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Christmas 2002
In this issue Editorial This year has been a very busy one for the firm. We have moved into our new premises in Queen Square and we have also enjoyed the great success of receiving Investors in People and Lexcel accreditation. The office move and the accreditation demonstrate our commitment to quality and to the provision of the specialist services which our clients require. Our growth is reflected in the national recognition which we enjoy in the Legal 500 publication, which recommended three core areas of our practice - insolvency, commercial property and private client work. Our insolvency team was also recommended in Chambers. As ever we have included with our newsletter at this time of year our Christmas Challenge so I do hope that you will have a prize winning go. Hopefully you will not find it too difficult and it will provide you with some amusement over the festive period. With best seasonal wishes from all of us here to all of you and your families. Peter Watkin Mediation,
mediation, mediation Previously mediation was popular because parties thought it sensible: it saved costs. Now parties are having to mediate because the court can impose costs sanctions against a party that refuses to mediate. Several decisions this year have emphasised the importance of mediation. In Frank Cowl & Others v Plymouth
City Council, Lord Woolf made it very plain that the parties should have
used the complaints procedure in place at the Council rather than immediately
litigating. Lord Woolf said in his judgment: The Court of Appeal's judgment in Dunnett v Railtrack Plc (in Railway Administration) took
matters a stage further. It was held that if parties and their
lawyers: Hurst v Leeming gave Mr Justice Lightman the opportunity to be even more forthright. In this recent case, the claimant had both before and after the commencement of proceedings invited the defendant to proceed to mediation. The defendant had refused. The refusal was not made without reason. The defendant cited the following reasons:
Lightman J dismissed the first three reasons, expressing his opinion that the fourth and fifth had merit in the particular circumstances. He warned that any unjustified failure to give proper attention to mediation would expose a party to the real possibility of adverse costs consequences and the risk of being severely penalised. Although a party could argue that mediation would have no prospect of success and so refuse to participate, this was a high risk course to take. The moral of the story is clear. Consider mediation at the outset. It is dangerous to ignore an offer to mediate - whatever the stage at which it is proposed. Combine mediation with an offer to settle. If a dispute ever ends up in court and your opponent is awarded less than the amount of the settlement offer he may be penalised in costs. For further information, please contact Adam Chivers ajc@meadeking.co.uk Flexible
Working - the right to apply The right will apply to an employee who:
The procedure is that the employee first asks for a permanent change to the employment terms. The employer must within 28 days arrange a meeting to discuss the employee's request. Within 14 days of the meeting the employer must provide a response giving clear business reasons if the application is not to be accepted. There should also be a right of appeal. In certain cases the employee will have a right to take a refusal by the employer to arbitration or to an Employment Tribunal. For further information, please contact Richard Holmes rwfh@meadeking.co.uk Change to
National Minimum Wage Adjudication:
the latest Over the last 3-4 years however the adjudication process has produced a plethora of satellite litigation through the courts. Specifically in recent months we have seen important decisions on:
Written agreements The Act provided that an agreement is in writing if
In RJT Consulting Engineers Limited v DM Engineering (Northern Ireland) Limited the Court of Appeal took the view that the terms of the agreement material to the issues giving rise to the reference should be clearly recorded in writing. It was not necessary for every term, however trivial or unrelated to those issues, to be expressly recorded or incorporated by reference. Notices of referral The responding party said that this was a wholly new claim and as it had not responded to it pre-adjudication the adjudicator had no jurisdiction. The court upheld the respondent. An adjudicator had jurisdiction only to determine disputes that were the subject of a notice of referral to him and could not decide matters outside the notice. So what is the effect of the decision? Very possibly parties will realise that their approach to adjudication may to an extent have to replicate the requirements of the Construction and Engineering Protocol which requires parties to set out their claims at an early stage with supporting evidence. And, with costs still not allowed in adjudication, parties confident of success may feel that if they have to devote even more resources to preparing their ground in advance they may be better off arbitrating. As ever the advantages of finality and of costs recovery which arbitration provides have to be balanced against the speed of the adjudication process. Withholding
notices For further information, please contact Phil Burbidge pjb@meadeking.co.uk Business
Tenancies: an overhaul At present unless special arrangements are made to exclude it, the Act entitles tenants to remain in occupation at the end of a lease and to seek a new lease at a market rent with landlords only being able to oppose renewal on limited grounds (for example where the tenant is seriously in breach of his obligations or where the landlord intends to redevelop the property or use it for his own business). In some cases compensation is payable to the tenant if he is refused a new lease. The main planned changes are:
