November 2011 News Articles
Company counts the cost of mistake when drawing up deeds
When drawing up deeds it is vital to meet all the legal requirements – otherwise the document could prove invalid and cost you thousands of pounds, as one firm found recently.
The case involved a financial services company that entered into an invoice discounting facility with two directors of a client firm.
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A deed was drawn up providing guarantees and warranties that the directors would be liable for outstanding debts if their firm ceased trading. The directors signed the documents in front of witnesses and then handed them over.
Later, the directors’ firm did go out of business and the finance company sought to recover some of its money.
The directors refused to pay so the case went before the High Court. It ruled that the deed could not be enforced because it had not been properly “delivered”.
Deeds are a more formal agreement than contracts. It is not enough that they are signed and witnessed. They also have to be “delivered” to the other party, which in practice means the other party has to make it clear that they wish to be bound by the agreement.
That did not happen in this case. The court found that the document the directors signed contained notes saying that changes would be made. From this, the directors were entitled to expect that an updated version of the deed would be drawn up for them to sign.
This did not happen and so the deed could not be said to have been “delivered”.
The ruling said: "The critical thing is that the person who has signed the deed must have separately indicated that he intends to be bound by the deed.
"Mere signature is not enough. Nor is it enough that what looks like a deed has been given to the person who appears to be the beneficiary of it – the issue is not whether the document has been physically handed over to the beneficiary, but whether the person whose deed it is supposed to be intended to be bound by it."
Please contact us if you would like more information about the issues raised in this article or any aspect of deeds and contract law.
Demand for rented accommodation is outstripping supply
There are now so many tenants looking for rented accommodation that the private rental sector (PRS) may soon be unable to meet demand, according to new research.
The Association of Residential Letting Agents (ARLA) says that the number of its members stating that there are more tenants than properties has reached the highest level since records began.
A survey of ARLA members found that 74% of agents believe that demand is outstripping supply. This has remained constant for the last four quarters.
The survey also found that the average period tenants remain in one property has reached a record 19 months. This is because people are wary of trying to find a new property in such a competitive market.
ARLA says that the Private Rental Sector is running out of space to cater for demand and so there’s a need for more properties to be made available.
Tim Hyatt, president of ARLA, said: "The reality is that there is a finite amount of rental property and unless both housing supply and mortgage availability improves then renters will find that their options in the market are reduced."
The increasing demand for rented property has prompted many landlords to increase their portfolios over the last few years. It also tempted new buy to let landlords into the market and that trend is continuing.
Buy to let property remains attractive but landlords need to ensure they are up to date with all the legal requirements and draw up professional tenancy agreements in order to protect their investment and avoid any costly problems.
Please contact us if you would like more information.
Businesses need customers to protect a trading name
The High Court has made it clear that having a business reputation is not enough to justify the protection of a trading name – the business must also be able to show that it has customers in the UK.
The issue arose in the case of two online dating agencies. One was a free service called plentyoffish.com which was set up in 2001. The other was a paid for service called plentymorefish.com and was set up in 2006.
The free service, which was based outside the UK and received its income through advertising, began receiving complaints from people who were angry at being charged for a service they thought was free. It turned out they had subscribed to the paid for service and then took their complaints to the owners of the free service by mistake.
The free service began proceedings to have the other firm’s trademark declared invalid.
However, the High Court ruled against the owners of the free service. It held that the law required a business to have customers in order to protect a trading name.
The free service had not been able to show that it had any customers or business in the UK. Having visitors to the website was not enough. People could only be classed as customers if they became members and used the dating services. Those services could be provided free, but people had to actively subscribe to them to be classed as customers.
The free service didn’t have such members in the UK and so could not protect its trading name.
Please contact us for more information about the issues raised in this article.
Changes to unfair dismissal rules ‘could save businesses £6m’
The Government has confirmed that it is making changes to the unfair dismissal rules in an attempt to encourage employers to take on more staff.
The qualification period for being able to bring a claim of unfair dismissal is to be extended from one year to two years. The change will come into effect from next April.
It’s estimated that the move will save businesses £6m a year.
The Government is also considering introducing fees for bringing tribunal claims and is staging a public consultation on the issue. The details haven’t been finalised but it’s thought the fee for lodging a claim could be £250. This would only be refundable if the claim was successful.
There has been no announcement about when fees might be introduced.
Ministers say the main purpose of the changes is to give employers the confidence to take on more workers. Business Secretary Vince Cable said: “Businesses tell us that unfair dismissal rules are a major barrier to taking on more people.
“The priority of this government is to increase growth in our economy. We have one of the most flexible labour markets in the world but there is more we can do to give British business the confidence it needs to create more jobs and support the wider economy to grow.”
We shall keep clients informed of developments. Please contact us if you would like more information about the issues raised in this article.
Surge in data security breaches by private companies
The number of data security breaches by private companies has risen by 58% over the last year, according to figures released by the Information Commissioner’s Office (ICO).
