Council mistake on price of flat leads to legal proceedings against homeowner

Chadwell Street property litigation
A London homeowner has recently been told to pay more than £350,000 to the Council or face losing his home. The Council mistakenly valued the flat he purchased as a one bed rather than a two bed flat. But who is to blame? Mr Zomparelli bought his two bed flat from Islington Borough Council for £340,000 in 2014 under the Right to Buy scheme which al...
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The implications of a 'Hard' Brexit

brexit
Will we witness a 'hard' exit from the EU? Or will Britain go softly, softly?
 
Now seems to be the time to get thoughtful about the potential implications of the UK voting to leave the EU.  There could be significant repercussions for the way in which commercial counterparties within the European Union choose to contract with each other and for their ability to resolve international disputes. 


In January 2017, the House of Lords’ EU Justice Sub-Committee will hear evidence from two senior UK Judges on the significance of EU legislation designed to facilitate cross-border civil disputes.  However, it cannot be avoided that there is the smell of uncertainty about the detail of the consequences for us for ending the UK/EU relationship, if it ends hard.

For Contracts

At present, EU legislation protects parties’ abilities to choose what governing law there should be for their contractual relationships and the ability to choose forms a fundamental freedom offered by English law.

The current EU framework applicable to contractual and non-contractual obligations is enshrined in the Rome I and Rome II Regulations, respectively. 

It is not beyond the realms of possibility that a decision could be taken to leave the rules as set out in the above regulations intact after Brexit.  A possible consequence being that the English Courts would be the final arbiter of how the rules are applied - ultimately a job reserved for the European Court of Justice as things stand.  If that were to happen, then nothing immediate would change, but it is possible that the interpretation of the two regulations could start to differ between the UK and the remaining EU member states over time. 

If the Rome I and Rome II Regulations were no longer to apply following Brexit, then it is possible that the UK would revert back to the rules in force before those regulations became law.  As such, in regards to contractual obligations, the Rome Convention; which applied to the law governing contracts made between April 1991 and 17 December 2009 could apply, which, of itself, would not materially alter the present position as we know it. However, in regard to non-contractual obligations, the Private International Law (Miscellaneous Provisions) Act 1995 - which is a regime which is unlike to Rome II - could operate so that the parties would not have an express right to choose the law applicable to non-contractual relations between them. 

However, it’s anticipated that when the UK eventually leaves the EU, the courts of EU member states will continue to respect the parties’ choice as to governing law as before; so that on choosing English law the parties to a contract will still enjoy an application of the rules set out in Rome I and II.

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Implications of filing a late Defence

court
File a Defence late and the chances are you will face judgment being entered against you.

The case of Billington –v- Davies and another [2016] EWHC 1919 [CH] heard in the High Court, considered an application by a Claimant for default judgment where the Defendants Defence was filed at Court after the deadline set for filing.

In considering whether to give default judgment, the key question for the Court is whether or not the Defence has been filed, rather than the mertis of the defence. There are strict time limits for acknowledging service and filing a Defence which are calculated by reference to service of the Claimant’s Particulars of Claim on the Defendant. Within 14 days after service of Particulars of Claim, a Defendant must have filed either an Acknowledgment of Service or a Defence. If neither is filed after 14 days, default judgment can be entered. If an Acknowledgment of Service is filed, a Defendant must file a Defence within 28 days after service on him of the Particulars of Claim. If no Defence is filed within that deadline default judgment can be entered.

In Billington the First Defendant did not file a Defence until the day before the Hearing of the Claimant’s application for judgment in default. It was argued that it was a pre-condition for obtaining default judgment that a Defence must not have been filed; the implication being that even a late Defence would be enough to scupper a successful application for default judgment. Deputy Master Pickering rejected this argument. In his judgment, the reference to a Defence in the CPR “was to a Defence which had either been served within time, or in respect of which an extension had been granted”. In the absence of either in this case, the Court considered the significance of a note contained in the White Book (the rule book on civil procedures), which stated that filing a Defence late would prevent a Claimant obtaining default judgment. It was held by the Court that this note was essentially wrong.

