Morrisons achieve Lexcel

We are very pleased to announce that last month we achieved the Lexcel accreditation.

Lexcel is the Law Society practice management standard. It is a scheme for any type of practice to certify that certain standards have been met following independent assessment. The Lexcel practice management standard is only awarded to solicitors who meet the highest management and customer care standards. Lexcel accredited practices undergo rigorous independent assessment every year to ensure they meet required standards of excellent in areas such as client care, case management and risk management.

Morrisons’ Solicitor becomes member of NASDA

Associate Solicitor Louise Fegan based at Morrisons Solicitors’ Redhill office has become a member of NASDA (The National Association of Specialist Dental Accountants).

The NASDA is an association of specialist dental accountants which was formed in 1998 by six accountants. Today there are now 37 members who between them have some 5,000 dentist clients, representing one fifth of the dental profession. All members are Independent Chartered or Chartered Certified Accountants with a proven track record in serving dentists and who place as much value on providing a reasonably priced accountancy service as meeting high standards.

New Improved HIP

The new HIP is now with us.

As from 6th April 2009 a HIP must be available when the property is first marketed. Previously it only needed to be commissioned when the property was first put on the market.

The other main changes are:

1. A Property Information Questionnaire will have to be included in the HIP. This will give details of damage by storm or fire, changes to the property, flooding, guarantees, services and access. If Leasehold details of the Landlord and management company, rent and service charge and some lease restrictions will need to be included. The form includes much of the information which would be included in the usual enquiries raised by solicitors. Any inaccuracy in it could lead to a claim for damages due to misrepresentation. We would recommend that such a form is completed through your solicitor, particularly the leasehold form as the lease will need to be checked before the form is completed.

2. The removal of local search insurance. Prior to the 6th April 2009 the HIP almost always included a personal local search. That is a search carried out by a search company as opposed to the official search issued by the local authority. A personal search was normally rather cheaper than an official one. However many local authorities did not make full information available to personal search companies so there were often questions that could not be answered. The risk of loss as a result of such unanswered questions was covered by search insurance. This insurance has now been withdrawn and the local authorities have been told by government that they must make all relevant information available. This should mean that a buyer will now have full search information available. This should be better than relying on insurance as a valuer’s opinion as to loss may well differ from a buyer’s.

The new HIPs will therefore contain rather fuller information about the property and will be an improvement from a buyer’s point of view. It is however important that a trusted HIP supplier is used. There are rumours that with the downturn in the property market some suppliers are cutting corners when carrying out personal local searches.

From a Seller’s point of view it will be important that the HIP is prepared quickly and efficiently and accurately.

Morrisons are able to prepare a HIP on your behalf.

The advantages of the Morrisons HIP are:

1. Advice can be given on the Property Information Questionnaire by a legally qualified expert.

2. The pack can be reviewed by a Lawyer to anticipate any problems

3. The pack will be easily available even if you change agents

4. The pack can be sent out immediately with the contract documentation. Currently there can be delays whilst the lawyers try to find out which agent has the pack and there are often problems downloading it as many agents only provide a web address for it.

5. Any personal local search included in the pack will be carried out by a reputable company. Currently there are local search providers who are providing searches of doubtful quality.

6. We can provide advice of choice of estate agents for properties in the Redhill, Wimbledon and Woking area.

For further information please contact Peter Mills on 01483 215353 or peter.mills@morrlaw.com

Risk taker Myerson twists on 19 and gets a 3

All eyes are now on City tycoon Brian Myerson following his unsuccessful attempt to convince the Court of Appeal to set aside his £25.8 million divorce settlement as the economic downturn has left him feeling unable to comply with the terms of the agreement. While the judgement of Lord Justice Thorpe in the Court of Appeal is clear and unequivocal, natural-born risk-taker Myerson may decide to take his chances and appeal to the House of Lords.

Myerson was seeking a decrease to the lump sum of £11.2million he agreed to pay to his ex-wife last year following the demise of their 26 year marriage. Following the agreement, and within a 10 month timescale, the credit crunch conspired to decimate the value of his share of the settlement to £1.17million.

The legal principle the Court of Appeal had to grapple with was whether the economic downturn represented a Barder event, a supervening or extraordinary event that no-one could have predicted, allowing the court to set aside the original agreement.

