and financial provision on divorce commented; “in order to avoid unnecessary and painful litigation, cohabiting parties embarking upon the purchase of a property or other assets, would be well advised to seek even one off advice to be aware of their rights upon separation especially if they are planning on purchasing as joint tenants and have not made an equal contribution to the purchase. Consideration of Declaration of Trusts or Cohabitation Deeds documenting contributions is advisable especially as in the wake of this Court of Appeal decision, if unmarried couples purchase in joint names and do not set out their respective shares, they will be held to own an asset equally and that will not always reflect the fairness of the situation.

Olive McCarthy
Breeze and Wyles

Kent Reliance Building Society transfers its business to OneSavings plc

By way of conditional transfer due to take place in February 2011, Kent Reliance Building Society will transfer its business, assets and liabilities. At a meeting on 19 November 2010 the members of the society agreed to the transfer with the Building Society ceasing to exist after the transfer.

Third Party Adminstrator Capstone rebrands to Acenden

For those of us who have dealt with the sub-prime work over the years Capstone should be a well known name. They were the contact for redemptions and late discharges in relation to SPML and Preferred. Irrespective of their reputation among lawyers there is little doubt that the systems that they have developed are second to none in order to service a sub-prime loan book.

Accordingly, they have convinced the administrator of Lehmans that they should be retained but allowed to service external businesses rather than just the former Lehmans brands.

Grant Shapps: A fairer future for social housing

Housing Minister Grant Shapps and Communities Minister Andrew Stunell today announced plans for the most radical reform of social housing in a generation, with a fundamental shift of power from Whitehall to councils and local housing associations.

The changes will affect all areas of social housing policy, giving councils more flexibility to use their social housing stock to the maximum effect and drive down waiting lists. Over the past 13 years the number of people on waiting lists has almost doubled to five million - caused, Ministers argue, by the current centrally-determined rules.

Ministers believe that the current rules to allocate social homes are unfair and, despite £17billion of spending on social housing over the last 13 years, have left nearly twice as many people on waiting lists.

Proposals published today will make the system fairer, giving councils the option to offer flexible tenancies and greater local discretion to decide allocations, so better use is made of this valuable national resource. The rules will strike a sensible balance between the needs of new and existing tenants, and ensure the support that social housing provides is focussed on the most vulnerable and those who need it most, for as long as they need it.Mr Shapps said councils will be given much greater flexibility to help homeless families find appropriate housing, and existing tenants who may be trapped in unsuitable accommodation, or unable to take up a job offer because they can't move. A quarter of a million social homes remain overcrowded, and more than 400,000 under-occupied.

Housing Minister Grant Shapps said:

"For far too long in this country there has been a lazy consensus about the use of social housing, which has left one of our most valuable resources trapped in a system that helps far fewer people than it should. This out-of-date approach has seen waiting lists rocket and is unfair to people who genuinely need social homes. They trap existing tenants in poverty, often in homes that aren't suitable for them.

"So the current system is ripe for reform, and the changes we're bringing in will ensure that from now on our social housing helps as many people as possible. The new system will protect the most vulnerable in society, ensuring those in greatest housing need are given priority. It will also be more flexible, with councils and housing associations able to offer fixed tenancies that give people the helping hand they need, when they need it. But above all it will be fairer - councils will now be able to make decisions that genuinely meet the needs of local people, and the changes will not any affect any existing tenants."

Communities Minister Andrew Stunell said:

"To have five million people stuck on social housing waiting lists is unacceptable - clearly this system is broken and needs a radical overhaul.

"We need to have a much smarter system that protects lifetime tenancies, but also provides the flexibility to ensure that help is targeted at people who really need it, and enables us to get more for every pound of taxpayers' money. In times of economic hardship, it is vital that social housing is effective in helping people get back on their feet."

Key reforms will include:

Flexible tenancies - decisions on tenancy arrangements will be made locally. Currently national policy dictates that social landlords can only offer lifetime tenancies. Social homes for life are allocated to people who may have only a short-term housing crisis, which means households continue to occupy a social home and to pay low rents, even if they no longer need this support. Councils and housing associations will now have the flexibility to offer new social housing tenants fixed tenancies - offering minimum contracts of two years. The lifetime tenancies and succession rights of existing council and housing association tenants will not be affected. New tenants will be guaranteed one succession to a spouse or partner, with landlords free to grant further succession rights.

