Breeze Blog by Breeze & Wyles Solicitors LLP

Divorce: Minimise the impact on your business.

2012-01-23T10:59:00.001Z

Planning for a divorce whilst happily married may seem pointless - but ignoring the possibility of a breakup can wreak havoc on your business

Unpleasant and emotionally charged as it may be divorce planning should be an integral part of overall business and personal financial planning. It's not only the breakup of your own marriage you need to worry about. If the survival of your company is a priority, as it is for most business owners, you need to safeguard it against any number of divorces, including those of partners, investors and your adult children.
Following the landmark divorce case of White v White [2001] 1 A.C. 596 the overarching principle in divorce cases is: family’s assets should be shared on a basis which reflects the respective contributions of the parties. However, in assessing contributions the role of the ‘homemaker’ (typically the wife) will be seen by the Court as no less valuable than that of the ‘breadwinner’ (often, but not always, the husband).

Most owners of privately held companies would be hard pressed to come up with cash equal to a quarter or a half of their business's value without wreaking havoc on their company's operations. That's why having an agreement in place that will both be fair to your spouse, should your marriage break up, and ensure your company's survival is of paramount importance.
The more elaborate and detailed the agreement, the higher your solicitor’s fees but this is far more cost effective than dealing with matters at the time of the divorce. As your financial situation is likely to change as the years go by, you will need to include a requirement that you and your spouse renegotiate and update your agreement at specified intervals. The particular strategies you should think about implementing depend on your own special circumstances.

Unmarried: I'm the sole owner of my business and still unmarried, but I'm close to setting my wedding date. I've read that to protect my company I should have a prenuptial agreement. Frankly, that's the last thing I can imagine bringing up at this stage of our relationship.

Despite the fact that they are not yet enforceable in the UK jurisdiction, case law has suggested that Judges are attaching more weight to prenuptial agreements in circumstances where: there are no children, independent advice was sought by both parties prior to signing the agreement, there has been an exchange of financial disclosure and on the whole the agreement seems fair. Radmacher v Granatino, [2010] UKSC 42 ruled that prenuptial agreements can be a decisive factor in determining the financial division on divorce.

The Law Commission’s consultation in relation to Marital Property Agreements (pre-nuptial and post-nuptial agreements) closed in April 2011. The results of the consultation are due to be published in 2012 so watch this space!!
You don’t need to be Donald Trump in order for divorce planning to make sense. The key point is to include a plan in which the spouse who is not active in the business will receive a financial settlement rather than a share in the company in the event of a divorce. Whatever the size of your business, and whether or not you're profitable yet, it would be beneficial to have an agreement.

Even better would be an agreement that covers the other key elements that could be sticking points. It should include an agreed-upon method to determine your company's value in the event of a divorce. (To ensure getting unbiased results, some people specify that two or three independent appraisers be engaged, with the couple agreeing to rely on their average estimate). When companies are valuable--and it does make sense to assume yours will be someday--you should also be sure to include an extended payout, perhaps lasting as long as 5 or 10 years, in order to shelter cash flow from the shock of a one-shot divorce payment.

Married:

If the business is the source of your family’s income then everything must be done to keep it going successfully (or else the family’s financial position will suffer) A sensible and commercial view must be taken when valuing the business (with everything possible being done early on to obtain agreement between the two parties so costs don’t escalate needlessly).

These principles are important since the Courts increasingly look to achieve a ‘clean break’ settlement between the husband and wife, with payments for their children being provided for by way of child support. In most cases, the parties will want to have the business valued so that a “clean break” can be achieved by one party buying out the other. You must consider whether this is actually the best approach for you and your business.

Your business may be profitable and successful but, at the same time, not be worth the sort of sum, post costs and Capital Gains Tax (even at only 10 per cent) to enable the family’s lifestyle to continue at the pre-divorce level.
Further, even if a value can be agreed it may be impossible for the party purchasing to find the funds and perhaps most importantly, where both husband and wife are instrumental in the business, the continued involvement of both parties in their respective roles may be fundamental to its future success.

For these reasons there may be an argument for spousal maintenance until, in the fullness of time, the business can sold to a third party. Then the interests of both parties can be capitalised.

Married: I'm happily married and the owner of a thriving company. My spouse doesn't work in the business.

Do everything you can to segregate all company related assets (such as ownership) and liabilities (such as bank loans to support the company) in the name of the spouse who is actively involved in running the business. Ideally, the family's joint financial assets, such as the ownership of a home, a car, or any investments, will be separate from those relating in any way to the business.

The business undoubtedly constitutes the bulk of your family's assets. Speak with your accountant and solicitor (both personal and business) about how to best go about separating the assets.

Married: Both spouses involved in the business.

You should take the same precautions when your spouse is a business partner that you would with any other business partnership. Any agreement does need to cover some essential issues, e.g. both spouses should agree to several restrictions concerning the ownership of their company's shares, such as it must be held only by people who are actively involved in the business. If either spouse leaves the business, their shares must be sold back to the partner who remains active. Neither spouse can sell shares to anyone else without the other’s permission. And finally, in the event of a divorce, one spouse must leave the business and agree to sell his or her shares back to the active owner. To cover all eventualities you could include a clause should you and your spouse separate but do not actually divorce.

You also need to plan for an orderly and fair transfer of the company, should that become necessary. It is imperative therefore to set out how the company will be valued.

Is divorce planning really necessary?

If you can come up with the cash to handle paying off your spouse then maybe not!

If it seems absolutely impossible for you and your spouse to agree on how business and marital assets should be split, maybe it pays to leave that one issue up to the judge, should you ever end up in Court. But you can still help protect the long-term survival of your company if you can at least agree on such matters as how the business will be valued and how long the payout will be extended.

Matters to consider:

• Can the business continue with just one of you?

• If only one party is involved, can the other be sure that the business will be run in an open and honest manner?

• Can a “clean break” be funded either immediately or on a safe and secure deferred basis?

• How will the staff react to the divorce?

• Has an independent and commercially realistic view of how to resolve the business issues been obtained?

For further information please contact Brendan O’Brien (Director – Company and Commercial) brendan.obrien@breezeandwyles.co.uk or Olive McCarthy (Director – Matrimonial Department) olive.mccarthy@breezeandwyles.co.uk

The effective credit control tools!

2012-01-17T14:50:00.000Z

Rachel Harper, a paralegal at Breeze & Wyles Solicitors LLP in the Debt Recovery Team talks about effective credit control to Brendan O'Brien Director and Head of Business Services .

It’s a familiar story, you have done the work, delivered the products/service but the invoice remains unpaid! Regrettably, it’s likely you will have at least one bad debt during the life of your business.

Cash flow is of major importance to everyone, including your debtor and therefore if they have even the smallest reason to delay or refuse payment they will do so.

When setting up your business credit control and invoicing terms are of paramount consideration – get this right and chasing outstanding payments is much more straightforward.

Know your customers - are they a sole trader, limited company, etc? Is the delivery address the same as their head office/accounts address? It is free to carry out a company’s search on the Companies House website – for a limited company this will reveal whether the debtor is still trading and provide details of their registered office.

If the work undertaken is going to amount to a substantial sum, consider carrying out a credit check. Once the credit check is carried out you can make an informed decision on setting a credit limit. DO NOT let credit limits be exceeded.

Obtain a deposit where practical to do so. Be mindful of any special materials required to complete the tasks in hand and obtain payment for “extras” up front.

Ensure that you have signed terms and conditions – amongst other details to consider, give thought to the following: when and where will you send your invoice? What are the payment terms? What happens if the type of product/service to be provided needs alterations? What are your interest rates for late payment?

Issue invoices periodically, waiting until the job has been finished can be detrimental to your cash flow, as each step is finalised invoice for the work undertaken to date.

Would you allow 70 day payment terms? If you are not utilising an efficient credit control system this may be exactly what happens! If you wait until the end of the month to carry out your accounts consider the following:

• Invoice sent to debtor in October
• Invoice received by debtor in November
• Invoice authorised for payment in next cheque run (at end of month)
• Payment sent to you at the beginning of December

Perhaps this may seem somewhat extreme but if you are not chasing payment your debtor will see this as payment on time!!

Do not give the debtor an excuse to question the figures - ensure that the invoice is correct as errors will only delay payment further. If you are required to reissue the invoice it is likely the debtor will restart the clock on the payment time. Payment terms should be clearly displayed on each invoice. Make sure the payment terms are clear and precise – if payment terms state “30 days” – 30 days from when? Is this 30 days from delivery, 30 days from date of invoice? 30 days from the end of the month in which the invoice is received?

Once the payment is due but not received make a gentle reminder – a telephone call reminding them of the “oversight” can work wonders. Keep a note of any and all contact in relation to chasing the invoice. If the invoice remains outstanding chase via letter setting out how overdue the payment is and when you expect them to return payment. Do not make idle threats – if threaten further action, such as adding interest or issuing proceedings, be prepared to follow it through.

Incentive for early payment – a blessing or a curse? Ensure that any early payment incentive will be enough to cover your costs and that you achieve your goal – to speed up payment. Most debtors will take advantage of a discount for early payment but what happens if they make late payment but at the reduced rate? Do you really want to spend more of your time and money chasing the difference between the reduced rate and the total invoice? Your terms of business need to be crystal clear on early payment discounts and their expiry.

Proof of delivery – where practicable obtain a signature stating that the goods were received in their entirety and in good condition. This will assist in relation to any future claims the debtor may try to bring, such as part of the order was broken or missing.

Retention of title - "all goods remain the property of (name of your business) until payment in full is received" - use of such a clause in your terms and conditions means that you retain ownership of the product until full payment is received, i.e. not only can you sue for the money owed but where practicable you can take back the goods delivered to your customer. You may also be able to claim the costs you have incurred in removing the goods from your customer!! It is also sensible to have the same wording on your invoices – this acts as a gentle reminder that the debtor does not own the goods as yet and will not do so until they settle the invoice.

Beat Stamp Duty Land Tax rise in March 2012

2012-01-13T17:26:00.005Z

Potential first time buyers are warned to note that there purchase of residential property in England and Wales may attract Stamp Duty if they complete after 25 March 2012. The Stamp Duty relief for first time buyers will come to and end on this date.

From this date the situation will change as set out in the Table below

Fig. 1

Purchase price % Stamp Duty then % Stamp Duty now
Up to £125,000 0 0
Over £125,000 to £250,000 1% 0
Over £250,000 to £500,000 3% 3%
Over £500,000 to £1 million 4% 4%
Over £1 million 5% 5%

If you are considering buying a property in the coming months and you fit the following criteria

Until 25 March 2012 first time buyers of residential property can apply for SDLT relief (as set out in Fig. 1 above) if all of the following apply:

•the effective date is on or after 25 March 2010 and before 25 March 2012

•the consideration given is £250,000 or less

•the buyer intends to live in the property and it will be their only or main home

•they have not previously owned property or land either in the UK or anywhere else in the world - including property bought with anyone else

then contact us on adrian.toulson@breezeandwyles.co.uk or 01279 715333

Is your Business worth more than you think?

2012-01-13T09:39:00.001Z

Intellectual property – what is it and why is it so important?

Whether you're an inventor, an author, a business tycoon or the owner of a small family business protection of your intellectual property is paramount.
What is Intellectual Property?

Intellectual property (IP) could be referred to as “creations of the mind”, for which exclusive ownership rights are recognised. These rights belong to a variety of intangible assets (assets that you can’t see), including inventions, phrases, symbols, music, works of art, and designs to name but a few. Some of the most common types of IP are copyright, trademarks, industrial design rights and patents. The term “Intellectual Property” is far reaching. However, most business owners only see IP as Patents or invention.

The importance of protecting intellectual property:

IP rights are valuable assets for your business - possibly among the most important it possesses. Businesses rarely value the IP or if when they do they do not understand the relationship between the value of terms such as ‘goodwill’ and IP.
Your IP rights can:

• set apart your business from its competitors
• provide revenue through licensing or sale
• offer customers something innovative and diverse
• form an important part of your promotion or branding
• be used as security for borrowing

What can be protected?

Amongst other things you can protect:

• Your business name
• logo
• designs
• inventions
• works of art
• works of intellectual effort
• trademarks

Only some IP is automatically protected by law; but there are other types of legal protection available. However, you must make the appropriate application to take advantage of the protection afforded by them.

It makes sense to do all you can to protect your business – this includes the IP. You can:

• protect it against encroachment by others and defend in the courts your sole right to use, make, sell or import it
• stop others using, making, selling or importing it without your permission
• earn revenue by licensing it
• exploit it through tactical associations with other businesses
• make money by selling it

What next?

Start by asking yourself: Why should others profit from my hard work?
The answer is obvious: They shouldn’t!
Ask further questions such as:
Who owns my website?
The company logo was designed by a third party – who owns the IP?
How do I protect my IP?

For answers to these questions and any other queries you may have we would be happy to help.

Please do not hesitate to contact Brendan O’Brien or Damian Pitts on 01992 558411 or brendan.obrien@breezeandwyles.co.uk or damian.pitts@breezeandwyles.co.uk

Employment Newsletter January 2012

2012-01-12T14:28:00.001Z

January 2012

Dear Employer

We hope you have enjoyed your well-earned Christmas Break and wish you a very happy and prosperous New Year!

There are exciting times ahead in the work place: various reforms that the Government is proposing are due to come into force, not least the new pension rules later this year. If it all gets too much, remember we are here to assist.

If you have any particular employment issues, please do not hesitate to contact us: details are at the end of this letter. If you have any comments or suggestions on this newsletter, please email newsletter@breezeandwyles.co.uk

Kind regards

The Employment Law Team

Some Recent Changes and Cases in Employment Law

No Right To See Redundancy Interview Notes

The EAT has overturned a Tribunal's decision that a redundancy was procedurally unfair because the decision to dismiss was taken before the interview notes the Claimant requested were provided. As part of reorganisation the Claimant came sixth out of seven candidates in a scoring exercise. She was given her scores and told she had not secured a position. She did not accept that her scores reflected her abilities and asked to see her interview notes. However, she did not actually challenge her scores or specify which of her scores she was unhappy with. She received the notes between 1st June and a meeting on 5th June, at which she was told that her employment would be terminated by reason of redundancy, on 12th June. She subsequently brought a claim for unfair dismissal, on the basis that some employees had been excluded from the redundancy process and not all those who sought voluntary redundancy were made redundant.

The Tribunal had found the dismissal unfair and the Employer appealed. The EAT allowed the appeal. As the Claimant knew her overall score and did not challenge it or its individual components, the Tribunal had no basis for saying that, by asking to see the notes taken at the interview, she had somehow communicated that she reserved the right to challenge her scores. The Tribunal had erred in drawing that inference, which had formed the basis for their conclusion that her dismissal was unfair. Also, the Tribunal had failed to stand back and ask whether there had been a fair redundancy process overall. There was no basis on which it could be concluded that the decision to dismiss the Claimant was unfair. (Camelot Group Plc v Hogg)

No TUPE Exemption For Company In Administration

The Court of Appeal has held that companies in administration are not exempted from TUPE. The Court of Appeal approved the EAT's approach to Regulation 8(7) of the TUPE Regulations 2006, which disapplies TUPE protection for certain kinds of insolvency proceedings. It preferred to lay down a general rule that administrations do not trigger Regulation 8(7) rather than to hold, as an earlier EAT had done, that the application of Regulation 8(7) depends on whether, as a matter of fact, the administrator intended to liquidate the assets of the company. The significance of Regulation 8(7) is that in certain situations, regulations 4 and 7 of the TUPE Regulations - ones that govern the automatic transfer of employees to a new employer and give employees the protection of the automatic unfair dismissal provisions - can be disapplied entirely. The situation is whether the transferring employer (the transferor) is the subject of "bankruptcy proceedings or any analogous insolvency proceedings which have been instituted with a view to the liquidation of the assets of the transferor".

In this case, the Court of Appeal said that given the range of possibilities open to an administrator upon the making of an Administration Order, it could not be said that the appointment of an Administrator is made "with a view" to liquidation of the company's assets. That may be what happens in practice, and in many cases it might seem to be clear from the outset that that is what is going to happen, but is not always the case. The Court of Appeal agreed with the EAT's preference for an "absolute" approach. (Key2law (Surrey) LLP v De'Antiquis)

Discrimination and Married People

In a recent case the EAT has held that married persons are protected from less favourable treatment for being married to a particular person (under Section 3 of the Sex Discrimination Act). In this case, although the employer did not discriminate against married people generally, the employee could rely on less favourable treatment that was specific to her marriage. In this particular case, the employee was discriminated against because of antipathy between the Chief Executive of the employer and the employee's husband.

Note that protection from discrimination on the basis that a person is married (or a civil partner) is now found in Sections 8 and 13 of the Equality Act 2010. (Dunn v Institute of Cemetery and Crematorium Management)

Fox Hunting and Poppies - Philosophical Beliefs

In a landmark decision an Employment Tribunal decided that a fervent anti-fox hunting campaigner was protected from discrimination because of his beliefs in animal welfare. Mr Hashman was employed by a garden centre and was a keen animal rights campaigner. He had given evidence in support of prosecutions for illegal hunting. When his employers discovered his fervent anti-hunting views he was dismissed. He argued that his dismissal was because of his belief in animal rights and that the dismissal was discriminatory.

The Equality Act 2010 protects against discrimination because of an employee's religion or beliefs. The question of what constitutes a philosophical belief has been addressed in previous cases, e.g. the belief must be about a weighty and substantial aspect of human life and behaviour and must attain a certain level of cogency, seriousness, cohesion and importance. It must also not be incompatible with human dignity and not conflict with the fundamental rights of others. The Tribunal held that Mr Hashman's belief was protected from discrimination.

This is the first time that a fervent objection to fox hunting has been protected as a philosophical belief.

By contrast, in the recent case of Lisk v Shield Guardian Company Limited, Mr Lisk, an ex-serviceman, objected when he was asked by his employer to remove his poppy at work. He submitted claims for direct discrimination and harassment on the protected ground of philosophical belief. He believed that people should pay their respects by wearing a poppy from 2nd November to Remembrance Sunday. However, the Tribunal concluded that the belief underpinning the wearing of a poppy could not be described as a philosophical belief because it lacked the characteristics of cogency, cohesion and importance that were required.

What's in the pipeline

Major Pension Reforms

From 2012 there will be some major pension reforms coming into force. These will include (but not necessarily be limited to) the following:

* With effect from 1st October 2012, the introduction of Auto-Enrolment. This will mean workers being automatically enrolled into their employer's qualifying pension scheme without any active decision on their part. At present many workers fail to take up valuable pension benefits because they do not make an application to join their employer's pension scheme. Auto-Enrolment is intended to overcome this. From 1st October 2012 (subject to the employer's own introduction date) all eligible workers will have to be auto-enrolled into a qualifying pension scheme. Employers can choose the qualifying scheme they use, which could include NEST (National Employment Savings Trust). Total contributions must be at least 8% of all qualifying earnings between £5,035 and £33,500, with a minimum employer contribution of 3%.

* The State Pension is to be increased in line with earnings (rather than prices)
Increase In Statutory Payments

From 9th April 2012 Changes are expected to come into force to the rates of Statutory Sick Pay (SSP) and Statutory Maternity, Paternity and Adoption Pay.

SSP will increase from £81.62 to £85.85 per week.

Statutory Maternity etc. Pay will increase from £128.73 to £135.45 per week.

New Compensation Limits In Force

From 1st February 2012 limits will be increased (as usual) on certain Employment Tribunal awards and other amounts payable under Employment Legislation. The main changes are:

* Maximum compensatory award for unfair dismissal increases from £68,400 to £72,300
* The limit on the amount of a week's pay for the purposes of calculating e.g. Statutory Redundancy Payments and the Basic Award for Unfair Dismissal will increase from £400 to £430.
* Guaranteed Pay will increase from £22.20 a day to £23.50 a day.
* The minimum basic award in cases where dismissal was unfair by virtue of health and safety, being an employee representative and the other statutory situations will increase from £5,000 to £5,300.
The new rates will apply where the event giving rise to compensation or payment occurs on or after 1st February 2012. Where the dismissal or relevant event falls before that date, the old limits will still apply, irrespective of the date on which compensation is awarded.

New Equality Advisory Service

The Government has made the decision to cease funding for the Equality and Human Rights Commission's (EHRC) helpline and Legal Grants Program in 2012. To replace this, the Government Equalities Office has announced the creation of a new Equality Advisory and Support Service to provide support to vulnerable and disadvantaged individuals facing discrimination. The service will provide telephone advice and support, encouraging problems to be resolved early and informally where possible.

Employer Traps and Other Tips

Making Notes

In any formal meeting with an employee you should also ensure that notes are taken, which are sent to the employee afterwards for their agreement. Making notes should also apply if (for example) you are going through a redundancy process and are applying selection criteria. It is always a good idea to have a record of why you reached a particular conclusion, so that there is no doubt later.

Equal Opportunities Policy

You should ensure that you have an Equal Opportunities Policy and that it is up to date. Should you find yourself in the unfortunate position of having a discrimination claim brought against your company, one of the first things that an Employment Tribunal will want to see is your Equal Opportunities Policy.

Other news from Breeze and Wyles

Debt Recovery Service Launch

We offer a low cost, fixed fee debt recovery service aimed at assisting businesses to chase unpaid invoices. An initial letter to a debtor costs just £2.00 plus VAT. This means that businesses can cost effectively chase their aged debtors. Many businesses now use this service to chase debts that otherwise would have been written off, because it offers such a cost effective and efficient solution. For further information please contact Rita Wright at rita.wright@breezeandwyles.co.uk or telephone 01992 558411.

Breeze and Wyles Solicitors LLP are a leading law firm with offices throughout Hertfordshire and Middlesex, providing quality legal service in all of the mainstream areas of the Law for over 90 years.

We are one of very few law firms that offer services online. Check out our services

· Divorce solutions at www.firstfordivorce.co.uk
· Home Information Pack service at www.breezepack.co.uk
· Solution for volume legal instruction at www.breezeplus.co.uk

We have been awarded Lexcel Accreditation and are regulated by the Solicitors Regulation Authority. If you would like further information on any of the issues referred to in this letter, or any other employment matter, please contact Jane Dismore at

2nd Floor, Stag House, Old London Road, Hertford, SG13 7LA
Tel: 01992 558411 Fax: 01992 503889

Homeowners warned to watch out for Squatters

2012-01-12T14:01:00.001Z

Homeowners warned to watch out for squatters

The housing market is sluggish, prices static, and more people are staying put and renovating or extending.

But homeowners wanting to protect their property value should also invest time in checking out their boundaries and making sure they don’t have squatters.

According to Andrew Moore, property law expert with Hertford based Law Firm Breeze & Wyles Solicitors LLP : “Mention squatters and most people think of someone who has made themselves at home in an empty property. But squatters’ rights, or adverse possession as it is known in law, can happen in all sorts of property ownership situations, including boundary disputes. They can easily turn into a property owner’s worst nightmare and in a tougher property market, buyers are more likely to dig deeper and come across such problems.”

Adverse possession is the law’s way of barring stale claims to land and recognising lengthy possession as giving a kind of title to land. The Land Registration Act 2002 sets out the requirements and procedure for claiming what is known as possessory title.

To be successful, the person claiming must have been in possession or control of the land in question to the exclusion of the legal or paper owner for at least ten years. If the paper owner interrupts the squatter’s possession, even for a short period, the ten year period begins again.

But a recent case that went all the way to the Court of Appeal has highlighted just how far the paper owner must go to secure that interruption.

In 2002 Mr and Mrs Zarb bought a house next door to Mr and Mrs Parry. Some years earlier a strip of garden had been sold by the Zarbs’ predecessor to the predecessors of the Parrys. The buyers thought that the boundary was marked by a hedge on the land, but this was about 12 feet beyond the true boundary.

When the Zarbs discovered the error in 2007, they decided to take back what was they believed to be their land. They went onto the disputed strip, removed a tree and some fencing erected by the Parrys and started to put in fence post along the actual boundary line shown in the deeds.

But they had been there for only twenty minutes when the Parrys discovered them and made them leave. Subsequent negotiations with expert advice to agree the disputed boundary failed and the neighbours went to Court, finally ending up in the Court of Appeal, where the Zarbs tested what amounted to “interruption” of adverse possession. They also claimed that the ten year period had not been satisfied, arguing that their predecessors had given consent for possession of the strip of land.

The Court of Appeal agreed that the true boundary was where the Zarbs thought it was, but judged that the Parrys had acquired ownership by lengthy squatting, saying that the 20 minute action by the Zarbs did not amount to interruption. The Court ruled that interruption required the paper owner to have exclusive control of the land, even if that control only lasted a short time, which had not been satisfied in this case.

Said Andrew: “If the Zarbs had been more careful in checking the situation when they bought the property, or in taking advice on how they could lay claim to the land, they would have stood a stronger chance of a successful outcome.

“This case highlights once again how important it is to investigate any issues over boundaries or the like. Once matters have been aired and settled, then the outcome should be recorded in the deeds. If things can’t be resolved amicably, then this sort of dispute is best dealt by mediation. Going to court is a very costly and lengthy option.”

He added: “If you are selling your property it is absolutely vital to be open and truthful about any boundary disputes or discrepancies. If you do not volunteer full details you might find yourself being sued for misrepresentation some years later, because if one thing is certain, it is that boundary disputes never fully die.”

ENDS

Web site content note:

This is not legal advice; it is intended to provide information of general interest about current legal issues.

New Debt Recovery Pricing for 2012

2012-01-10T13:39:00.003Z

Breeze & Wyles Solicitors LLP has the pleasure to announce that to ensure that we maintain a marketing leading pricing structure we have revised the pricing for all instructions received from today.

Our new pricing structure is available upon request by e mail to rita.wright@breezeandwyles.co.uk

New Year: New Approach to Debtors? If so read on!

2012-01-10T13:32:00.001Z

Fact Sheet 4; Simple steps that you can take to improve your internal debt recovery rate.

DELIVERY OF AN INVOICE;

 Ensure that an invoice is delivered promptly and accurately and that the invoice states the customer’s full name. Make sure that you are able to clearly and correctly identify your client’s name and status – is your client a Limited Company? Partnership or Sole Trader? Include your customers full and correct name. Correct identification of your customer is imperative if you are to successfully decrease your average debtor days.

 Include on the invoice your customer’s reference number so that your customer is able to easily identify the invoice.

 Ensure that the invoice states clearly the payment terms and the date by which payment is to be made.

 Ensure that a copy of the invoice is retained.

 Ensure that the invoice goes directly to the person in the organisation who will be responsible for paying the bill. It is sensible to call and obtain this information from your customer, before sending the bill. This limits the risk of your invoice sitting on anothers desk for a few days or weeks, before finally making its way to the correct person.

 Ensure that your invoice clearly shows the manner in which payment can be made. Ensure that you offer the opportunity to pay by credit card / debit card or BACs and identify how these methods can be utilised by your payee. Payment by these methods is often the quickest and easiest method for your payee – the easier it is for your payee to pay your invoice, the quicker you will get paid.

CREDIT CONTROL

 Ensure that you have a proactive and efficient process for chasing unpaid debts, as soon as the payment term expires. The key here is to ensure that you receive reminders, through either your accounting package or outlook, as soon as an invoice becomes overdue. You can not chase your debts proactively if you do not know when an invoice has become overdue.