It was found that neither the Defendant’s lack of funding, nor the existence of negotiations between the parties existing prior to the application for default judgment, were good reasons for delaying filing a Defence. The Deputy Master found that this was not an appropriate case where he should exercise his discretion to extend time.

A useful reminder

This case serves as a useful reminder for all those served with Claim Forms on the perils of ignoring the time limits for filing a Defence. Anyone served with a Claim Form and/or Particulars of Claim by a Claimant, should seek legal advice as quickly as they can to avoid filing and serving documents late and/or pleading facts which are unhelpful or not accurate or comprehensive enough for both the Court and the other side to understand the essential facts in the case.

MORE INFORMATION 

If you have been served with Claim Forms and require advice on filing a Defence, please call on 01708 229444.
 
The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as at October 2016.

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Legal 500 UK recommends dispute resolution team

Legal 500 UK recommends dispute resolution team
Pinney Talfourd's property litigation, commercial litigation and debt recovery teams are recommended by Legal 500 UK. 

Legal 500 UK announced their 2016 rankings in September and we are delighted to announce that our Dispute Resolution Department has been recommended in the following rankings:

Stephen Eccles heads up the Department and is recommended as a “leading individual” and ‘knowledgeable and efficient’. Legal 500 said the debt recovery team was “responsive and commercial”.

Legal 500 highlighted a number of notable cases including:

  • Court of Appeal case involving a procurement contract and in particular breach of contract and the Unfair Contract Terms Act 1977.
  • Advising a well known retailer in relation to planning, development and break clauses relating to their warehouse facility. Value circa £10million.
  • Advising in relation to the development of premises as a hotel including advice upon rescission, breach of an agreement to lease, damages and specific performance.

The Legal 500 rankings are carefully selected after rigorous assessment and provide a guide to the top legal providers across the UK.

More information

If you would like a member of our team to advise you on any business or personal dispute please contact our Dispute Resolution Department on 01708 229444 (Upminster or Hornchurch), 01277 211755 (Brentwood office) or 01702 418433 (Leigh-on-Sea). 

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How far would you go to catch a Pokemon monster?

pokemon
Pokemon Go has taken the world by storm and players are breaking the law and even risking their lives to get ahead.

Pokemon Go has had over 6 million downloads since it was launched in the UK in mid-July. Pokemon Go is a new mobile augmented reality game where players, called trainers, catch virtual monsters situated in the real world. Its co-developers, Nintendo and Niantic, have earned millions from the time of its launch and it has been credited for getting the generation of computer game teenagers more active. However, just as it has some advantages, the game poses numerous disadvantages and legal impediments.

The game interacts with an actual map of your surroundings to help you to find and catch the virtual monsters. As such, it has the element of augmented reality and is thus covered by this law in UK. This therefore raises concerns about privacy and security especially since it is grounded on GPS and geolocation. The game provides a database of the individual’s daily routines and movement. This then raises the question of who has access to such valuable data and who is legally liable if something untoward happens to the player.

Another legal problem that may arise from Pokemon Go relates to virtual location rights. Given that the game is quite new, it is currently not covered by any legislation. However since many of the virtual locations designated as ‘gyms’ or PokeStops are private properties, private businesses, schools and churches the game may well lead to illegal trespassing and potential nuisance claims.

The first legal case against Pokemon developers was filed in the US early this month. The case is the first class action lawsuit that seeks damages for flagrant disregard on the game’s effect on real world locations. The class suit amounts to over £3.7 million and is filed before the California Northern District Court under Marder v. Niantic, Inc. et al (4:16-cv-04300).

It may not be long before cases will also be filed against UK Pokemon Go players. The UK police have already issued warnings against players on trespassing. They have also warned against going to unlit or busy areas where players can be targets of thieves. Other risks that come with playing the game have been identified already from focusing on the mobile device while crossing streets, driving, and even entering police sites with non-police business.

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When is a personal injury settlement 'final'?

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Can you be bound by a personal injury settlement reached by a third party over which you had no control or say? 

Our Personal Injury Department recently acted for a female Claimant making a dependency claim arising from the death of her partner from mesothelioma due to occupational asbestos exposure caused by his former employers.