Fairer allocations - councils will now be able to set their own rules about who qualifies to go on the housing waiting list. At the moment anyone can apply to live in social housing, whether they need to or not. The 'reasonable preference' categories for those with the greatest housing needs will be kept, to ensure priority for social housing continues to go to the most vulnerable in society and those who need it most.

Greater mobility - it will be easier for any of the eight million social tenants in England to move when their circumstances change. Only five per cent of social tenants moved home over the past year compared to almost a quarter of tenants in the private sector. Existing tenants will be removed from housing waiting lists - freeing up social landlords to work together and focus on helping those tenants wanting to move to do so. A new National Home Swap Scheme will offer tenants access to details of social homes available for swaps across the country, regardless of which home swap service they have joined - making it easier for them to move whether to a different sized property, to be closer to family, or for work.

Fairer provision for homeless people - there will be greater flexibility for councils to make decisions on how best to help people at risk of homelessness at the local level. Currently some homeless families are turning down the decent private rented accommodation they've been offered as a settled home, and demanding to be provided with expensive temporary accommodation, at huge cost to the taxpayer, until a social home becomes available. Councils will be able to offer flexible solutions to people at risk of homelessness. Despite tight public finances, the Government will be investing £400m to prevent homelessness and rough sleeping.

Affordable Rents - a new 'Affordable Rent' tenancy will be offered by housing associations to some new tenants of social housing from April 2011. Affordable Rent properties will offer fixed term tenancies at a rent higher than social rent - with landlords able to set rents at up to 80 per cent of local market rents. This will enable landlords to raise funds to build more affordable housing for those who need it. The Government is investing £4.5 billion in new affordable homes over the Spending Review period, which combined with the reform of social housing should deliver up to 150,000 new homes over the next four years.

New tenants power of scrutiny - Grant Shapps has announced plans for the abolition of the Tenant Services Authority, and instead to give England's eight million social housing tenants strengthened powers to ensure that their landlords provide quality housing and are held to account when problems arise. Landlords will be expected to support tenant panels - or equivalent bodies - in order to give tenants the opportunity to scrutinise the services being offered and to be involved in resolving disputes. These changes will be made as part of the forthcoming Localism Bill.

Twenty-year joint venture will attract national and international inward investment

STFC, Langtree, Halton Borough Council and North West Development Agency joint venture at Daresbury Science and Innovation Campus set to stimulate UK economy.

Twenty-year joint venture will attract national and international inward investment.

6,000 knowledge-based jobs to be created in science and innovation sectors.

The Government has confirmed a major investment in science and innovation with the announcement of a public-private joint venture that firmly establishes the award winning Daresbury Science and Innovation Campus (Daresbury SIC) in Cheshire as one of the world’s principal locations for scientific research, innovative technology development and entrepreneurial collaboration.

Minister of State for Universities and Science, David Willetts, confirmed the Government's support for this new public-private partnership comprising the Science and Technology Facilities Council (STFC), Halton Borough Council, the North West Development Agency (NWDA) and private sector property investment development company, Langtree.

The 20-year joint venture creates a 50:50 partnership between the public and private sectors and will bring more than 6,000 jobs to the area during its lifetime, attracting further domestic and international positive inward investment in world class scientific research and innovation.

Confirming the joint venture, David Willetts said:

“Science, technology and innovation can play a crucial role stimulating the economy. This great facility at Daresbury is an excellent example of this.

"Daresbury has a long heritage of providing cutting edge and innovative science. This development will not only strengthen the science base at the campus, it will also drive up inward investment and increase the economic impact of science through business access to a broad range of scientific capability and facilities. Teamed with international collaboration, this model of open innovation will lead to the creation of new technologies, products and services, new businesses, and new jobs that will benefit all aspects of UK society.”

Under the agreement, STFC will contribute involvement in major public sector science programmes and a proactive approach to ensuring fundamental research can be harnessed and exploited by innovators, entrepreneurs and industry. Langtree will develop 1 million square foot of space for science and innovation facilities, hi-tech businesses and supporting infrastructure for the Campus, which has already benefitted from over £67m investment from the NWDA.