 Where the chasing of invoices is being done internally, automation is ideal because it will limit internal resources whilst ensuring that debts are still being chased. Use standard precedent letters and diarise weekly chasers to be made both by letter and telephone.

 Telephone calls are time consuming but often offer a higher rate of return. Make sure you stick to the timescales (If you tell a customer you want payment in 7 days and they don’t pay, chase again by letter or phone promptly on day 8).

 Decide how many letters and telephone calls you will undertake during your internal credit control process and what the course of action will be should payment not be made. We would suggest that instruction to us to send a letter before action to your debtor, at a cost of £2.00 plus VAT, should be the automatic next step following exhaustion of your internal credit control function. Our instruction is quick and easy and instructing us promptly will ensure that ongoing pressure is applied to your debtor. This will increase the likelihood of recovery.

 Make sure that staff with the appropriate skill set and personality are responsible for your credit control. There is little point having someone who is overtly shy and embarrassed, in charge of asking a customer for a commitment to pay by a certain date.

 Make sure that your credit controller is efficient and proactive and keeps records of each call made. When a debtor says that they will make payment, make sure that your credit controller asks them to commit to a date by which payment will be made. If your customer defaults, ensure that the customer is called again and ask for a revised payment date. If the customer defaults again, it is highly likely that further action is going to be required. Continued failure to meet agreed payment proposals may be a sign that your debtor is experiencing financial difficulty.

 To illustrate the importance of making a record of a telephone call with a debtor, you can take the example where in a telephone call a debtor admits liability, or tries to agree a payment plan. A telephone note recording admission may well help to question the credibility of a debtor who subsequently tries to deny liability for the debt.

 If you do agree an installment plan with a debtor, it is worth confirming the agreement in writing and making sure that when negotiating the agreement with the debtor, you reserve the right to claim the entirety of the invoice should the debtor default on the installment plan.

 Act quickly and don’t delay. Delay will breed further delay by your debtor. If you threaten Court action or referral to a Solicitor, follow through with the threat. Otherwise, the debtor may not take you seriously and prioritise paying other creditors that are pushing for payment.

 Categorise your debtors in to those who “Won’t pay” and those who “Can’t pay”. Where resources are limited, focus your internal resources on chasing those who “won’t pay”.

© Maria Koureas-Jones
Breeze & Wyles LLP 2011

NEW YEAR – OLD DEBTS?

2012-01-09T10:34:00.001Z

Why not make 2012 the year that your credit control really is under control!

Breeze & Wyles LLP offer a low cost and efficient commercial debt recovery service which allows businesses to chase unpaid invoices at just £2.00 plus VAT for a letter before action.

The key points to our service are:-

Transparent fixed fees
• Highly qualified and specially trained staff to manage both undefended and defended actions.

• Compensation and interest for late payment

• Full service is handled internally by Breeze & Wyles LLP, none of the legal process will be outsourced, including transfer up to the High Court where necessary

• Experts in an array of enforcement methods

• Secure transfer of data electronically

• You choose how to receive recovered money, by cheque or on the day of receipt by telegraphic transfer (subject to banking hours). The telegraphic transfer service carries a £10.00 fee whilst cheques are free.

• Free Tip Sheets to assist with your businesses credit control and related issues.

We pride ourselves in our service delivery and would ask that you give us the opportunity to demonstrate our skills to you.

For further information regarding our low cost debt recovery initiative or to receive our detailed proposal in relation to debt recovery please contact Rita Wright: rita.wright@breezeandwyles.co.uk or Rachel Harper: rachel.harper@breezeandwyles.co.uk or telephone: 01992 558411.

What the new employment changes mean to business!

2011-12-14T16:17:00.002Z

A look ahead at the bigger issues lined up for employers in 2012

As business counts down to the Christmas break, employers are being reminded to prepare themselves for changes set for introduction over the coming year.

The Government is to put forward a raft of measures aimed at reforming employment law and whilst we wait to hear the detail, one change that is known for certain is the change in pension age.

The Pension Act received the Royal Assent and became law last month. It means that the pension age for women will rise to 65 in 2018; the age for both men and women will rise to 66 by October 2020 and to 67 at some time between 2026 and 2028. This follows on from the abolition of the default retirement age (DRA) in October and will mean that workers can choose to carry on working after the state pension age and choose when to start taking their state pension.

The scrapping of the retirement age has come at the same time as figures show a huge 32% increase in the number of age discrimination claims* and for employers, the change means ensuring there are age-friendly attitudes and processes in place.

The Government has also announced some of the other measures that will be coming up for legislation in the near future, to include changes to unfair dismissal and consultation procedures.

The proposal to increase the qualifying period for bringing an unfair dismissal claim to two years has been widely reported. The effect will be that an employee who is dismissed within two years of starting work will not be allowed to bring an unfair dismissal claim, a doubling of the current qualifying period of one year.

However, the Government may be set for a difficult ride on this one, as there have been previous attempts to have a longer qualifying period. It was originally set at two years, but was challenged as being discriminatory, by placing certain groups at greater risk, and as a result was reduced to its current one-year level.

The Government has presented this as a route to boost employment, hoping that small to medium sized businesses will be encouraged to take on employees, particularly younger workers, given more flexibility on staffing decisions over the extended two year period. Critics have said that young people would be hardest hit by the relaxed dismissal process, being most likely to be last in and first out, whilst more experienced workers are likely to be retained.

Also set for change are ‘compromise agreements’. When an employee is dismissed the employer and employee often enter into such an agreement, under which the employee receives some compensation and agrees not to make a claim for unfair dismissal. These are to be replaced by ‘settlement agreements’ which will be simpler and will have standard wording.

The Government also plans to introduce ‘protected conversations’ in which employer and employee will be able to discuss issues without fear of subsequent retribution or accusations. It is hoped that this will open discussion about performance, retirement plans and so forth. However, the employer will not be protected against claims of discrimination or harassment arising out of a protected conversation and so, in practice, their use may be limited.

A fundamental review of the procedural rules of industrial tribunals will be held, and the procedures for bringing a claim for unfair dismissal will be reviewed. This includes, for example, plans for a one month conciliation period. The effectiveness of the TUPE regulations - Transfer of Undertakings (Protection of Employment) Regulations - that protect employees rights and conditions when a business is sold or transferred, will be reviewed.

Finally, the Government plans to introduce a drastically simplified dismissal procedure for micro employers with less than ten employees, with no-fault compensated dismissal being the norm.

Said employment law expert Jane Dismore of Breezeand Wyles Solicitors LLP : “The Government hopes that these reforms will bring down unemployment and stimulate investment and expansion, by cutting red tape and the risks involved in taking on new staff. But the devil is always in the detail and we will have to wait and see what that holds, and certainly no one should change policies until we’ve got the full picture.

“In the meantime, the end of the year is a good time to review current practice. Employers need to make sure they have robust processes in place, particularly looking at how they are treating older workers. If we do see the promised increase in the unfair dismissal qualifying period, it’s quite likely that other claims will increase, such as age discrimination.

“Businesses should also be checking to see they’ve covered all bases with the raft of legislation and the outcome of significant cases we’ve seen in the past year – the Bribery Act, the changes around agency workers, and how to manage social media use by staff.”

ENDS

* Official figures for cases submitted to employment tribunals in the year to March 2011

Web site content note:

This is not legal advice; it is intended to provide information of general interest about current legal issues.

Corporate Sellers Wanted!

2011-12-05T10:18:00.003Z

I have a client interested in purchasing a company or companies that fit the following criteria:

Business established for 5+ years with continuous, demonstrable profits over the last 3-4 years and registered in England and Wales
Sectors:
Manufacturing & Engineering:
Pharmaceutical / Chemical
Industrial Equipment
Animal Feed
Packaging
Food Producers (frozen, ready-made meals)
Cash & Carry
Acquisition Type:
Business sale; 100% ownership
Management:
Strong 2nd tier management in place
Future Outlook:
Potential to grow / expand
EBITDA: £1m+
Owner(s):
Potentially looking for vendors to stay on for up to 12 months to ensure a smooth handover
Transaction:
Looking to pay the vendors off 100% upfront with no deferred element. However may defer some element where the business does not quite fit the criteria above

Eurozone Crisis: Recover your Debt or become a bank!

2011-12-01T11:07:00.006Z

The news from the Eurozone is worse every day that passes. Yet have not seen a catastrophic event, but this is only a matter of time. Yesterday it was rumoured that a European Bank was finding it difficult to re-finance itself. As a result global central banks carried out a collective action to ease pressure. However, the situation was described by the Governor of the Bank of England, Sir Mervyn King, as an "exceptionally threatening" environment.

What this means is that bank are going to be less likely to lend in the near term. So where do your customers go now to retain financial stability? YOU of course!

In order to maintain cashflow in their businesses they will delay payments further than they have done in the past. Due to the volatility in the banking sector, and a further credit crunch now possible it is an imperative in an already cash stressed economy that you ensure that you limit your exposure to all of your clients in respect of the credt terms that you have given them. More importantly you should be ensuring that those debts in excess of 60 days are being recovered pro-actively.

The challenge is to balance the non-financal performance of your business, the order book in other words against the chas driven economic reality that now pervades. Is a client who delays paying and to whom you are exposed more than others in your order book worth the risk?

If you unsure of what to do next speak to our market leading debt recovery team on 01992 558411 or e mail me at brendan.obrien@breezeandwyles.co.uk. With letters before action at a cost of £2.00 this is an opportunity to strengthen the cash position of your business.

Flower power wins the day in Interflora trademark battle

2011-11-30T12:33:00.002Z

Internet advertisers who use competitor names to draw traffic have been dealt a rap on the knuckles following a high profile battle between Marks & Spencer and Interflora.

In the fast growing world of internet advertising, new online techniques are demanding new rules and the latest ruling from the Court of Justice of the European Union (ECJ) says that a trademark owner can stop a competitor from using their trademark as a keyword in a search engine such as Google.

But the judgement stopped short of a complete ban, saying the competitor would have to be taking unfair advantage of the trademark owner’s reputation or devaluing the trademark itself.

Marks & Spencer had selected the word ‘Interflora’ as a keyword on Google’s paid referencing service, AdWords. As a result, when a member of the public searched for Interflora on Google, a Marks & Spencer advertisement appeared at the top of the screen, as a ‘sponsored link’.

Interflora objected to this and brought proceedings in the High Court on the basis that M&S was abusing its trademark. The English court referred the issue of whether a competitor could use a trademark as a keyword to the ECJ, who published their ruling last week (24th November).

The ECJ ruled that a trademark owner was entitled to prevent a competitor from using its trademark as a keyword in order to advertise identical goods or services, or where using the trademark as a keyword amounts to taking advantage of the reputation of the trademark owner or is likely to dilute or tarnish the trademark.

Explained Brendan O’Brien Head of Business Services: “Although this involved the might of Marks & Spencer versus a franchise representing small florists across the land, I suspect that usually it is a smaller company that wants to take advantage of the reputation of a large company’s trademark. Small businesses should take note of this case and be aware that nowadays trademark owners are vigilant in protecting their rights, both online and offline.”

However the ECJ did not outlaw using a trademark as a keyword completely: this would be allowed, the Court said, where the advertisement put forward alternative goods and services and did not merely offer an imitation of the trademark owner’s goods or services and provided the advertisement did not dilute or tarnish the trademark.
He added “As is so often the case, you can do it if you do it right, so before you use McDonald’s as a keyword to advertise your takeaway, get advice from an expert.”

ENDS

This information is not intended as legal advice

Interflora Inc and Another v Marks and Spencer plc Times Law Reports 24.11.2011
First Council Directive 89/104/EEC Articles 5(1) and (2)
Council Regulation (EC) no. 40/94 Article 9(1)A

Distributorship Agreement and Vertical Restraints

2011-11-29T17:12:00.001Z

SUMMARY
DEFINITION OF VERTICAL RESTRAINTS

Vertical restraints are agreements or concerted practices entered into between two or more companies each of which operates, for the purposes of the agreement, at a different level of the production or distribution chain, and relating to the conditions under which the parties may purchase, sell or resell certain goods or services. These guidelines set out the principles for the assessment of vertical agreements with a view to determining whether they affect competition between Member States.

SCOPE

The guidelines describe the vertical agreements that generally do not fall within Article 81(1): agreements of minor importance, agreements between small and medium-sized firms and agency agreements

GENERAL FRAMEWORK FOR CASE-BY-CASE ANALYSIS

The guidelines on vertical restraints also describe the general framework of analysis and the policy which the Commission plans to follow in the field.

Analysis of the effects on the market of vertical restraints

The negative effects on the market that may result from vertical restraints which EC competition law aims to prevent are as follows:

•foreclosure of other suppliers or other buyers by raising barriers to entry;
•reduction of inter-brand competition between the companies operating on a market;
•reduction of inter-brand competition between distributors;
•limitations on the freedom of consumers to purchase goods or services in a Member State.
However, vertical restraints often have positive effects, in particular by promoting non-price competition and improved quality of services. Consequently, the application of certain vertical restraints may be justifiable for a limited period where:

•one distributor may "free-ride" on the promotion efforts of another distributor;
•a manufacturer wants to enter a new geographic market, for instance by exporting to another country for the first time. This may involve certain "first-time investments" by the distributor to establish the brand in the market;
•certain retailers in some sectors have a reputation for stocking only "quality" products;
•client-specific investments have to be made by either the supplier or the buyer, such as in special equipment or training;
•know-how, once provided, cannot be taken back, and the provider of the know-how may not want it to be used for or by his competitors;
•in order to exploit economies of scale and thereby see a lower retail price for his product, the manufacturer may want to concentrate the resale of his product on a limited number of distributors;
•the usual providers of capital (banks, equity markets) provide capital sub-optimally when they have imperfect information on the quality of the borrower or there is an inadequate basis to secure the loan;
•a manufacturer increases sales by imposing a certain measure of uniformity and quality standardisation on his distributors. This may enable him to create a brand image and thereby attract consumers. This can be found, for instance, in selective distribution and franchising.

Method of analysis for vertical restraints

In general, the assessment of a vertical restraint involves the following four steps:

•the companies involved need to define the relevant market in order to establish the market share of the supplier or the buyer, depending on the agreement. In order to calculate the market share, the relevant product market (which comprises any goods or services which are regarded by the buyer as interchangeable) and the relevant geographic market (which comprises the area in which the companies concerned are involved in the supply and demand of the relevant goods and services) are taken into account;

•If the relevant market share does not exceed the 30% threshold, the vertical agreement is covered by the Block Exemption Regulation, subject to the conditions set out in Regulation No 2790/1999;
•If the relevant market share is above the 30% threshold, it is necessary to assess whether the vertical agreement distorts competition. The following factors to be taken into consideration are: the market position of the supplier, competitors and the buyer, entry barriers, the nature of the product, etc;
•If the vertical agreement falls within Article 81(1), it is necessary to examine whether it fulfils the conditions for exemption. In that case, the vertical agreement must contribute to improving production or distribution or to promoting technical or economic progress and must allow consumers a fair share of those benefits. At the same time, the vertical agreement must not impose on the companies concerned restraints which are not indispensable to the attainment of those benefits or to eliminate competition.

The most common vertical restraints

The most common vertical restraints are:

•Single branding

Single branding results from an obligation or incentive which makes the buyer purchase practically all his requirements on a particular market from only one supplier. It does not mean that the buyer can only buy directly from the supplier but that he will not buy and resell or incorporate competing goods or services. The possible competition risks are foreclosure of the market to competing and potential suppliers, facilitation of collusion between suppliers in cases of cumulative use and, where the buyer is a retailer selling to final consumers, a loss of in-store inter-brand competition.

•Exclusive distribution

In an exclusive distribution agreement, the supplier agrees to sell his products only to one distributor for resale in a particular territory. At the same time, the distributor is usually limited in his active selling into other exclusively allocated territories. The possible competition risks are mainly reduced intra-brand competition and market partitioning, which may in particular facilitate price discrimination. When most or all of the suppliers apply exclusive distribution, this may facilitate collusion, both at the suppliers' and the distributors' level.

•Exclusive customer allocation

In an exclusive customer allocation agreement, the supplier agrees to sell his products only to one distributor for resale to a particular class of customer. At the same time, the distributor is usually limited in his active selling into other exclusively allocated classes of customer. The possible competition risks are mainly reduced intra-brand competition and market partitioning, which may in particular facilitate price discrimination. When most or all of the suppliers apply exclusive customer allocation, this may facilitate collusion, both at the suppliers' and the distributors' level.

•Selective distribution

Selective distribution agreements, like exclusive distribution agreements, restrict the number of authorised distributors, on the one hand, and the possibilities of resale on the other. The difference vis-à-vis exclusive distribution is that the restriction of the number of dealers does not depend on the number of territories but on selection criteria linked in the first place to the nature of the product. Another difference vis-à-vis exclusive distribution is that the restriction on resale is not a restriction on active selling to a territory but a restriction on any sales to non-authorised distributors, leaving only appointed dealers and final customers as possible buyers. Selective distribution is almost always used to distribute branded final products. The possible competition risks are a reduction in intra-brand competition and, especially in cases of cumulative effect, foreclosure of a certain type or types of distributor and facilitation of collusion between suppliers or buyers.

•Franchising

Franchise agreements contain licences of intellectual property rights relating in particular to trade marks or signs and know-how for the use and distribution of goods or services. In addition to the licence of IPRs, the franchiser usually provides the franchisee during the life of the agreement with commercial or technical assistance. The licence and the assistance are integral components of the business method being franchised. The franchiser is in general paid a franchise fee by the franchisee for the use of the particular business method. Franchising may enable the franchiser to establish, with limited investments, a uniform network for the distribution of his products. From the competition viewpoint, in addition to provision of the business method, franchise agreements usually contain a combination of different vertical restraints concerning the products being distributed, in particular selective distribution and/or non-compete and/or exclusive distribution or weaker forms thereof.

•Exclusive supply

Exclusive supply means that there is only one buyer inside the Community to which the supplier may sell a particular final product. For intermediate goods or services, exclusive supply means that there is only one buyer inside the Community or that there is only one buyer inside the Community for the purposes of a specific use. For intermediate goods or services, exclusive supply is often referred to as industrial supply. The main competition risk of exclusive supply is the foreclosure of other buyers.

•Tying

Tying exists when the supplier makes the sale of one product conditional upon the purchase of another distinct product from the supplier or someone designated by the latter. The first product is referred to as the tying product and the second is referred to as the tied product. If the tying is not objectively justified by the nature of the products or commercial usage, such practice may constitute an abuse of a dominant position. Agreements of this type, which are designed to make the sale of one product conditional upon the purchase of another distinct product, may be incompatible with the competition rules.

•Recommended and maximum resale prices

The practice consists in recommending a resale price to a reseller or requiring the reseller to respect a maximum resale price. The possible competition risk of maximum and recommended prices is that they will work as a focal point for the resellers and might be followed by most or all of them. They may then facilitate collusion between suppliers.

Employment Law Newsletter December 2011

2011-11-29T14:29:00.001Z

Dear Employer

Finally, after much speculation, the Government has announced its plans for the “most radical reforms to the Employment Law system for decades”. Some of the proposals are subject to consultation, while the Government has committed to others. Meanwhile, the good old chestnuts continue to crop up and not just in the turkey stuffing: the Christmas season is nearly upon us and with it comes (for those who can still afford it) the oft-dreaded office party. If you are one of the employers who will still be contemplating putting on their Santa Claus outfit and entertaining their staff, do remember that drunken lunges, whether by the Managing Director or the Accounts Clerk, are generally to be discouraged in order to avoid a claim.

We take this opportunity to thank you for your loyalty in the past year and let us look ahead to a brighter New Year.

In the meantime, remember prevention is generally better and cheaper than cure. If you have any problems, take advice before they fester. If in doubt, shout.

If you have any particular employment issues, please do not hesitate to contact us: details are at the end of this letter. If you have any comments or suggestions on this newsletter, please email newsletter@breezeandwyles.co.uk

Kind regards

The Employment Law Team

Some Recent Changes and Cases in Employment Law

Facebook and Unfair Dismissal

Posting derogatory statements on Facebook and other social network sites about an employer/clients can constitute a disciplinary offence. However, in a recent case involving an employee who made minor derogatory remarks on Facebook and was dismissed, the dismissal was held to be unfair. She had an excellent disciplinary record and had apologised for the comment, which did not refer to any clients by name, neither was there any evidence of any actual or likely harm to the company’s relationship with its clients. This is in contrast with an earlier case in which an employee was fairly dismissed for making derogatory comments about the customers in the pub where she worked.

It is worth noting however, that in this case the employee’s compensatory award was reduced by 20% for contributory fault (Whitham v Club 24 Limited (trading as Ventura)) (the earlier case was Preece v J D Wetherspoons Plc)

Employee on Sick Leave

The Employment Appeal Tribunal (EAT) has held that an employee on long-term sick leave must request annual leave in accordance with the Working Time Regulation in order to be entitled to payment for it. In this case a nurse injured her knee in an accident at work in November 2005. She was on long-term sick leave then returned to work, but she was eventually dismissed in March 2008. The employer paid her in lieu of untaken leave accrued in the annual leave year, which began April 2008, but nothing in respect of the two previous leave years, during substantial parts of which she had been receiving no pay at all. She brought a Tribunal claim seeking payment of four weeks leave for each of those two years.

There was no dispute that she had accrued leave in those years but the Tribunal found that she had to trigger her entitlement to be paid for it, by giving notice of the employer of her wish to take holiday, which she had not done. (Fraser v South West London St George’s Mental Health Trust)

What’s in the pipeline

“Radical Reform”

The changes to the Employment Law system which have been proposed include the following:
• Reform of the Tribunal system

• The introduction of Tribunal fees. Currently, two options are proposed, an initial fee to lodge a claim and then a second fee to proceed to a hearing. The second option would require those seeking an award above £30,000 to pay more to bring a claim.

• “No Fault” dismissal for firms with fewer than 10 employees.

• Reduction of consultation period for collective redundancies.

As advised in a previous Ezine, the Government has already committed to increasing the qualifying period for unfair dismissal to 2 years (currently 1) from April 2012 (NB – this may be indirectly discriminatory to women, as fewer women acquire 2 years continuous service: employers should therefore not get too excited yet and watch this space). It has also committed to:

• Requiring all employment disputes to be offered ACAS pre-claim conciliation before going to a Tribunal.

• Consulting in 2012 on “Protected Conversations” to allow Employers to have discussions with staff about retirement or poor performance which could not be relied on in a Tribunal claim.

• Consulting on simplifying Compromise Agreements (renamed “Settlement Agreements”)

• Considering how, and whether, to develop a “rapid resolution scheme” to offer a quicker and cheaper alternative to Employment Tribunals.

Long Term Sickness Absence Review

The Government has published the results of an independent review of the sickness absence system which recommends the creation of an independent assessment service (IAS) to provide an in-depth assessment of individuals’ physical and/or mental function when they have been signed off work for four weeks. The IAS would provide advice on how an individual on sickness absence could be supported to return to work. The review also analyses the current sickness absence system and makes a number of other suggestions to help combat the 140 million days lost to sickness absence annually. The review says that the current sickness absence system is failing e.g. because it pushes people away from the labour market towards inactivity. To address the failings, the review also suggests that (for example):

• There should be employer expenditure to keep sick employees in work or speed their return, e.g. medical treatments or vocational rehabilitation, which should attract tax relief;

• SSP record keeping obligations should be abolished, reducing administrative burdens on employers and saving them £44 million a year.

Watch this space!

The Employer Traps and Other Tips

References

Remember, there is no general obligation in law to provide a reference. However, if you do provide one, it must be true, accurate and fair.

Old Staff, New Methods

It may be helpful to remember that there is an implied duty on the part of the employee to accept reasonable adaptations to change e.g. to keep up with new technology. However, be aware that the implied term applies to the methods of performance of existing contractual duties and is not to be used to force through changes to those contractual duties themselves.

Interest on Commercial Debt - DONT FORGET!!

2011-11-22T14:46:00.002Z

Asking for interest on unpaid invoices will sometimes be enough to prompt payment and avoid having to issue proceedings in the County Court.

It is always a tough decision to take the step of instructing solicitors to collect an unpaid invoice and taking legal action should always be a last resort. But in these tough economic times, businesses cannot afford to allow invoices to remain unpaid for too long.

When we send a letter before action we always include interest from the date the invoice was due and this will often have the desired affect of prompting a debtor to make an immediate payment to avoid the debt for continuing to grow.

You have the right to ask for interest on unpaid invoices in 3 circumstances.

1. Your terms and conditions may have a clause that claims interest for late payment of invoices. It is surprising how often Companies don’t know that they have this clause in their terms and conditions and this interest will take precedence over other forms of interest. It should be noted that it should be enough to deter late payment and should be a fair alternative to statutory interest. Quite often terms and conditions were drafted when the Company first started trading and have never been changed.

Check your terms and conditions and if you think these need updating or you would like us to simply look them over please contact Brendan O’Brien for further information.

2. Under the Late Payment of Commercial Debts (Interest) Act 1998 you are entitled to claim interest at the rate of 8% above Bank of England base rate on all invoices from the date the invoice was due. You are also entitled to compensation on each invoice under the Act. This can substantially increase the amount owed. For letters before action we will calculate the interest and compensation for you and add this to the amount owed. We have found that this is often enough to prompt payment. This does, however only apply to business to business debts but from 7 August 2002 all businesses can now claim interest under the act from the public sector.

3. Finally, you are entitled to interest under s69 of the County Court Act 1969 at the rate of 8% from the day you issue proceedings to the date you are paid or Judgment. For Judgment debts over £5,000 you can continue to claim the interest until the debt is paid. You can therefore claim the Late Payment interest or if you are not entitled, (for example your contract is with a “consumer” rather than a business), you can claim interest under the County Courts Act.

Remember you can only claim type of interest at a time.

It is, I think you would agree, worth trying our Low Cost Fixed Fee Debt Recovery Service where we will send calculate the interest, add the compensation if you are claiming under the Late Payments Act, and send a letter all for £2 plus VAT.

If you would like to know more about our Debt Recovery Service please contact me at Rita.Wright@breezeandwyles.co.uk or telephone 01992 558411 to speak to me personally.
Rita Wright

Head of Undefended Debt Recovery Team

Hertford Contact Centre - Coffee Morning 3 December 2011

2011-11-22T11:27:00.002Z

As some of you will know, Olive McCarthy, Director and Head of Family Law at Breeze & Wyles Solicitors LLP set up the Hertford Contact centre in 2009 with Nicola Cable to enable absent/estranged parents to have quality time with their children in an environment acceptable to the other parent with care. It is run on donations, funding and volunteers to keep it going. It has helped 26 families to date and is a valuable service offered to the public for the benefit of children without charge.

The centre will be holding a fund raising coffee morning on Saturday 3 December 2011 between 10am and 12noon at the Oasis Coffee Bar at the front of Hertford Methodist Church, Ware Road, Hertford.

Please do come along and join us to help raise funds. We will be selling cakes and a small selection of homemade crafts as well as holding a raffle.

We look forward to seeing you there!

Continuity planning – planning for the unexpected

2011-11-22T11:14:00.001Z

Planning for every eventuality is costly and time consuming but some things are worth the time and expense. Continuity planning is a normal consideration for most businesses...but what if those making the decisions can no longer do so? Dementia, although far more common in the elderly, can occur before the age of 65 ("early onset dementia"), how would your business cope if a key person suffered from sudden onset dementia? If not dementia then consider what would happen to your business if a director/partner were involved in an accident and suffered serious injuries, perhaps leaving them in a coma.

