June 2009 News Articles
Employers given more scope when making redundancies
Employers can take length of service into account when selecting candidates for redundancy, the Court of Appeal has ruled.
The court was called upon to clarify the law after Rolls Royce was faced with the prospect of laying off several of its workers. The three judges held that length of service was a legitimate point to consider even though it could give older employees an obvious advantage over younger colleagues.
However, the ruling does not mean a simple “last in, first out” approach can be adopted. The judges made it clear that while length of service could be one of a number of factors under consideration, it should not be the only criteria used.
The ruling will be welcomed by many employers who would like to consider length of service when dealing with redundancies. However, they should still tread carefully and ensure they also take other factors into account before making any decisions.
Please contact us if you would like more information about this or any aspect of employment law.
Landlords and letting agents face stricter regulations
Landlords and letting agents face tougher regulations under new measures now being carried forward by the Government.
Ministers say they want to improve standards in the private rented sector and provide more protection for tenants, especially those affected by repossessions.
All landlords in England will have to be registered and they will have to include their registration number on tenancy agreements. They will be removed from the register for persistent poor performance in matters such as carrying out essential repairs and protecting tenants’ deposits.
The register will be run by an independent organisation and landlords will be required to update their registration each year. To reduce the administrative burden, they will be able to register via the web and will only need to provide minimal information such as their name and address and the address of the property being let.
Currently, letting and managing agents do not need to have professional credentials. Ministers say this means tenants and landlords have limited chance of redress if things go wrong. Under the new proposals, there will be increased regulation for all letting and managing agents, supervised by an independent regulator.
There will also be improved complaints and redress procedures for tenants. This will include a system to enable tenants to register complaints about landlords. If the complaints are substantial and proven then the landlord may be removed from the national register.
The Government also plans to change the law so that tenants have a minimum of two months’ notice if their home is repossessed because their landlord fails to keep up with the mortgage payments.
Housing Minister Margaret Beckett said: “We need to ensure tenants have the protection they deserve, the many decent landlords receive the support they need, and those landlords whose performance is inadequate either improve or leave the sector.”
The proposals are based on recommendations contained in the review of the private rented sector carried out last year by Julie Rugg, a member of the Centre for Housing Policy at York University.
The consultation process will close on 31st July.
Partners could be personally liable for business debts
The recession is highlighting the risk some partnerships face as they try to keep their businesses afloat despite falling orders and rising debts.
Many may find that if their business becomes insolvent, they could be personally liable for its debts. It can mean partners not only lose the business they have spent years building up, they may also lose their personal savings and even their homes in some cases.
This is an issue that many partners put to the back of their minds when business is good but it quickly comes to the fore when times get difficult as in the current economic downturn.
The answer could be to consider restructuring the business as a Limited Liability Partnership (LLP). There are several advantages to becoming an LLP – including possible tax benefits - but the main one in the current economic climate is that it helps to ensure that liability lies with the business itself rather than with the individual partners.
The personal assets of each partner should be protected in most circumstances if the business fails.
LLPs need to drawn up properly to be effective so partners wishing to protect their interests should seek legal advice as soon as possible. Please contact us if you would like more information.
Builders merchants were partners despite lack of written agreement
People setting up a business together should put down in writing the basis of their relationship to reduce the risk of disputes in the future.
However, even when there is no written agreement, the law can still help to resolve differences as in the recent case of two builders’ merchants, Mr R and Mr D, who ended up disputing whether or not they were business partners.
The two men had bought a company from their former employer. They had no written agreement but they were joint signatories to the business bank account and they took equal shares of the profits.
The business had an overdraft facility which was secured by a legal charge on Mr D’s property. However, both men were liable for the debt and correspondence from the bank was issued to both of them as joint account holders.
The relationship later broke down and Mr R decided he wanted to either dissolve the partnership or sell his 50% stake to Mr D. Mr D refused to accept that there was a partnership. He said they were not business partners but simply working partners and Mr R had merely been a salaried employee.
The court decided in favour of Mr R saying the fact that the overdraft had been supplied by Mr D was not enough to say they were not partners. He had never informed Mr R that he thought of him as just a salaried employee.
The bank account was in both their names and it was unlikely that an employee would be allowed to draw as much money as the owner of the business. It was clear that the operation of the business matched the definition of a partnership as found in the Partnership Act 1890.
Therefore, there had been a partnership which had been dissolved when Mr R wrote to Mr D informing him of his intentions.
Eleven major companies sign up to prompt payment code
As cash flow problems continue to threaten the stability of many firms, eleven major companies have agreed to sign up to the Government’s Prompt Payment Code.
They include high profile names such as Barclays, Sony UK and B&Q. The pledge means they agree to pay their suppliers on time within the terms agreed at the outset of the contract.
They also promise not to change the payment terms retrospectively.
Explaining the need for the code, the Business Minister Shriti Vadera said: “Late payment can be the final straw for small businesses in the current climate so the commitment by major companies heading up supply chains to pay on time is a win for all businesses.”