The Daresbury Science and Innovation Campus is home to STFC’s Daresbury Laboratory, The Cockcroft Institute and the Daresbury Innovations Centre, which already hosts more than 100 high tech companies, most of which are SMEs looking to find innovative solutions to global challenges including energy, healthcare, security and the environment.

New Second Lender retains Breeze & Wyles Solicitors LLP to its panel

Breeze & Wyles Solicitors LLP are delighted to announce that they have been retained by Portal Portfolio LLP to process their second mortgage title investigations and registrations. Portal Portfolio, the UK’s first pension-backed secured loan lender, launched earlier this month offering a new type of secured loan that allows borrowers to invest simultaneously in a pension fund returning 4% and, at the same time, obtain loans of up to £75,000 with a starting rate of 9.9%.

Brendan O’Brien Director at Breeze & Wyles said:

“There is a neat fit between the innovation of Portal Portfolio in its funding arrangement and our market leading track record for automation. We are extremely pleased to be involved in this new project that will have significant benefits for both businesses”

These new loans are initially being distributed exclusively through All Types of Mortgages and will pay introducers 4% of the loan as commission.

The scheme is aimed at anyone who has a self-invested personal pension or SSAS pension and is looking for a loan. By collectively investing in an independent pension fund, the borrowers, and any other investors looking for a guaranteed 4% return, provide the facilities to allow Portal Portfolio to offer secured loans at market leading rates

Employers must minimise stress for workers

This month’s National Stress Awareness Day has focussed attention on the problem of stress in the workplace and is a reminder to employers that stress is a health and safety issue that they ignore at their peril.
The Health and Safety Executive believes that last year in Britain over 11 million working days were lost as a result of stress related illness and estimates that 415,000 individuals experienced work related stress at levels that made them ill. This makes stress the second most common work-related illness and almost double that of back pain.
Many are forecasting that stress at work is likely to rise in the recession, as businesses try to reduce costs; employees who leave may not be replaced, and in the worst case scenario, businesses may have to make redundancies. As a result, the burden on employees may increase, while worries about job security might make employees reluctant to tell employers that they feel overworked or suffering from stress.
“Employers cannot ignore the dangers of stress; they can be sued or even prosecuted for failing to ensure safety standards at work and this applies to the mental health and safety of employees just as it applies to their physical safety,” explained employment law specialist Jane Dismore of Breeze & Wyles Solicitors LLP.
“Recent proposals by the Government to press people to come off incapacity benefits and sickness-related benefits, and back into employment, also means that employers may be engaging with people who are not used to employment, which is likely to further increase employer responsibility.”
Against this backdrop, the Health and Safety Executive are encouraging employers to adopt effective strategies to combat stress, saying it can pay dividends in increased productivity. Doncaster Metropolitan Borough Council has reduced the number of days lost to stress-related absence by 13194 days within a year of introducing such a strategy.
The Department for Work and Pensions has an online centre for health, work and well-being issues at http://www.dwp.gov.uk/health-work-and-well-being/news/ with links to information elsewhere, including the Business Link Workplace Well-Being Tool, which allows employers to calculate the cost of ill health in the company.
References:
www.hse.gov.uk/stress; www.hse.gov.uk/statistics
www.hse.gov.uk/stress/casestudies/doncaster-metropolitan-council
http://www.businesslink.gov.uk/bdotg/action/detail?itemId=1084516235&type=PIP&furlname=wwt&furlparam=wwt&ref=&domain=www.businesslink.gov.uk

OFT acts to improve Lending Practices

The OFT has taken action to address unsatisfactory business practices of payday lender CIM Technologies Ltd, known as Tooth Fairy Finance.

Tooth Fairy Finance is a payday lender which typically lends amounts of between £100-£300 to students on a short-term basis via telephone or SMS.

The OFT has imposed requirements on Tooth Fairy Finance which set out that it must not:

vary the repayment date or amount payable in respect of the loan, unless this is specifically agreed in advance with the debtor trade using names other than those permitted by its credit licence levy debt collection charges that are disproportionate to the amount owed.

The company must also appoint a suitably qualified person to advise on, and administer as necessary, legal and regulatory compliance. Failure to comply with these requirements could lead to a fine of up to £50,000 per breach or to action by the OFT to revoke the company's credit licence.