The proposals are expected to come into force in the second half of 2003. For further information, please contact Edward Langford eal@meadeking.co.uk Profit
without honour: accounting for non-disclosure In this edition we examine a recent decision of the Court of Appeal in the case of JJ Harrison (Properties) Ltd v. Harrison [2002] BCC 729. The case concerned a director of a property company who acquired property from the company in 1986 for £8,400 without disclosing its development potential. He subsequently sold the land in two parts for £110,300 in 1988 and £122,500 in 1992. The company, perhaps unsurprisingly, applied for an order to the effect that the director at all times held the land on trust for the company and was liable to account to it for the profits which he had made from the transactions. The Court of Appeal was happy to oblige, stressing that a director, on appointment to office, assumed the duties of a trustee in relation to the company's property. When the director purchased the land from the company in 1986, he failed to comply with the statutory disclosure requirements of a director and acted in breach of his fiduciary duties in failing to ensure that the land was sold at its full value. His existing duties as a director required him to ensure that the land was not conveyed at all until the company had received advice as to its value in the light of the change in planning potential. The director's breach of these statutory and fiduciary duties made it right that he should account for the £110,300 and £122,500 which he received following the sales in 1988 and 1992, in each case after bringing to the credit of that account a proportion of the purchase price of £8,400 and the cost of any works which had resulted in an enhanced price on sale. For further information, please contact Clare Harris ch@meadeking.co.uk Care fees -
is the family home at risk? The current situation is that only people with assets of less than £19,000 are entitled to state funded care. Most married people these days jointly own their home and if they hold the property as joint tenants this means that on the first death the deceased's share is automatically transferred to the surviving spouse. If that surviving spouse then goes into care the entire value of the property is taken into consideration by the local authority when assessing the assets of the surviving spouse taking them well over the £19,000 threshold. The solution is for a married couple to sever the joint tenancy in their home so that they hold the property as tenants in common. When the first spouse passes away the deceased's half share in the property can be transferred to, say, their children, leaving the property owned as to 50% share by the surviving spouse and 50% by the children. If the surviving spouse then has to go into care their half share in the property is treated as effectively valueless and as the law stands at present the local authority is likely to accept that the home should be disregarded when assessing the surviving spouse's assets. Moreover, severing the joint tenancy in a property is often a useful capital tax planning tool as a means of utilising a share in property to mitigate a potential inheritance tax liability. For further information, please contact Richard Boulding rjb@meadeking.co.uk or Jackie Martin jam@meadeking.co.uk Construction
Team special report Since its inception, the last three to four years of the adjudication process has produced a plethora of satellite litigation through the courts. Specifically in recent months we have seen important decisions on:
Written agreements The Act provided that an agreement is in writing if
In RJT Consulting Engineers Limited v DM Engineering (Northern Ireland) Limited the Court of Appeal took the view that the terms of the agreement material to the issues giving rise to the reference should be clearly recorded in writing. It was not necessary for every term, however trivial or unrelated to those issues, to be expressly recorded or incorporated by reference. Notices of referral The responding party said that this was a wholly new claim and as it had not responded to it pre-adjudication the adjudicator had no jurisdiction. The court upheld the respondent. An adjudicator had jurisdiction only to determine disputes that were the subject of a notice of referral to him and could not decide matters outside the notice. So what is the effect of the decision? Very possibly parties will realise that their approach to adjudication may to an extent have to replicate the requirements of the Construction and Engineering Protocol which requires parties to set out their claims at an early stage with supporting evidence. And, with costs still not allowed in adjudication, parties confident of success may feel that if they have to devote even more resources to preparing their ground in advance they may be better off arbitrating. As ever the advantages of finality and of costs recovery which arbitration provides have to be balanced against the speed of the adjudication process. Withholding
notices For further information, please contact Philip Burbidge pjb@meadeking.co.uk Meade King
news Our expansion plans continue. We are pleased to say we have recruited Alison Bluck to our insolvency department. Alison is an experienced insolvency lawyer and has specialised over the last decade in a variety of litigation dealing with insolvency, company, partnership and banking issues and white collar fraud. She qualified in 1992 and made her mark in contentious and non-contentious insolvency matters including the prosecution of director disqualification cases for the DTI. She has had the conduct of several reported cases - some in the Court of Appeal. Alison adds strength and depth to our highly regarded and successful insolvency team. Whilst every effort has been made to ensure accuracy, information contained in The Orchard may not be comprehensive and should not be acted upon without professional advice. |
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