March 2011 News Articles
Localism Bill could ‘cause chaos’ in the property market
The Localism Bill could cause uncertainty and chaos in the property market, according to the Law Society.
The Society is concerned that the Bill will allow planning authorities to pursue a planning enforcement order at any time after they become aware that there has been a breach of planning control.
It means property owners could become liable for a breach by a previous owner, unless they could prove that the breach had been concealed from them.
Under the current system, the Town and Country Planning Act provides time limits on the taking of planning enforcement action.
The president of the Law Society, Linda Lee, said the new system could cause uncertainty for buyers of both residential and commercial property if they could not establish whether previous owners had concealed a breach of planning control.
She said: “These reforms could have a serious effect on both the residential and commercial property markets, where innocent purchasers could become liable for the actions of a previous owner.
“This could lead to purchasers demanding that every breach of planning control is remedied or that the price is abated for the risk. It also could delay transactions while enquiries are being made about the planning status of a property.
“It increases the level of due diligence buyers would need to do, as there will no longer be a cut-off date. This could involve buyers incurring considerable expense. It could even necessitate taking out insurance against any unknown potential liability.
“While aimed at the fraudulent and blatant cheats, the provisions are drawn so widely that they will catch anything which has not been expressly pointed out to the planning authority.”
We shall keep clients informed of developments.
LLP had no power to expel one of its partners
The High Court has ruled that a limited liability partnership had no right to expel one of its partners because there was no binding agreement giving it the necessary powers.
The case involved a recruitment agency in which the three members had marketed themselves as partners since 2004.
They then started to consider becoming a limited liability partnership and there were discussions about how fees should be allocated.
The agency was incorporated in 2007 and there was an agreement that 25% of all fees should be paid into the business to cover running costs. There was no written agreement about procedures for expelling a partner and the issue had not been formally discussed.
One of the members considered himself as the senior partner, although there was no formal acceptance of this by the others. This self-styled senior partner became dissatisfied with the work of one of the other two partners and dismissed him.
He also refused to refund the dismissed partner’s 25% contributions to the running of the business.
The High Court has ruled that this was unlawful and unfairly prejudicial because the lack of a formal agreement meant there was no power of dismissal.
The court held that without such an agreement, the only way to remove a partner was to buy him out or dissolve the partnership.
Please contact us if you would like more information about the issues raised in this article.
Government decides against extending Time to Train regulations
The Government has shelved plans to extend the Time to Train regulations to smaller firms.
Employees with organisations employing more than 250 people have had the right to request time for training since April 2010. The previous Labour Government had planned to extend that right to small and medium-sized businesses in April this year.
However, the Coalition Government says it doesn’t want to burden small businesses with more regulation. It has decided to delay implementation to allow for further “discussion scrutiny and evaluation”.
We shall keep clients informed of developments.
Businesses fear rising debts and falling profits
New research has revealed that businesses are becoming increasingly worried about the twin problems of rising debts and falling profits.
Surveys carried out by the insolvency trade body R3 show that one in five businesses (19%) are worried about the amount of debt they owe to their creditors.
At the same time, more than 850,000 businesses are experiencing decreased profits. More than 40% of businesses had seen a reduction in sales volume and 32% had seen their market share reduce.
The R3 research shows that smaller businesses owe an average of about £110,000 to their bank, £82,000 to trade creditors and £27,000 to the Crown.
It is the debts to trade creditors that cause business owners the most concern.
The President of R3, Steven Law, said: “In a fragile recovery, debt is an important part of working capital in most businesses. With VAT rises and the impact of public sector cutbacks yet to be felt in full, many businesses are concerned about their ability to repay the money they owe in fragile conditions.
“Worry about trade debts is often more keenly felt as businesses deal with this creditor group on a day to day basis - these debts can therefore seem more obvious than those owed to the bank or the Crown.
“Early professional advice is the best way to allay fears over debt levels. Ascertaining whether your current debt levels are sustainable should fiscal and monetary policies change is an important challenge for all businesses.”
It is also important, of course, for creditors to take action as soon as debts begin to mount up to avoid the risk of debtors defaulting. It is often the case that taking early legal action is the difference between recovering the debt and not being paid.
Please contact us if you would like more information about credit control and debt collection.
Recession sparks rise in landlord and tenant disputes
The recession has sparked a surge in the number of disputes between landlords and business tenants, according to new research.
Figures compiled by the legal publishers Sweet & Maxwell show a 43% increase in disputes in the High Court in London involving landlords and tenants of commercial property.