Her partner died without making a Will. Because they were not married, she was not able to make a claim under the Law Reform (Miscellaneous Provisions) Act 1934 (LRMPA) in respect of the pain, suffering and loss of amenity he suffered before his death.

The adult children of the deceased from his marriage (his wife having pre-deceased him) settled a LRMPA claim on behalf of his estate with the insurers for the negligent employer.

Fatal accidents Act 1976

After instructing Stephen Green, a Partner and personal injury specialist at Pinney Talfourd, our Claimant made a dependency claim under the Fatal Accidents Act 1976 by virtue of her 6 year co-habitation period with the deceased.

The employers insurers made an admission of breach of duty and causation.

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Are you owed money in Europe?

cash
Following the Brexit vote, Stephen Eccles, debt recovery expert outlines why you need to act quickly if you are owed money by an individual or business in Europe.

Following the United Kingdom’s historic decision to leave the European Union, anyone owed money by an individual or business in the European Union is advised to act quickly and take advantage of current European debt recovery procedures.

You could be forgiven for thinking that it might be complicated or prohibitively expensive to recover your debt, especially if the amount outstanding is small. However, there are several procedures available to allow money claims to be recovered both quickly and easily.

It is unclear for how long these procedures will remain available in the courts of England and Wales. Debt recovery expert Stephen Eccles at Pinney Talfourd Solicitors in Essex outlines the current options.

European small claims procedure

The European small claims procedure enables businesses and consumers to issue small claims in all member states of the European Union (EU). The process is an alternative to using the national law of the particular member state and is suitable for cases where you consider that the claim may be contested. In this country European small claims are treated in the same way as domestic small claims matters. The procedure uses standard forms that can be used by all parties across the whole of the EU and there are standard time limits to ensure effectiveness. Once a judgment has been officially recognised, it is automatically enforceable in other member states. Most European small claims are conducted on paper only, although it is possible to have an oral hearing, which may be conducted via video link if necessary.

This procedure is suitable for monetary and non-monetary claims up to a value of €2,000 (excluding interest and costs). European small claims are not suitable for claims over marital property, property that is the subject of a will, employment, tenancy, bankruptcy or other claims, so it is always worth seeking advice on whether your claim is likely to be suitable for the European small claims procedure before making an application.

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Managing the online reputation of your business

computer
When does a negative statement constitute defamation and what you can do to protect the reputation of your business. 

In a world where business is increasingly conducted online, customers are choosing to turn to the Internet in order to share their experiences of all manner of commercial transactions. This ranges from rating their plumber to complaining about poor service from their utilities providers.

Positive online reviews can increase traffic to your site, and improve the trust that customers have in your products and services. They also build confidence in your brand.

However, negative reviews can be detrimental or even disastrous for your business, and your brand may be irreparably damaged. While people are entitled to their own opinions and it is impossible to please everyone all of the time, should false or malicious comments online be tolerated?

When does a statement become defamation?

A statement may be defamatory if it is untrue and has caused or is likely to cause your business serious harm. Under section 1(2) of the Defamation Act 2013 (‘the Act’), a body trading for profit must, in order to establish serious harm, show actual or likely serious financial loss; but a natural person does not have to satisfy that further requirement.

The term ‘defamation’ covers libel and slander. Both concern the publication of defamatory material, that is, something that adversely affects a person's reputation.

The distinction between the two in the context of the Internet can sometimes be blurred. Broadly speaking, libel concerns "lasting" forms of publication such as print, online or broadcasting. Slander concerns more transient forms such as spoken words or gestures.

Libel is the publication in permanent form of a defamatory statement. Slander is its publication in transitory form. It is now generally accepted that defamatory statements on web pages are to be regarded as libel.

Generally, If it is said or spoken aloud, it is slanderous. The Act overhauled the law in this area and changed the criteria for what was required in order to bring a claim for defamation. It introduced the requirement for there to have been serious harm caused to the reputation of the claimant. For a business, it is necessary to show, on the balance of probabilities, that the defamatory material in question has led to actual or probable serious financial loss to the Claimant.

In considering serious harm, a court will have regard to all of the relevant circumstances, including events post-publication.

Does the author have a defence?