It is very common for elderly parents to consider appointing their children as Attorneys, to deal with financial matters when they can no longer do so for themselves. However, Lasting Powers of Attorney (LPAs) should be used to safeguard not only your family but also your business and business finances in times of emergency.

Would your creditors be willing to wait whilst the director recovers? Would staff wait to be paid? Numerous problems could arise if a key person in your business is unable to fulfil their role. It is important to have steps in place to ensure that your business can carry on trading properly in the absence of key personnel.
If one of your key personnel loses mental capacity without having documentation in place (whether company documentation or an LPA) to deal with your business, only the Office of the Public Guardian (OPG) (also known as the Court of Protection) has power to appoint someone to manage their finances (Court cannot make healthcare/welfare decisions). This person is known as a Deputy. Obtaining a Deputy can be a long and costly procedure, time you do not have if you wish your business to run smoothly. Further, obtaining an LPA is far cheaper than obtaining a Deputy Order.

Obtaining an LPA should be viewed as an “insurance policy” – you may not need to use it but if you do you will certainly be glad it was there!

Rather than leave the decision to the OPG as to who deals with your business finances if you are not mentally capable of doing so, why not make the decision for yourself? An LPA is a document which allows you to appoint someone to act on your behalf, as if they were you, but their action must be in your best interests. Prior to use the LPA must be registered with the OPG.

The important difference between LPAs and ordinary powers of attorney is that they remain valid after the individual who has granted the power becomes mentally incapable.

There are several decisions to make when drawing up an LPA, these include:

• Who will be your Attorney(s)? You can appoint more than one person to be an Attorney.

• Replacement Attorney(s)? If for some reason your chosen Attorney cannot or will not act (there is no obligation on them to do so) do you wish to name a replacement?

• How should your Attorneys Act? If you appoint more than one Attorney should they act jointly or jointly and severally or even a mixture of both?

• Restrictions and/or guidance: You can place restrictions on your LPA, such as the fact that it will only become effective IF/WHEN you lose mental capacity. You may wish to advise on the type of investments your attorney can make or which banking/investment institutions you would like them to use.

• Notification – would you like a business partner, accountant, family member or friend to be notified that you have entered in to the LPA?
All LPAs must be signed by a “certificate provider” this can be a solicitor, doctor or other professional or someone that has known you for two years or more. If you choose not to notify anyone of your decision to enter into an LPA then two certificate providers will be required. Before you can use the LPA it must be registered with the OPG, registration can take some sixteen weeks, depending on the workload of the OPG.

As you can see dealing with an LPA whilst you do have mental capacity may be a lengthy process but hopefully you have the time to wait!! It is possible to leave it too late, at which time the OPG will need to step in, meaning that you do not get to choose your own Attorney, place any restrictions or conditions on the use of the LPA and whilst all of this is being decided, what is happening to your business?.
Take action before it is too late!!!

For further information please contact Hardeep Nijher, based at Breeze and Wyles’ Cheshunt office either by telephone 01992 642333 or email: hardeep.nijher@breezeandwyles.co.uk

Where there is a WILL there is a way!

2011-11-20T21:12:00.003Z

There are many reasons to make a Will including providing for your family and ensuring your assets are distributed in the way you want, rather than in accordance with the laws of intestacy. However, as a business owner have you considered: WHAT WILL HAPPEN TO YOUR BUSINESS IF YOU DIE WITHOUT MAKING A WILL?

Failure to make a Will can leave family and business partners in chaos. As a business owner, you should consider the following and make sure that the way in which your business is dealt reflects your wishes:

Do you want your business to continue trading after your death?

Yes: Then you need to clarify who should inherit your business interests

No: How will the interests and assets be dealt with? Should they be sold and monies distributed to your beneficiaries or do you wish to make specific gifts of your assets, such as your tools or premises?

When deciding upon the above, consideration should always be given to any Partnership Agreements, Shareholder Agreements and/or any other company documentation which may dictate the way in which your business is to be distributed upon your death. This is particularly important as company documentation can take precedence over a Will. If there is a conflict between your Will and the company documents, then the company documentation may be followed – even if this is not what you had intended!

Ensuring that your Will is properly drafted can help prevent costly disputes after your death. Even the most complex of Wills is, by far, more cost effective than protracted litigation. The last thing your family or business partners need after your death is lengthy litigation relating to the ownership/running of the business: a business that you have spent time and money building!

Tax relief – a range of potential tax savings can be utilised when making a Will, to include Inheritance Tax and Business Property Relief. Failing to make the most of available tax reliefs for your business could be very costly to your business and family........but extremely profitable to the tax man!

Is there adequate succession planning for directors? If, not then this should rectified in your company documentation.

Finally......once you have a Will ensure that it is regularly updated to take account of changes in your personal, tax and business circumstances.
MAKE A WILL you cannot take away the stress caused to your family or business partners after your death but you do not need to add to it!!!

For further information in relation to making a Will please contact Mr Hardeep Nijher, who is based at our Cheshunt office, either by telephone on 01992 642333 or email hardeep.nijher@breezeandwyles.co.uk and he will be happy to assist.

Improve your internal debt recovery rate

2011-11-15T09:20:00.001Z

DELIVERY OF AN INVOICE;

 Ensure that an invoice is delivered promptly and accurately and that the invoice states the customer’s full name. Make sure that you are able to clearly and correctly identify your client’s name and status – is your client a Limited Company? Partnership or Sole Trader? Include your customers full and correct name. Correct identification of your customer is imperative if you are to successfully decrease your average debtor days.

 Include on the invoice your customer’s reference number so that your customer is able to easily identify the invoice.

 Ensure that the invoice states clearly the payment terms and the date by which payment is to be made.

 Ensure that a copy of the invoice is retained.

 Ensure that the invoice goes directly to the person in the organisation who will be responsible for paying the bill. It is sensible to call and obtain this information from your customer, before sending the bill. This limits the risk of your invoice sitting on anothers desk for a few days or weeks, before finally making its way to the correct person.

 Ensure that your invoice clearly shows the manner in which payment can be made. Ensure that you offer the opportunity to pay by credit card / debit card or BACs and identify how these methods can be utilised by your payee. Payment by these methods is often the quickest and easiest method for your payee – the easier it is for your payee to pay your invoice, the quicker you will get paid.

CREDIT CONTROL

 Ensure that you have a proactive and efficient process for chasing unpaid debts, as soon as the payment term expires. The key here is to ensure that you receive reminders, through either your accounting package or outlook, as soon as an invoice becomes overdue. You can not chase your debts proactively if you do not know when an invoice has become overdue.

 Where the chasing of invoices is being done internally, automation is ideal because it will limit internal resources whilst ensuring that debts are still being chased. Use standard precedent letters and diarise weekly chasers to be made both by letter and telephone.

 Telephone calls are time consuming but often offer a higher rate of return. Make sure you stick to the timescales (If you tell a customer you want payment in 7 days and they don’t pay, chase again by letter or phone promptly on day 8).

 Decide how many letters and telephone calls you will undertake during your internal credit control process and what the course of action will be should payment not be made. We would suggest that instruction to us to send a letter before action to your debtor, at a cost of £2.00 plus VAT, should be the automatic next step following exhaustion of your internal credit control function. Our instruction is quick and easy and instructing us promptly will ensure that ongoing pressure is applied to your debtor. This will increase the likelihood of recovery.

 Make sure that staff with the appropriate skill set and personality are responsible for your credit control. There is little point having someone who is overtly shy and embarrassed, in charge of asking a customer for a commitment to pay by a certain date.

 Make sure that your credit controller is efficient and proactive and keeps records of each call made. When a debtor says that they will make payment, make sure that your credit controller asks them to commit to a date by which payment will be made. If your customer defaults, ensure that the customer is called again and ask for a revised payment date. If the customer defaults again, it is highly likely that further action is going to be required. Continued failure to meet agreed payment proposals may be a sign that your debtor is experiencing financial difficulty.

 To illustrate the importance of making a record of a telephone call with a debtor, you can take the example where in a telephone call a debtor admits liability, or tries to agree a payment plan. A telephone note recording admission may well help to question the credibility of a debtor who subsequently tries to deny liability for the debt.

 If you do agree an installment plan with a debtor, it is worth confirming the agreement in writing and making sure that when negotiating the agreement with the debtor, you reserve the right to claim the entirety of the invoice should the debtor default on the installment plan.

 Act quickly and don’t delay. Delay will breed further delay by your debtor. If you threaten Court action or referral to a Solicitor, follow through with the threat. Otherwise, the debtor may not take you seriously and prioritise paying other creditors that are pushing for payment.

 Categorise your debtors in to those who “Won’t pay” and those who “Can’t pay”. Where resources are limited, focus your internal resources on chasing those who “won’t pay”.

Recession: Cash Flow is paramount

2011-11-14T11:17:00.001Z

Most small business owners have had a difficult few years, the lack of available cash and new customers has made some small businesses think hard about what they are doing; whilst some still seem to be content to sit and try to weather the storm, waiting for the economic recovery! Now, more than ever, small business owners need to realise cash generated from customers - the effective collection of such cash has become priority.

Markets are smaller and customers can afford to be choosy about when, where and how they spend their money. Many small businesses have no idea how to attract new clients as until recently the customers have come to them. Even now, when attending networking events, there can be many businesses of a similar nature and with no demarcation in promises or offers. It’s no longer enough for a business owner to say that their unique selling point is “great service” and/or “personal service” because all businesses claim to offer these!

There needs to be a clear difference between you and your competitors: tangible benefits to meet with the customer needs. Business owners must ensure that they have systems in place to help deliver a better and more consistent service, services which are more cost effective and efficient than those used in recent times. Keeping your customers happy and keeping them coming back for more is now, more than ever, vital to making a success of your business. Excellent service, professionalism and value for money are all fundamental to attracting new customers. The complacency gained during a business boom needs to be replaced with diffidence; there is longer a queue of potential customers waiting at the door.
When business is plentiful pricing is not an issue as there was enough business to be had to make up for loss leaders and margin shortfall, although pricing and margins are now critical to business success.......remember, there is always somebody who can do it cheaper than you!

Lack of cash is the number one killer of small businesses and the old business adage “turnover is vanity, profit is sanity, but cash is reality,” has never been more true. Your suppliers will want you to pay quickly however, your customers will take their time in settling your invoices. In brighter times (remember the days before the recession?) it was easier to be relaxed with finances, a 90 day debt was nothing to worry about......anyway the banks would assist with loans and overdrafts! However, now businesses are finding more and more that they need to live on immediate cash flow generated and effective credit control is therefore paramount.

Most businesses sell their products and services on credit, Late Payment Legislation has been in place since November 1998, this gives businesses the right, in certain circumstances, to charge statutory interest and compensation on late payments from customers.

Breeze and Wyles offer a low cost, innovative debt recovery scheme with LBAs costing just £2.00 plus vat, making it cost effective to chase even lower value debts. For further information please contact Rita Wright: rita.wright@breezeandwyles.co.uk or Rachel Harper: rachel.harper@breezenadwyles.co.uk or telephone: 01992 558411.

Relationship Insurance: Kernott -v- Jones

2011-11-10T18:21:00.003Z

We insure our cars against accidents that we hope will never happen, we insure our houses against fires that we hope will never happen, we insure our holidays against mishaps that we hope will never happen, so why don’t we insure our relationships against breakdowns that we hope will never happen?

The idea of setting out in writing what should happen on the breakdown of a relationship may not be a romantic one but, like all insurances, is becoming increasingly necessary.

Following a landmark decision of the Supreme Court on 9th November 2011 ‘relationship insurance’ seems to be all the more important.

In the case of Jones v Kernott, the Supreme Court this week gave their judgment. The case involved an ordinary couple, Patricia Jones and Leonard Kernott, who bought a house together. They went on to have two children but sadly the relationship broke down. The couple separated and then tried to sell the property but it failed to sell. They cashed in a life insurance policy to enable Mr Kernott to move out and buy another property. 14 years later Mr Kernott asked for his 50% interest in the house back but Ms Jones claimed that as she had been maintaining the property and all outgoings since their separation, she should be entitled to a much greater share of the property which had substantially increased in value since the date when they had originally attempted to sell.

The Supreme Court held that it was only fair that Mr Kernott should not receive 50% of the increase in value since the date of the original attempt at sale as Ms Jones had maintained the property, including the mortgage, since this date and Mr Kernott had benefited from the increase in his own property.

Whilst this might sound straightforward, the couple’s claim was originally started in 2007, some 4 years ago. The reason for the complexity is that the law relating to unmarried cohabitating couples has been, and still continues to be, as clear as mud! The Supreme Court was left with the job of inferring what they believed was likely to have been the couple’s intention as to ownership as their actual intentions were unwritten.

The law relating to ownership of property continues to be complex and unclear for unmarried couples. The Courts continue to look at, among other factors, the written intentions of the parties and if they didn’t write these intentions down, they can also find themselves going through years of litigation.

If you want advice as to how to best protect your interest in property or other assets, speak to one of our family solicitors.

Terms of Business: Retention of title

2011-11-10T18:13:00.005Z

A retention of title clause is a provision in a contract for the sale of goods that the ownership of the goods remains with the seller until payment of the purchase price is made by the buyer to the seller.

The reason for a retention of title clause in a contract is to ensure that when a seller extends credit for the provision of goods, if the buyer subsequently becomes insolvent without making payment for those goods then the seller can recover those goods instead.

The protection afforded generally only relates to the goods themselves so that when they are incorporated into other goods, the best example of which is raw materials converted into other products the created product cannot be protected and then recovered.

The nature of this type of clause is relatively simple but also looks very much like a form of security. So when this clause is drafted quite widely, for instance to cover products created from those goods, security is deemed to be given by the company and as a result it should be registered in accordance with the Companies Act. Failure to register will mean that the clause is no longer valid. Accordingly the wider the clause is drafted the more likely that the a court will set the clause aside for want of registration.

Retention of title is a valuable tool for the seller who sells with extended terms of credit, i.e. not payment on delivery. However, the clause can be rendered meaningless if the drafting is wrong.

Does TCF have benefits for the non-regulated sector?

2011-11-07T18:57:00.001Z

Does TCF have benefits for the non-regulated sector?

For eight of the last ten years Debt Collection has seen very little investment. This is not the case now. The existing profit centres are generating less income than and have been downsized. Now credit recovery is seen by many as such a key component of the business process that recovery teams are receiving unprecedented levels of investment. The availability of external debt recovery products is much larger than it was. At the same time, businesses in the regulated sector are facing compliance issues from the FSA. What can we learn from their changes in culture.

Those businesses with lending as their core activities already need to know and comply with the principles of ‘Treating Customers Fairly’ (‘TCF’). They will know that an automated debt recovery system is unlikely to fit all customers. Where processes are compliant, where a customer is identified to be in financial difficulty, appropriate communication is made with them to discuss the solutions available. The reasons for non-payment can be many and varied as are the solutions.

Is TCF a burden or a tool?

In an upturn in the economic cycle TCF can be seen by many to be a burden as rates of recovery are higher using the traditional tools available. Credit Control and Debt Recovery systems will generally ensure a good return on the lower levels of debt with minimal wastage. In a downturn debtors are more likely to be in a distressed financial situation. TCF requires the lender to indentify the debtor’s financial situation and to consider the options available to the customer even if those options do not form part of the lender’s product range. The credit professionals dealing with customer relationships must exhibit similar skills and attitudes to those of the frontline sales team, ensuring that both parties reach a satisfactory solution.

Upper management should be using this information to inform their business and recovery strategies to ensure that the efforts are not wasted. The availability of this information is critical to the management of the debtor profile while also giving the business the opportunity to retain hard-won customers.

It is no surprise that large numbers of businesses do not know their debtors or debtor profile and any credit control action taken is tends to be counterproductive. Quite often a debtor is a slow payer rather than obstructive. While the first impression after initial contact may be that the debtor is obstructive in fact significant numbers of debtors really do not know enough about their financial position to be immediately or assistance. Should you move to debt recovery as the first option the uninformed debtor will balance the pressure that the recovery process places on them against the stigma attached to formal insolvency procedures. In the majority of cases the pressure will be too great and insolvency will be guaranteed. As a result they will miss out on the options available to them and by proceeding to an insolvency event reduce the level of returns available to all of their creditors. While insolvency may be unavoidable where it can be avoided it should. Creditors should not create this situation by their actions.

TCF requires and enables you to obtain information about your customer. It is only by understanding your customer that you can balance your subsequent decisions and actions between being effective, timely and fair. Moreover implementing compliant procedures ensures that customers consider all of their options before having to take the drastic action of entering formal insolvency procedures.

TCF for all?

It is deliberate that the above paragraphs have not been restricted to FSA regulated organisations. TCF must be seen as a tool for all credit professionals whether internal, external or in the legal professions. Knowing your debtor is key to both retaining a long–term relationship and a greater recovery rate. Whether you are operating in or outside the regulated sector, creating a recovery process that follows the principles of TCF is essential to the continued existence of your business. Rather than a ‘necessary evil’ TCF is a business imperative.

Brief Guide to Enforcement of Foreign Judgments and Orders

2011-11-07T18:34:00.003Z

1.Enforcement of United Kingdom Judgments in England & Wales

1.This section relates to enforcement of judgments and orders from other parts of the United Kingdom, i.e. Scotland and Northern Ireland, in England and Wales.

2.Usually the judgments in question are for money especially as it is desired to enforce by execution, but similar provisions can apply to a non-money judgment.

3.The normal procedure is for the Court in Scotland or Northern Ireland to issue a certificate under Section 18 of, and Schedule 6 to, the Civil Jurisdiction and Judgments Act 1982.

4.For Scottish cases this is normally known as a Form 1 (which is a different Form 1 from their form of summons to start proceedings which appears also to be called Form 1).

5.This certificate certifies the date of judgment and the amount due under the judgment and whether interest runs and if so the amount and the date from which it runs. In Scottish cases this is commonly different from the date of judgment, sometimes earlier, and sometimes there are different dates and rates of interest applicable to different sums due under the judgment, for example if interest is due at a higher rate on some of the money under the Late Payment of Commercial Debts legislation.

6.The certificate (Form 1) has to be registered in the Central Office of Queens Bench Division of the High Court in London before a writ of execution can be issued. Sometimes this is done by the Claimant’s solicitors and sometimes by Breeze & Wyles Solicitors LLP as part of the process for issue of the writ of execution. There is no fee for registration of the Scottish or Northern Ireland Judgment in the Queen’s Bench Division of the High Court of Justice in London but the Court allows £39.00 additional costs for the registration process.

7.It is important to note that the Certificate of the Court in Scotland or Northern Ireland must be registered in the Queen’s Bench Division within six months of the date of its issue otherwise an updated Certificate will be required.

8.Once the foreign judgment has been registered in the High Court in London either by the Claimant’s solicitors or Breeze & Wyles Solicitors LLP a writ of execution can be issued and delivered to Marston Group Limited for the normal Court fee of (presently) £50.00 with the writ attracting the normal costs of execution of £101.75 recoverable against the Defendant (inclusive of the £50.00 Court fee).

9.This process is dealt with by Breeze & Wyles Solicitors LLP at the same charge as a normal transfer up of £27.50 plus VAT whether the Claimant’s solicitors register the judgment or Breeze & Wyles Solicitors LLP undertake this. Assuming no complications the process is generally completed within 7-14 days of receipt of papers.

10.In relation to Scottish matters, some liabilities which are not at first sight matters relating to judgments or Court orders can be enforced under the above procedure if they are registered in the Books of Council and Session in Edinburgh. Examples might be liabilities under deeds of separation or bonds relating to loans for crofters.

2. Enforcement in England & Wales of European Community Judgments (including Republic of Ireland)

1.The procedure depends upon whether there is in force a European Enforcement Order (see section 3 below) or not.

2.In the absence of a European Enforcement Order enforcement is dealt with under what is known as “the Judgments Regulation” which is the European Council Regulation (EC) number 44/2001 of 22nd December 2000.

3.Application has to be made to the Central Office of the Queen’s Bench Division of the High Court in London for registration of the EEC judgment. This application is made without notice to the Defendant and attracts a fee of (presently) £40.00.

4.The application has to be supported by a witness statement exhibiting:

1.The foreign EEC judgment or order for enforcement, or an authenticated copy.
2.Where the judgment is not written in English a translation into English certified by a notary public or other qualified person and accompanied by written evidence confirming that the translation is accurate is also required.

5.The application (usually in the witness statement) where it relates to enforcement of a money judgment must state:

1.the name of the Judgment Creditor and his address for service within England & Wales (usually the address will be that of Breeze & Wyles Solicitors LLP).
2.the name of the Judgment Debtor and his address or place of business if known.
3.the amount in respect of which the judgment is unsatisfied.
4.that the European Court has not suspended enforcement of the judgment.
6.The witness statement is normally drafted by Breeze & Wyles Solicitors LLP on the basis of information received from or obtained from the Claimants lawyer.
7.The application will be considered by a Master at the Central Office of the High Court and assuming permission is granted to register the judgment the Registration Order, which must be in a special form, must be served on every person against whom the jdgment was given. This is normally done by a process server whose fee is likely to be about £70.00 plus VAT in a straightforward.
8.The Registration Order must state the right of the Judgment Debtor to apply within 28 days from service of the Order for the variation or cancellation of the Registration Order.
9.No steps may be taken to enforce the judgment before the end of the 28 day period or, where an application is made, until it has been determined.
10.The costs of Breeze & Wyles Solicitors LLP for this service are approximately £350.00 plus VAT (if applicable) plus the Court fee of presently £40.00. Normally the Court will add these costs to the indebtedness so they are recoverable from the Debtor in the event of a successful recovery. In the absence of complications a Registration Order would normally be received within about 21 to 28 days of receipt of papers.
11.After the time of 28 days from service required under the Registration Order has expired a writ of execution can be issued in the normal way paying the Court fee of £50.00.

3. European Enforcement Orders

1.Commonly a Creditor’s lawyers will obtain a European Enforcement Order which is an Order under European Council Regulation (EC) 805/2004 creating a European Enforcement Order for uncontested claims. This is often referred to as an EEO.

2.The foreign lawyers have to obtain the European Enforcement Order Certificate and supply it to Breeze & Wyles Solicitors LLP.

3.The requirements from the foreign lawyers are:

1.An authenticated copy of the judgment of the foreign Court.
2.If the judgment of the foreign Court is not in English an authenticated translation.
3.An original copy of the European Enforcement Certificate.
4.If the European Enforcement Order Certificate is not in English and authenticated translation thereof.
5.A cheque for the Court fee of £50.00 in favour of HMCS.
6.The procedure, provided the documentation is in order, is somewhat simpler than the method of enforcing a European Judgment under the 1982 Act but more complex than a transfer up.
7.Breeze & Wyles Solicitors LLP would normally propose to charge approximately £150.00 plus VAT (if applicable) plus the Court fee payable of (presently) £50.00 for this service.

The authentification of documents generally relates to them being issued or certified by the Court or other suitably empowered authority for that purpose in the country from which the document emanates.

1.The process would normally take about 14-21 days from receipt of papers in a straightforward case

4. European Enforcement Orders in respect of Judgments of Courts of England & Wales for enforcement in other jurisdictions

This is not generally within the realm of the service provided by Breeze & Wyles Solicitors LLP for Marston Group Limited as the enforcement by definition takes place outside of England & Wales and therefore Marston Group Limited have no jurisdiction. In such circumstances generally the Creditor is advised to contact the Court in question with a view to obtaining a certificate from the English or Welsh Court for registration in another part of the United Kingdom using a form number 111. The application normally has to be supported by a witness statement giving certain prescribed details.

5.Enforcement of Judgments from Jurisdictions outside the European Community

At present enquiries in regard to this are rare and each case would have to be dealt with on its individual circumstances including consideration of what treaties or other arrangements for reciprocal enforcement are in place between England and Wales and the jurisdiction in question. Such arrangements are not necessarily in place, e.g., some judgments of the lower Courts in the Channel Islands can not be enforced in an easy manner in the UK without taking completely new proceedings.

The costs of dealing with these enquiries would be dealt with on a time charge basis to be arranged with the lawyers concerned.

If you have any specific problems on which you require advice, please do not hesitate to contact us.

Brendan O’Brien

Breeze and Wyles Solicitors LLP exhibits at the Innovative Property Show 2011

2011-11-04T11:03:00.004Z

Breeze & Wyles Solicitors LLP has the pleasure to announce that it exhibited at the Innovative Property Show held at Wembley Stadium yesterday. The exhibition showcased the talent existing in the Property Industry and it was good to see so many people in this depressed market promoting innovation in the way that they conduct their business.

Adrian Toulson Director of Breeze & Wyles Solicitors LLP (second from left) is shown here having presented the award for Woman Surveyor of the Year at the Innovative Property Show 2011.

Review your processes: Commercial Debt Recovery Considerations in 2012

2011-11-04T09:40:00.006Z

Chasing Debt in the downturn

With the economy in the doldrums (and potentially a further recession only just around the corner) everyone seeking to recover debts must urgently review their procedures and indeed their priorities.

Cash is most definitely king in this climate.

You should look at trying to recover monies rightfully owed to you swiftly and cheaply. You can achieve this by constantly reviewing the same in conjunction with continually inventing different ways in which to encourage debtors to pay. In effect this means that you must look outside the traditional debt recovery methods for the solutions.

Recovering Debts at court should be regarded as a last resort once all other avenues have been explored.

The implications of not getting the debt recovery solution right are grave. [See my previous blog on pass the parcel]

Size of Indebtedness

No amount of money is too small to chase, however District Judges nationally do not like to see Claim Forms chasing anything less than £25.00.

You should not write off money owed to you. You are able to chase an outstanding invoice up to six years before the expiry of the Limitation Period, at which time you will not be able to bring an action.

The Costs of Recovery

There is a premise that the cost of recovery may outweigh the amount owed. This is true and there is a point when you need to address the issue, but in my view it is better to issues proceedings and move to judgment to protect your position. If you have judgment then you stand a better chance of getting your money back then if you had not issued proceedings.

Considerations

Intelligence and speed are vital

has contact with the debtor been made?

have you opened up meaningful dialogue with the debtor?

does the debtor have a justifiable dispute?

has the dispute been resolved. If not why not?

how old is the information that you have on the debtor?

when was the last time that someone visited the debtor at their premises?

do you have any personal guarantees on the file?

were trade references taken up when the sales team opened the original account?

who have you contracted with: an individual, partnership or limited company? the trading vehicle is vital.

is the debtor solvent?

customer profiles? do you track your customers trading history with you?

payment history? Can you track the history of the customer payments to you?

debtors location. Do you know the location of the debtor?

How often are your terms and conditions reviewed? if irregularly then check now and see if it reflects you current trading methods and is it fit for purpose

Are you able to take payment by credit or debit card?

if a debtor fails to make payment are you freezing their account immediately. Sales will sell whatever the problems in the background thereby increasing the debtor risk

has the debtor bounced a cheque. This is easier to sue on

Always follow through on a threat to issue proceedings. If you don’t this will be seen as a sign of weakness and be used against you in the future. It may also get out into the market meaning that when you threaten your threats become de-prioritised by the debtor against equal standing creditors.