The OFT is also working with the Consumer Finance Association (CFA), the trade association for payday lenders, to promote higher standards across the payday loans sector.

Ray Watson, the OFT's Director of Consumer Credit, said:

'Payday lending provides access to credit for consumers who have limited choices. It is imperative that those who offer payday loans do so responsibly and in accordance with the law. Where we are not happy with a business' lending practices we will not hesitate to take action to protect consumers.'

NOTES

See the requirements imposed on Tooth Fairy Finance (pdf 52kb).

Businesses should not include terms in their contracts with consumers that enable them to vary the date and amount for collection without prior agreement. The OFT considers such terms are likely to be unfair under the Unfair Terms in Consumer Contracts Regulations 1999, as they have the potential to operate to the significant detriment of consumers. For example, where money is unexpectedly taken from consumers' ccounts during a time of financial difficulty, consumers may incur additional fees and charges from their bank or financial provider.

Under the Consumer Credit Act 1974 (the Act), businesses that offer goods or services on credit or lend money or are involved in activities relating to credit or hire must be licensed by the OFT. The OFT has a duty to protect the interests of consumers by monitoring the fitness of those holding or applying for licences.

A licensee who carries on business under a name not specified in the credit licence commits an offence (section 39(2) of the Act).

Where the OFT is dissatisfied with any matter in connection with a business, a proposal to carry on a business or any other conduct by a licensee, associate or former associate, the OFT may impose 'requirements' on the licensee (section 33A of the Act). The OFT may also take action to impose a requirement whilst dealing with an application for a licence to be issued. Requirements may require a business to do or not to do (or to cease doing) anything specified for the purposes connected with addressing the OFT's dissatisfaction, or securing that matters of the same or a similar kind do not arise.

There are two ways that OFT can impose requirements. Firstly, the OFT may issue a formal notice to the business informing it of the requirements it is minded to impose. The business may then make representations to an adjudicator who will consider these and make a determination. The business has a right of appeal to an Independent Tribunal. Alternatively, the business may propose requirements and if these are in the same terms as the requirements the OFT is minded to impose, the OFT can impose these requirements without proceeding with the formal notice. Under this procedure, which has been used in this case, the business does not have a right of appeal to the Tribunal

Independent review launched to ensure IP system promotes growth

An independent review into how the intellectual property system can better drive growth and innovation has been launched today.

Prime Minister David Cameron unveiled the six-month review during a speech at a major event in Shoreditch before an audience of business people.

He spoke about how the Government can help make Britain the most attractive place in the world to start and invest in innovative technology companies.

He revealed the Government had published a Technology Blueprint that spells out how the Government will support high-tech innovation, including reviewing the IP system.

Mr Cameron said:

“I can announce today that we are reviewing our IP laws, to see if we can make them fit for the internet age.”

The Blueprint also reveals the Intellectual Property Office will trial a peer to patent project, which will allow people to comment on patent applications and rate contributions to help improve the quality of granted patents.

The six-month review aims to identify barriers to growth within the IP framework, which consists of the rules and regulations covering how IP is created, used and protected in this country.

It will particularly focus on how the IP system can be improved to help the new business models arising from the digital age.

Baroness Wilcox said:

“The internet has fundamentally changed the business landscape. Some sectors, such as the creative industries, have been transformed by it. The intellectual property framework must keep pace.

“An IP system created in the era of paper and pen may not fit the age of broadband and satellites. We must ensure it meets the needs of the digital age.

“The future of the economy lies in the highly skilled, technology sectors. For many of those companies their intellectual property is their most valuable asset.

“We must ensure the intellectual property system helps not hinders those companies.

“This review will look at what changes can be made to our intellectual property system to ensure it helps firms grow.”

The review will look at:

Barriers to new internet-based business models, including the costs of obtaining permissions from existing rights-holders;

The cost and complexity of enforcing intellectual property rights within the UK and internationally;

The interaction between IP and Competition frameworks;

The cost and complexity to SMEs of accessing services to help them protect and exploit their IP.
The review will also look at what the UK can learn from the US rules covering the use of copyright material without the rights-holder's permission.

The US has a ‘fair use’ system that sets out certain conditions for using copyright material without permission. This is in contrast to the EU where there are categories of copyright material that can be used without permission.