There are some very specific defences which can apply to Internet defamation. These cover the actions of intermediaries and website operators.

Generally though the author of the review or material will have a defence if the content is true, or in the case of statements that have a degree of partiality as to the truth, substantially true. Even if some of the published material is untrue, if no serious harm or financial loss has been caused to your business, the author will still have a valid defence; for example, it may be difficult to prove probable serious financial loss if a review focuses on a product that you no longer stock.

It is also a defence if the material constitutes an honest opinion (formerly the defence of fair comment). If it is not someone’s honest opinion, or if it is someone else’s opinion and not the author’s, the defence fails, although in practice this is likely to be difficult to prove. For the honest opinion defence to succeed, it needs to be a statement of opinion, which indicates the basis of the opinion, and must have been made by an honest person, based on any fact that existed at the time the statement was made.

It is also possible to defend a claim on the basis that the statement was published in the public interest and on the basis of reportage.

What evidence is needed to prove serious financial loss?

The evidence you require may differ, depending on the nature of the defamatory content, but generally you need to be able to prove the following:
  • the content is available on the internet
  • it relates to your business
  • it is not true or not the author’s honest opinion
  • the review has or will cause your business serious financial loss if it is not removed

Proof of actual or likely damage to your business is required that:
  • specifies what the loss is or is likely to be, and
  • shows that the loss is serious (‘serious’ loss may mean, for example, that you have lost potential clients and the value of those clients is significant)


Alternatives to going to court

Going to court or arbitration can be particularly costly. Before resorting to time-consuming and expensive court action, it is well worth seeking the advice of a dispute resolution lawyer. Often such disputes can be resolved without the need to start legal proceedings.

It is possible for victims of website defamation to try to get the search result(s) removed from Google and other search engines. If this fails, your lawyer may be able to put pressure on the author and also the website operator or host, where applicable, since both can be liable for defamation. The defences available to website operators and hosts are complex and, if they do not comply with the regulatory provisions prescriptively, they may risk losing their defence to an action.

What are your legal options?

If a case does have to go to court remedies that the court may grant a successful claimant include: 
  • damages
  • an injunction to restrain publication of derogatory remarks
  • for a successful claimant
  • an order for the defendant to publish a summary of the judgement
  • an order to remove a statement or cease distribution of the same
  • an Offer of Amends (an apology made in open court)

As with all court proceedings there are costs consequences to consider and it is not advisable to take action without having sought specialist advice beforehand. In practice, these cases are often resolved without needing to go to court. The material can be removed on the basis that there be no further claim for compensation. Whilst a lack of compensation may be disappointing, you will have achieved what you set out to do in many cases by having the offending material removed.

There is a one-year limitation which applies to making a defamation claim which starts to run from the date of the “accrual of the cause of action” (the date of publication) so it is advisable to seek legal advice as early as possible to explore the options in your particular case.

More information

If you need help with removing an online review or other content that is libelous, contact us on 01708 229 444.


The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice, and the law may have changed since this article was published. Readers should not act on the basis of the information included and should take appropriate professional advice upon their own particular circumstances. This article is based on the law as at May 2016.

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Court versus Alternative Dispute Resolution

court
Do I have to go to court to resolve my civil dispute? The short answer is not necessarily. There are plenty of other options.
 
It is a common misconception that being involved in a civil dispute inevitably means that you have to trot off to court for a resolution i.e. litigation.

Considerations such as the fear of giving evidence; the cost of legal fees and the sheer investment of time, often deter parties from even getting a claim off the ground.

However, there are alternatives, in particular, settlement or Alternative Dispute Resolution (ADR).

Why should I consider them?

First off, you are strongly encouraged to do so by the courts.

The Civil Procedure Rules (CPR), Practice Direction – Pre-Action Conduct and Protocols, states:-

Litigation should be a last resort (emphasis added). As part of a relevant pre-action protocol or this Practice Direction, the parties should consider whether negotiation or some other form of ADR might enable them to settle their dispute without commencing proceedings.
Parties should continue to consider the possibility of reaching a settlement at all times.’

So there you have it, enshrined in the CPR itself. Even the Court of Appeal has made it clear in recent years that the courts can impose costs penalties on those who unreasonably refuse to consider other methods of resolving their disputes.

