Bankruptcy laws strike a delicate balance between satisfying creditors and enabling debtors to make a clean break so that they can get on with their lives. In one ruling that clarified the law, the Court of Appeal decided that that balance came down in favour of allowing a bankrupt businessman to preserve his private pension.
The man was adjudged bankrupt on his own petition and, although the amount of his debts was disputed, creditors claimed that he owed more than £6.5 million. On the day before he was discharged from bankruptcy, his trustee in bankruptcy applied for an income payments order (IPO) under the Insolvency Act 1986. Such an order would have entitled his creditors to most of his pension.
In refusing the trustee’s application, a judge noted that the man wished to preserve his pension for the benefit of his children on his death. With that in mind, he had not exercised his contractual options to draw down lump sums or other payments from his four pension policies. The judge found that the trustee could not require him to exercise the options for the benefit of his creditors.
In dismissing the trustee’s challenge to that decision, the Court found that his arguments, if correct, would drive a coach and horses through the protection afforded to private pensions by the Welfare Reform and Pensions Act 1999, legislation that was designed to encourage people to save for their old age.
The Insolvency Act contained a mechanism by which trustees could claw back excessive pension contributions that unfairly prejudiced creditors’ interests. However, that was not the case in this instance and, in the circumstances, the man could no more be required to crystallise his pension rights for his creditors’ benefit than he could be required to find work so that his salary might be the subject of an IPO.
Mike Sutton, Personal Injury specialist at Sydney Mitchell Solicitors was instructed on behalf of Mr Davison’s family following the death of Mr. Robert Davidson on 27th January 2016.
At the time, Mr. Davidson was a resident of Aran Court Care Home in Garretts Green, Birmingham. He was 79 years of age and suffered from Alzheimer’s and Vascular Dementia. His family considered that Mr. Davidson was known to put objects in his mouth and ought to have been considered to have been a known risk for choking, and that appropriate procedures ought to have been put in place.
On the evening of 27th January 2016 Mr. Davidson was found to be choking. Emergency services attended and when the paramedic arrived Mr. Davidson was found to be in cardiac arrest. CPR was commenced which resulted in a nurses glove being dislodged from his throat. The glove had been causing an obstruction of his airway. Mr. Davidson was taken to Heartlands Hospital but, sadly, passed away shortly after arrival.
Sydney Mitchell arranged for representation for the family at the Inquest. The Inquest lasted for three days and was held with a Jury. The Jury decided that the death was not accidental but had been contributed to by the neglect of the care home. Without representation it is likely that the scope of the Inquest would have been very much narrower, crucial witness evidence would not have been heard and that a narrative verdict, with an ultimate finding of neglect, would not have been possible
If you would like advice regarding similar issues please contact Mike Sutton email@example.com 0121 698 2200
Read more in recent press articles in the Birmingham Mail and The Sun:
In AA Solicitors Limited (T/A AA Solicitors) and Another v Majid, a young female lawyer who was treated in a demeaning and disrespectful manner by the principal of the firm for which she worked has been awarded more than £20,000 in compensation.
The principal was an older man in a position of power and authority who treated the woman as if she was only present in the office for his pleasure and gratification, rather than to work or improve her legal skills. She politely rejected his advances and the firm later purported to make her redundant.
Her sexual harassment claim was upheld by an Employment Tribunal and she was awarded £14,000 for injury to her feelings, £4,000 in aggravated damages and £2,111 in respect of lost earnings. The principal and his firm, who were held jointly and severally liable, argued before the Employment Appeal Tribunal (EAT) that the award in respect of injury to feelings was excessive.
In rejecting the appeal, however, the EAT found that, in the eyes of a reasonable person, the law would be regarded as deficient if it did not mark the principal's conduct with an award that recognised how humiliating it was for the woman to lose her job because she was not willing to play the sexually charged role that he had allotted to her. The EAT noted that, happily, the woman had not been out of work for long and had quickly found employment with another law firm.
This case serves as a reminder that the law protects employees from unwanted conduct relating to sex and from behaviour which violates their dignity. This includes behaviour by one employee towards another. Employers are advised to ensure that all employees are aware that no form of harassment will be tolerated in the workplace and have in place robust procedures for enforcing the policy.
Contact Jade LInton for advice on how to create and enforce an effective anti-discrimination policy.
A recent case shows that being a director is less about the title of your job with the company and more about the role you assume.