Common sense comes out on top in contract dispute

2011-11-04T08:49:00.001Z

Overview:
Contracts under dispute are not easily interpreted and the latest Supreme Court judgement has gone for the application of business common sense. Business needs to ensure that commercial contracts are well drafted.

Victory for common-sense as judgment is given in long running battle over bank payout.

Courts should apply business common sense when interpreting commercial contracts according to a judgment delivered this week (2nd November).

The Supreme Court has ruled in the case of Rainy Sky SA and Others v Kookmin Bank, that when the wording of a contract could be read in either of two ways, the court should opt for the interpretation that makes business common sense and reject the other.

The case involved a number of ship-owning companies which had placed orders for new ships to be built by Jinse Shipbuilders, a Korean company. Each contract provided that the buyer should pay a deposit on placing the order and for repayment of the deposit in certain circumstances including rejection of the ship on delivery, destruction of the ship before delivery, and the insolvency of Jinse. The contract also required the shipbuilder to provide a bank guarantee or bond for the repayment of the deposit, and these bonds were provided by Kookmin Bank.

In the event, Jinse Shipbuilding became insolvent and the buyers all called on Kookmin Bank to refund their deposit. Kookmin Bank refused, arguing that they did not need to pay out as the bond did not specifically list insolvency of the builder as being covered.

The Supreme Court has now said that if the bank’s interpretation were accepted, it would lead to the “surprising and uncommercial result” that the buyer could not call in the bond upon the insolvency of the builder, which was the very event most likely to require security.

Lord Clarke of the Supreme Court went on to say that, where there are two possible interpretations of a contract, the interpretation that is to be preferred is the one that is consistent with the commercial purpose of the contract.

There are two important principles that the courts apply when interpreting contracts and other legal documents. One is that the court should interpret the document in such a way as to give effect to the intention of the parties; the other is that the courts must give effect to the ordinary meaning of the words.

Explained commercial law expert Brendan O’Brien of Breeze & Wyles Solicitors LLP: “The two principles are often at odds with each other and both have their limitations. The previous Court of Appeal judgement in this case went on a ‘literal’ approach which found in the favour of the Bank. Now the Supreme Court has gone for an ‘intentional’ interpretation.

“The problem with the intentional approach is that the intention of the parties is often the thing that is in dispute and the only evidence of their intention is the words they have used.

“The problem with the literal approach is that often the wording of a document is like an optical illusion or double picture that can be seen in different ways. One minute you see a mermaid at the bottom of the ocean, the next a man with a moustache. You can see both images but not at the same time; they are irreconcilable and neither is the ‘correct’ image.

“So, when interpreting legal documents, you need some external factor to help decide what’s right. That is what Lord Clarke was saying in his judgment, namely that business common sense needs to be applied.

“The lesson is that a badly-drafted document can be a hostage to fortune and business needs to get commercial contracts well drafted by a specialist.”

ENDS
This information is not intended as legal advice

Rainy Sky SA and others v Kookmin Bank [2011] UKSC 50

Fact Sheet 3: What you NEED to know when your debtor is Insolvent

2011-10-31T10:26:00.003Z

Fact Sheet 3 – What can you do when you hear that a debtor is insolvent? What does this mean for you as creditor?

More frequently, we are approached by clients who have “heard” that their debtor is insolvent. It might be that the business has heard this on the grapevine, or that they have heard informally from the debtor. Alternatively, a business might have received formal notification from an appointed insolvency practitioner.

Insolvency Jargon

There are a number of different types of corporate insolvency and a great deal of “jargon” which sometimes causes confusion for creditors. The most common phrases you will hear are “administration” and “liquidation”. This fact sheet focuses on these two areas of corporate insolvency.

Administration

If a business is in administration, it means that an administrator has been appointed to replace the directors for the purpose of “assessing” whether the Company can be rescued; whether the company or its assets should be sold; or whether the company should be wound up.

Whilst a Company is in administration, a moratorium exists which prevents creditors from pursuing a claim against the Company, without the authority of the Court or the administrator. The purpose of the moratorium is to protect the assets of the Company whilst the administrator is deciding whether the Company can be rescued or not. The moratorium lasts for the duration of the administration. The administration will come to an automatic end after 12 months unless the creditors, or Court, agree to a further extension of up to 6 months.

The administrator is an officer of the Court and as such, must act in the best interest of all creditors generally. Within 8 weeks of appointment, the administrator will make proposals to creditors, for achieving the purpose of administration. In the majority of cases, within 10 weeks of appointment, the administrator will also hold a meeting of the creditors. The purpose of the meeting is to enable the creditors the opportunity to vote in favour, or against, the administrator’s proposals.

What should you do if a debtor is placed in to administration?

Upon discovering that a debtor is in administration, you should ensure that the administrator is aware of the debt! It sounds obvious, but it is dangerous to assume that your debtor has recorded all unpaid invoices on its accounts package. Therefore, you should inform the administrator of the debt to ensure that you receive the administrator’s proposals and details of the creditors meeting.

If an administrator has been appointed, the appointment should be registered with Companies House. Therefore, if the debtor will not disclose details of the appointed administrator, you can find details of the administrator at Companies House.

Once you have proved your debt to the administrator, there is little else you can do pending conclusion of the administration. In reality, it is highly unlikely that unsecured creditors will receive any payment during the period of administration. If at the end of the administration, the administrator places the company in to liquidation, you might receive something towards the debt following the liquidator’s appointment. Whether you will receive a payment, and how much you receive, will however depend on whether there is any money “left in the pot” following payment to secured and preferential creditors.

You should of course take advice from your accountant regarding the impact on your accounting obligations, following the debtor’s administration.

Liquidation

A business may be wound up / placed in to liquidation, in one of three ways;

1. By a shareholder resolution (this should only happen where a Company is solvent); Members Voluntary Liquidation;
2. By creditors application to wind up a Company due to the Company’s inability to pay its debts; Creditors Voluntary Liquidation;
3. By Order of the Court; Compulsory Liquidation

The liquidator will take control of the Company’s assets and his / her primary duty is to realise assets and distribute to the creditors according to a specific order of priority.

In the case of a Compulsory Liquidation, the Official Receiver will be appointed to investigate the causes of the Company’s failure. The Official Receiver will call a Meeting of Creditors within 4 months from the date of the winding up order. At least 21 days notice of the meeting must be given to the Court and to all Creditors. The notices issued will inform the creditors of the date by which a proof of debt and proxy must be lodged, in order for the creditor to vote at the meeting.

Once the distribution to creditors has been completed, the Company will be dissolved.

What should you do if a debtor is placed in to liquidation?

Upon discovering that a debtor is in liquidation, you should ensure that the liquidator is aware of the debt! It sounds obvious, but it is dangerous to presume that your debtor has recorded all unpaid invoices on its accounts package. You will need to lodge a formal proof of debt with the Liquidator if you are to be able to vote at the creditors meeting and / or receive any distribution throughout the liquidation process.

If a liquidator has been appointed, the appointment should be registered with Companies House. Therefore, if the debtor will not disclose details of the liquidator, you can find details of the liquidator at Companies House.

Whether you will receive a payment, and how much you will receive, will depend on how much is left once the liquidator has paid out debts in accordance with the statutory order of priority.

You should of course take advice from your accountant regarding the impact on your accounting obligations, following the debtor’s administration.

Avoiding Insolvency

Whilst you will not completely avoid the risk of an insolvent debtor, you substantially increase the likelihood of your debtor becoming insolvent with every day that passes following non-payment of an invoice. The key is to be proactive in your credit control process and to ensure that there is no unnecessary delay in appointing a Solicitor following exhaustion of your credit control process.

I would recommend that our low cost debt recovery service, which enables you to send a letter to a debtor threatening Court action for £2.00 plus VAT, be seen as an automatic extension of your debt recovery process. In other words, the moment your letter cycle has been exhausted, I would recommend that you instruct us to send a letter to your debtor, so that continued pressure is applied.

Many companies are juggling debts and paying those creditors that “shout the loudest”. Your debtor may however, get to the point where it can no longer juggle debts and therefore, insolvency is unavoidable. To limit the risk of you being heavily exposed to one of your major customers when their insolvency is a risk, I would recommend sending a letter before action / issuing Court proceedings, through our service, in order to add volume to encourage your debtor to prioritise your debt before it is too late.

Maria Koureas-Jones

© Breeze & Wyles LLP 2011

This blog content does not represent legal advice. Every situation is different and you should seek legal advice if any of the content applies to you.

Get your head out of the clouds and protect electronic assets

2011-10-26T17:23:00.001+01:00

Online assets could end up in a black hole or in the hands of fraudsters, if individuals do not find a secure route to pass on to their family confidential passwords and account information in their wills

Billions of pounds worth of online assets could end up in a black hole or in the hands of fraudsters.

Research has shown that nearly half of adults in Britain now own internet-hosted assets, but many are failing to protect confidential information or finding out how to pass these assets on when they make their will.

A recently-published survey by London University’s Centre for Creative and Social Technology reveals that 44% of adults in Britain have internet banking accounts, eBay accounts or personal records such as digital photograph albums. The total value of these assets is valued at £2.3 billion.

Many of those surveyed had not drawn up a will that would protect these assets and ensure they passed on to their family. Since the assets are intangible and often not evidenced by paper files of monthly statements, there is a danger that they will be forgotten, or that the family are aware of their existence but cannot access the personal belongings because they do not know the password.

The other problem highlighted by the London University survey was that 11% of those questioned either had mentioned, or intended to mention, each account number and password explicitly in their wills, and this can give rise to a danger of fraud.
Breeze & Wyles explains: “After a person dies, the executors named in the will must apply for confirmation of their appointment. Once the Courts issue this confirmation, known as a Grant of Probate, the will is a public document; anyone can request a copy of the will and if it sets out account numbers and passwords, a fraudster could potentially gain access to those internet accounts or private documents.”

They went on to advise that any personal information that should not be published should be kept with the will in a separate envelope; that way it will remain secret but will not be overlooked.

They added: “The plain fact is that there are many unregulated will writers who don’t have the specialist knowledge. The best thing is to go to a specialist solicitor, particularly if they are a member of the Society of Trust and Estate Practitioners, then you know they will be properly qualified, regulated and insured, and will give knowledgeable advice so you achieve the outcome you want.”

This week is National Write a Will Week and current figures suggest that around 70% of the population have not made a will, leaving their dependents to deal with the intestacy rules.

ENDS

Web site content note:

This is not legal advice; it is intended to provide information of general interest about current legal issues.

Property; New Homes CQS Update

2011-10-26T10:03:00.002+01:00

Potential pitfalls await unprepared buyers of newly built homes warns CQS accredited Breeze & Wyles Solicitors LLP

Home buyers choosing to purchase newly built properties face pitfalls with yet further complications when buying a property before it is even built or where it is only partly built, says Breeze & Wyles Solicitors LLP in Enfield.

Breeze & Wyles Solicitors LLP, which earlier this year secured the Law Society’s Conveyancing Quality Scheme status, says that the legalities of buying newly built property differs from buying a second hand property and there are different factors to consider such as whether the property will be approved as suitable for occupation and whether the new roads and drains will be built properly.

The warning comes as recent research by Which? shows that more than half of those homeowners surveyed who had bought a newly built property in the last five years experienced problems, including delays and unexpected additional costs.

John Appleton said: “Buying a new home requires some additional preparation in advance with your solicitor. Establishing whether the plans reflect what is registered at the Land Registry and finding out whether the property complies with all of the planning and building regulation requirements are particularly important for newly built properties.

"In addition, making sure the contract sets out everything the builder has agreed to do, such as laying a lawn, installing additional sockets and laying carpets is important.

“At Breeze & Wyles Solicitors LLP we are familiar with the tighter deadlines, pre-exchange contract issues, as well as the special procedures including the need for an additional valuation involved in obtaining a mortgage for a newly built home.”

Breeze & Wyles Solicitors LLP says that a raft of legal issues need to be checked, such as planning permission, rights of drainage and water supply, as well as rights to use all pipes and cables to the property. Your solicitor will also ensure that building regulations have been adhered to, a special insurance for new homes is obtained and issues relations to roads on the estate where the property is being built comply with the Highways Act.

John Appleton adds: “Buying a newly built house comes with many benefits – no chain, a brand new home and often appealing finance packages on buying. However, the downside is that there is more to it than signing on the dotted line. Getting help from a CQS accredited solicitor such as Breeze & Wyles Solicitors LLP should be the first port of call when a newly built house.”

Breeze & Wyles Solicitors LLP underwent a rigorous application and assessment by the national Law Society to become part of CQS initiative, which recognises high quality in residential conveyancing. CQS has the support of the Council of Mortgage Lenders, the Building Societies Association, Legal Ombudsman and the Association of British Insurers.

Ends

Breeze & Wyles Solicitors LLP
Contact by e mail: john.appleton@breezeandwyles.co.uk

Employment Law Newsletter October 2011

2011-10-25T11:10:00.003+01:00

Dear Employer

You may have seen in the press news that, to many employers, will seem like a sign that the Government is finally doing something for employers: the current qualifying period for the right to claim unfair dismissal will be extended from next April from 1 to 2 years. This was the length until just over a decade ago, when it was reduced for the protection of employees who had been dismissed after that length of time for no proper reason and without any recourse to justice. In an attempt to ease matters for struggling businesses (or perhaps to gain votes), the present Government has proposed this change. The Government claims that increasing the period to 2 years, combined with other proposals, should see the number of unfair dismissals claims drop by around 2000 per year but watch this space. On paper it sounds good but of course it may give rise to more discrimination claims, for which there is no qualifying period.

In the meantime, remember prevention is generally better – and cheaper – than cure. If you have any problems, take advice before they fester. If in doubt, shout – we are here to help, at our brand new modern offices in the centre of Hertford.

If you have any comments or suggestions on this newsletter, please email newsletter@breezeandwyles.co.uk

Kind regards

The Employment Law Team

Some Recent Changes and Cases in Employment Law

1. The cost of disability adjustments

A recent case has reaffirmed the principles which govern the employer’s liability to make reasonable adjustments for a person who is disabled, whether under the previous Disability Discrimination Act or the current Employment Equality Act. In this case the Foreign and Commonwealth Office (FCO) refused to provide a team of “lip speakers” to support a deaf employee’s proposed role in Kazakhstan. The Employment Appeal Tribunal noted that, while cost is not decisive in deciding whether an adjustment is reasonable, this does not mean it is not relevant: not even the Government’s resources are infinite.

The EAT upheld the decision of the Employment Tribunal that the support the employee had requested was not a reasonable adjustment. The EAT said that tribunals are required to make a judgment on how much it is reasonable to expect employers to spend based on what the tribunal considers right and just in its capacity as an industrial jury. This may include a number of considerations such as the size of any budget, what the employer has spent in comparable situations, what other employers are prepared to spend and the policies set out in any applicable collective agreements. However, such considerations, even where they have been identified, can be of no more than suggestive or supportive value: there is no objective measure for assessing one kind of expenditure against another. Cordell v Foreign and Commonwealth Office CEAT

2. Employee status

In a new case on employee status an Employment Tribunal has found that an independent financial advisor who was purportedly self-employed was in fact an employee. In the Tribunal’s view, a key element pointing to employee status was the need to comply with Financial Services Authority (FSA) requirements. The Tribunal considered that the training and supervision obligations that this entailed contributed to a sufficient element of control, always a necessary element in the employer/employee relationship, over the claimant’s work. The employee’s status came to light when he was told that his self employment had ceased and he lodged several claims, including unfair dismissal.

Whilst the tribunal’s decision does not set a precedent, it suggests that compliance with FSA standards mean the “control” aspect of employment status is more likely to be satisfied. The same reasoning could be applied in other highly regulated sectors, e.g. where there is a need to comply with Health and Safety Regulations. (Johnson-Caswell v M J B Partnership Ltd)

3. Agency Workers

As advised in our last newsletter, the Temporary Agency Workers Regulations came into force on 1st October 2011. In order to allay any fears about the burden that the Regulations may place on employers, it is worth noting that:

• The regulations are not retrospective, i.e. the 12 week qualifying period for employee rights for existing agency workers will start only from the 1st October 2011;

• Regulations do not give agency workers employment status as such. The right to claim unfair dismissal is much more limited than for the “usual” employee. The Regulations provide narrower entitlement, for example the following:

o From day 1: same entitlement as comparable employees to, for example, provision of staff canteens, staff rooms, car parking etc. Hirers must also ensure that agency workers have the same information about the company’s job vacancies that would be available to comparable staff;

o After 12 weeks: the worker is entitled to receive the same treatment in respect of certain pay and other basic working conditions as if they had been employed directly by the hirer. This includes pay and bonuses, working hours, annual leave etc. There does not need to be an actual comparator for this entitlement.

The above is very much a summary of the situation.

What’s in the pipeline

1. From 6th April 2012 the qualifying period for the right to claim unfair dismissal will be extended from 1 year to 2 years.
The Employer Traps and Other Tips

1. Selection for Redundancy
Remember that the criteria that you use for redundancy needs to be transparent to avoid complaints and possibly claims.
2. Notice of Termination
We regularly see contracts of employment in which the period of notice to be given by the employer to the employee is unlawful, as it does not constitute the statutory minimum. This is one week for every complete year the employee has worked. The contract can provide for more than this but it cannot provide for less.

Debt Recovery Proposal

2011-10-17T13:29:00.003+01:00

Following significant interest in the previous blog I have been asked to publish on the web our debt recovery proposal.

Here it is

http://www.breezeandwyles.com/DebtRecovery/pricing.html

How to avoid holding the Debt Parcel when the music stops playing!

2011-10-17T12:09:00.006+01:00

Brendan O'Brien, Director and Head of Business Services at Breeze & Wyles Solicitors LLP says:

'This recession is unlike any other. At a time when it is difficult to do business due to lack of funding or risk taking an histoically low number of businesses are taking formal insolvency procedures.'

He asks: 'Why is this?. Traditionally in previous recessions there has been very little support from lenders and HMRC alike. This time around with lenders applying flexibility to their financially distressed customers and the HMRC's "Time to Pay" solution businesses are able to stay afloat when in the past they would not.'

'So what does this mean? This situation cannot and will not continue. When the change occurs no-one can really foresee. However, inter business debt, short term debt often in significant amounts has been increasing both in terms of amount per business and also perhaps more pertinently in the time it takes to pay that debt. Without knowing it good businesses are prejudicing their continued existence by tying there long term survival to weaker businesses.'

'You have delivered the goods or services and are awaiting payment. You have probably increased your credit terms to some of your key clients. However, there is a point where you must consider whether the business risk is too great. Yes, the sales force will argue that a customer is a key account and maybe they are right but there comes a point where you must decide whether your exposure is reaching a point of no-return. If they are not paying you then they are probably not paying a lot of other people and this is when the "Pass the Parcel" game begins. The debtor will try to pay those who shout the loudest to ensure the continued existence of the business. However, survival is not inevitable. When the debtor is no longer able to delay the formal insolvency procedure "ARE YOU ONE OF THOSE CREDITORS HOLDING THE PARCEL"?. An insolvency event is likely to give very little by way of return, say single pennies in the pound of what you are owed.'

'The only way to avoid this situation arising is to ensure that you have a good end to end credit control/debt recovery solution in place that is constantly working for you and that you are not afraid to upset a long standing customer relationship to ensure your own survival. A good customer will explain their problems and keep the channel of communication open to you. A poor one will ignore you. Another option is to review your credit terms and align them to your clients but stick to them and apply limited or no flexibility in their operation.'

'Finally, look at the debt recovery market and ensure that you are working with lawyers who understand the debt recovery market and have other 'non-legal' weaponry at their touch. Debt Recovery should not be expensive. The days of hourly charges in debt recovery ended many years ago as debt recovery became commoditised. Those lawyers proactively operating in the debt recovery space should be able to provide you with a section by section pricing to ensure that your invoices get paid. Those prices should make you ask why you hadn't thought of this before.'

'Our system is a great example of what is on offer. We will send a letter before action for £2.00 (yes TWO POUNDS!!) to your debtor. the remainder of the costs of the debt recovery cycle are equally surprising. Why dont you try it out?'

If you are interested in working with the Breeze & Wyles Solicitors LLP Debt Recovery team to ensure your survival contact brendan.obrien@breezeandwyles.co.uk for a copy of the full debt recovery proposal and pricing structure. If you debt recovery needs are different to the standard we have worked with other clients to create a niche product for them and we will be able to do so for you.

Business needs to look inside the latest gift horse on employment rights

2011-10-13T09:29:00.001+01:00

The latest changes to unfair dismissal rights are not a clear cut route to fewer tribunals as discrimination claims are likely to fill the gap and employers must also deal with the challenge of managing social media in the workplace

Following the announcement of a new two-year qualification period for unfair dismissal by the Government last week, experts are warning employers that it may just mean a shift in the type of claims made.

Under current rules, a claim for unfair dismissal can be made after being with an employer for a qualifying period of one year. That will increase to two years from April 2012, and the Government is also looking at a proposal to charge the employee a tribunal fee of up to £1250 to bring any such claim.

The announcement has come following consultation on routes to resolve workplace disputes and encourage business to stimulate employment prospects, but experts are saying it’s unlikely to bring the benefits promised.

Said Jane Dismore, employment expert with Breeze & Wyles Solicitors LLP : “The Department for Business has suggested this change could save employers £6m a year in tribunal costs, and see unfair dismissal claims fall by around 3000 a year, but it’s very likely that we will simply see an increase in other types of claim which are potentially more costly and time-consuming to defend.”

Claims are increasingly being linked to discrimination and to whistle blowing, which can be made from day one of employment. It is being predicted that these will rise, as workers who believe they have been dismissed unfairly before the two year qualifying period could claim they were discriminated against, or harassed for speaking out about company practice. Discrimination claims currently have no upper limit at tribunal, whereas unfair dismissal is capped at £68,400.
Recently published figures from the Ministry of Justice show there was also a sharp rise in the number of claims for age discrimination last year, and with the recent removal of the default retirement age at 65, these look set to increase.

And now the latest area to come under the spotlight for employment practice is managing social media in the workplace. Cases are on the up, with two recent examples highlighting the need for companies to have clear policies in place to avoid this new minefield. Earlier this year, pub chain Wetherspoons successfully defended an unfair dismissal case after an employee posted rude comments about customers on her Facebook account during working hours, with judgement going in their favour because they had a clear policy which set out grounds for disciplinary action, and which they had properly implemented.

But in the most recent tribunal decision, Whitham v Club 24, an employee who let off steam on Facebook was found to be unfairly dismissed. Here the case hinged on the lack of clear social media policy combined with a failure to follow the processes that were in place for misconduct.

Jane added: “Of course employees need protection against bad employers, but more often than not, cases will succeed because due process has not been followed by an employer, rather than because of any planned intent. The moral is that employers must make sure they keep up to date with the law and that both policy and practice are robust - that is the surest way to reduce this risk and minimise tribunal costs.”

The proposal to introduce a tribunal fee on employees is intended to tackle weak and groundless claims, and this will go to consultation next month to look at the amounts involved, and what reduced rates may apply to those who are unemployed or on low incomes. It is unlikely any such fee would be introduced before 2013.

ENDS

Web site content note:

This is not legal advice; it is intended to provide information of general interest about current legal issues.

http://www.direct.gov.uk/en/Nl1/Newsroom/DG_199636
Whitham v Club 24 Ltd t/a Ventura
Preece v JD Wetherspoons Plc

Breeze & Wyles Solicitors LLP exhibiting at the Watford Business Expo

2011-10-10T08:26:00.001+01:00

Modern Marketing Methods

Breeze & Wyles Solicitors LLP shall be exhibiting at the bestbusinessexpo on Wednesday 12 October 2011. To see us at the exhibition the details are as follows:

Starts: Wednesday October 12, 2011, 10:00AM BST
Ends: Wednesday October 12, 2011, 04:00PM BST
Event Type: Other
Location: Ramada Hotel
Watford, HERTFORDSHIRE GB
Price:
Website: http://www.bestbusinessexpo.co.uk
Industry:
Keywords: Business Expo Exhibition Event Seminars Workshops Networking Watford Hertfordshire Marketing
Intended For: Business Owners, Decision Makers
Organization:

Business 2 Business Expo theme "Modern Marketing Methods" Free to attend Seminars from Steve Clark and Dexter Moscow well known Marketing Personalities. Networking, Workshops and approx. 50 Exhibitors. Visitors must Register to get Free Entry. peter@bbexpo.co.uk

Murphy’s Law threatens premiership football revenues

2011-10-05T10:06:00.002+01:00

European ruling in the case of publican Karen Murphy opens the way for Premier League football to be shown using cheaper foreign decoders. European ruling opens the way for Premier League football to be shown using cheaper foreign decoders

A ruling by the European Court of Justice has opened the door for millions of households and pubs across the UK to receive cheap screening of live Premier League matches via other EU television companies.

In its judgment delivered on Tuesday morning (4th October) the ECJ has declared that the Premier League’s business model - whereby the rights to broadcast premier league matches are sold to different companies on a country by country basis - is contrary to the principle of the single European market.

The case was brought by Karen Murphy, a publican in Portsmouth, who was fed up with paying over £8,000 a year to Sky for a commercial licence to screen Premier League games at the Red White and Blue pub in Southsea. Instead she bought a satellite dish and decoder from NOVA, a Greek company at a cost of £800 per year.

NOVA had a licence to broadcast Premier League games in Greece, but the broadcasting footprint covered by NOVA extends far beyond their national borders, meaning anyone with the right equipment is able to receive the NOVA broadcast within the footprint.

Mrs Murphy screened Premier League matches at her pub and was prosecuted by Media Protection Services for an offence under the Copyright Designs and Patents Act 1988. She was found guilty and fined but she appealed and the Court of Appeal referred the question of the legality of the Premier League’s arrangements to the ECJ.

“The ruling is highly controversial. It’s still being interpreted, and we also need to see how the High Court responds,” explained Brendan O'Brien.

“The copyright industry works largely on a territorial basis and to have ruled that this approach is illegal within the European Union would have caused chaos. The ECJ ruling stopped short of this and said that a football match is not an artistic work that can be copyrighted.

“But although the ruling went in favour of Karen Murphy, there is still a problem, as all the graphics, video and music in the opening titles are still subject to copyright, and cannot be screened in commercial premises. There may be ways around that, but the Premier League is likely to move to take action where they can, for example through encoding, or it may pose problems if the sponsor’s logo is painted on the pitch.”

Any venue showing TV broadcasts must still ensure they have a commercial premises licence from a broadcaster, even if now the licence may possibly be from a broadcaster in a different EU country.

Sky has paid £1.6 billion for the exclusive right to broadcast Premier League matches in the UK and it provides all the cameras, equipment and operators at Premier League games. If that exclusivity is unenforceable, it not only loses the asset it paid for, but also is providing its equipment and skills for the benefit of competitors.

The Premier League is likely to have to radically rethink the sale of licences if this judgment stands. Sky is unlikely to want to pay £1.6bn when it renews its licence in 2013 if the British public have deserted it for cheaper European providers.

And according to sports pundits, it could turn out to be a hollow victory if the Premier League loses its vast television revenues, as it is likely that English football will suffer from top to bottom; the Premier League clubs will lose income for youth development and buying the best players and the lower leagues and grassroots football clubs will lose out too.