It is a sad truth that the courts are busy, slow, under resourced and expensive.

Where does this leave you?

The obvious answer is ADR.

What is ADR?

It is a collective description of methods of resolving disputes otherwise than through the normal trial process. This rather cumbersome definition can again be found in the CPR.

It provides a generally more speedy, informal, private and less legalistic alternative to court proceedings.

It is easier to understand by looking at the various different forms of ADR which are available:

Negotiation

The most obvious method is simple negotiation between the parties and/or their legal representatives.

Mediation

The best known and most popular.

A third party neutral (often a specialist in the relevant field) assists the parties to facilitate a negotiated settlement.

Covers wide ranging disputes relating to consumers, family law, personal injury, land and property, neighbour disputes, to name but a few.

Quicker and cheaper than conventional litigation. It has the advantage of leaving the parties free to find a private commercial solution.

Arbitration

Often arising from a private agreement i.e. a contract, between the parties which provides for arbitration as their preferred means of resolving any disputes. More typically found in commercial disputes.

Involves the appointment of a specialist arbitrator to resolve disputes outside the court process but in a judicial way.

Conciliation

Often encountered in employment disputes, where ACAS (the Advisory, Conciliation and Arbitration Service) has a duty to conciliate in most types of claim that can be brought in the employment tribunal, or disputes which could result in such proceedings.

At Pinney Talfourd we have the people and the expertise to help you take advantage of ADR to give you the very best chance of finding a resolution to even the most challenging of disputes.


More information

If you would like more information on any of these Alternative Dispute Resolution options please contact our Dispute Resolution Department on 01708 229444 or email This email address is being protected from spambots. You need JavaScript enabled to view it.


This article was written by Stephen Green, Partner at Pinney Talfourd Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as at March 2016.

Photo courtesy of Kari Haley, Flickr
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To Restrain or Un-Restrain

We take a look at the Proceeds of Crime Act and Restraint Orders.
 
For anyone who has experienced their assets being ‘frozen’ by a Restraint Order made under the Proceeds of Crime Act 2002 you will identify with the very frightening and helpless feeling that permeates through one’s mind when you become aware of the terms of the Order. Especially so, in relation to the implications for use of bank accounts. It suddenly becomes clear that a detailed investigation has been under way into your activities and affairs for some considerable time – but you were oblivious.

Has this really happened to me?

Often the initial reaction of clients is one of disbelief. Soon that feeling can become resentment at the mis-stated 'facts' gleaned from an accredited Financial Investigator’s supporting witness statement , or the settling in of thoughts about why the Order was made on an ex parte basis (without the Defence present or even aware of the private application), or even the anticipated conclusions that “must have” been reached about the benefit had by the Defendant from the proceeds of crime.

Clients can feel like they are losing the game straight from kick-off!

The Test

The Crown has to be seen to be transparent and be careful not to mis-state their case or leave out important facts which may contribute to a judge’s understanding of the reasons why the Order ought to be made. The test that needs to be satisfied at the application stage is:

‘is there reasonable cause to believe that the alleged offender has benefitted from his criminal conduct?'. (s40(2) POCA 2002).

The Court too has an important duty to the absent defendant. This is often forgotten, or not used properly until the next stage – the inter partes stage - when the defendant can apply to vary or discharge the Order.

The Crown do not simply have to show that the proceeds of crime have been had but there must also be a ‘risk of dissipation’. If the Defendant would have had the opportunity to dissipate but chose not to, the burden weighs more heavily on the prosecution. This presents an early opportunity for the Defence to seek to discharge the Order.

Discharge and Variation

Challenges to orders can be made against the Court, the prosecution or both. Judicial Review of the decision to grant the Order is also possible but more likely the first step will be the Defendant making an application to vary or discharge the Order.

At this stage both sides are usually represented. Experience tells us that such hearings can be before the Judge who granted the Order or before any of several other Judges who may also decide subsequent applications to Discharge or Vary the Order.

A prosecution has to be brought within reasonable time – usually one year from the date of the investigation being started.

Full and frank disclosure by the prosecution is fundamental.