The move is a step in the right direction but it still leaves thousands of firms struggling to cope with the problem of late payments. Firms in this situation should seek legal advice to help them recover debts as quickly as possible.
A solicitor can draft a letter requesting payment and outlining what action may be taken if the debt is not settled. For example, under the Late Payment of Commercial Debts (Interest) Act 1998, firms are allowed to charge interest on overdue invoices. This punitive charge is currently 8% above base rate. Firms are also entitled to levy a statutory late payment fee of between £40 and £100 depending on the size of the debt.
A solicitor’s letter is often enough to ensure payment because most companies will settle immediately when they see you are serious about exercising your rights. For more entrenched cases, it may be necessary to initiate legal proceedings but most companies will still settle before the matter gets to court.
Please contact us if you would like more information about recovering debts.
Employers to be named and shamed if they default on tribunal awards
Employers who fail to pay awards made by employment tribunals will now find themselves named and shamed as part of a government clampdown.
Offending individuals or firms will be entered in the Registrar of Judgments if they fail to pay after being taken to court to enforce the award. The registrar can be searched by members of the public and by credit reference agencies.
The move is intended to give more weight to tribunal rulings and reduce the time people have to wait to receive payments.
The Justice Minister Bridget Prentice said: “A few unscrupulous individuals are defying or delaying payment after tribunal rulings and we will not hesitate to name and shame them. Delays like this prolong the ordeal and force successful claimants to continue with court action to recover their money.”
Make sure you don't pay too much for your Home Information Pack
House sellers who get a Home Information Pack from an estate agent are being urged to ensure that the price isn’t being inflated by hidden charges or commission fees.
The warning from the Law Society comes after a Channel 4 News investigation found that some estate agents were adding more than £100 to the cost of a HIP. This is because many agents hire outside providers to supply the HIP and then add on a commission fee for themselves when billing the client.
Law Society President Paul Marsh said: “The cost of the HIP charged to the home seller by the estate agent could be much higher than necessary and more than the agent actually pays the HIP provider. Because of these hidden referral fees the estate agent is overcharging the seller and making a secret profit.
“Sellers should ask for details of the exact costs to discover if the agent is charging them more than they should be, and more than the HIP actually cost the estate agent. They should also ask if the estate agent is receiving a hidden commission from the HIP provider, which would mean the estate agents are keeping part of the cost themselves.
“If the agent is paying £300 to the HIP provider and then charging their client £400 the client is paying an extra £100 unnecessarily. With the other costs involved in selling, these added costs are unwanted extras.
“If sellers do find their agent is charging extra for their HIP they should ask their solicitor if they can provide a HIP instead, as solicitors are required to be fully open with their clients about fees. The added benefit of using a solicitor is that they are all strictly regulated and required to follow stringent rules, unlike estate agents.”
Please contact us if you would like more information about Home Information Packs.
New Bill will modernise rules relating to trusts
A new Bill to update the law relating to trusts has been introduced in the House of Lords.
The Perpetuities and Accumulations Bill will modernise the rules which restrict how long an owner can control the future ownership of property (perpetuities) and how long trustees can add income to capital (accumulations). The rules are designed to prevent people locking wealth away indefinitely.
A spokesman for the Ministry of Justice said: “The Bill will restrict the rule against perpetuities to trusts and simplify its operation by introducing a single 125-year period. It will remove restrictions on accumulations except for charities, which will be subject to a 21-year limit.
“Other than a limited right to opt in to a 100-year period, the changes will not affect pre-existing trusts or wills.”
The Bill will implement recommendations put forward by the Law Commission in a report published in 1998.
Sir Terence Etherton, chairman of the Law Commission, welcomed the Bill and said reform of this ancient area of law is long overdue. He added: “The effects of the Bill will be felt particularly in commercial transactions, which will be freed from the unnecessary complexity added by these rules.”
Please contact us if you would like more information about trusts.
Safeguards put in place as family courts are opened to the media
Several safeguards have been put in place to protect the privacy of children as family courts are opened up to the media.
The Government hopes that allowing journalists to attend hearings will increase public confidence in the system. However, the Justice Secretary Jack Straw has confirmed that only reporters who hold a valid UK Press Card will be accredited to attend family courts and they will not be allowed to identify children and families.
People involved in a case will be able to request that the media be excluded if they feel there are valid reasons why the proceedings should not be publicised. The court can also place restrictions on what can be reported in order to protect the welfare of children and their families.
Judges can still deny access to reporters if they feel it is necessary in order to protect the welfare of a child, or for the safety or protection of other participants in the case such as witnesses.
Jack Straw, Secretary of State for Justice, said: "Public confidence in the justice system is a necessary and vital part of a democratic society. I want to ensure that reforms to the family courts system increase their accountability to the public.
"People need to trust the justice system. One important way is by creating a more open, transparent and accountable system while protecting children and families during a difficult and traumatic time in their lives."
Family courts were opened to the media on 27th April. Only a tiny minority of cases are likely to attract any media attention.