The case of Barder spawned litigation in which ex-spouses have tried to re-open court orders as to the distribution of capital. It is worth noting that the case itself was somewhat extreme: the wife committed suicide and killed the children only 5 weeks after an order was made. Naturally, the court agreed with the husband that it would be unfair for the capital settlement to stand, since it gave the now deceased wife most of the capital assets.

Since then, other less extreme events have been viewed as Barder events, such as re-marriage of one party soon after a court order, accountancy evidence forming the basis of the agreement being found to have been completely wrong, and a variety of other issues felt to be fundamental to the original order. However, courts will generally decline to re-visit a capital order once it has been made. Many have tried and failed to persuade the courts to re-open orders and the caselaw is littered with such failures. For now at least, Myerson can be added to that long list.

Lord Justice Thorpe rejected the appeal for a number of reasons, but primarily because price fluctuations in the shares market are not unforeseeable. Mr Myerson of all people would surely agree that the markets can go down as well as up. (Had they gone the other way, he certainly would not have been bringing his application!)

The current state of family law in England and Wales is that while the level of maintenance can be varied upwards or downwards if financial circumstances change - and we are seeing a great many such applications these days - one-off lump sum payments or other such capital orders are final.

Only if there has been some sort of fraud by one of the parties, or a non-disclosure of significant sums, or some such trickery, can one expect an easy attack on a capital order. But there is also the possibility of a Barder application, if there has been a fundamental change that neither party could possibly have foreseen. Mere change in asset values has been litigated several times as a Barder event, with varying degrees of success, but generally very little.

It is clear that there are thousands of divorce settlements that have been jeopardised by recent adverse economic conditions and the Court of Appeal were more than aware that to rule in Mr Myerson’s favour would be to open the floodgates and swamp the courts with similar applications. Public policy considerations such as congested court lists are important, and no doubt weighed heavily on the court’s mind.

Other reasons why Mr Myerson failed are that the original order was agreed rather than imposed on him, and as the Court noted, he still has the opportunity to turn his fortunes around as “unusual opportunities are created for the astute in a bear market”.

There is another interesting point on Myerson, which is that the lump sum was payable by instalments. Such orders are viewed more along the lines of maintenance orders and are therefore considered variable where good reason arises – though perhaps not as easily as a maintenance order. It may therefore be revised downwards when Mr Justice Bennett reviews the matter in July, despite the failure of his Barder application.

Those feeling the pinch of the current recession may want to review their financial orders made in divorce proceedings. We recommend that the focus be on maintenance reviews, rather than capital set-asides, but there may well be room for review where there has been a non-disclosure or a significant and unforeseen change in circumstance.

The words of Mrs Justice Hale in the 1994 case of Cornick may make a good starting point for anyone in this situation: Is the change in asset value simply a “natural process of price fluctuation” or has a wrong value been attributed to an asset which, had it been known about at the time would have led to a different order? The difference could be crucial.

This is a complex area of law and legal advice should be sought. If Mr Myerson appeals on, only time will tell whether or not the Law Lords will give clear and detailed guidance on the many issues now arising.

For more information please contact Andrew Perryman on 01483 215359 or andrew.perryman@morrlaw.com

New rules introduced for workplace disputes

Workplace disputes between employers and employees will need to be dealt with in accordance with new rules from 6 April 2009. From then a revised ACAS Code of Practice on disciplinary and grievance procedures (the ‘Code’) will replace the existing and unpopular statutory disciplinary and grievance procedures’ (‘SDGPs’). The SDGPs were introduced in 2004 to help reduce employment tribunal claims but have had the opposite effect with the law becoming more complex leading to satellite litigation over whether, for example, the employer had complied with a particular step in the statutory procedure.

The SDGPs set out a mandatory three-step process to be followed by employers and employees regarding disputes in the workplace.

Non-compliance with the procedures had major consequences. For example:

1. an employer’s failure to comply with the statutory dismissal procedure meant the dismissal was automatically unfair;

2. failure to lodge a grievance by the employee meant a subsequent claim (e.g. for sex discrimination) was inadmissible at the employment tribunal; and

3. automatic increase/decrease by 10-50% on awards for non-compliance with the SDGPs.

The new Code is quite short but is accompanied by a detailed supplementary guidance booklet. The Code provides that employers and employees should raise and deal with issues promptly and that parties should act consistently and fairly.