A Case Study

In the case of Windsor & Hare v CPS [2011] EWCA 143, at Court of Appeal, HMRC were investigating an alleged duty diversion fraud involving suspects linked to the Eastenders group of companies dealing in alcohol imports.

In December 2010 HMRC obtained ex parte both a restraint and a management receivership order from a Judge sitting at the Old Bailey. In the subsequent appeal proceedings the Court of Appeal quashed the orders, but allowed time for the Crown to re-apply to the Old Bailey for new orders. That later application was unsuccessful. The Appeal Court took advantage of the case to effectively teach HMRC a lesson and it also serves as a lesson to Judges that such orders should not be granted ex parte unless the prosecution can demonstrate that they have done their job properly.

Fulfilling the requirements of the statutory test is crucial for the prosecution and failing that, it opens up a potential playground for the defence. The key ground for the Court of Appeal was the insufficiency of the evidence before the Judge who granted the Order – could the judge draw from what was before him “reasonable cause to believe?” The witness statements in support of the application were full of badly-connected suspicion. Suspicion is not evidence, and the Court firmly found it insufficient to satisfy the test. It was deemed irrelevant to the restraint order test that the people involved in the case had previous convictions for the same alleged offence.

The Prosecution’s Disclosure

There has been a swathe of cases concerning ex parte applications by prosecutors before Crown Court Judges. The ex parte procedure imposes a duty on the prosecution to make a balanced application and inform the Court of all material facts. Any non-disclosure should be reflected in costs against the prosecution – by far an under-used defence tool.

Non-disclosure which is 'appalling' is likely to disqualify the Restraint order altogether.

Of potentially powerful use are the detailed procedural rules under the Criminal Procedure Rules and the Attorney General's Code of Practice. It is plain that the higher Courts are prepared to quash Restraint Orders, and other Orders granted ex parte in the early stages of investigations.

The Prosecution: Risk of Dissipation

In the Proceeds of Crime Act there is no reference to ‘risk of dissipation’. It is case law that has developed this test.

In R v B [2009] 1 Cr App R 14 Moses LJ said :

"There can be no justification for such a restraint unless the prosecution establish that there is a real risk that assets will be dissipated which might otherwise meet a confiscation order should there be a conviction."

So, if you have been under investigation for a long time and during that time there has been no evidence, (e.g. bank balances being transferred to overseas accounts or tainted gifts being made) then that is positive evidence against the making of the Order.

Living & Legal Expenses

The amount allowed by the Order for ordinary living expenses is usually set at £250 per week; barely enough to sustain a medium sized family. Variation applications usually focus on living expenses first, but can be rather busy with other company related restrictions needing to be addressed simultaneously with that.

For living expenses, these are analysed together with proof of such expenditure. An early analysis can be highly beneficial.

No exceptions can be made for legal expenses in relation to the actual offence in respect of which the Restraint Order is made (s41(4)(a)). Third party litigation funders or state legal aid are the two most common funding methods for cases.

Why seek advice?

Pro-active early negotiations conducted with the prosecution, robust defending and the early implementation of effective strategies will all maximise the chances of discharging a Restraint Order. This may ultimately avoid charges being brought. In this context, the restraint proceedings may seem like a warm up game before the main match – the criminal proceedings.

 

The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as at March 2016.

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New Rules for Evicting Tenants

eviction
For landlords in the private residential rental sector, having the right to regain control of your property when you need to is a vital power.

Section 21 of the Housing Act 1988 allows landlords to end an assured shorthold tenancy by serving notice, without having to show any fault on the part of the tenant.  Stephen Eccles, Head of Dispute Resolution law at Pinney Talfourd in Upminster, is our expert in landlord and tenant disputes. He outlines amendments to section 21 introduced from 1 October 2015 and warns of new traps for unwary landlords. 

WHAT ARE THE THE KEY CHANGES TO THE HOUSING ACT 1988?

The amendments to section 21 affect three key areas:

  • compliance;
  • the form of the notice; and
  • timing, specifically for serving the notice and starting possession proceedings.

There are also new rules requiring rent paid in advance to be repaid; and measures to stop landlords from evicting tenants who complain about the condition of the property. 