But in the meantime, the ruling also looks to be a victory for sports fans at home, as they may be able to buy a cheaper service from elsewhere in the EU. However, English fans are unlikely to give the Greek economy the much-needed boost it needs, as although the NOVA commercial service is considerably less, the consumer service currently costs more than Sky.

He added: “It’s undoubtedly the start of more, rather than less, discussion on the topic of what constitutes copyright, not least from the fans themselves who could well argue that the beautiful game is indeed a work of art!”
ENDS

Web site content note:

This is not legal advice; it is intended to provide information of general interest about current legal issues.

Reference:
European Court of Justice, plus related cases: Murphy v Media Protection Services (case C-429/08) and Premier League v QC Leisure and others (case C-403/08).

For High Court decision: http://www.bailii.org/ew/cases/EWHC/Admin/2007/3091.html

Employment Newsletter September 2011

2011-09-27T08:10:00.002+01:00

Dear Employer

We hope you have enjoyed a successful summer and your staff have returned from their summer holiday full of renewed vigour to make you the millions that you perhaps did not earn during the worst of the recession.

Clearly something is improving: HM Courts & Tribunals Service has reported that the number of claims for unfair dismissal and redundancy has fallen slightly, possibly as a result of the improving economic climate. On the other hand, claims by part-timers have nearly tripled, while age discrimination claims have risen by 32%. The moral of the story is that if you have part-time workers or those who may be older (although age discrimination applies across the range), then tread carefully and take advice sooner rather than later: the median award for age discrimination claims is currently the highest of the discrimination strands, at £12,697 (with all others around £5000 and £6000).

As always, prevention is better than cure, and generally a lot cheaper too. If in doubt, shout – we are here to help, at our brand new modern offices in the centre of Hertford.

If you have any comments or suggestions on this newsletter, please email newsletter@breezeandwyles.co.uk

Kind regards

The Employment Law Team

Some Recent Changes and Cases in Employment Law

1. LAY-OVER TIME AND MINIMUM WAGE

The Employment Appeal Tribunal (EAT) has held that lay-over time, which required a worker to stay overnight at a given location ready for work the next day, did not constitute “work” for the purposes of the National Minimum Wage Regulations 1999. The EAT highlighted the danger of confusing “work” for minimum wage purposes, with “working time” under the Working Time Regulations, as the Tribunal in this case had done. In this case, Mr Baxter was a casual driver for a company, driving clients going on holiday to their point of departure. Drivers would sometimes be asked to stay overnight in a hotel or B&B in order to pick up passengers in the morning. The employer then increased the rate paid for normal hours but a flat rate was introduced for those “lay-over” periods. Mr Baxter made several claims, including one that the pay he received for his lay-over hours was less than the minimum wage. Although the Employment Tribunal found for Mr Baxter, the EAT stressed that only the National Minimum Wage Regulations were relevant to his claim for lay-over pay. In summary, the EAT thought it was plain from the facts that he was not working during his lay-over period: he was not at his place of work, was performing no tasks and had no responsibilities. [Baxter v Titan Aviation Ltd]

2. COMPENSATORY REST PERIODS AND SHIFT WORKERS

The Court of Appeal in the case of Hughes v The Corps of Commissionaires Management Ltd has given guidance on compensatory rest periods. This concerns Regulation 24 of the Working Time Regulations 1998 in the context of a security guard working 12-hour shifts. As he was contactable during his rest break it could be interrupted. However, he would be entitled to start a break again if it were interrupted. He claimed that this breached the Working Time Regulations 1998. The Tribunal found that his breaks met the requirement of Regulation 24(b) of providing the necessary protection to safeguard his health and safety. Mr Hughes appealed. The EAT dismissed his appeal but held that his employer had not breached the Regulation on a different basis that the breaks were, in fact, compensatory rest under Regulation 24(a). Mr Hughes appealed again, and the Court of Appeal dismissed it. This is an important case for shift workers and is very much summarised here: if you need to know more, please let us know.

3. FAILURE TO RESPOND TO EMPLOYER’S LETTER WAS NOT SELF-DISMISSAL

A recent case in the EAT has held that an employee was not “self-dismissed” when he failed to reply to a letter stating that he would be taken to have resigned unless he contacted the employer. The claimant was a lorry driver who had had an accident in 2005 at work which seriously injured his spine, leaving him unable to do his job. In June 2005, he brought a personal injury claim against the company. When he was evicted from his home in January 2006, he failed to tell the company of his new address as required by the employee handbook. In June 2006, no longer receiving sick notes from him, the company sent a letter to his old address saying that if they had not heard from him by 5th July, they would conclude that he no longer wished to work for them and that he had terminated his employment by his own volition. The letter was returned by the Post Office and no further attempt to contact him was made. He first found out about the June 2006 letter in May 2009. In July 2009 he lodged numerous claims at the Employment Tribunal, including unfair dismissal. The company contended his employment had ended by dismissal, effective on 5th July 2006, and therefore he had exceeded the three-month limit for bringing a claim.

The Employment Tribunal Judge struck out his claims following an earlier case but the EAT held that that was wrong. It followed an earlier decision, being that repudiation by the employee must be accepted by the employer, whereupon the contract is terminated by the employer in circumstances amounting to a dismissal by the employer. On that basis, the employee’s contract was not impliedly terminated by resignation on 31st January 2006. Furthermore, the letter of June 2006 did not amount to the company’s acceptance of repudiation or indeed resignation by the employee. The EAT took the view that no effective steps were taken by either party to terminate the contract of employment until the letter from the company in the personal injury claim reached him in May 2009, saying that his employment had been formally terminated in July 2006. That was the employee’s first opportunity to know that the company no longer wished to bound by the contract. He had accepted that state of affairs by starting Tribunal proceedings on 28th July 2009 and therefore his complaints were brought in time.

3. SELF-EMPLOYED OR EMPLOYEE?

The case of Autoclenz v Belcher has probably thrown into panic a lot of firms that operate car valet services in car parks. This case went all the way to the Supreme Court, which confirmed that the right approach when determining the legal status of a worker is not to look just at the terms of the written contract but to look at all the circumstances relating to the relationship. In this case, it was held that despite indications to the contrary, the “self-employed” car valets were actually employees. The fact that HMRC had previously confirmed that they were self-employed for tax purposes did not mean they were self-employed for employment law purposes. In this case, the contracts had been worded to give the impression of self-employment; there was no obligation on the part of the valet to do any work; the valet had the right to use a substitute instead. Despite that, they were held to be employees.

What’s in the pipeline

1. The Agency Worker Regulations
The Agency worker Regulations are likely to come into force on 1st October 2011. In the Regulations, “Agency Worker” means an individual who (a) is supplied by a temporary work agency to work temporarily for and under the supervision and direction of a Hirer; AND (b) has a contract with the temporary work agency which is (i) a contract of employment with the agency, or (ii) any other contract with the agency to perform work or services personally. The Regulations are, therefore, based upon the relationship of the temporary work agency and employee or a contract to provide personal services. It gives agency workers the same rights, after various periods of time, as the employees of the Hirer. Where it is a contract with the agency to perform work or services personally, it will not be necessary for that work or those services to be performed for the agency.

2. CHANGES TO NATIONAL MINIMUM WAGE
As advised in our May newsletter, these increase as usual on 1st October.
The Employer Traps and Other Tips

1. NEW AGENCY WORKER RULES
Ensure if you have any temporary agency workers that you are familiar with, or obtain advice on, the new Regulations so as not to fall foul of denying the worker the employment rights to which they become entitled after the various qualifying periods.

2. PAY IN LIEU OF NOTICE (PILON) CLAUSES IN CONTRACTS
These allow you to unilaterally terminate the contract immediately by giving the employee pay in lieu of notice (assuming you are terminating their employment for one of the statutory five fair reasons). It means that the contract is ended immediately, rather than at the end of what would otherwise have been the notice period. This can be important in the context of annual bonuses, which are often dependent on the employee still being a member of staff at a particular time of the year. It means that a judiciously timed PILON can permit you to exclude the employee from that bonus pool.

3. STATUS OF YOUR STAFF
As the Autoclenz case shows, be very careful if you are treating any of your staff as self-employed: perhaps you should take advice on whether in fact they may really be employees.

Breeze and Wyles: Our Debt Recovery Launch Event

2011-09-23T17:06:00.003+01:00

Preparations for our event started with torrential rain and the attendance of some unusual guests…

The “good old” English weather did not however put a dampener on the event, which we are pleased to announce was a real success; attended by over 50 businesses.

Breeze and Wyles, appreciating the challenging times that businesses are facing, have launched a low cost, fixed fee, debt recovery service, aimed at helping businesses to chase “slow paying” debtors. For example, the cost for a business to send a letter to a debtor regarding an unpaid invoice is £2.00 plus VAT.

Breeze and Wyles Head of the Defended Debt Recovery Department, Maria Koureas-Jones, spoke at the event;

“I strongly believe that Breeze and Wyles are enabling businesses access to legal services that were previously non-cost effective, when debt recovery fees were charged based on a Solicitor’s hourly rate. In turn, I believe that as a firm we are helping businesses to improve their cash flow position in a time when businesses are finding managing cashflow a challenge”

Businesses are finding that they have an ever-increasing aged debtor list, with the average payment period far exceeding most businesses standard payment terms. With the threat of a debtor’s insolvency remaining a real issue, expediency in chasing unpaid invoices, has to be a priority for businesses.

Our service should be seen as an extension to a businesses internal credit control function, to ensure expediency and continued pressure on a debtor – this is vital to increase the chances of recovery.

Brendan O’Brien, Director and Head of Business Services, speaking from the Firm’s new commercial premises in Hertford, was thrilled with the support and interest shown by both local and national businesses; “I am pleased with the feedback from all of the businesses that attended. As well as raising the awareness of our debt recovery service, the event served as an opportunity for businesses to meet new contacts. It is an example of the steps that we are taking to facilitate new business relationships in our local area”.

If you would like to find our more about our debt recovery service, please email rita.wright@breezeandwyles.co.uk.

As a firm, we are more than happy to discuss the provision of a bespoke debt recovery service for businesses that have unusual or very specific debt recovery requirements. For further details, please email; brendan.obrien@breezeandwyles.co.uk.

The WARRANTIES SCHEDULE in the context of a Share Purchase Agreement

2011-09-22T15:39:00.001+01:00

Here it is intended to consider just some of the warranties which are commonly found in share sale agree-ments; in particular, those which are most likely to give rise to difficulties in negotiations for the sale of the target.

A Accuracy of information
The purchaser is concerned to know that the information fed to him and his advisers before he enters into the purchase agreement and on which he bases his view of the target and its worth is correct. Often a great deal of information will have been handed over before the agreement is in draft form. The problem for the sellers in accepting a warranty confirming the accuracy of the information provided to the purchaser is to identify just what information has been handed to the purchaser, possibly months earlier and possibly very informally during a preliminary visit by the purchaser or his accountants. The sellers should seek to restrict the warranty to those items listed in and attached to the disclosure letter; it can be a laborious task prepar-ing the list but it has the advantage to both sides of setting down clearly and precisely what information is being warranted.

It is sometimes a difficult question whether the purchaser's accountants' report should be added to that list, especially so in cases where the report is not actually shown to the sellers. This may be because it is critical of the management of the target provided by the sellers, or recommends future action which may be unpal-atable to the sellers or, more rarely, because it suggests the target is worth more than the consideration of-fered. In each case it would be hard on the sellers if the purchaser had a claim for a breach of warranty in respect of some matter clearly identified in the report but omitted from the disclosure letter. There seems no objection in principle to adding the report to the list of documents treated as disclosed even if it has not been seen by the sellers. The report can then be produced at the discovery stage of any proceedings which arise from a breach of warranty claim.

B Materiality
The purchaser will invariably seek to impose a 'materiality' warranty ie one by which the sellers confirm that everything material which might affect a purchaser's willingness to buy the shares being sold or which might affect their value has been disclosed1. His concern is that there might be something known to the sellers of which the purchaser is unaware. The sellers should seek to reject this; it is not uncommon for at least 100 warranties to be given and, on top of these, the purchaser's accountants will often have carried out a thor-ough review of the target's business. If there is some matter which has passed the notice of the purchaser or his accountants, its importance might well not have been apparent to the sellers either and it seems a little hard on them that they should bear the risk here. Whether the purchaser should insist on this will probably depend on how extensive his investigations have been and how co-operative the sellers have shown them-selves in the disclosure exercise.

1 It is perhaps equally important for the purchaser to know of any factor which might enhance the value of the shares as might adversely affect such value. This is particularly important if deferred consideration is payable by reference to either the unascertained present performance or the future performance of the target. It can come as a shock to the purchaser to be obliged to pay out more than he - if not the sellers - was expecting.

C Accounts and management accounts
Most purchasers base their willingness to purchase on the hard figures contained in the most recent audited accounts of the target and (depending how stale those are) management accounts. There are accordingly a significant number of warranties dealing with these accounts. In practice, merely disclosing them will be sufficient to discharge a number of the warranties; audited accounts will for example disclose changes in accounting principles from those required by statute (CA 2006, Part 15) and from those applied in the preceding period and any extraordinary items.

The accounts referred to in the warranties are usually the most recent audited set of accounts. As such, they are required to give a 'true and fair' view of the company and its profit in respect of the period for which they are prepared (CA 2006, ss 396(2) and 404(2))1. What they do not, and cannot, do is give a 'true and accurate' view of the company and the sellers should seek to strike these or similar words from any such warranty.

1 Mr Justice Andrew Smith in Macquarie Internationale Investments Ltd v Glencore UK Limited [2009] EWHC 2267 (Comm), [2009] EWHC 2267 at paragraph 162 held that the requirement to prepare accounts in accordance with relevant accounting standards cannot, in the absence of exceptional circumstances, be separated from the requirement for the accounts to give a true and fair view of the finances of the target; they are not separate warranties, independent of each other. This is because accounting principles require that accounts are prepared so as to give a true and fair financial picture.

Still less can the management accounts (which will be unaudited) either be true and accurate or give a true and fair view. The standard of management accounts varies from infrequent and sometimes incomprehensi-ble jottings on not much more than the back of an envelope to regular, orderly and sophisticated accounts which even a lawyer has the hope of understanding. The sellers should seek to temper any management accounts warranty accordingly but may well find that the purchaser will want it made quite clear the basis on which the management accounts have been prepared and the extent to which they can be relied upon.

D Business of the company
The warranted accounts can give only a historic view of the target: the purchaser is obviously anxious to know the state of the target at the time he buys it. Further warranties are designed to do this by seeking information about the performance of the target since the date to which the warranted accounts are prepared.

A warranty may seek to do this in the broadest terms by seeking to establish any material changes - good and bad - in the state of the target since the accounts' date. A problem for the sellers is that it is extremely wide in its application, extending as it does to the target's prospects. It clearly invites the sellers to disclose matters which are generally known as well as those which affect the target in particular. Under the warranty, the sellers might have to disclose that the business climate might change with a change of government at an impending general election, or that erratic movements on the pound/dollar exchange rate could affect the target's performance. The sellers would be well-advised to seek to limit the scope of this warranty.

A warranty confirming that the target's debts are good and collectable should also not be accepted lightly by the sellers. It is in effect a guarantee by the sellers that the target's debtors will pay up in full. For most businesses, this is unlikely to happen and the sellers should seek to limit the warranty to a disclosure of the target's bad and doubtful debt history, the present provisions made and the target's policy on bad and doubtful debts generally.

E Agreements and arrangements
The warranties will also specify a number of types of contracts about which the purchaser requires informa-tion. There may be a number of, for example, lease or hire purchase agreements relating to the target's vehi-cles which are within the scope of the warranty and require disclosure; depending on how many there are, the sellers may suggest a de minimis cut off so that only those which relate to vehicles worth £15,000 or more when new need be disclosed, with the rest being summarised in broad terms. This may or may not be acceptable, probably depending on the size of the share sale transaction as a whole. What the sellers should concern themselves with are the payments needed to be made at the end of such lease or hire purchase agreements; there are sometimes 'balloon' provisions whereby substantial extra payments need to be made if the vehicles have exceeded a certain mileage during the lease or hire purchase period.

Trade union recognition agreements also should be disclosed under a suitably drafted warranty. The terms of these are often only partly reduced to writing and, even in the present industrial relations climate, the pur-chaser should press for as much information as possible on agreements or understandings between the target and the unions.

F Insolvency
A warranty will usually deal with the target's solvency. Obviously if anything material were disclosed here it is most unlikely that the purchase would proceed. In any event the purchaser's solicitors should carry out a company search against the target immediately before exchange of the agreement as it would be far prefer-able not to proceed to exchange than to proceed and then have the bother of trying to enforce breach of warranty claims.

G Intellectual property rights
Intellectual property is covered by the warranties. The importance of this will depend on the target's busi-ness. The purchaser will however in all cases be concerned to know the basis on which the target uses its computer systems; software programmes may be licensed to it rather than owned outright, and the hardware will often not be owned outright. The purchaser will also wish to know who operates these systems; accounts for example may be handled by the target's parent company and the purchaser will need to make his own arrangements for this in the future, or negotiate interim arrangements with the sellers. The purchaser may also require confirmation of matters in relation to trading names, trademarks, patents and websites.

H Properties
The warranties schedule will also deal with the target's properties. There are a number of ways of dealing with the target's properties. The sellers' solicitors may agree to produce certificates of title, the terms of which are agreed with the purchaser's solicitors, or a substantial number of warranties may be given in respect of the properties against which full disclosure is made. In the former case, only an extremely limited number of warranties are required; depending on the terms of the certificates, this could be as little as confirmation that details of all properties are set out in the agreement and that sufficient information has been provided to enable the certificates of title to be prepared. If certificates are not to be prepared, then a much fuller set of property warranties might be expected.

In practice, the purchaser's solicitors investigate title in much the same way as if the matter were a property purchase and generally do not rely on extensive property warranties. Preliminary enquiries and requisitions on title, at least in standard form, are usually raised. If the property lawyers are instructed in good time, local authority searches are made. The title deeds to the properties are of course inspected.

The difficulties arising from the property warranties relate mainly to those matters which do not concern title but the condition or value of the properties. For example, a warranty may seek to deal with the materials used in the construction of the building on the properties and this may well not be known to the sellers, or easily ascertainable even in a survey assuming, of course, that it is practicable to carry one out. Similarly, property warranties may deal with likely expenditure and the state of repair of the properties. Sellers may reasonably wish to resist these - their solicitors will also bear in mind any property warranty which confirms that the target has complied with its obligations as lessee, which obligations are likely to include keeping the properties in good repair and condition.

I Tax warranties
The tax profile of the target is of fundamental importance to the purchaser who will be concerned to ascertain a combination of the following:

(1) all tax returns are up to date and all tax records required to be kept by law are complete and accurate, including records relating to transfer pricing;
(2) that the provision for tax in the balance sheet forming part of the warranted accounts or the last completed accounts is sufficient to cover all the liabilities that may become due in respect of the accounting period covered by those accounts;
(3) all tax, VAT, stamp duties and customs duties that was due to be paid in the last three years was paid on time and there are no outstanding liabilities for interest or penalties;
(4) the target has no ongoing dispute with the tax authorities and is not likely to be the subject of an investigation or non-routine audit by the tax authorities;
(5) the target company has not entered into or been party to any schemes or arrangements designed partly or wholly for the purpose of avoiding or deferring any liability to tax;
(6) the target company has not, in the last three years, relied on any formal or informal un-published concession dispensation or practice which affects the amount of tax chargeable on the target company or which purports to modify or provide exemption from any obligation to make or submit any computation notice or return to any tax authority;
(7) the target company has properly applied PAYE, making all such deductions and pay-ments of tax as required by law from all payments to or treated as made to employees, ex-employees, officers and ex-officers of the company, and punctually accounted for those deductions and tax payments to HMRC;
(8) the target company has not agreed to make a repayment of share capital, or otherwise reduced its share capital, or issued any new share capital which has been paid otherwise than by new consideration. The target company has not issued any security which is of a character that the interest payable thereon is treated as a distribution under CTA 2010, s 1000;
(9) the target company has not entered into any transaction which has or may give rise to a direct or indirect charge to inheritance tax;
(10) the extent to which the realisation of assets at book value would give rise to a tax li-ability;
(11) all the necessary conditions for the availability of all capital allowances claimed by the target company have at all material times been satisfied and remain satisfied, and that no bal-ancing charge will arise if assets are disposed of at the book value shown in the last accounts;
(12) all the claims or elections that the target company could have made that may affect capital gains; in particular, whether the target company has rolled-over gains made in the past into real or intangible assets.
(13) whether the target company is a close company within CTA 2010, s 439, and that it has never been a close-investment holding company, which would mean the higher rate of corporation tax would apply.

Certain of the tax warranties are designed to elicit the disclosure of unusual, or potentially troublesome, transactions. Where the target is potentially liable for taxes primarily payable by another person, it is desir-able for the target to be able to recover that liability from the sellers. This is the function of the tax deed. The sellers would almost certainly be best advised, in such an event, to pay the amount of any claim made under the deed to the purchaser because there is otherwise some possibility of relief from capital gains tax being impaired and in the case of the target claiming under the tax deed, of a grossing-up of the amount paid taking place (as to the reasons for this, see CT[5.210] ff). The same dangers apply also in the event of a claim being made by an assignee of the warranties.

Although provision is made in cl 13 of the share sale agreement for the purchaser to assign the benefit of the warranties (at least in limited circumstances), this should only be permitted in exceptional circumstances as the payment in the hands of the assignee might be assessable to tax and the assignee will accordingly wish the payment made to be grossed-up.

The purchaser should bear in mind the overall limitation of liability in cl 8 of the share sale agreement when considering whether to cause the target to sue under the tax deed, when a grossing-up might take place.

In practice, involving as they do specific and detailed knowledge of both the target's affairs and of the tax laws, the tax warranties are often dealt with by the target's auditors who have little option but to work care-fully through each and every one of the warranties with a tax handbook in hand. It is an area where the purchaser's own advisers should be especially careful to cut out any and all irrelevant warranties.

Chewy lesson for business as Bertie Bassett fires the last shot

2011-09-22T13:12:00.002+01:00

In a battle over contract terms, a Court ruling has left a company with a £110 million liability, saying that it comes down to who fires the last shot.

The High Court ruling was given in a case brought by sweet manufacturer Trebor Bassett Holdings against ADT, the fire and security company, and it’s prompted a reminder to business to check their supply procedures.

When a supplier provides a quote to provide goods or services on standard terms, and the purchaser accepts the price but counters to say it will be on their standard terms, the contract will normally be on the terms of the party that fires the last shot, although the courts will take into account relevant surrounding circumstances.

In this latest ruling, Trebor, the sweet manufacturers, were moving production lines to a new factory. They invited ADT to quote for the installation of a fire-prevention system, which was provided, subject to ADT’s terms and conditions. The quote was accepted using a purchase order which said that the contract was to be on Trebor’s standard terms, and that these had already been supplied.

When a fire broke out and destroyed Trebor’s new factory, they sued ADT and this is when the issue of whose terms would apply became crucial, as ADT’s terms would have limited liability to £14,000 whereas Trebor’s claim for damages was £110 million.

ADT claimed that they had supplied Trebor with a revised specification and quote that was drawn after work started, but the judge found that there was no evidence that the revised specification and quote had been delivered to Trebor. As a result, the work had been carried out on the basis of the Trebor purchase order. Although ADT had argued that Trebor’s standard terms had not been supplied to them, the Judge held that the fact that the purchase order stated that the terms had been supplied was enough to put ADT on enquiry as to what the terms were.

Explained commercial law expert Brendan O’Brien of Breeze & Wyles Solicitors LLP: “A contract is formed when one party makes an offer and the other party accepts that offer. If A offers to do a job for £500 on his standard terms and B accepts the figure of £500 but says the job is to be done on different terms, the law regards this as a counter-offer. If A goes ahead and does the work without further negotiation he will be treated as having accepted B’s counter-offer. This is why the basic rule is that, where there is a battle of forms, the terms of the party who fired the last shot will normally apply.

“Large companies often use purchase order forms when buying goods or services. These forms will usually state that the purchase is made on the buyer’s terms, as in this case, even though the supplier will usually have delivered a quotation saying that the goods or services are supplied on their terms. Small to medium-sized businesses need to be aware of this when quoting for large companies and must realise that specifying terms in their quotation is not conclusive.”

He added: “The case is also a reminder to make sure that the terms of business are actually communicated to the other party, it’s not enough to just say they exist. Even though Trebor were lucky to get away with it here, the best advice must always be to provide a copy of one’s terms or, at the very least, to say exactly where they can be viewed, for example, on one’s website.”

ENDS

This information is not intended as legal advice

Buyers must consider worst case scenario when “buddying up” on property ladder

2011-09-21T17:11:00.001+01:00

Home-buyers who "buddy up" with a friend or relative in order to afford their first home must factor in all worst case scenarios before buying, says Breeze & Wyles Solicitors LLP in Enfield, Hertford, Cheshunt and Bishops Stortford.

Breeze & Wyles Solicitors LLP, which earlier this year secured membership to the Law Society’s prestigious Conveyancing Quality Scheme, which recognises high standards in home-buying, is warning those looking to buy their first home with a friend or relative that there is more to consider. Breeze & Wyles Solicitors LLP says failing to plan for all eventualities, even death, could leave you in difficulty in future.

John Appleton Head of Residential Conveyancing says: “With home loans less accessible than a few years ago joining up with a friend or relative to buy a home is a good alternative. However, there is much more to consider when buying this way. There is a high possibility that one party to the joint ownership’s circumstances could change, so it is vital to consult your solicitor early on to cater for every possible change in circumstance.

“Sometimes a co-ownership contract might be necessary, but at the very least Breeze & Wyles Solicitors LLP can highlight all the options and possible scenarios to both owners. We can also advise on the type of mortgage which might be suitable and how joint ownership fits into your estate and will. There may also be tax implications that we can advise on.

“Circumstances when buying jointly are more likely to change. If you buy with a friend and they subsequently marry or change jobs they might want to move on and not be tied down anymore by the property they jointly own with you. Or if you buy with a family member who doesn’t reside there, but who dies and leaves their share to someone else you may need to factor that into any initial agreement.

“It does sound daunting, but far from put anyone off it is important that you seek legal advice on joint ownership. When it is difficult, as now, to raise a deposit and secure a mortgage on your own buddying up is an excellent way to get a foot on the property ladder, but it needs to be done with legal advice from a CQS accredited firm.”

Breeze & Wyles Solicitors LLP underwent a rigorous application and assessment by the national Law Society to become part of CQS initiative, which recognises high quality in residential conveyancing. CQS has the support of the Council of Mortgage Lenders, the Building Societies Association, Legal Ombudsman and the Association of British Insurers.

Ends

Breeze & Wyles Solicitors LLP

Reality is what counts in a contract

2011-09-20T16:14:00.001+01:00

Employer is made to face up to regulations and responsibilities

Employers have been given a warning about using employment contracts to try and get round working time and minimum wage regulations.

The judgement from the Supreme Court in the recent case of Autoclenz Ltd v Belcher and others, has shown that an apparently cast-iron contract will not help an employer to avoid their responsibilities.

Instead, the Court has said, what matters is the reality of the relationship rather than the wording of the employment contract and companies must not try to outwit the system.