This is in spite of the fact that three quarters of businesses surveyed understand that the Data Protection Act (DPA) obliges them to keep personal information secure – that’s up 26% compared with last year.
Companies face a fine of up to £500,000 for serious breaches of the DPA.
The ICO said recent examples of breaches of the DPA included a housing group sending personal details about 200 employees to the wrong email address, and a local council which accidentally published a spread sheet containing the names, salaries and dates of birth of 900 current and former employees.
The survey also revealed that public confidence in the system has fallen with less than half of the people questioned believing that organisations process data in a fair and proper manner.
The Information Commissioner, Christopher Graham, said: “I’m encouraged that the private sector is waking up to its data protection responsibilities, with unprompted awareness of the Act’s principles higher than ever. However, the sector does not seem to be putting its knowledge to good use.
“The fact is that security breaches in the private sector are on the rise, and public confidence in good information handling is declining. Businesses seem to know what they need to do – now they just need to get on with doing it.
“It’s not just the threat of a £500,000 fine that should provide the incentive. Companies need to consider the damage that can be done to a brand’s reputation when data is not handled properly. Customers will turn away from brands that let them down.”
Please contact us if you would like more information about the issues raised in this article.
More couples drawing up pre-nup agreements
An increasing number of couples are drawing up pre-nuptial agreements, according to a survey of solicitors specialising in family law.
It follows a ruling by the Supreme Court in the high profile case of the heiress Katrina Radmacher and her former husband Nicolas Granatino. Until that time, pre-nup agreements were not legally binding although courts would take them into account.
The position changed last year when the Supreme Court upheld the pre-nup agreement in the Radmacher case and went on to say that such agreements should generally be accepted by the courts unless there were strong reasons against doing so.
Lord Phillips, president of the Supreme Court, said: "The court should give effect to such an agreement if it is freely entered into by each party with a full appreciation of its implications, unless in the circumstances prevailing, it would not be fair to hold the parties to their agreement.”
He stressed that judges would still have the discretion to ignore pre-nups if they were unfair, especially to children, but said that following the ruling it will be natural to infer that parties entering into agreements will “intend that effect be given to them”.
“What is important is that each party should have all the information that is material to his or her decision, and that each party should intend that the agreement should govern the financial consequences of the marriage coming to an end.”
Lord Phillips added: “The circumstances of the parties at the time of the agreement will be relevant. Those will include such matters as their age and maturity, whether either or both had been married or been in long-term relationships before. What may not be easily foreseeable for less mature couples may well be in contemplation of more mature couples.”
The ruling means that if both parties freely enter into a pre-nup that is fair, and both disclose all the relevant financial information in advance, then that agreement will be upheld by the courts.
The accountancy firm Grant Thornton recently carried out a survey which found that 58% of family lawyers had seen an increase in the number of couples drawing up pre-nup agreements following the ruling.
Please contact us if you would like more information about pre-nuptial agreements or any aspect of matrimonial and family law.
Woman sacked for Facebook comments wins compensation
A woman who was sacked after making comments about her colleagues on Facebook has been awarded £14,540 in compensation.
Mrs E A Whitham worked as a team leader for Ventura, a firm which provides customer care services for companies such as Volkswagen. Mrs Whitham posted a comment on Facebook saying: “I think I work in a nursery and I do not mean working with plants.”
Two of her colleagues reported the comment to senior management at Ventura and the company conducted a disciplinary hearing. She apologised for the comments but was dismissed for gross misconduct.
Mrs Whitham then took the matter to an employment tribunal.
Ventura tried to justify the dismissal by saying that the comments put the firm’s reputation at risk and could have potentially ruined its relationship with Volkswagen, which was a key client.
However, the tribunal rejected this argument saying: "it would seem to us that it would be a very strange world in which a company the size of Volkswagen, working with a company the size of (Ventura), would terminate an important commercial agreement ... because of a number of relatively mild comments made by a relatively junior employee of (Ventura) and which do not, in any manner, directly refer to VW in any event."
The tribunal found that Mrs Whitham had been unfairly dismissed and she was awarded £14,540 in compensation.
Please contact us if you would like more information about the issues raised in this article or any aspect of employment law.
Man awarded £1.8m compensation after ‘sun glare’ accident
A 23-year-old man has been awarded £1.8m compensation after suffering brain injuries in a road accident.
He had been in the passenger seat of a vehicle when the driver was blinded by glare from the sun. The driver lost control of the car and collided with a stationary truck.
The passenger suffered a near fatal brain injury.
He was unconscious for six weeks and then had to spend three months in a rehabilitation unit. He lost his vision to the left side in both eyes and suffered nerve damage.
After he completed his rehabilitation, he had to move in with his parents for nearly two years before he could move into his own flat. He initially needed 24-hour support but this was reduced over the following year.
The man brought a claim against the driver saying he had been driving without due care and attention.
The driver admitted liability and the man was awarded a lump sum of £1.8m as well as annual payments of £62,500 for the rest of his life.
If you have been injured in an accident that wasn’t your fault, please call a member of our personal injury team.