Failure to follow the Code’s provisions will no longer result automatically in a dismissal being found unfair or an employee’s claim being inadmissible. However, tribunals will examine the parties’ compliance with the Code in determining whether, for example, a dismissal was unfair. Tribunals will also have discretion to increase/decrease by up to 25% any compensation awarded where there is unreasonable non-compliance by either party with the Code’s provisions.

The content of the Code is easy to grasp and straightforward. On handling disciplinaries and dismissals it sets out the following steps for employers to follow:

1 establish the facts of each case
2 inform the employee of the problem
3 hold a meeting with the employee to discuss the problem
4 allow the employee to be accompanied at the meeting
5 decide on appropriate action
6 provide employees with an opportunity to appeal.

A similar simple step based approach is given for handling grievances.

ACAS has suggested that employers with effective policies in place (e.g. those that comply already with the SDGPs) are unlikely to need to change them as a result of the new regime. However, employers would be well advised to revise their policies in any case to make sure that they comply with the Code.

Significantly, in a departure from the SDGPs the Code does not apply to redundancy dismissals or those on the non-renewal of fixed-term contracts. In the case of redundancies, the ACAS Redundancy Handling Book offers helpful guidance.

Whilst the new rules will come into force on 6 April 2009 there are transitional provisions for disciplinary and grievance cases started before 6 April 2009. In the case of grievances, the SDGPs will continue to apply if the subject matter of the grievance occurred on or before 5 April 2009 and continues beyond that date.

Employers may be bemused by the overhaul of the rules in this area after less than five years but we believe it represents a beneficial change for employers. Only time will tell if the government’s stated intention of reducing tribunal claims comes to fruition. In the meantime employers must adopt the minimum procedural requirements set out in the Code. Where in doubt expert employment law advice should be sought but, as a rule of thumb, we advise employers to always consult with a solicitor before deciding on any dismissal.

For more information please contact David Seals on 01737 854573 or email dbs@morrlaw.com .

A reminder and update for directors

This briefing serves as a memoir on the duties imposed on directors under the Companies Act 2006, now in full force, and new increased penalties for late filing of company accounts at Companies House. In addition it will provide an introduction to the draft Bribery Bill which was published on 25 March 2009.

Director’s duties
Prior to the enactment of the Companies Act 2006 (the “Act”), the duties of a director were governed by statute and case law. The Act has codified these duties in a non-exhaustive list of ‘general duties’ which effectively incorporate those duties previously governed by case law.

The ‘general duties’ are summarised as follows:

· Duty to act within powers – a director must act in accordance with the company’s constitution and must only exercise powers for the purpose for which they are conferred – before making a decision check that the company’s memorandum and articles of association expressly give permission to do an act.

· Duty to promote the success of the company – please see below for a full analysis.

· Duty to exercise independent judgement – essentially a director can still rely on the judgement of others providing they exercise their own judgement in determining whether to accept that judgement or not.

· Duty to exercise reasonable care, skill and diligence – this duty is determined by a double standard; i) having regard to the reasonable care, skill and diligence expected of a director carrying out the said task and ii) having regard to the general knowledge, skill and experience the director has – this prevents a director from arguing that they did not have the requisite knowledge to make an informed decision.

· Duty to avoid conflicts of interest – a director must avoid a situation in which he has, or can have, a direct or indirect interest that conflicts, or possibly may conflict, with the company’s interests – the simplest way to avoid such a conflict is to declare any potential conflict at a board meeting of the directors.

· Duty not to accept benefits from third parties – conferred by reason of being a director or performing (or failing to perform) anything as a director – if a director is keeping a benefit (whether financial or not) secret from others, this could fall within the scope of a breach of the duty.

· Duty to declare interest in proposed transaction or arrangement with the company – the nature and extent of the direct or indirect interest must be declared prior to entering into the transaction or arrangement – the Act helpfully tells a director how not to breach a duty – declare the interest.

Particular attention is given to:
The duty to promote the success of the company (for the benefit of its members)

This replaces the duty developed by case law to act in good faith in the interest of the company.

In exercising this duty a director should have regard to (amongst other things):-

(a) the likely consequences of any decision in the long term,
(b) the interests of the company’s employees,
(c) the need to foster the company’s business relationships with suppliers, customers and others,
(d) the impact of the company’s operations on the community and the environment,
(e) the desirability of the company maintaining a reputation for high standards of business conduct, and
(f) the need to act fairly as between members of the company.