The case involved an insolvent company that ran bars and restaurants in London. When it went into liquidation in 2014, the company had a deficiency in excess of £1 million, mainly in respect of unpaid PAYE, National Insurance Contributions and VAT liabilities.
Following an investigation by the Insolvency Service, it was concluded that the company had traded while insolvent and that a former director, who had resigned as a director in 2013, had been paid more than £250,000 before the company collapsed.
His son had remained as a director, but the report indicated that the father still acted as if he were a director and his formal resignation did not mean he had ceased to be a de facto director.
Both father and son were disqualified from acting as directors of UK companies for a total of more than eight years.
Says Leanne Schneider-Rose:
If your company is in trading difficulties, take advice promptly to protect your personal position.
If you require help or advice on Insolvency matters, please contact Leanne Schneider-Rose on 0121 698 2200.
In Donovan v Greggs plc, the Employment Tribunal (ET) ruled that the employer's decision to dismiss an experienced baker for failing to comply with its strict hygiene rules was fair.
Bakery chain Greggs plc operated a strict policy on hand washing, details of which were included in the staff handbook. The need to comply with the policy was reinforced by staff training and in regular communications with employees.
Sion Donovan, a bakery worker with 11 years' service, acknowledged the importance of hand washing in order to ensure safe food preparation but admitted having failed to wash his hands before returning to the food preparation area.
Greggs argued that a zero-tolerance approach to its hygiene policy was essential in order to prevent the risk of its bakery products becoming the vehicle for the spread of an infection that could cause illness, as well as reputational harm that could do serious damage to the company's business. In its view, an employee who could not be trusted to adhere to the rules posed an unacceptable risk to the safety of its food preparation.
Mr Donovan argued that dismissal was too harsh a punishment in light of his unblemished service record and was therefore outside the band of reasonable responses available to his employer in the circumstances.
In rejecting Mr Donovan's claim of unfair dismissal, the ET acknowledged that length of service can be a mitigating factor when deciding what disciplinary action is appropriate. However, in this case Mr Donovan's experience in the food industry was 'a double-edged sword'. Greggs was entitled to expect such an experienced worker to respect its hygiene rules but he had shown that he could not be relied upon to do so. Given the potential risk of such behaviour to the company's customers and to its reputation, the decision to dismiss him was reasonable.
Under the draft Equality Act 2010 (Gender Pay Gap Information) Regulations 2016, annual reporting on the gap in pay between male and female workers is to become compulsory for private and voluntary sector employers with 250 or more employees.
The Regulations were originally scheduled to come into force on 1 October 2016, but their implementation has been delayed. The final draft Regulations will now be laid before Parliament this autumn with a planned implementation date of April 2017. As things stand, employers will be required to report on pay differences using data from a specific pay period that contains the relevant date, which is every 30 April from 2017 onwards. Employers will then have 12 months beginning with the relevant date in which to publish the information.
If you would like assistance with carrying out a review of the pay and conditions of your workforce to check that these are fully compliant with equal pay legislation, contact Jade LInton firstname.lastname@example.org 0121 746 3300.
It is regrettably not unheard of for directors to flout their duties and help themselves to company money to which they are not entitled. However, one High Court case showed that professionally managed litigation can be a swift means of catching up with miscreants and recovering defined monetary losses.
A financial services company had launched proceedings against a former director, alleging wholesale breaches of his fiduciary duties. Amongst other things, he was accused of wrongfully extracting commissions from clients, misappropriating company funds and submitting false business expenses claims.
The director put in a detailed defence to the company's claim. However, that defence was later automatically struck out due to his failure to comply with case management directions. The company was therefore granted a default judgment against him for a sum in excess of £105,000.
That award represented losses that could be precisely quantified in money terms. The Court found that placing a value on other elements of the company's claim –including an allegation that the director had secretly diverted away its business for his own benefit – would require a full hearing.
Says Sundeep Bilkhu,
The courts can come down hard when there is a failure to comply with case directions. If you are engaged in a company dispute, we can provide expert legal advice as well as ensuring careful management of the case as regards procedures and requirements of the court.
For help and advice contact Sundeep on 0121 698 2200 email@example.com
The following changes to the National Minimum Wage (NMW) rates for workers aged under 25 came into effect on 1 October 2016:
- The NMW rate for workers aged 21 to 24 increased from £6.70 to £6.95 per hour;
- The NMW rate for workers aged 18 to 20 increased from £5.30 to £5.55 per hour;
- The NMW rate for 16- and 17-year-olds increased from £3.87 to £4.00 per hour; and
- The apprentice rate of the NMW, which applies to apprentices aged under 19 or 19 or over and in the first year of their apprenticeship, increased from £3.30 to £3.40 per hour.