Please contact us if you would more information about family law.
NHS manager wins record damages in ageism case
An NHS manager has been awarded record damages after being passed over for a new post running breast screening services because she was considered to be too old.
Linda Sturdy was 56 when she was discriminated against by Leeds Teaching Hospitals NHS Trust in 2006. The job she applied for was given to a colleague who is 13 years younger than her.
An employment tribunal has now awarded Mrs Sturdy £33,500 damages for injury to her feelings and £5,700 in aggravated damages. This is the highest ever award for a case of this kind.
Giving the tribunal ruling, Judge Christine Lee said the injury to Mrs Sturdy’s feeling was “about as serious as it gets”. She said Mrs Sturdy’s managers had failed to carry out an unbiased investigation when she complained of age discrimination and had behaved towards her in a way that was “high handed, malicious, insulting and oppressive”.
The case was closely monitored by Age Concern. A spokesman said: “Age discrimination in the workplace is outlawed and employers should not get away with pushing aside older jobseekers’ CVs just because of their age. Instead of valuing their lifetime of skills and experience‚ employers are rejecting older workers often with the glib excuse that they are over qualified.”
Please contact us if you would like more information about age regulations or any form of discrimination in the workplace.
New Bill intended to improve protection for cohabiting couples
A new Bill designed to provide more protection for cohabiting couples is now making its way through Parliament.
The Cohabitation Bill has the backing of the family lawyers’ association, Resolution. It is being put forward as a Private Members’ Bill by Lord Lester of Herne Hill.
It is uncertain whether or not the Bill will ever become law but it is at least highlighting the problems that couples could face if their relationships break up. Unfortunately, many people are confused about their legal rights. Recent research showed that more than 50% of people believe there is such a thing as common law marriage giving cohabiting couples the same legal protection as married couples.
This is not the case. Cohabiting couples have very few automatic rights and this can cause numerous problems.
For example, if your home is in your ex-partner’s name then you will have no automatic right to stay there if you are asked to leave. Nor will you automatically be entitled to a financial share in the house, even if you helped to pay for it over several years. Your former partner won’t have to pay maintenance for you, even if you gave up your job to look after the children while he or she went out to build a lucrative career.
If you don’t already have a will then you should draw one up as soon as possible. Otherwise your estate could pass to your relatives rather than your partner.
If the Cohabitation Bill does become law it will provide much needed protection for cohabiting couples but one has to remember that most private members’ bills fail to make it on to the statute book.
It means that until the law does change, cohabiting couples who don’t wish to get married have little choice but to provide their own legal protection.
Many couples protect themselves by drawing up living together agreements which state in advance how their assets should be divided if their relationship fails.
Some people may feel embarrassed at first to be making such legal arrangements as it seems that they don’t fully trust each other. However, such concerns soon disappear and most couples end up feeling their relationship is stronger because both partners feel more secure.
Please contact us if you would like more information.
Nurse awarded £254,000 after developing latex allergy at work
A nurse has been awarded more than a quarter of a million pounds compensation after developing an allergy to latex which forced her to give up her career.
The woman began working for her local NHS Trust as a community staff nurse in 2003. A year later, when she was aged 43, she developed the allergy to latex through coming into regular contact with it as part of her daily work. As a result, she suffered psychologically and was unable to continue her career. She also began suffering allergic reactions in different environments such as a swimming pool, a job centre and in shops.
Her family had to remove rubber backed carpets in her home and replace them with laminate flooring. Her doctors considered that she would remain allergic to latex as a result of her exposure to it during the course of her work.
She brought a claim for compensation on the basis that the Trust had been negligent in failing to screen her for latex allergy when she began work and so therefore had failed to protect her.
The Trust admitted that it had been negligent in failing to protect her but disagreed that she would not be able to work again. It said she could have returned to work in 2006 in a different role and earned the same as she had in her previous job.
Experts for the Trust and the nurse agreed that she would be able to work from home or in a controlled office environment but neither were able to say where she would be able to find such employment.
Leeds County Court awarded her £254,610 to compensate for her pain and suffering, medical costs and loss of earnings and other benefits.
Anyone who suffers injury as a result of someone else’s negligence is entitled to claim compensation. Please contact us if you would like more information.
Accident victim receives £1.2m compensation for her injuries
A woman motorcyclist who suffered multiple injuries in a road accident is to receive £1.2m in compensation.
The woman, who was 43 at the time of the accident and worked as an electronics assembler, was riding her motorcycle when she was hit by a car which turned into her path. She suffered multiple injuries including fractures of her wrist, leg and pelvis. She later developed chronic depressive adjustment disorder.
As a result of her injuries she will never be able to work again. She has lost her independence and will need regular care for the rest of her life. Her husband is chronically ill himself and so all her care and assistance will have to be provided commercially.
The driver of the car admitted liability and so the woman is now to receive £1.2m in an out of court settlement. The money is to compensate for her pain and suffering, her loss of earnings and to help pay for the care that she will need for the rest of her life.