This duty has broadened the considerations a director should be mindful of in promoting the success of the company to include environmental and community considerations.

The Act does not provide guidance on which considerations carry more weight and what the position is when a conflict arises. Thus, it would be a matter for the directors to exercise their discretion in good faith.

From a practical point, directors may feel that it is necessary in their board minutes to minute consideration of all the above factors to show that this duty has been adhered to. Although this is a sensible approach, it can prove time consuming, therefore recent practice has prescribed that the board minutes could contain a generic statement to show that the factors have been considered.

Company and Limited Liability Partnership (“LLP”) Filing Requirements
From 1 February 2009, companies are subject to increased automatic penalties if their accounts are delivered late to Companies House.

The penalty varies from £150.00 to £7,500.00 depending on the type of company and how late the accounts are filed. Failure to deliver accounts on time is a criminal offence and the directors (or designated members of an LLP) serving at the time of the missed deadline can be PERSONALLY liable to a fine of up to £5,000 plus £500 per day until the accounts are filed.

The Bribery Bill
The purpose of the Bill is to “reform the criminal law of bribery to provide for a new consolidated scheme of bribery offences to cover bribery both in this country and abroad”.

This draft Bill creates a corporate offence of negligently failing to prevent bribery in connection with a company’s business that can only be committed by a corporate body. If an individual, such as a Compliance Officer, is not allocated to be responsible for preventing bribery then responsibility is deemed to be that of any senior officer, which includes a director. The rationale here is to improve a company’s corporate governance and accordingly a defence is allowed where the Compliance Offer is not a senior officer and the company can show it had adequate systems in place to prevent bribery. If, however, a defence is not accepted, the court will have the power to impose an unlimited fine on indictment.

Directors should be aware that it will be a criminal offence where they offer or accept or agree to offer or agree to accept a bribe. For this offence the maximum penalty is ten years’ imprisonment and/or an unlimited fine.

Although this draft Bill is not yet law, it is important that companies and directors are aware of the proposed changes to the law in a pro-active way rather than being reactive.

Further Information
For further information or to discuss any concerns with respect to your company or LLP, please contact Natalie Wood on 01737 854544 or at natalie.wood@morrlaw.com.

Expanding Personal Injury Department

We are pleased to report that recently our personal injury department has been boosted by the arrival of Peregrine Lavington, a solicitor with 30 years’ experience of working for clients who have suffered injuries owing to someone else’s fault. Peregrine has been a member of the Law Society’s Personal Injury panel since 1994 and is a member of the Association of Personal Injury Lawyers.

“I get real satisfaction when I win a case where liability has been denied or when I achieve a good settlement of damages for a client who has been injured through no fault of his own” says Peregrine.

A recent example of a case where the level of damages far exceeded expectations was for a client who sustained a hairline fracture of his ankle when he slipped on a wet floor at work. He began to experience severe pain and swelling in his joints (sero-negative spondylo-arthritis to be precise!) which meant that he could not return to active physical work which he had done all his life. A claim which would have been worth £2,500 for the ankle became one worth £125,000.

“DIY” Claimants
“Often people try to pursue their claims directly with the insurers for the other party and find that their claim stalls or the insurers make a derisory offer. They may do this to avoid the cost of using a solicitor but in most cases they can recover their solicitor’s fees in addition to their damages so it makes sense to see a solicitor.”

What about those adverts for “no-win no fee” deals on TV etc?
“These are mostly for Claims Management companies or middle men who sell your claim to a firm of solicitors. There is nothing wrong with this but you should be aware that in some instances the fee that the lawyer pays may be deducted from your damages. At Morrisons we guarantee that you will receive 100% of your damages whatever the level of your legal costs. This is very reassuring to our clients” says Peregrine, “especially in lower value claims”.

What happens if I lose my case?
“The vast majority of claims succeed because the lawyer would not have taken the case on unless he felt the client had a good chance of winning. However to cover the risk of losing we advise our clients to take out a policy of insurance which would pay any costs arising from the loss of their case.”

Clinical negligence
Peregrine also handles claims against hospitals and doctors for negligent treatment.

So if you have had the misfortune to have been injured through someone else’s fault or suffered as a result of negligent treatment in the last 3 years contact Peregrine direct on 020 8971 1041 or email: personalinjury.web@morrlaw.com

The first consultation is free. If we decide to take your case on we will continue with it under a “no-win no-fee” agreement.