Autoclenz provided car cleaning services to motor retailers and auctioneers and described their valeters as sub-contractors in their contracts, rather than employees. The contract also said that the valeters could get other people to carry out the valeting for them; that they were not obliged to provide their services and that Autoclenz did not guarantee that it would provide work on any specific occasion.

The aim of the contract was to make the valeters self-employed, so that they would not qualify for paid leave and the minimum wage.

But 20 of the valeters, supported by their union, brought a case against Autoclenz claiming that they were really ‘workers’ for the purposes of the Working Time Regulations and the National Minimum Wage Regulations. When the case reached the Supreme Court, the judges ruled in their favour, saying that they were employees in spite of the wording of their contract.

In the ruling, the Supreme Court said that a contract for work or services is different from an ordinary commercial contract between parties of equal bargaining power. Very often a company that is offering work is able to present the individual worker with a written contract on a take it or leave it basis. Because of this, the Court ruled that relative bargaining power of the parties must be taken into account in deciding whether the written contract represented the truth of what was agreed, saying that they had to consider all the circumstances, not just the written word.

Said Jane Dismore law expert Breeze & Wyles Solicitors LLP: “This case demonstrates that even if an employer comes up with an apparently cast-iron contract, it will not help them to get round the Working Time and Minimum Wage Regulations. Employers must accept their responsibilities and not try to outwit the system.”

She added: “When it comes to employment contracts, the Courts are going to be ‘realistic and worldly wise’, as the judges put it in this case, and will be looking beyond the wording of the contract to assess the true situation.”

ENDS

Web site content note:

This is not legal advice; it is intended to provide information of general interest about current legal issues.

Statutory Demands: What Constitutes a Genuine Dispute requiring Resolution?

2011-09-16T10:56:00.001+01:00

It is accepted that the use of Statutory Demands in debt recovery is fraught with traps for the unwary. The Courts have in the past held that there must be no genuine dispute between the parties that would make litigation rather than the nuclear option of insolvency the appropriate course of action. This has been supported in the judgment given in the case of CROSSLEY-COOKE V EUROPANEL (UK) LTD [2010] EWHC 124 (Ch).

The Facts

The appellant in this case, appealed against a decision of a lower court rejecting his application to set aside a statutory demand served on him by the respondent in respect of an alleged debt.

The debt related to a number of unpaid invoices in respect of materials allegedly delivered by the respondent to the appellant in 2008. There was a dispute as to whether the appellant had actually placed the orders and as a result he refused to pay for the goods because, although he had an account with the respondent, another business on the same industrial estate had placed the order and to whom the deliveries had been made. That business had since ceased trading. Copies of the invoices had been sent to the appellant (who raised no objections at the time) and a representative of respondent later attended at the appellants address to seek payment. As a result of that visit the appellant wrote a cheque and handed it to the representative, but with the written qualification on it that it required confirmation before it was paid it into the bank. The cheque was later stopped.

The court was presented with various potential sets of facts as to how that situation might have come about. One possibility was that he may have ordered the materials through his account for use by this other business, or alternatively the materials may have been ordered by the other business using the appellant's account details without 's knowledge. If the former hypothesis was correct he would be liable and would have to look to the other business for reimbursement. If the other hypothesis was correct he would not be liable.

It was held that:

the appeal would be allowed with the statutory demand being set aside.

(1) This was a true appeal and the appellate court should be reluctant to intervene with the lower courts's ruling unless the lower court had applied the law incorrectly or erred in principle. Union Bank (UK) plc v Pathak [2006] EWHC 2614 (Ch) applied.

(2) There was a genuine triable issue here for the purposes of r 6.5(4) of the Insolvency Rules 1986 - the lower court had applied too strict a test in dealing with the appellant's contentions. It was not a question of looking at the balance of probability and it was not appropriate to conduct a mini trial at that stage. There was sufficient uncertainty in the circumstances to raise doubt as to the appellants indebtedness. Without expressing a view as to which of the alternative hypotheses might be more credible, the onus was on the respondent to commence proceedings to have them tested at full trial.

When looking at the facts any number of situations could have given rise to the debt. Even though and objective observer is more likely to favour the creditor, there is still a chance that the debtor's statement if the facts were accurate. Even the fact that a cheque was presented and then stopped was not sufficient to provide the respondent with a strong enough counter argument that there was no genuine dispute.

So in effect, it is only safe to use a Statutory Demand where there is a liquidated sum outstanding and it cannot realistically be denied that the debt is owed.

Guidance on when to use Statutory Demands in Debt Recovery

2011-09-16T10:45:00.001+01:00

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 recipient’s 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.

Cashflow: A recipe for Survival

2011-09-15T09:57:00.005+01:00

It is unclear from the number of sources commenting on the economy what 2012 holds for business. The Government’s official position is that growth will increase this year but many Economic Indicators point in the other direction. Indeed if one of the southern European States defaults on its soverign debt obligations there are commentators predicting double digit negative growth.

In these uncertain times how do businesses with a profitable core operation ensure survival? Cost cutting exercises have been carried out by many to ensure survival. Staff costs have already been reduced. Cheaper supply options have already been considered and where appropriate have been implemented. From where will the cashflow come? During the boom, the majority of businesses needed to concentrate on customer and contract acquisition and then delivery to those customers. We have spent the last three years waiting for the floodgates of boom to open but the doorkeeper seems to absent without leave.

Business Leaders have already restructured their operations to maintain a strong cash-flow position. One certainty is that turnover will remain static for all but a few market sectors. It is certain that in the short to medium-term trading your way out of the situation, on the same basis is not an option. In the forefront of the decision makers mind is the hope that some competitors will fail. Even though the market will contract further, if a significant number of competitors fail then the share of the market available to the business will be sufficient to guarantee its existence through to the end of the downturn. But turnover and cash are not the same thing.

A considerable amount of the ‘survival’ money is tied up in debt of which a significant amount may be long-term. As Debt Recovery lawyers we have noticed that the age of debt upon which we are asked to advise is continuing to increase. A small number of businesses have realised that the impact on cash-flow of a robust and rigorous debt recovery process is now a business imperative. By stealing a march on your ‘cash competitors’ you will be taking steps to ensure the business survives. More importantly in your banking relationships greater emphasis is now being placed on your ability to review and analyse the profile of your debtor book. Banks are taking a much greater interest in this information for the purposes of assessing the viability of your business. Make sure that this is simply not just a box ticking exercise, very real results will give reality to your attempts to deliver survival if not growth if you get it right.

Strategies and Techniques for Recovery

1. Credit Control

There is now an industry delivering various techniques for debt recovery or collection without the need in the vast majority of cases for the use of courts. The court procedure adds a cost element to the process of recovery which need not be incurred. Using techniques such as telephone contact, letters and personal attendance recent debts are likely to the recovered in full. At the very least an assessment of the debt profile can be undertaken. Credit control is not a simple recovery procedure in the sense that this is all it seeks to achieve. If only it was that simple. In the current economic climate cash-flow of all of our customers is limited. If Debtors are prudent then they will make payment of their debts strictly in priority to their business needs. An assessment of their liability forecasts will mean that the amount they owe you is down the list of priority. The credit control process enables you to move your debt up that list.Furthermore, it enables you to assess whether the debtor is of sufficient financial standing to maintain an ongoing relationship.

2. Statutory Demand

Where there is no likelihood of a dispute about the amount outstanding and that sum is more £750. It may be worthwhile serving on the debtor a Statutory Demand. This process is the preliminary step to bankruptcy or liquidation of the debtor. It focuses the mind of the debtor on the payment of your debt above all others due to the potentially catastrophic impact of not dealing with the Demand.Once the time period for the debtors to apply to have the Demand set aside or make payment has expired you have a number of choices as to how to proceed. Formal insolvency proceedings are an option but this means that all creditors will then have equal rights in accordance with the class of debt that they have as against any funds available to pay the creditors. This may mean that you will only recover a small portion of the amount owed to you by the debtor.

Caution should be exercised when using this process. It is critical that a proper and detailed assessment of the circumstances surrounding the debt is carried out before a Demand is served. The Court frown upon creditors using this process where there is or is likely to be a genuine and serious dispute about the claim. Criticism and costs penalties will arise where there is a genuine dispute as to the claim.

3. Proper Debt Recovery

A significant debt recovery industry exists to support you with your cash collection. Take time to consider the options and if you are already working with this industry push those with whom you work to look for innovative ways in which they can work with you, since your competitors will. Old habits die hard but when they do it is often at the expense of the business!

Make sure that the cost of the service does not increase your overhead too dramatically as, remember, this is your money!

If this article and the points it raises are of interest to you please feel free to contact Brendan O'Brien on 01279 715333 (by e mail at brendan.obrien@breezeandwyles.co.uk).

Your Terms and Conditions in the Debt Recovery process

2011-09-14T14:52:00.001+01:00

Credit Control

• Ensure that your internal credit control function has a “letter cycle” which starts as soon as the payment terms have expired.
• Make sure that your credit controller is fully aware of the terms and conditions and that he / she makes reference to them where appropriate (e.g. where there is a retention of title clause in the terms and conditions, this is often a useful tool to encourage prompt payment).

Other Considerations for your Terms and Conditions

• Where you supply goods, do you retain title in those goods (under your terms and conditions) pending full payment of your invoice?
• Do your terms and conditions allow you to claim interest and compensation for late payment?
• Do you seek a personal guarantee from directors where you are trading with a new client, limited company or an unknown quantity? Is this appropriate in the circumstances? If it is, this can dramatically decrease your annual “write offs”.
• Have your terms and conditions been reviewed in the last 12 months? Or following the delivery of new goods or services? If not, we would recommend that these be reviewed and where necessary updated, in order to ensure that they are as watertight as possible thereby increasing your chances of recovery, should litigation prove necessary. If you would like Breeze and Wyles to review your terms and conditions, please contact our Brendan O’Brien on 01279 715322.

© Breeze & Wyles LLP 2011

Simple steps to improve your debt recovery

2011-09-14T14:40:00.001+01:00

There are many things that a business can do to help improve its debt recovery. Many of these are simple and free. Businesses often do not think about credit control, until after an invoice becomes overdue. Businesses should focus on credit control throughout the sales process. This means that your sales force need to understand their role in credit control! Here’s how;

Your Sales Force

 Ensure that your sales force is trained in debt recovery - do they understand their role in the payment recovery process?

 Ensure that your sales team clarify the legal status of the customer and the customers full business name, at the outset. Is the customer a Limited Company / Partnership or Sole Trader? Ensure that your records include this information because it will become important, should you need to issue a claim against the customer for non-payment.

 Ensure your sales team ask for details of where and to whom, invoices should be sent. If invoices are sent directly to the correct person, this will help to speed up the payment process.

 Where your sales team provide a quote for goods / services, ensure that they understand the importance of sending the customer a copy of your terms and conditions BEFORE the first order is placed. Whilst this might seem minor, failure to send terms and conditions before the first order, can cause difficulties when it becomes necessary to evidence what payment terms were agreed.

 Encourage your sales team (where they are managing customers on an ongoing basis) to look out for signs of a customer’s financial difficulties and to report back to the finance director if the salesperson suspects that a customer may be in financial difficulties. Why? So that your business can take a view regarding the credit to be extended to the customer. Should you limit the credit limit or stop offering credit to this customer in order to limit your exposure?

 It may be more difficult to secure new customers and therefore, your sales team may be inclined to relax procedures; maybe by offering extended credit facilities or undertaking less stringent checks on new customers. Make sure sales staff understand the effect this can have on cashflow.

 Consider linking a salesperson’s commission to “paid” bills where your salespeople currently receive commission based on their sales.

Terms and Conditions

 Ensure that your terms and conditions are sent to a customer BEFORE the first order is placed. Example of sales person who faxes / emails quotes but doesn’t fax / email the reverse of the quote which is the terms and conditions! Whilst this might seem minor, it can cause difficulty when establishing what payment terms were agreed.

 Make sure that your terms and conditions are up to date and as water tight as they can be. When did you last have your terms and conditions reviewed? If your terms and conditions are not up to date and as water tight as possible, you are making things more difficult in terms of debt collection and also, potentially more expensive. If terms and conditions are clear on payment terms and the charges to be applied in the event of a default, chasing that debt is often easier – particularly where your credit controller is able to quote the relevant clauses when chasing unpaid invoices.

 Is it appropriate and practical to get a personal guarantee? Bargaining power will not always allow this however, it might be appropriate where you are trading with a Company that has no or limited trading history.

 Do you assess a customer’s credit worthiness before contracting with them? An assessment at the outset will enable you to establish whether you should vary your payment terms depending on your assessment of the customer’s credit worthiness? If the customer is more of a risk to you, perhaps you will want shorter payment terms and a term that you will not provide further goods or services until outstanding invoices are paid in full?

Credit Checks

 Undertake credit checks on customers and have firm guidance for your staff as to your position on credit. Ensure that staff are aware of these guidelines and that they stick to them.

 Where you believe that a customers financial position has changed, undertake a further credit check and where necessary limit the credit afforded to that client. If alarm bells are ringing with you, chances are there is a reason for this and not undertaking these steps may leave your business exposed.

Credit Control

 Ensure that an invoice is delivered promptly and accurately and that the invoice states the customer name / customer reference, address and invoice amount. Ensure that the invoice also states clearly the payment terms and the date by which payment is to be made. Make sure that you retain a copy of the invoice.

 Ensure that you have a proactive and efficient process for chasing unpaid debts, as soon as the payment term expires. The key here is to ensure that you receive reminders, through either your accounting package or outlook, as soon as an invoice becomes overdue. You can not chase your debts proactively if you do not know when an invoice has become overdue.

 Where the chasing of invoices is being done internally, automation is ideal because it will limit internal resources whilst ensuring that debts are still being chased. Use standard precedent letters and diarise weekly chasers to be made both by letter and telephone.

 Telephone calls are time consuming but often offer a higher rate of return. Make sure you stick to the timescales (If you tell a customer you want payment in 7 days and they don’t pay, chase again by letter or phone).

 Decide how many letters and telephone calls you will undertake during your internal credit control process and what the course of action should be where payment is not made i.e. write off or instruct a Solicitor.

 Make sure that staff with the appropriate skills and personality are responsible for your credit control. There is little point having someone who is overtly shy and embarrassed, in charge of asking a customer for a commitment to pay by a certain date. Make sure that your credit controller is efficient and proactive and keeps records of each call made. When a debtor says that they will make payment, make sure your credit controller ask them to commit to a date by which payment will be made. If your customer defaults, ensure that the customer is called again and ask for a revised payment date. If the customer defaults again, chances are further action is going to be required.

 To illustrate the importance of making a record of a telephone call with a debtor, you can take the example where in a telephone call a debtor admits liability, or tries to agree a payment plan. A telephone note recording admission may well help to question the credibility of a debtor who subsequently tries to deny liability for the debt.

 If you do agree an installment plan with a debtor, it is worth confirming the agreement in writing and making sure that when negotiating the agreement with the debtor, you reserve the right to claim the entirety of the invoice should the debtor default on the installment plan.

 Act quickly and don’t delay. Delay will breed further delay by your debtor. If you threaten Court action or referral to a Solicitor, follow through with the threat. Otherwise, the debtor may not take you seriously and prioritise paying other creditors that are pushing for payment.

 Categorise your debtors in to those who “Won’t pay” and those who “Can’t pay”. Where resources are limited, focus your internal resources on chasing those who “won’t pay”.

Where payment is not made despite exhaustion of your internal credit control function, refer the matter to us and take advantage of our low cost debt recovery service, where legal fees start at as little as £2.00 plus VAT. Contact Rita Wright of Breeze and Wyles Solicitors for further details on 01992 558411 or rita.wright@breezeandwyles.co.uk

Breeze & Wyles Solicitors LLP Hertford has moved!

2011-09-12T16:40:00.004+01:00

With effect from 30 August 2011 Breeze & Wyles Hertford office moved from its previous location in Fore Street to Stag House in Hertford. The address is now: -

Hertford Office, Breeze & Wyles Solicitors LLP

Second Floor, Stag House, Old London Road, Hertford, SG13 7LA

All other details remain the same as: -

Tel: 01992 558411
Fax: 01992 582834
DX: DX57901 Hertford

Brendan O'Brien Director and Head of Business Services said:

"In keeping with our drive for growth based on excellent customer service the Hertford Office and the fee earners located there need a working environment conducive to increased work activity.

The feedback from staff since the move has been invariably positive.

As a result this is an open invitation to Business Services clients or potential clients to come and visit us for a coffee to inspect what we have on offer, more twenty-first century than nineteenth century. I would be happy to meet with anyone to discuss their legal needs whilst they see what we have to offer."

Debt Recovery Launch

2011-09-12T16:31:00.000+01:00

Breeze and Wyles Solicitors LLP launched their new exciting commercial debt recovery service with a Cocktails and Canapes Party held at Ware Priory on Tuesday 6th September 2011. The event was enjoyed by more than 50 local and national businesses.

Breeze and Wyles, appreciating the challenging times that businesses are facing, have launched a low cost, fixed fee, debt recovery service, aimed at helping businesses to chase “slow paying” debtors. For example, the cost for a business to send a letter to a debtor regarding an unpaid invoice is £2.00 plus VAT.

Breeze and Wyles Head of the Defended Debt Recovery Department, Maria Koureas-Jones, spoke at the event;

“I strongly believe that Breeze and Wyles are enabling businesses access to legal services that were previously non-cost effective, when debt recovery fees were charged based on a Solicitor’s hourly rate. In turn, I believe that as a firm we are helping businesses to improve their cash flow position in a time when businesses are finding managing cashflow a challenge”

Businesses are finding that they have an ever-increasing aged debtor list, with the average payment period far exceeding most businesses standard payment terms. With the threat of a debtor’s insolvency remaining a real issue, expediency in chasing unpaid invoices, has to be a priority for businesses.

Brendan O’Brien, Director and Head of Business Services, speaking from the Firm’s new commercial premises in Hertford, was thrilled with the support and interest shown by both local and national businesses; “I am pleased with the feedback from all of the businesses that attended. As well as raising the awareness of our debt recovery service, the event served as an opportunity for businesses to meet new contacts. It is an example of the steps that we are taking to facilitate new business relationships in our local area”.

Can't Pay, Won't Pay - How to get results?

2011-09-12T11:48:00.001+01:00

Cash flow to most businesses in these difficult times is a key business objective. Are you spending too much time chasing bad debts, the can't pays and are you pursuing the rest, the wont pays. All such debts form part of your profits but do not equal cash.

Do you engage actively with your debtors to understand the most efficient way to get your money from them? Do you what is necessary to ensure that you are paid first?

Many businesses are experiencing cash flow difficulties and therefore are paying those creditors in the order of who shouts the loudest. By taking positive action to recover debt, business will apply pressure to these won't pay debtors, which should motivate them to move you to the top of their list and make payment early.

At a recent event Maria Koureas-Jones, from Breeze & Wyles Solicitors LLP, delivered a presentation on the steps that businesses can take to improve their internal credit control processes to reduce their aged debts.

Regarding the won't pays, the internal credit control process should be applied diligently and timeously to encourage payment. If the debt remains unpaid after the credit process has been exhausted, it is recommended that the debt is referred to a solicitor.

A letter from the solicitor to the debtor informing them that legal action will be taken to recover the debt (before the solicitor issues a Court claim) is often effective; it is additional pressure on the debtor to settle the outstanding amount.

The negative issue for a business considering this addition to the credit control process is the cost associated with instructing a solicitor to recover the debt.

This is particularly true where a solicitor is charging an hourly rate for this service. These costs often deter a business from recovering its debts in this way because its is generally correct to assume that recovering debts in this manner will make the process non-cost effective. The outcome is often that a business will write-off the debt despite the fact that the debtor might have the means to pay.

FIXED COST DEBT RECOVERY SERVICE

It is for this reason that Breeze & Wyles Solicitors LLP has launched a fixed-cost debt recovery service for commercial debt recovery. A Letter before Action costs as little as £2.00 plus VAT, making it affordable for businesses to chase unpaid debt, irrespective of amount.

In the event that a debtor still does not make payment after receiving this letter, the scheme also gives businesses the opportunity to issue County Court proceedings and to enforce a County Court judgment at a fixed price.

A business's claim will be enhanced through the inclusion of interest, costs and compensation to which the business will be entitled. Depending on the age of the debt and the terms agreed this additional sum can be quite significant.

The Service aims to ensure cost transparency to enable clients to remain in control at every stage. Breeze & Wyles Solicitors LLP expect this service to offer business value for money.

One final thought: assume that the debtor is suffering cash flow problems sufficient to lead to short term insolvency. How do you know when this will happen? Isn't the important question 'Will it happen before or after I get paid?' One of the debtors other creditors will eventually consider taking action to recover its debt and then you will only be entitled to a few pennies in the pound. Make sure you are one of those creditors who gets paid in full.

For a copy of the debt recovery tips, e mail rita.wright@breezeandwyles.co.uk

© Maria Koureas-Jones
Breeze & Wyles LLP 2011

Why use a shareholders agreement rather than amending the articles?

2011-08-11T13:43:00.004+01:00

A Shareholder Agreement is a contract between the shareholders of a company and in some instances the company itself governing the management of the company and the relationship between the parties. The agreement will set out the basic terms of the relationship between the shareholders, their rights and obligations and any remedies for non-performance. This will include, for instance, matters upon which a vote needs to be taken and where such votes will require unanimity or a higher degree of consent than 51:49. The primary objective of a shareholders agreement is to create balance between shareholders whose economic power may be unequal.

An example is where four investors 25% shareholders all contributing equal capital into the company. However, one of the investors has utilised all of their savings in so doing. The others, having not agreed previously to do so, are willing to invest further sums. They issue shares to themselves in return for the future investments and dilute the value of the shareholder incapable of providing additional funding. By itself this is not unfair prejudice. However, they are now in a position to ignore the other shareholder when taking management decisions and that shareholder may be unfairly prejudiced by the choices made over which (through the articles) their say is merely words. A properly drafted shareholders agreement can deal with these situations and prevent them happening. The negotiations leading to a shareholders agreement will draw more out of the parties than they would otherwise discuss in the heat of initial investment

Various pieces of legislation provide remedies for 'unfair prejudice' between shareholders, particularly where those prejudiced are minority shareholders (namely section 459 Companies Act 1985 (now section 994 Companies Act 2006), Section 260 of the Companies Act 2006 (derivative claim) and sections 122-125 of the Insolvency Act 1986). However, the cost of taking proceedings can be prohibitive particularly when the investor has invested all of their life savings, or a significant part, into the company venture. The risks associated with litigation are quite high due the difficulty of providing sufficient evidence to convince a court of the merits of the claim. A properly drafted Shareholders Agreement will attempt to bridge the gap of ‘unfair prejudice’ to prevent certain situations arising and in those situations providing mechanisms to deal with those issues.

The Articles of Association provide an enforceable contractual relationship between the company and a member (section 33 Companies Act 2006). However, a member will not always be able to force the company to enforce the Articles against another member. Additionally, there is serious doubt that one shareholder can bring a claim against another shareholder pursuant to the articles. On the other hand, these remedies are available through a properly drafted Shareholders Agreement.

It is often of benefit to include in the agreement a 'duty of good faith'. When investing in a company, the parties will justifiably look first to their own commercial interests before that of the other shareholders. A ‘Good Faith’ clause will seek to ensure that the parties are looking out for the general interest of the investment as a whole rather than their own commercial interests.

With this in mind we recommend that if you are looking to invest for the first time you ensure that you have a Shareholders Agreement in place before providing the investment so that whilst it might lie in the cupboard for many years, on the day that a problem arises it is their ready to be used for your benefit to protect your investment.

When bothersome building work can lead to harassment

2011-08-09T13:09:00.002+01:00

Property owners who carry out building works could find themselves liable not just for nuisance, but also for harassing their neighbours if their behaviour amounts to deliberate and persistent tormenting.

An Englishman’s home may be his castle, but now there is a new weapon in the armoury to deal with feudal behaviour by neighbours from hell.

That’s the outcome of the latest Court of Appeal case which has ruled that house owners who torment their neighbours could find themselves in court for harassment.

Samantha Jones and Rachel Lovegrove moved into their new home in Nottingham in 2002 and within a matter of weeks their next door neighbours, Liam and Lesley Ruth, started major works to enlarge their house, both on the ground floor and by adding a third storey.

The work should have been completed within a year, but instead it dragged on for five years leaving Jones and Lovegrove to suffer from the resulting noise, dust, pollution and vibration. They also experienced trespass by the Ruths, who erected scaffolding in their garden without permission, made holes in the gable end wall of their property to insert purlins, and caused substantial damage with increased structural loads caused by the new third storey.

Not surprisingly, Jones and Lovegrove won their claim for nuisance and trespass, winning a substantial sum in damages. But more unusually, Samantha Jones also claimed damages for personal injury under the Protection from Harassment Act 1997, which she claimed had been caused by Mr Ruth and his family.

Severe back pain brought on by anxiety and depression meant she had been unable to work since April 2005 and was receiving physiotherapy and counselling. She claimed that the anxiety was caused by the Ruth’s aggressive and intimidatory behaviour, their refusal to provide information about the progress of the work and by ignoring repeated requests to reduce the noise and make good the damage they had caused. They had also left abusive notes concerning the same sex relationship of Jones and Lovegrove.

At the first trial, the judge agreed the behaviour was harassment but awarded Samantha Jones just £6000 for distress and anxiety, way below the amount she had claimed. He refused further compensation by saying the injuries and loss of earnings were not foreseeable.

But the Court of Appeal disagreed, saying that the trial judge had been wrong to apply negligence criteria to the claim. They said that there was no requirement of foreseeability under the Protection from Harassment Act and awarded Ms Jones the full amount she had claimed.

Explained Property Law expert and Senior Partner Peter Tunstill of Breeze & Wyles Solicitors LLP: “Although this judgement does not say that building works on their own will amount to harassment, it does give comfort to people who are faced with extreme behaviour by a neighbour. All too often there are stories of difficult and aggressive neighbours who refuse to put matters right. Following this judgement, those neighbours may be found guilty of harassment and they will have to pay the cost, whatever it may be.”

He added: “It’s important to keep neighbours in mind when you’re buying a property. Asking the sellers if there have been any previous disputes is one of the standard questions asked during the conveyancing process and if a seller doesn’t disclose any dispute, they will be in trouble for misrepresentation. “

“And if you get involved with neighbours wanting to use part of your building for their own development, as in this case, then you need to find out what your rights are for any compensation and deal with it at the outset. The Court of Appeal held that the correct damages to compensate for the Ruths tying into the dividing wall was £15,000, being the equivalent price that might have been paid if the households had negotiated a price and agreed what’s called an ‘easement’ on the property before work started.“

ENDS

Jones and Lovegrove v Ruth [2011] EWCA Civ 804
Protection from Harassment Act 1997

Web site content note:

This is not legal advice; it is intended to provide information of general interest about current legal issues.

Breeze Blog by Breeze & Wyles Solicitors LLP: Debt Recovery Launch Party 6 September 2011

2011-08-08T17:04:00.000+01:00

Breeze Blog by Breeze & Wyles Solicitors LLP: Debt Recovery Launch Party 6 September 2011: "Breeze & Wyles Solicitors LLP is delighted to announce its volume debt recovery launch party. If you are interested in attending please see..."