The numbers rose from 28 in 2008 to 40 in 2009, the latest year for which data is available. However, these figures only cover cases involving sums above £25,000. It’s thought there were many more disputes involving lower figures.
Sweet & Maxwell also point out that thousands of disputes are settled by negotiation or arbitration and don’t get to court.
The researchers put the increase down to the economic downturn which has prompted businesses to try to reduce their overheads by shedding excess office and retail space. In the haste to cut costs, legal obligations can become blurred.
Some of the trigger points include tenants trying to reduce their costs by scrutinising service charges and their contractual obligations. There has even been legal action over whether or not a service charge covers Christmas decorations in a shopping centre.
Disputes can also arise when tenants try to sub-let some of the space they no longer need, sometimes at a sub-market rent. Landlords may fear that this could have a detrimental effect on future rent reviews and consequently, the investment value of the property.
Lease assignment can be another point of contention if the tenant tries to hand over to someone the landlord considers inappropriate or unable to meet the necessary financial or legal requirements.
Please contact us if you would like more information about landlord and tenant issues.
Mother wins fight to have children returned to United States
A mother has won her legal battle to have her children returned to the United States so that she can see them and maintain contact.
The case involved an American mother and a British father. They had married in the United States and had two children. They lived in the US while they were married.
Following the break-up of the marriage, the children continued living with the father but were visited often by the mother.
The father was then charged with assault on a former girlfriend. He also found himself in severe financial difficulties. To avoid facing the charge and to be closer to his family because of his financial problems, he decided to return to the UK taking the children with him.
He did not tell the mother he was leaving or give her a forwarding address.
As soon as the mother discovered what had happened, she began legal proceedings under the Hague Convention to have the children returned to the United States.
The father claimed that she had consented to the removal of the children. He also submitted that the risk of imprisonment and his financial difficulties could expose the children to psychological harm if he were forced to return to the US.
The court, however, granted the mother’s application to have the children returned. It held that the father had failed to show that she had consented to the removal of the children. In fact, the evidence suggested the opposite.
As far as the assault charge was concerned, the court was not convinced that the father would be arrested or that if he was, the children would be not be sufficiently cared for by the mother and the US welfare system.
In any case, the father had to accept responsibility for his situation. To accept his arguments would give a signal to would be abductors that they could improve their case by breaking the law and by giving up their employment so they have no money.
Please contact us if you would like more information about family law issues.
Woman wins case to prevent £2.3m family farm going to RSPCA
A woman has won the right to inherit her family’s farm worth £2.3m and prevent it from being left to the RSPCA.
The issue arose because the woman’s parents drew up mirror wills. They each left all their estate to the surviving partner. When the surviving partner died, the estate was to bypass their daughter and go to the RSPCA.
They said this was because the daughter was already well provided for. The father died first so his wife inherited all the estate. When she then died, the estate passed to the RSPCA.
The daughter challenged the will saying that her father had coerced her mother into making the will against her mother’s wishes.
The court heard that the mother had suffered from agoraphobia with caused her extreme anxiety when leaving her home or when she was in the company of strangers. The illness also severely affected her understanding.
It was unlikely that she would have accompanied her husband to a solicitor’s office to have a draft of the will read to her, and even if she had, she probably would not have understood what it meant.
The court revoked the woman’s will having found that it was executed under undue influence from her husband.
The decision to revoke the will has now been upheld by the Court of Appeal but for different reasons. It held that the will was invalid because of the woman’s lack of knowledge and approval. That being the case, it wasn’t even necessary to consider the issue of undue influence.
The daughter will now inherit the farm.
Please contact us if you would like more information about wills and probate.
Injury victim left paralysed after car crash awarded £4m
A young woman who suffered severe brain injuries and was left paralysed after a car accident has been awarded a lump sum of £4m.
She will also receive £300,000 a year for the rest of her life.
The accident happened when the woman was only 16 years old. She was sitting in the front seat of a car, wearing a seat belt, when the driver lost control and collided with a lorry travelling in the opposite direction.
The woman, who is now 20, sustained brain damage which resulted in paralysis of all four limbs.
She had just taken her GCSEs at the time of the accident and hoped to become a paramedic. Now she will never be able to work and will need constant care for the rest of her life.
She took legal action against the driver of the car who was later convicted of careless driving. The driver’s insurers admitted liability.
Anyone who is injured as a result of someone else’s carelessness is entitled to claim compensation. Please contact us if you would like more information about making a personal injury claim.