The review will make recommendations on the changes the UK can make as well as the long-term goals to be pursued through the international IP framework. It is expected to report in April next year.

The IPO will also trial a peer to patent project, which aims to improve the quality of the patents by ensuring they are sufficiently new and inventive.

Patent examiners cannot be expected to have access to all the information already in the public domain and this project aims to address that.

In the trial selected patent applications would be available for people to comment on and crucially rate each other comments. The highest rated comments would then be submitted to the patent examiner
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Baroness Wilcox said:

“This project aims to reduce the number patents being granted for ideas and inventions that are not new or inventive. It will result in fewer disputes and legal challenges providing more certainty for businesses.

“We are looking to use the vast array of knowledge out there to improve the patent system for business.”

The IPO is already working to improve the IP system for businesses. It is extending the free online IP Healthcheck tools aimed at SMEs and is working for the creation of an EU-wide patent system to cut costs and bureaucracy for companies operating across the continent.

IPO invests £3m of in-year savings in business support

More than £3m of in-year savings made by the Intellectual Property Office (IPO) will be directly used to support UK business, Intellectual Property Minister Baroness Wilcox announced today.

Baroness Wilcox revealed the savings will fund projects to help companies develop new technologies and offer advice in developing their intellectual property.

The announcement forms part of a cross government package of measures, which were revealed today, to help the five million small companies in this country grow and boost enterprise across Britain.

The IPO made 11 per cent savings earlier this year, as requested from all Government departments, and now money has been earmarked to help more than 300 companies.

Baroness Wilcox said:

“This investment in growth will help businesses carry out new research projects, bring new products to market and receive extra support in developing their intellectual property.

“The future of the UK economy lies with these high tech industries. For many of these innovative firms, their ideas, their intellectual property, will be their most valuable assets.”

Baroness Wilcox added the savings had been made without damaging frontline services.

She said:

“This investment clearly demonstrates the Government can identify savings without harming frontline services.

“We have identified and eliminated waste. That money will now go on helping firms grow and succeed.”

The money will fund competitions and schemes run by the Technology Strategy Board, which is the Government’s main channel for promoting innovation. The projects chosen for support would have a significant IP element.

The Technology Strategy Board projects being supported by the IPO are:

Small Business Research Initiative, which uses government procurement to drive innovation. It involves running competitions to find new technologies to solve the needs of government departments and often supports small early-stage companies.

Collaborative R&D support. This brings together business and academics to undertake pre-competitive research in areas where the UK is strong. So for example, the current round is targeting Advanced Materials, Biosciences, Electronics, High Value Manufacturing, Information and Communications Technology and Nanotechnology.

This support will enable businesses to benefit from:

Project funding

Advice on IP protection. Firms supported by the Technology Strategy Board will be helped to develop an IP strategy to take their products to market.

IP audit - a detailed look at a company to help it ensure intellectual assets are identified and managed properly.

State of the art basic assessment - looking at whether the proposed idea is new and what competing solutions exist.

Half of the savings will be used to support business while the rest will be re-invested in measures leading to greater efficiencies within the IPO. The funding will be for one year only.

Cross government action to unleash enterprise and help small business

Small Business Minister Mark Prisk today hosted a Summit for Small Business and set out a cross government package of measures to help the five million small and medium companies in this country grow and boost enterprise across Britain.These businesses will be vital to economic growth as they are at the heart of the economy, providing 60 per cent of jobs and half of GDP.

But despite 66 per cent of small and medium-sized enterprises (SMEs) being ambitious to grow within two to three years, just 20 per cent expand their workforce each year.

To help translate aspiration into action today, ministers from Department for Business, Cabinet Office, Treasury and Communities and Local Government have announced three major policies to:

*improve access to finance;

*make it easier to do business with the public sector; and

*allow social tenants to start up their business at home.

Lord Young has today taken up the role of Enterprise Advisor to the Prime Minister, to propose new ways of encouraging business start-ups, reducing burdens, maximising procurement opportunities and engaging with small businesses.

Government achievements for small business are published in a document today entitled: 'Backing small business’.

Minister for Business and Enterprise Mark Prisk said:“As a former small business owner I know how important our SMEs are to the growth of this country. I entered government with the goal of making this the most entrepreneurial decade in our history and I’m confident today’s announcements will help make that a reality.”