Debt Recovery Launch Party 6 September 2011

2011-08-05T11:00:00.005+01:00

Breeze & Wyles Solicitors LLP is delighted to announce its volume debt recovery launch party. If you are interested in attending please see attached invite and contact details to attend

Warning: Employee or Contractor - Be careful in your negotiations

2011-08-05T10:29:00.004+01:00

When using people assets to operate your business it is essential to clarify the extent of your responsibilities to those people. When working on ad-hoc contracts it might be better to use people in a contractor capacity to ensure that their use is more flexible. When operations are stable, stability in use of people is key and then contracts of employment are preferred.

Recently a decision of the Supreme court Autoclenz -v- Belcher has sought to clarify the precess of ensuring that you know which type of contract applies to the use of an individual or group of individuals.

Autoclenz provided car-cleaning services to motor retailers and auctioneers. It employed a number of valeters, including the claimants. The contracts under which the valeters worked described them as sub-contractors. The claimants issued proceedings against Autoclenz in November 2007 at the employment tribunal, seeking to be legally recognised as workers within reg 2(1) of the National Minimum Wage Regulations 1999. The tribunal held that they were workers. Autoclenz appealed to the Employment Appeal Tribunal, which held that the claimants were workers on the basis that although they were not working pursuant to contracts under s 54(3)(a) of the National Minimum Wage Act 1998 (the 1998 Act), they were working under another contract under s 54(3)(b) of that Act. Both parties appealed to the Court of Appeal, which held that the claimants were workers under both s 54(3)(a) and (b) of the 1998 Act. Autoclenz appealed to the Supreme Court.

The issue arose as to whether the claimants were workers within reg 2(1) of the 1999 Regulations (which adopted the definition in s 54(3) of the 1998 Act) and within reg 2(1) of the Working Time Regulations 1998.

The appeal would be dismissed.

The essential question in each case was what the terms of the agreement had been. Although an agreement might be implied rather than express, the court of tribunal's task was to ascertain what had been agreed. The relative bargaining power of the parties would have to be taken into account in deciding what had been agreed and the true agreement would often have to be gleaned from all the circumstances of the case, of which the written agreement was only a part.

On the evidence, the documents had not reflected the true agreement between the parties. Four essential contractual terms had been agreed between the parties:

(i) that the valeters would perform the services defined in the contract within a reasonable time and in a good and workmanlike manner;
(ii) that the valeters would be paid for that work;
(iii) that the valeters would be obliged to carry out the work offered to them and Autoclenz had undertaken to offer work; and
(iv) that the valeters had had to personally do the work and could not provide a substitute to do so. Accordingly, the tribunal had been entitled to hold that the claimants were workers because they had been working under contracts of employment within the meaning of reg 2(1) of the 1999 Regulations and reg 2(1) of the 1998 Regulations.

Applying the relevant principles, the Court of Appeal had been correct in holding that those had been the true terms of the contract and that the tribunal had been entitled to disregard the terms of the written documents in so far as they had been inconsistent with them.

What can we learn from the celebrities?

2011-08-05T08:39:00.002+01:00

Those who enjoy a bit of celebrity news will have seen the speculation surrounding Cheryl and Ashley Cole's alleged reconciliation.

So, do we think that Cheryl's showing us that it's possible to forgive and forget, is it simple naivety, or is it a publicity ploy?! Who knows!

What it's probably safe to assume is that they'll have taken legal advice about the protection of their substantial assets.

Many people don't realise that when a couple get married they automatically take on financial responsibilities towards each other. In the event of a breakdown of the marriage it's the court that has the last say as to how those assets are divided.

It is possible, however, to protect those assets by way of a pre-nuptial or post-nuptial agreement but only if the document is accurately drafted and legal advice has been sought. A quick agreement drawn up over the kitchen table just won't do.

As experienced family solicitors we regularly advise on asset protection. If you can identify with similar concerns, why not drop into our local offices in Ducketts Wharf for some practical advice.

“Staycation” second homes can be legal minefields, warns Breeze and Wyles Solicitors LLP

2011-08-03T16:49:00.002+01:00

John Appleton of Breeze and Wyles Solicitors LLP in Enfield says the popularity of second homes in the UK, which are often used as holiday homes, could expose owners to a “minefield” of risks.

The popularity of "staycations" - staying in the UK rather than travelling overseas for a holiday - has seen more second homes being used by "staycationers."

Statistics from the English Housing Survey: Household Report 2009-10 shows that there are 279,000 second homes in England, but Breeze & Wyles Solicitors LLP which holds the Law Society's excellence in home buying accolade - the Conveyancing Quality Scheme (CQS), is warning that owners are not always aware of the potential problems of owning a second home.

John Appleton Head of Residential Coneyancing says: “Second homes are often unoccupied for long periods of time. However, they could become targets for squatters, or there could be legal considerations to take into account when renting them out for short periods to holiday makers, and there are often insurance issues to take into account, not to mention the types of issues that come with buying any home, such as any legal anomalies or liabilities attached to the property.

"There are also tax implications for second home owners that need to be considered.

“It is essential that anyone buying a second home contacts a CQS accredited solicitor such as Breeze & Wyles Solicitors LLP to look at the potential risks and benefits of buying.

"Equally, anyone who already owns a second home for their own holiday purposes, but plans to let it be used by family members or others for extended periods could be changing its status as a holiday home without realising.

"During off seasons second home owners might look to rent out the property for long periods of time and suddenly you have a landlord and tenant relationship which carries with it a host of additional obligations and liabilities.”

Breeze & Wyles Solicitors LLP underwent a rigorous application and assessment by the national Law Society to become part of CQS initiative, which recognises high quality in residential conveyancing. CQS has the support of the Council of Mortgage Lenders, the Building Societies Association, Legal Ombudsman and the Association of British Insurers.

Ends

Martyn Bateman martyn.bateman@breezeandwyles.co.uk

Breeze and Wyles conquers Berlin metaphorically speaking

2011-08-03T16:34:00.006+01:00

Two Partners of Breeze & Wyles Solicitors LLP formed part of a team that cycled from Radwinter to Berlin. The ride was completed in seven and half days covering 660 miles at an average of 90 miles per day.

On a personal note I would like to thank a number of people for their help and support. In particular Helen for her unswerving support for the project and my training, Simon Berry for his fantastic organisation and the marathon trip back from Berlin, Ruth Berry for bringing us clean clothes to the Hotel in Berlin and giving us a tour of Berlin on Saturday and Sunday, the remainder of the team (Murray Fraser, Darren Rudkin, Tom Berry and Jack D. Palma) for being there and making what was at times a very difficult trip light hearted, the guys at Newdales Bicycle shop in Saffron Walden for their constant help and finally Stuart Pothecary at Dulwich Cycle Fix for his continued advice in the run up to the start day. I wouldn’t have done this without all of you!

For those who enjoy seeing pain and endurance I have penned my diary here for those to read

DAY1 (Friday 22 July 2011): Start 3.30pm Radwinter to Harwich (52 Miles)

Starting from Simon’s house in Radwinter at 3.15pm we met with the other members of the team and had our first chance to meet with Jack Palma (who for the rest of the trip gave us much merriment). The weather was good and with a following wind we made the ferry port by 8.30pm with only two stops totalling approximately 1 hour.

We caught the 11.15pm Ferry to Hook of Holland.

DAY2: Hook of Holland to Arnhem (109 miles – aggregate 161 miles)

Arriving at the Hook we disembarked the ferry at 8.30 am and headed for the Hague to find the start of the Route R1 that starts at Boulogne and ends in St Petersburg. This route passes through the Hague and Berlin and was initially considered to be the best route both in terms of shortest route and the limited number of climbs. The weather was slightly cloudy but we had no rain during the day. However, finding the R1 was more of a challenge than was expected taking until 11.00 am. During the day the temperature fell and stopping became a challenge as getting warm again was more difficult when we started. During the day Jack suffered a calf muscle pull and had to take a bus from Woerden to Utrecht and then a train from Utrecht to Arnhem to meet with us in the evening at the hotel. At this stage we thought that Jack would play no further part in the trip.

DAY3: Arnhem to Munster (98 miles – aggregate 259 miles)

This was by far and away the worst day of the trip. The route was flat until the end but the weather was atrocious. Raining from the moment we started until we finished. The clothes I was wearing to cycle in got wet and I was very cold, so much so that by the end of the day I was wearing three cycling tops all of which were wringing. When we arrived at the Hotel at 9.30pm I could not stop myself shivering and had to shower for 20 minutes just to raise my internal body temperature. Jack remained at Arnhem looking to catch up with us later in the trip.

DAY4: Munster to Hoxter (99 miles – aggregate 358 miles)

Relief! It wasn’t raining and the sun was out. The day was perfect but the route now included some significant climbs which slowed overall progress. Leaving at 9 am we made our way slowly out of Munster finding the R1 after about an hour. Following the R1 became a challenge as the quality of the pathway deteriorated rapidly as we left the city and some debate was had about returning to minor roads to ensure that progress was made and no damage caused to the bikes. Using the minor roads was a good decision and we made good progress during the middle of the day until we reached the Wesser Hills. From a personal perspective the hill descents were one of the major highlights of the trip where those wishing to push themselves achieved in excess of 35 mph with no traffic on the road. However, finding the hotel was a significant challenge as it was not in the city of Hoxter but about 10km before it. Good meal in the evening as the Hotel was contacted and agreed to keep the restaurant open despite us arriving at 10.30 pm.

DAY5: Hoxter to Goslar (88 miles - aggregate 446 miles)

Raining again for most of the day. Climbs and descents galore. The hotels start to blur. Met with Jack in the evening who having tried out a ride on his bike during the day announced that he would be fit for the rest of the trip. At the start whilst pumping up the tyres I noticed that Tom Berry had a broken spoke on his back wheel. We had to get this fixed in Hoxter before proceeding further. Leaving the hotel we made our first and only significant mistake. We took a direct route rather than following the main road. Within half a mile we had a 30% upward incline lasting for 2 kilometres. Everyone had to walk up the hill wasting a large amount of time. We only arrived in Hoxter (10Km) at 11 am..

DAY6: Goslar to Bermburg (85 miles – aggregate 531 miles)

Jack joins us for the trip and the weather is good. We made excellent progress as we passed into the old East Germany. Almost immediately we passed into the old GDR despite a lot of money having been spent Germany is finding it difficult to paper over the cracks. The roads and buildings are of a poorer quality. In fact on one occasion travelling on what in the UK would be a good quality B road on the map we suddenly found ourselves (still travelling on that road on the map) riding on a dirt track between Redisleben and Rheinstedt. Having departed the Harz Hills the riding was easier and faster and we arrived at the Hotel in Bermburg at 8.30 pm. Unfortunately Tom broke 2 spokes on his rear wheel late morning and we had to find a bicycle shop on route to carry out repairs. This delayed us by about an hour.

At the end of the ride Jack felt tired but had no reason to complain about his leg which had withstood the ride – Great News!

DAY7: Bermburg to Wittemberg (50 miles – aggregate 581 miles)

This was the shortest full day of the trip. Leaving late at 9.30 am we arrived in Wittemberg at 4.30pm and had an opportunity to sight see around Wittemberg, where Martin Luther nailed his criticism of the pope to the Church-Schloss door.

DAY8: Wittemberg to Berlin (79 miles – aggregate 660 miles)

Aaargh! It’s raining again!

Made excellent progress in the morning leaving at 7.30 am we had ridden 54 miles by lunch including stops. We stopped at a restaurant in Potsdam and took over the facilities as we dried and changed clothes for the final leg. The staff were extremely helpful both in providing things for us and being calm in the face of this onslaught.

The roads were excellent as you would expect in the run in to a capital city and indeed there was an eight km stretch through the woods where the road/path was about 20 ft wide and no traffic. Speeds increased to mid 20’s mph in the afternoon as the end was in sight.

Eventually we arrived at the Brandenburg Gate (See Photo) at 6.30 pm took some photographs and departed for the hotel. Though not clear from the photo it was still raining and we were drenched (although not as cold as on DAY3). We arrived at the Hotel at 7pm to a nice glass of Gin and Tonic. What a relief!

Looking back on the trip I was surprised by the caution with which drivers in Holland and Germany approached cyclists and the quality of the cycle paths. Both the drivers and local authorities in the UK have a lot to learn if cycling is to become as popular here as on the continent, particularly in the year that we have the first Briton to win a jersey of an colour in the Tour de France!

NOTE:

Brendan arrived in Berlin on Friday at 7pm having started cycling from Radwinter the previous Friday. The total distance cycled was 660 miles at an average of ninety miles a day. It was hoped that by cycling in July bad weather would be avoided. This was not the case. On three days, including the last day, it rained solidly. Despite the weather it was great to finish with very few aches and pains.

He did all of this with a 30lb rucksack on his back and one of Ralph's muslin nappies to protect his follically challenged head from the sun!

Brendan is still accepting donations to Radwinter Church, in particular the 'loo' fund. If you wish to donate please make cheques payable to 'Radwinter PCC' and send them to him at our home address: Bank House, Sampford Road, Radwinter, Essex, CB10 2TL.

He hopes to raise £5000 this year.

Minister for Insolvency calls for Consultation on change to Regime

2011-07-20T14:36:00.003+01:00

Open date: 15 Oct 2010

Closing date: 10 Dec 2010

Response date: 19 Jul 2011

--------------------------------------------------------------------------------

This call for evidence invites people to have a say on how the existing consumer credit and personal insolvency regimes might be improved and seeks views on a number of Coalition commitments, including:

tackling unfair bank charges;

introducing a seven-day cooling off period for store cards;

introducing a power for a regulator to cap interest rates on credit and store cards; and

requiring credit card providers to make electronic statements available to enable consumers to judge whether an alternative credit card would provide better value for money.

Breeze & Wyles Solicitors LLP announce promotions in Expansion Drive

2011-07-18T10:23:00.004+01:00

Breeze & Wyles Solicitors LLP are pleased to announce the promotion of four Solicitors from within its ranks as Members and Associates.

Brendan O'Brien Marketing Director said: "In this volatile market Breeze & Wyles Solicitors LLP continue to demonstrate a resilience that is not seen amongst its competitors. We are able to rightly reward our hardworking junior management for their efforts. The growth is seen in two areas at the traditional core of our business, Residential Conveyancing and Family. However, the promotions give the firm extra skills and expertise that were not previously existent in the business. We can now offer Mediation as part of our service, tracking the forthcoming changes in Legal Help and Matrimonial work suggested by the current Government."

He adds: " The Directors of the firm congratulate Adrian, Andrew, Henal and Karen for convincing them that the enhancement in their positions will deliver significant returns in the future both in terms of revenue, vision, direction and delivery of quality service to clients."

Adrian Toulson, a former partner of Cunnington’s Solicitors joins the membership with effect from 1 April 2011. Previously the firm’s senior Conveyancing Manager at the Bishops Stortford office, Adrian specialises in Volume Transactional Conveyancing and will become the Head of Transactional Conveyancing within the firm’s Breezeplus trading arm. His responsibilities include work generation and marketing to lenders, Corporate Estate Agents, Independent Financial Advisers and Panel Managers. Adrian also sits on and is an active member of the Executive Committee of the Conveyancing Association.

Andrew Moore, a Solicitor with the firm in our Private Client Conveyancing Department is promoted to Associate with effect from 1 July 2011.

Karen Johnson, a Solicitor with the firm in our Matrimonial Department is promoted to Associate with effect from 1 October 2011. Karen is a Resolution Accredited Specialist (Advanced financial provision and Domestic Abuse) and a Family Mediator.

Henal Gautam, a Solicitor with the firm in our Matrimonial Department is promoted to Associate with effect from 1 October 2011. Henal is a member of the Law Society Children Panel Accreditation scheme (adult and child representative),a member of the Association of Lawyers for Children and a member of Resolution

Innovating companies need to shine up their patents

2011-07-18T09:30:00.001+01:00

Innovation companies need to gear up to maximise the advantageous tax regime that’s set to be introduced later this year for patented products.

And with the news that protected intellectual property can attract greater investment, the move looks all the more important.

The planned move to a 10% corporation tax rate for profits attributable to qualifying patents – the so called ‘Patent Box’ - was first announced in 2010 and the Government has now released proposals for consultation, with the final legislation set to be introduced in Autumn 2011.

The consultation comes as the Intellectual Property Office has reported that research has shown that innovative companies who are protecting their IP – whether through patents, copyright or trade marks - are consistently attracting higher levels of investment.

The reduced corporation tax rate is designed to encourage businesses to develop and actively exploit patents, rather than sitting on IP, as often happens. The new regime will be phased in over five years from 1st April 2013, with tax savings gradually rising from 60% of potential benefits in year one to the full 100% in year five. According to the current proposals, the new rate will apply to global profits derived from products patented in the UK or by the European Patent Office, but it has been left open as to whether other national patents may be included in future.
The system from 2013 will benefit both pre-existing and new patents, but is available only after a patent has been granted, with a back-dated claim of up to four years to the date of the patent application being currently proposed. The Government is particularly asking for feedback as to whether the four year backdating proposal is fair and reasonable and asking business to look at their historical data.

Companies who will be able to claim the reduced rate include both licence owner and exclusive licensees; where the patent is jointly owned, all collaborators will qualify if they can show a significant contribution.

Whilst the tax break will apply to both licence income and patent income embedded in sales proceeds of patented products, it does not seem likely that income from products made from a patented process will be included, with the possible exception of pharmaceuticals, and this may lead to a review of strategy for some companies.
Explained Brendan O’Brien Corporate Law expert: “There is scope for companies with activities that would not currently fall within the Patent Box to review their strategy. If it is possible to attribute activity to a patented product instead of the process, then they could attract the reduced rate. Although, as with all things, everyone needs to weigh up the admin burden of opting in to such a scheme.”

He added: “Every company involved in innovation and patenting must now review what they are doing to see where sales and licence agreements can best benefit from the new regime.

“The other tactic that should be quickly adopted is to submit narrow focus patent applications at an early stage to enable fastest access to the so-called Patent Box, these can then be backed up by the usual applications for broad protection at a later stage. Speed is of the essence as once the application is in, it opens the door to retrospective tax claims after qualification is awarded.”

Within the current proposals, there are no plans to include profits generated from copyright or trade marks in the new arrangements.

ENDS

This information is not intended as legal advice

Minister reveals value of intellectual property to UK businesses on visit to Nottingham

2011-07-10T21:28:00.004+01:00

Reports published today show that investments made by businesses in products and services that are protected by intellectual property rights (IPRs) are worth £65 billion a year. The announcement was made by Minister for Intellectual Property, Baroness Wilcox on a visit to Nottingham.

Two new reports, ‘The Role of Intellectual Property Rights in the UK Market Sector’ and ‘Film, Television & Radio, Books, Music and Art: UK Investment in Artistic Originals’ commissioned by the Intellectual Property Office (IPO), highlight that more money than ever before is being invested in products and services that have protection in copyright, designs, patents and trade marks.

The reports also show that £3 billion of copyright investment is not included in National Accounts, meaning that a substantial amount of money is not accounted for in the value of intellectual property growth. The IPO is now working with the Office of National Statistics (ONS) to factor that into Gross Domestic Product (GDP) in 2012.

Baroness Wilcox was in the city to find out how the University of Nottingham and low carbon company 4energy have benefited from protecting their intellectual property. The first stop was at the University’s Technology Demonstrator, which is a showcase for local businesses interested in getting their technology licensed for commercial development.

Baroness Wilcox said:

“These reports show that business investment in intellectual property rights has more than doubled since 1990 and were worth at least £65 billion in 2008, a figure which is expected to continue to grow. This is a significant amount of growth and it’s important that this investment continues to build over the coming years.

“The University of Nottingham’s Technology Demonstrator is a great platform for developing intellectual property as it gives inventors the chance to show their creations to a potential worldwide audience. We have also recently launched a guide for universities to explain how they can best manage their intellectual assets and reap the financial benefits.

“It’s wonderful to meet students, researchers and inventors who are passionate about their creative ideas and have a world class venue in which they can develop.”

The University of Nottingham is one of the leaders in the UK when it comes to taking its discoveries from the lab into the marketplace. Baroness Wilcox met inventors like Professor Barrie Hayes-Gill, who runs Monica Healthcare Ltd. With support from the University, he has created commercial products out of his research findings, including a portable wireless foetal monitoring device for at risk pregnancies.

Professor Chris Rudd, Pro-Vice-Chancellor for Knowledge Transfer at the University said:

“This visit to Nottingham by the Minister responsible for protecting and developing Britain’s innovation and new business ideas for the future — our ‘intellectual property’ — signals the real value and great potential that exists in UK universities as engines of ingenuity. The University of Nottingham has a very strong track record transforming brilliant discoveries and research insights from theory into reality.”

Following the visit to the University, Baroness Wilcox travelled to low carbon company 4energy who design and manufacture low energy cooling equipment for the Telecoms sector. They have made the most of the IPO’s green patent channel. This process gives priority to inventions with environmental benefits which can help to speed up the patent process.

There have now been over 500 green patent applications in the UK under the green channel application scheme, with over 100 of those applications being successful.

Baroness Wilcox said:

“The Government is committed to providing businesses with incentives to be environmentally friendly and the green patent channel is vital to that process. The scheme offers businesses the chance to bring their inventions quickly into the marketplace to be competitive.

“Businesses who decide not to protect their intellectual assets are taking a huge financial risk because they may lose any rights to their creative ideas. We would therefore always encourage companies to make an investment and make sure they gain the financial benefits they are entitled to.

“The recent Hargreaves review of intellectual property in the UK highlighted that strong evidence should drive future policy and it is clear from the reports published today that protecting rights can add billions of pounds to UK businesses.”

Stuart Redshaw, Chief Technology Officer and Co-Founder of 4energy Ltd said:

"The ability to accelerate the timescales from application to granting has made a significant difference to the way we are able to operate our business. We have been able to bring forward expansion plans and develop new customers with far greater confidence knowing that our intellectual property is protected.”

The main findings of the reports are:

Investment in UK businesses covered by intellectual property rights is worth at least £65 billion per year
Knowledge investment in rights protected by patents, trademarks, design and copyright has more than doubled since 1990
Over the last ten years business growth from intellectual property investment has been bigger than that of business investment in their fixed capital (for example, hardware, office material and general business spending, but excluding computers)
Copyright and design are the biggest contributors to growth of intellectual property rights – copyright includes software as well as music, publishing, broadcast and film
Around £3 billion of copyright investment is currently not included in national accounts and the Intellectual Property Office is working with the Office of National Statistics to adjust Gross Domestic Product starting in 2012.

The IPO are now working alongside the Office for National Statistics to provide these figures on a annual basis and highlight the growth of intellectual property in the market sector. The two reports have been released today and full details can be found on the IPO website www.ipo.gov.uk.

Investor seeking Majority Stake in IT Consultancy Operation

2011-07-04T16:55:00.005+01:00

General characteristic of buy-side demand

LARGE IT FIRM IS LOOKING FOR IT CONSULTING FIRM IN EUROPE AND US

Kind of target (company, project etc.)

IT CONSULTING / OUTSOURCING FIRM IN EUROPE, US

Target location

EUROPE, US

Maximum funds available for acquisition

US$30M

Stake for acquisition

AT LEAST 51%

Industry, Branch

IT outsourcing, application development outsourcing, testing outsourcing, etc.

Specialization

- AT LEAST 15% EBITDA
- LARGE CLIENTS
- 100+ STAFF PREFERRED

Legal form of the target (any, JSC, State company etc.)

PERFER PRIVATE COMPANY

Technology (programming languages)

NOT SPECFICIED

Experience in IT projects development in certain business domains (name the domains)

IT, TECHNOLOGY AND/OR TELCO CLIENTS
for example, if they work for clients such as Microsoft, IBM, will be very good)

If you are interested in beginning a dialogue please contact me on brendan.obrien@breezeandwyles.co.uk stating the nature of the business that you are offering.

Hospitality or Bribery? From 1 July 2011 make sure you know!

2011-07-03T20:36:00.004+01:00

With effect from 1 July 2011 the Bribery Act came into force.

Individuals risk a maximum sentence of 10 years for paying or receiving bribes under the act, while companies - even those with no headquarters in the UK - can receive fines for failing to prevent bribery.

Companies that are caught could also face a permanent ban from tendering for government contracts across the EU.

The SFO will be the lead prosecutor of breaches and must prove bribery to a criminal standard.

So do you have a policy or procedures that enable you to detect when this is happening, but more importantly have you told your employees what you will find unacceptable?

Contact Jane Dismore, Head of Employment law at Breeze & Wyles Solicitors LLP if you need to create these procedures and policies.

UK business set to benefit from simpler and cheaper patent system for Europe

2011-06-27T16:45:00.001+01:00

A single European patent looks ever more likely as ministers reached important agreements on the detail of a unitary patent at the Competitiveness Council in Luxembourg today.

For the first time in 60 years, ministers have agreed on the languages regime for the patent – the number of translations which applicants need to file to get their patent. This is a significant achievement for the UK, the Hungarian Presidency and the Commission. They also agreed on the technical details of the patent itself.

As a result it will be easier and cheaper to register patents, with far fewer translations required than at present. The availability of a single patent for the European market will be an incentive for innovation and will enhance the competitiveness of European businesses.

Speaking at the Competitiveness Council in Luxembourg, UK Intellectual Property Minister Baroness Wilcox said:

“The creation of a single European patent and patent court is crucial for UK industry. We support a European patent system which gives real benefits for business, consumers and the economy. It is vital to offer businesses the same access to patent protection in their home market of Europe, as competitors in the US, China and Japan enjoy in theirs.

“A unitary patent and court system will save businesses time and money whether they are patent holders or those seeking to challenge patents. The savings to UK business are likely to be around £20 million per year in translations costs alone.”

Agreement of these two regulations, one establishing the patent and one on the language regime for the patent, will radically reduce the cost of translating patents in Europe by up to 80 per cent. This will also allow any company or individual to protect their inventions through a single European patent valid in 25 countries.

A recent independent review of Intellectual Property and Growth by Professor Ian Hargreaves found that establishing a unitary patent would remove IP barriers between EU countries and could increase UK national income by over £2 billion a year by 2020.

Change to Use Class Orders: will this spell the end of the High Street?

2011-06-27T08:39:00.002+01:00

Planning Minister Greg Clark today said the Government could scrap red tape in order to encourage 'meanwhile uses' of empty buildings, transforming them into new shops, business start-ups, and community projects.

Empty properties can lead to a spiral of decline, spoil high streets, and act as a magnet for anti-social behaviour. Meanwhile uses are a way of putting a vacant space back into good use for the benefit of the whole community while a permanent solution is found.

In London's Exmouth Market, for example, a shop lying empty for two years has been transformed by social enterprise Meanwhile Space into a hub offering space to business start-ups and community-focused projects. Shop space has already been booked by a furniture business and a vintage wares store eager to try out their business idea.

Mr Clark believes that it should be easier for businesses and communities to arrange meanwhile uses for empty buildings without having to jump through unnecessary hoops in the planning system.

The Minister today signalled that the Government could scrap rules requiring costly and time consuming planning permission in order to temporarily change the use of empty buildings, as part of a future wider review on deregulating the used class orders system.

This could help reinvigorate local high streets, encourage community enterprises; support entrepreneurs to start-up, contribute to economic growth; and help build stronger, more vibrant communities.

Mr Clark said:

"Empty properties can drain the life away from town centres and are a waste of a valuable social and economic resource.