WHICH TENANCIES ARE AFFECTED?

Housing matters in Wales are now devolved, so these changes apply only to tenancies in England.  The new rules currently affect assured shorthold tenancies granted on or after 1 October 2015, but not ‘continuation’ tenancies that arise automatically if a tenant stays on after the initial fixed term ends.  Continuation tenancies will be affected from 1 October 2018.  Until then, landlords will need advice on what sort of assured shorthold tenancy they are dealing with before relying on section 21.   


COMPLIANCE

You cannot serve a section 21 notice unless you have given the tenant:

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Ten Common Debt Recovery Mistakes

StephenE
Stephen Eccles reveals the ten most common mistakes business owners make when it comes to tackling debtors, and what to do instead.
 
Stephen Eccles heads up the award winning Dispute Resolution department at Pinney Talfourd Solicitors. He is a seasoned expert and also a recommended lawyer by Legal 500 UK 2015 on debt recovery issues. Below he reveals the ten most common mistakes business owners make when it comes to tackling debtors and advises on the best course of action.

1. Failing to have a credit policy

When a company provides goods or services before receiving payment, it is essentially the same as handing over cash. For this reason it is vital for cash flow and ultimately the survival of your businesses to be able to predict when you are likely to get paid and the cost of ensuring that this happens. This begins with having a credit policy.
By gathering the same types of information from each customer, it is possible to attribute different risk levels to each and adjust your payment terms accordingly. Your credit policy provides uniformity of terms for each type of customer you have and ensures compliance with regulations. Without a credit policy you are at risk not only of losing money, but also of breaching consumer protection regulations. If you treat some consumers more favourably than others without proper rationale, you could even fall foul of discrimination legislation.

2. Not having enough information about your debtor

Before you enter into any new business relationship, it is highly advisable to undertake ‘due diligence’ at the outset. This means you should try to gain as much knowledge as possible about your new customer’s ability to pay as is reasonable, depending on the size of the transaction. If dealing with consumers, it is also advisable to gather information relating to their employment status, their home ownership status, other financial commitments and whether they have had county court judgments or issues with debt repayments in the past. This can be done by carrying out a credit check. If dealing with businesses Stephen advises that you know what type of business organisation you are dealing with. It could be a limited company, partnership, limited liability partnership or an individual. Surprisingly many clients do not know this when they come to us.

3. Being inflexible and failing to review terms

While it is of course vital to the survival of the business to have a credit policy, which you send out with your terms of business at the start of your relationship with your customers, it is also very important to learn from experience. With time, you will begin to identify and profile the types of customers you have who are high risk and those who are low risk. You can then tailor the availability of credit to each type of customer accordingly. Some of your debtors may have genuine cashflow issues but otherwise be prompt payers, so it is important that this is taken into consideration.

Businesses should review their credit policies to ensure that they remain relevant and effective for their business. Businesses change, economies strengthen and weaken, and there can be differing demands on cash flow. If you do not adapt your policy having learned from mistakes you have made in the past, or tailor to the changing needs of your business, you could end up in serious financial difficulty.

4. Ignoring the costs of debt recovery

Before you embark on a campaign to recover a debt from a customer, it is vital to evaluate the costs that you will incur in doing so. Obtaining a judgment in the county court may only be the start of the process. Enforcing a debt can also be costly so it is worth weighing up the likely expenditure against the size of the debts or you may end up losing even more money.

5. Not complying with regulations

There are numerous regulations that businesses must adhere to when seeking to recover debts from consumers. Overly aggressive or persistent demands may also constitute criminal activity contrary to the Prevention of Harassment Act. As such, in order to avoid penalties, you must ensure that your policy does not break the law.

6. Failing to follow up

A robust credit policy must also be structured; your debt recovery staff should be able to follow a procedure to ensure that your debtors are contacted consistently. If you demonstrate persistence, late payers will soon learn that they cannot just ignore the debt. Decide how long you will continue to contact them until they pay, and when you will pursue formal recovery proceedings.