The hourly rate of the National Living Wage, which was introduced on 1 April 2016 and is payable to workers aged 25 and over, remains unchanged at £7.20 per hour.
The accommodation offset increased from £5.35 to £6.00 per day.
Contact Jade Linton for advice on any employment law matter.
In a recent case (CT Plus (Yorkshire) CIC v Black and Others), the Employment Appeal Tribunal (EAT) provided important guidance on the operation of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE) with regard to the service provision change (SPC) provisions. Regulation 3(1)(b)(ii) states that TUPE applies when activities cease to be carried out by a contractor on a client's behalf and are carried out instead by another person on the client's behalf. The EAT stressed that in this context 'client' means 'an organisation that is in a position to carry out activities either itself or by commissioning them from others to carry out those activities on its behalf'. It is central to all three forms of SPC identified in TUPE that there should be a client or group of clients for whom the service is performed.
CT Plus Limited, a community interest company owned by a charity, had successfully tendered to operate a park-and-ride bus service from a council-owned car park on the western outskirts of Hull to the city centre. The company received a substantial subsidy from Hull City Council to offset the costs of running the service, which operated to a timetable set by the Council. Under the terms of the contract, the Council also had control over the type and age of the buses to be used and their branding.
Stagecoach, which is a much bigger operation than CT Plus, with an extensive depot in Lincoln, decided that it could operate the service profitably, without subsidy, albeit with a reduced service outside peak hours. It therefore gave notice of its intention to the relevant Government agency. Since a subsidised service of the kind CT Plus had agreed with the Council cannot be run in competition with a commercial service, its contract was terminated.
Stagecoach declined to take on CT Plus's drivers, arguing that there was no SPC under TUPE. CT Plus disagreed and proceedings were brought before an Employment Tribunal (ET) in order to establish whether there had been a TUPE transfer and who should compensate the employees who had lost their jobs. The ET ruled in Stagecoach's favour.
In ruling on CT Plus's challenge to that decision, the EAT acknowledged that Stagecoach had both a legal and practical relationship with the Council. It paid a monthly sum for use of facilities at the park-and-ride hub and liaised with the Council in respect of a range of matters connected to the service.
However, the EAT noted that Stagecoach used its own buses and drivers. It was performing the service as a commercial venture, for its own benefit, and was not acting on behalf of the Council, which could not be viewed as its client, being no more than an 'interested bystander'. The provisions of TUPE had been applied by the ET in a commonsense and pragmatic manner, without error of law. The appeal was therefore dismissed.
If you are involved in the transfer of a business or expect to lose or secure a contract for service provision, contact Jade Linton for advice.
When a commercial tenant fails to pay rent due, the landlord can take legal action to terminate the lease or can 'peaceably re-enter' the premises and take possession of them. Where a court order is made, the tenant has six months in which to apply for 'relief from forfeiture' of the lease.
A recent case has shown up an interesting anomaly when peaceable re-entry is the chosen route for repossession of let premises. In such cases, the court has discretion to allow an application for relief from the landlord's possession and that is based on whether the tenant has applied for relief with 'reasonable promptitude'.
In the case in point, the tenant company failed to make an application for relief from forfeiture for more than 14 months and the landlord opposed the application on the basis that it was not made with reasonable promptitude. Clearly, the decision in such cases will be highly fact-specific, but the range of factors taken into consideration by the court in making the decision (which was in favour of the tenant) makes interesting reading.
- The loss suffered by the landlord (in this case considered to be none, because it had taken no steps to re-let the property);
- The relationship of the rent arrears to the value of the lease (in this case less than 1 per cent);
- The tenant's demonstrated ability to pay the arrears of rent; and
- The tenant company's particular circumstances, which in this case included the director being in prison and suffering from depression.
Any landlord faced with significant rent arrears should consider carefully the steps they can take to obtain payment of the sums owing or repossession of the property. We can advise you of your options and help you choose the path likely to lead to the best outcome.
For advice on any aspect of landlord and tenant law and assistance in making sure that any lease you sign means what you think it means, contact Sundeep Bilkhu on 0121 698 2200, email firstname.lastname@example.org or fill in our online enquiry form.