"We want to make it easier for businesses and community enterprises to reanimate vacant spaces, helping to revive struggling high streets and kick-start local growth.

"Removing bureaucratic barriers in the planning system could play a major part in encouraging meanwhile uses of empty buildings, transforming them into new shops, business start-ups and community projects."

Eddie Bridgeman from Meanwhile Space, a social enterprise which brings empty spaces back into use, said:

"We welcome the fact that the Government is considering getting rid of the need for planning permission for the temporary use of buildings.

"This could give a big boost to getting business and community enterprises into empty premises."

Removing the need for planning permission to temporarily change the use of empty buildings could be a key part of a future Government consultation on deregulating the use class order system. The Government wants to hear similar ideas and views on how the 'change of use' part of the planning system can be improved.

The Government is already working to cut down planning bureaucracy and has announced a full review of national planning policy by 2012. For example it is already consulting on allowing commercial property to be changed into residential property without needing planning permission. This could create 70,000 new homes over 10 years.

The Plan for Growth, published alongside the Budget in March, set out a radical plan of reform to help deliver strong, balanced and sustainable growth in the long term. Reform of the planning system is a key element of that, and today's announcement is another step to creating the right conditions for businesses, to start up, invest and grow.

BIS announce that Consumer Protection in need of reform

2011-06-21T12:11:00.002+01:00

New proposals to simplify the confusing and overlapping provision of consumer protection are needed to better protect consumers, Consumer Minister Edward Davey announced today.

Under proposals set out in a new consultation ‘Empowering and Protecting Consumers’, ministers want to see a new simplified ‘consumer landscape’ with public funding concentrated on two bodies that consumers trust and already turn to for advice – Trading Standards and the Citizens Advice service.

Consumer Minister Edward Davey said:

“This government believes in giving more power to people. Our consumer policy is all about empowering consumers to make the right decisions for themselves when they buy goods and services.

“But we also need to ensure we have the right system of help, advice and protection when consumers need support. For too long people have been faced with a confusing landscape of different, public, private and voluntary consumer bodies, with overlapping roles and responsibilities. It is not always clear where to turn for trusted advice and information which consumers need to make good choices or a champion to support them when they have been ripped off.

“The proposals which I have published today seek to put an end to such confusion and make sure consumers are empowered and have champions. The Citizens Advice service has for a long time offered trusted advice, information and advocacy. So it’s right that it sits at the heart of our plans.

“Likewise, Trading Standards are trusted by the public to do a good job in enforcing consumer law and standing up for consumers. But there are barriers which get in the way of effective responses to rogues who operate across authority boundaries. Our proposed reforms will strengthen their hand in tackling these threats to consumers.”

Strengthening consumer power helps drive competition, making businesses more efficient and innovative. Reforming the consumer landscape was a key part of the Government’s Plan for Growth, published at the time of the Budget, and its focus on creating the right conditions to deliver strong, sustainable balanced economic growth.

The consultation paper sets out proposals for the Citizens Advice service – the familiar bureaux on the high street and their supporting national organisations - to become the single service that consumers can turn to for information and advice. It will also act as their champion across a range of sectors. In turn, this will help empower them to make more informed decisions about the goods and services they buy.

It also sets out plans to strengthen the leadership and coordination of Local Authority Trading Standards Services in tackling difficult cases that cross local authority boundaries.

The ‘Empowering and Protecting Consumers’ consultation will run for 14 weeks until the end of September and government is keen that consumers, the voluntary and private sectors share their views on the proposed reforms.

Breeze & Wyles Solicitors LLP acquires Conveyancing Quality Scheme Accreditation

2011-06-20T16:38:00.002+01:00

It has been announced to0day that Breeze & Wyles Solicitors LLP has acquired the Law Society Conveyancing Quality Scheme (CQS) Accreditation.

the Law Society says about the scheme:

"The Conveyancing Quality Scheme will provide a recognised quality standard for residential conveyancing practices. Achievement of membership will establish a level of credibility for member firms with stakeholders (regulators, lenders, insurers and consumers) based upon:

the integrity of the Senior Responsible Officer and other key conveyancing staff.

the firm's adherence to good management standards.

adherence to prudent and efficient procedures through the scheme protocol.

the scheme will create a trusted community which will deter fraud - year on year we will drive up standards."

Turkish Business Opportunity. Interested?

2011-06-13T09:21:00.003+01:00

COMPANY OVERVIEW

A “fast casual dining” restaurant chain with 20+ stores that has good branding and a strong position in the marketplace. Currently the chain is experiencing cash flow difficulties and is urgently seeking a strategic partner/investor.

The concept was based on extensive market research and surveys to identify customer profile, and it has been well accepted by consumers. The chain is modelled on several overseas chains and was successfully introduced into its south-eastern European home country.

A typical restaurant is 100 sq m and serves in store or via delivery. The chain has a different menu for breakfast, lunch and dinner and closely manages customer habits by an online a centralized database of customers and call centre, based on a “Customer Relationship Management” (CRM) system which supplements the in store sales by providing delivery. Over 50,000 regular customers are now profiled in the database, which has increased the frequency and loyalty of these customers. The food is prepared at a centralized kitchen and delivered daily to the chain’s locations.

MANAGEMENT

The company was founded by four partners, one who was the founding CEO of a leading high end restaurant chain, a successful US businessman who has returned to the country for this project and an owner of an international kitchenware manufacturer.

CURRENT SITUATION

• Central Kitchen Closed: To save operational costs.

• Severe Cash Flow Problems: Caused by aggressive development program.

• Infrastructure: Facilities and infrastructure for 40 stores including operating manuals, software, call centre, accounting, ERP, point-of-sale

• Develop Wholesale Business: Wants to expand into wholesale

If you are interested in this please contact me on brendan.obrien@breezeandwyles.co.uk.

Solicitors Defend Access to Justice for Vulnerable

2011-06-10T10:37:00.000+01:00

The Government is shortly expected to publish the outcome of its consultation process in which it proposed to dramatically overhaul the availability of legal funding by reducing the types of matters covered. In terms of family disputes it means that funding will no longer be available to cover divorce. In addition funding for financial or children matters will not be available except to a victim of physical domestic violence.

Public funding was introduced with the aim of ensuring that all people regardless of means would have access to legal advice and assistance when required. Its introduction recognised that justice was a basic right for all people and should not be restricted to those who could afford to pay. Currently Legal Aid remains available for a range of matters including; housing, debt, immigration and family disputes (including divorce, disputes involving children, financial disputes and domestic violence).

Karen Johnson an Accredited Specialist Family Solicitor and Mediator at local firm Breeze & Wyles Solicitors LLP said; “We have seen the Government proposals and are extremely concerned abut the impact the proposed cuts will have on local people and families. Our family team remain committed to providing the full range of advice and services in family matters whether clients pay privately or are eligible for public funding.

It is a sad reality that many relationships do fail and if this happens, the couple are left to pick up the pieces so that they are able to move forward. In an ideal world any issues regarding children and finances can be agreed without involving anybody else. However, this is not always possible. The current availability of funding allows people who have been unable to reach an agreement between them to access legal advice. As members of ‘Resolution’ we would always do what we can to settle a disagreement and minimise the acrimony at an early stage and would only consider advising a client to make an application to the court as a last resort.

In the event that clients are denied the opportunity of early legal advice, we consider it inevitable that there will be an increase in applications being made to court, an increase in unfairness in outcomes to the detriment of the people involved and the children for example fathers wrongfully denied contact with their children, mothers denied their appropriate financial settlement on separation. What is of particular concern is that the absence of access to legal advice and support may result in people taking desperate measures, a concern all the more poignant given the recent shooting of a mother and her young child in Braintree following a child residence dispute”

The governments aim is to reduce spending by £350million. Whilst this is a large amount of money it is actually only 16% of the Government’s legal aid budget but will result in 68% reduction in the number of people who can get help and the concern expressed by the Law Society and supported by many involved is that these cuts are both disproportionate and affect only the most needy and vulnerable in society.

For anybody who wants to know more or wishes to sign a petition which will be sent to Ken Clarke opposing the proposed cuts they should visit www.soundoffforjustice.org. If any would like advice on family matters they can contact Breeze & Wyles Solicitors LLP on 01279 715330 (Bishops Stortford). The Firm also has offices in Enfield, Cheshunt and Hertford.

Agency/Temp Workers: Are you ready for the changes?

2011-06-07T12:11:00.006+01:00

An article in the Independent yesterday makes worrying reading for Employers. In a market place where the previous flexibility provided by the use of agency workers was essential to survival and growth, legislation comes into effect from 1 October 2011 more closely aligning the rights of agency workers to that or employees where the agency worker remains in employment for twelve weeks or more.

It is therefore unsurprising that the majority of businesses (particularly SMEs) are against the legislation.

Share your views by return of e mail to me at brendan.obrien@breezeandwyles.co.uk

Business must keep a Close Eye on Web Law

2011-06-06T12:42:00.002+01:00

The cookie monster holds off for now, but he’ll be back for business soon...

Everyone is talking about privacy laws and the need for Parliament to legislate for the problems raised by the new online communities such as Twitter, but we haven’t heard much about the EU’s Privacy and Electronic Communications Directive, with new amendments that were set to have full force from the end of May.

And although the very mention of ‘Brussels directive’ has the potential to turn-off any listener, these new regulations are set to radically change the way companies do business and market themselves on the internet.

Stringent new rules require web-site owners to obtain consent before installing so-called ‘cookies’ on the computer of visitors to their site.

Cookies are small files which enable websites to store data relating to users. At its most innocent and basic, a cookie enables the website of an on-line shop to record what is in your basket as you surf the virtual shopping aisles, or to know what scene you have reached if you are watching a drama on-line. But cookies can also be used to record your preferences and behavioural patterns for targeted advertising, and data collected by one website can be passed on to another business.
In future, if a cookie is not essential, the website will have to obtain the user’s consent to install it on their computer. But how this consent is to be sought and given is a question that nobody can answer at present.

The Department for Culture Media and Sport says that it will be consulting with the industry and that rules will be phased in. In view of this delay against the original timetable for the legislation, the Information Commissioner has said that everyone will be given twelve months to get their house in order.

But this does not mean that the Information Commissioner’s Office will let everyone off the hook. The Commissioner has warned: “Those who choose to do nothing will have their lack of action taken into account when we begin formal enforcement of the rules”.

Said Head of Business Services, Brendan O’Brien : “The 12 month breathing space is just as well, given that a business could be fined £500,000 for failing to obtain consent in accordance with the rules.

“But there’s a clear warning that business must get ready for the introduction of the new rules on cookies and they must be on the alert for statements and advice from the Department for Culture Media and Sport over the coming months.”

He added: “Websites and sales procedures are going to have to be reviewed comprehensively ready for when the rules are in place and evidence of prompt action will be essential if a heavy fine is to be avoided.”

Web site content note:

This is not legal advice; it is intended to provide information of general interest about current legal issues.

Breeze and Wyles Solicitors: Employment Law Newsletter May 2011

2011-05-31T18:14:00.003+01:00

Dear Employer

As your employees are likely to have benefited from the recent deluge of bank holidays, we hope they have returned with renewed vigour to face the summer – that is, before they all go off on annual leave. Weather-wise, the long dry spell seems set to continue, but we hope that your business is not experiencing a drought and continues to flourish.

Please note that if you have an employment problem you should always seek specific advice – these newsletters are for information only.

If you have any comments or suggestions on this newsletter, please email newsletter@breezeandwyles.co.uk
Kind regards

The Employment Law Team

Some Recent Changes and Cases in Employment Law

1. CLARITY ABOUT TUPE FOR COMPANIES IN ADMINISTRATION

There has been confusion about the TUPE situation if a company goes into administration, especially when it is then sold off under a pre-packed administration deal. Employers have often been uncertain as to whether the employees transfer or not. The previous position was that decided by the case of Oakland v Wellswood (Yorkshire) Ltd. Under the case the EAT had ruled (controversially) that administrations generally fell within Section 8(7) of the TUPE regulations, meaning that employees would not automatically transfer to the transferee upon administration. The EAT has now decided that the case was wrongly decided and that all administrations (including pre-package administrations) fall within Section 8(6) of the TUPE Regulations. This means that if the transferor is the subject of “relevant insolvency proceedings” but “not with a view to the liquidation of the assets of the transferor”, then the employees will transfer and will receive unfair dismissal protection.

This recent case, therefore, makes the situation clearer. [OTG V Barke [2011]]

2. ABILITY TO REFUSE TIME OFF FOR PRAYER

The Employment Appeal Tribunal (EAT) has held in a recent case that refusing an employee permission to leave work to attend Friday prayers at a Mosque was a proportionate means of his employer achieving a legitimate aim – meeting the operational needs of the business. Mr Cherfi, a Muslim, worked as a security guard where his employer required all security officers to remain on site throughout their shifts. He was therefore refused permission to travel to Friday prayers at a Mosque in another area. However, there was a prayer room on site and Mr Cherfi had the option of working a Saturday or Sunday rather than Friday. He brought a claim for indirect discrimination under the Employment Equality (Religion or Belief) Regulations 2003 (now found in section 19 of the Equality Act 2010). The Tribunal dismissed Mr Cherfi’s indirect discrimination claim, finding that although he was placed at a disadvantage as a practising Muslim by not being allowed to attend prayers in congregation, the employer would be in danger of financial penalties or even losing its contract with its client if it did not maintain a full compliment of security staff on site throughout the day. The Tribunal therefore found that the requirement for him to remain at work on Friday at lunch times was a proportionate means of achieving a legitimate aim and therefore a claim for discrimination could not succeed. Mr Cherfi brought an appeal but the EAT dismissed it.

3. “RED-TAPE CHALLENGE” WEBSITE LAUNCHED

The Government has recently launched its “red-tape challenge” website, which allows business and the public to vote for regulations which they think should be scrapped. The challenge is to examine over 21,000 statutory rules and regulations currently active in the UK, focusing on regulations that the Government considers to place the biggest burdens on business and society. The website will operate until April 2013. Every few weeks the Government will publish all the regulations affecting one specific sector of industry. Employment regulations can be found under the “general regulations”. Respondents are able to say what is working and what is not, what can be simplified and what can be scrapped. Ministers then have 3 months to decide which regulations they will scrap, with the presumption that all burdensome regulations will go unless the relevant government department can justify to an independent reviewer why the regulation is needed. The Government intends to repeal scrapped regulations “as quickly as possible”.

4. DISMISSING EMPLOYEE WITH UNCERTAIN IMMIGRATION STATUS

The EAT has held that it was reasonable for an employer to dismiss an employee when the UK border agency failed to satisfy the employer that the employee had the right to work in the United Kingdom. The decision (based upon the complicated facts of the case) suggests that it is reasonable for employers to err on the side of caution to avoid possible penalties of up to £10,000 for employing illegal workers. (Kurumuth v NHS Trust North Middlesex University Hospital)

5. ADDITIONAL PATERNITY LEAVE

Additional paternity leave has now been introduced which allows up to 26 weeks of maternity (or adoption) leave to be transferred to the father. Also, any outstanding statutory maternity pay (SMP) can be taken by the father (and it will then be called additional statutory paternity pay (ASPP)). The rules, however, are relatively complex – for more information, please ask us.

What’s in the pipeline

1. INCREASE TO NATIONAL MINIMUM WAGE

This will increase from 1st October 2011 as follows:
1. Adults from £5.93 to £6.08 per hour.
2. 18 – 20 year olds from £4.92 to £4.98 per hour.
3. 16 – 17 year olds from £3.64 to £3.68 per hour.
4. Apprentices from £2,50 to £2.60 per hour.
The Government estimates that nearly 900,000 of Britain’s lowest paid workers will gain from these changes. The Government also announced in the budget that it will invite the Low Pay Commission in its next report to consider the best way to give businesses greater clarity on future levels on the national minimum wage, including consideration of two-year recommendations. The Government believes this could provide greater certainty for business and help them plan employment and investment decisions.

2. POSSIBLE CHANGES TO PARENTAL LEAVE AND FLEXIBLE WORKING

The Government has published its consultation on a new system of shared parental leave and on extending the right to request flexible working to almost all employees.
Under the proposed system of parental leave, while the initial portion of leave will still be reserved to the mother, much of it will be shared as the parents see fit. For example, 18 weeks maternity leave will be available to be taken in a continuous block around the time of birth, while the remainder of existing maternity leave would be reclassified as parental leave. Each parent would have 4 weeks paid leave exclusive to them, with the remaining weeks available for either parent on an equal basis.

The consultation also considers the extension of the right to request flexible working to all employees employed for 26 consecutive weeks and would allow – but not require – employers to prioritise competing requests to take account of the employees’ personal circumstances.
This is very much a brief summary: more information when the consultation is completed.

The Employer Traps and Other Tips

1. QUESTIONS ON HEALTH

Remember that under the Equality Act 2010, an employer must not ask about a job applicant’s health (including any disability) before offering work. Such questions can be asked after a job offer is made in order to make reasonable adjustments if necessary, and assess whether the health condition would render that person unsuitable for the position when there are no reasonable adjustments that could be made. The safest thing, therefore, is to remove health questions from application forms. Although it is not active disability discrimination merely to ask about a job applicant’s health, if you rely on the information given, it could lead an Employment Tribunal to conclude that you have committed a discriminatory act. Similarly, although it is not unlawful to ask questions about the number of days absence that someone has had, it means that the use to which any answers may be put may prove problematic.

Can't Pay, Won't Pay - How to get results

2011-05-31T17:27:00.004+01:00

Cash flow to most businesses in these difficult times is a key business objective. Are you spending too much time chasing bad debts, the can't pays and are you pursuing the rest, the wont pays. All such debts form part of your profits but do not equal cash.

Do you engage actively with your debtors to understand the most efficient way to get your money from them? Do you what is necessary to ensure that you are paid first?

Many businesses are experiencing cash flow difficulties and therefore are paying those creditors in the order of who shouts the loudest. By taking positive action to recover debt, business will apply pressure to these won't pay debtors, which should motivate them to move you to the top of their list and make payment early.

At a recent Hertfordshire Chamber Breakfast Meeting Maria Koureas-Jones, from Breeze & Wyles Solicitors LLP (a Chmaber Patron Member) delivered a presentation on the steps that businesses can take to improve their internal credit control processes to reduce their aged debts.

Regarding the won't pays, the internal credit control process should be applied diligently and timeously to encourage payment. If the debt remains unpaid after the credit process has been exhausted, it is recommended that the debt is referred to a solicitor.

A letter from the solicitor to the debtor informing them that legal action will be taken to recover the debt (before the solicitor issues a Court claim) is often effective; it is additional pressure on the debtor to settle the outstanding amount.

The negative issue for a business considering this addition to the credit control process is the cost associated with instructing a solicitor to recover the debt.

This is particularly true where a solicitor is charging an hourly rate for this service. These costs often deter a business from recovering its debts in this way because its is generally correct to assume that recovering debts in this manner will make the process non-cost effective. The outcome is often that a business will write-off the debt despite the fact that the debtor might have the means to pay.

FIXED COST DEBT RECOVERY SERVICE

It is for this reason that Breeze & Wyles Solicitors LLP has launched a fixed-cost debt recovery service for commercial debt recovery. A Letter before Action costs as little as £2.00 plus VAT, making it affordable for businesses to chase unpaid debt, irrespective of amount.

In the event that a debtor still does not make payment after receiving this letter, the scheme also gives businesses the opportunity to issue County Court proceedings and to enforce a County Court judgment at a fixed price.

A business's claim will be enhanced through the inclusion of interest, costs and compensation to which the business will be entitled. Depending on the age of the debt and the terms agreed this additional sum can be quite significant.

The Service aims to ensure cost transparency to enable clients to remain in control at every stage. Breeze & Wyles Solicitors LLP expect this service to offer business value for money.

One final thought: assume that the debtor is suffering cash flow problems sufficient to lead to short term insolvency. How do you know when this will happen? Isn't the important question 'Will it happen before or after i get paid?' One of the debtors other creditors will eventually consider taking action to recover its debt and then you will only be entitled to a few pennies in the pound. Make sure you are one of those creditors who gets paid in full.

For a copy of the debt-recovery tips, e mail Maria at maria.koureas-jones@breezeandwyles.co.uk

Landlord left with £270,000 property repair bill after consultation blunder

2011-05-31T17:23:00.000+01:00

Failure to consult with tenants over works means landlord has to carry the cost say Court of Appeal

Landlords who fail to consult with flat owners before carrying out works cannot expect help from the courts if the tenants refuse to contribute to the expense.

This was the decision of the Court of Appeal, in the case of Daejan Investments Ltd v Benson and Others.

Where flats are sold on long leases there will always be a clause that says tenants must contribute towards the cost of maintaining and repairing the building.

For any leases granted after 31st October 2003, regulations under the Landlord and Tenant Act 1985 say that landlords must consult with tenants about works that they propose to carry out.

If the landlord fails to consult, he can recover only a limited amount from each tenant.

In these circumstances, the landlord’s only hope is to ask the Leasehold Valuation Tribunal to order that the requirement to consult should be dispensed with, which the Tribunal may do if it is satisfied that to do so is reasonable.

In the Daejan case the landlord carried out major works to the building at a cost of £270,000. The tenants refused to contribute on the grounds that the landlord had not consulted them properly.

Daejan Investments then asked the Leasehold Valuation Tribunal for an order to dispense with the need for consultation, but the Tribunal refused saying that it had no power to do so solely because of the financial consequences for the landlord. The Court of Appeal has now upheld that decision.

Said Hannah Collins, property law expert with Breeze & Wyles Solicitors LLP: “This case is a stark reminder of the perils of not taking professional advice. Here, the landlord incurred expenses of £270,000 on the building work and was only allowed to recover £250 from each of the five tenants. Landlords need to check where they stand and undertake the necessary consultation before embarking on any work, whether it’s small fry or a major investment such as this.”

Web site content note:

This is not legal advice; it is intended to provide information of general interest about current legal issues.

Don’t panic says Bribery Act Guidance

2011-05-31T17:18:00.000+01:00

The sporting season looks safe following the announcement of the long-awaited Guidance on the Bribery Act 2010

“Be prepared, but don’t panic” is the message being sent out to business by the Ministry of Justice in its long awaited guidance on the Bribery Act 2010.

The Act, which will come into force on 1st July 2011, simplifies and consolidates existing law on corruption and creates a new crime of failing to prevent bribery.

In simple terms, bribery is defined as giving or offering a person a financial or other advantage in order to induce them to act improperly. Receiving or requesting an inducement in return for acting improperly is also a crime.

When the Act was passed it caused quite a storm, with some commentators suggesting that it marked the end of corporate hospitality. The Guidance published by the Ministry of Justice on 1st April has allayed those fears, stating clearly that: “hospitality is not prohibited by the Act”.
As well as clarifying that providing tickets to sporting events and taking clients to dinner are not criminal offences, as long as the gift is reasonable and proportionate, the Guidance points out that a prosecution under the Act can only be brought if the Director of Public Prosecutions or the Director of the Serious Fraud Office believes that the prosecution is in the public interest.
With the 2012 Olympics on the horizon, as well as the regular sporting season events, this has brought a sigh of relief from organisers as well as for businesses who host corporate entertainment.

The other area of controversy caused by the Act was the crime of failing to prevent bribery, which meant that a company could be guilty of a crime as a result of the actions of another person, who might not even be an employee.

Again, the MoJ’s Guidance offers reassurance. Firstly, a company can only be guilty when an act of bribery is committed by another person if it does not have adequate anti-bribery measures in place. Secondly, the Guidance stresses proportionality: in the case of a small local business the risk of bribery is minimal and so the anti-bribery procedures will be minimal, while in the case of a large corporation tendering for defence contracts abroad, there is a higher risk of bribery and so the anti-bribery procedures must be very robust.

The Guidance provides advice on the factors that make for adequate anti-bribery measures:

· Commitment: A top-level commitment to create an anti-bribery culture in the company
· Risk assessment: a careful study of the markets in which the company does business
· Due diligence: a company must know its clients, know its employees and know its agents
· Communication: a company must ensure that its employees and agents know and understand the company’s anti-bribery policies
· Monitoring and review: markets change and companies move into new markets. In either case the assessment of risk must be continual

Said Jane Dismore, Employment Expert with Breeze & Wyles Solicitors LLP “Businesses will welcome the plain-speaking guidelines now issued by the Ministry of Justice, but they cannot simply look at the MoJ’s Guidance, breathe a sigh of relief, and ignore the Bribery Act.

“Every business, no matter how small, must carry out a risk assessment, review their standard terms for employees, and review induction procedures for new employees. If the risk assessment throws up any potential opportunities for bribery, employers should alert staff and make sure that they are on their guard. These steps should be recorded in writing.”
www.justice.gov.uk/guidance/bribery.htm

Web site content note:

This is not legal advice; it is intended to provide information of general interest about current legal issues.

Landlords left confused on disability ruling

2011-05-31T17:14:00.000+01:00

Landlords have been left baffled where they stand on the Disability Discrimination Act after the Court of Appeal rejected a claim by a disabled tenant.

In the case of Beedles v Guinness Northern Counties Ltd, the Court of Appeal ruled that The Disability Discrimination Act 1995 (DDA) did not require the landlord to carry out repairs and redecoration which were the responsibility of the tenant under the terms of the tenancy. But the judgement also implied that an assessment must be made in each individual case where disabled tenants look for special auxiliary services from landlords.

Mr Beedles was the tenant of Guinness Northern Counties (Guinness) under an assured tenancy. Under the tenancy agreement, he was obliged to keep the interior of the flat in good decorative repair. His flat was in a very shabby condition but could be made respectable by minor work including sticking back peeling wallpaper and thorough cleaning.

Mr Beedles was on benefits and, although he could afford the materials required for the job, he could not afford to pay someone else to carry out the work. Being disabled, he could not safely climb ladders and so he made a request under the DDA, asking Guinness to carry out the work as an auxiliary aid or service, but Guinness refused.

For landlords, the DDA requires them to provide auxiliary services at the request of a disabled person if that service would enable or facilitate the disabled tenant’s enjoyment of premises. In court, the case turned on the interpretation of the words ‘enjoy’ and ‘enjoyment’.

Mr Beedles argued that ‘enjoy’ meant that he ought to be able to live in his flat and feel comfortable in his surroundings as would any other tenant. The Court of Appeal rejected this and held that ‘enjoyment’ meant no more than being able to use the premises in an ordinary lawful way.

But the judgement implied that an assessment must be made in each individual case, as to whether the auxiliary service requested would enable the tenant to live in the premises as would any other typical tenant.

Said Hannah Collins, property law expert with Breeze & Wyles Solicitors LLP: “Although this judgment should be of some comfort to landlords, the exact extent of landlord responsibility remains far from clear.

“One of the judges, Lord Carnworth, suggested that he was not sure whether a statute could transfer an obligation from a tenant to a landlord unless it was expressly intended. It is a pity the Court did not consider this in more detail, because it might have provided a much more certain guide as to what was required of a landlord.”

She added: “It means landlords will need to have processes in place to make sure that each request of this sort is carefully considered in future.”

Beedles v Guinness Northern Counties Ltd [2011] EWCA Civ 442 (19 April 2011)
http://www.bailii.org/ew/cases/EWCA/Civ/2011/442.html

Web site content note:

This is not legal advice; it is intended to provide information of general interest about current legal issues.