7. Only using one means of communication

Letters and emails can often be enough to get some debtors to pay, but some of your debtors may require a more personal approach. Telephone calls are an effective way of getting your debtor to provide information to you, and it is much harder to ignore someone when you are speaking directly to them. In other cases, reminders via text messages can also be effective but again this will depend on the profile of the debtor you are dealing with.

8. Having out-of-date customer records

Out-of-date information about your customers can lead you to assess them as a lower risk than they may be, so it is worth making sure that you keep a record of their ability and willingness to pay on each occasion so that you are not caught out later on. If you do have to take court action, you will need their correct address and contact details for service of court documents.

9. Failing to undertake due diligence with companies

In much the same way that consumer customers’ details need to be up to date, it is important to ensure that you are contracting with the right business. Companies can often have group subsidiaries, so it is vital that you have a binding contract with the right company, that this company has the means to pay, and that it is the correct company to pursue should payment not be forthcoming.

10. Not understanding your customers’ payment processes

Each of your customers will have a different procedure for paying invoices. It may not be entirely straightforward, and may require the authorisation of several individuals before payment can be made. Therefore, it is important to know the names of the people responsible for this process so that you are not unnecessarily sending reminders or increasingly forceful demands at a time when payment is winding its way to your account, albeit slowly.

Find Out More

For more information on credit policies or any other debt recovery matter, contact Stephen Eccles in our Dispute Resolution Department who will be happy to discuss your options.

Contact us on 01708 229 444 or click here to visit our Dispute Resolution page.

This article was written by Stephen Eccles, Partner and Head of our Dispute Resolution Department at Pinney Talfourd Solicitors. The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as at November 2015.

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Pilot Franchises - What you need to know

fireworks
Pilot franchises - rocketing to the moon or fizzling back down to earth? November is the month for fireworks and we look at what you need to know about pilot franchises.
 

The risks of pilot franchises

Like the lighting of your first firework on bonfire night you never quite know whether a pilot franchise will turn out to be beyond your best expectations, a slow burner, or simply fizzle out before it really gets going.

The element of risk with a pilot franchise is higher than your average franchise. After all it will be a business which is untried and untested as a franchise system. It may have been running successfully as an independently owned business for many years but that does not mean that the business and the proposed franchisor will adapt to franchising.

Reason for pilot operations

Businesses generally pilot their business model to see whether it will work as a franchise set up before franchising it. Not all franchisors recruit pilot franchisees to run the pilot operation. They will often use one of their own company owned outlets but run it as if it were an independent franchisee.

Pilot franchises are the “guinea pig”. They allow the franchisor to test it out, fine tune the business method and system and see what, if anything, needs to changed, improved or further considered before the system is properly franchised.

It also gives the proposed franchisor and those running it the chance to see whether franchising is for them or not. There are many considerations to take account of when a business is deciding to franchise, such as territories and locations, the type of franchisee they want to have on board, what support, training and guidance they will have to provide, marketing methods and how the brand, standards and goodwill will be maintained across a much larger network of businesses.

It should be viewed as a learning opportunity for both the pilot franchisee and the franchisor. There will need to be much closer discussion between the two as to what is working, what is not and how to overcome any short comings.

Reward and probably a bit more risk

The fact that the pilot franchisee will often be closely involved with the franchisor in ironing out any issues does not mean they will not have strict obligations to the franchisor and be subject to the terms of a franchise agreement like any other franchisee. They will.

However, the pilot franchisee has a chance to negotiate these initial pilot agreement terms much more strongly than any other franchisee who is signing up to a tried and tested franchise.

Pilot franchisees must be aware that pilot franchises are often for one year or two, in comparison to a full five year franchise. At the end of the term of the pilot agreement if the franchisor decides to continue franchising and agrees to offer the pilot franchisee a full franchise agreement (which is usually discretionary) the full franchise agreement terms will very much be “up for grabs” again.

The pilot franchisee will usually be sent a full franchise agreement – probably on the then standard terms of the franchise agreement and it is likely to look very different to the terms of the pilot agreement.

The franchisor is also likely to want to retain the pilot franchisee who, by this time, has knowledge of the system and can assist with the welcoming of new franchisees. However, the negotiating position with regards to the terms of the full franchise agreement may not be as strong for the franchisee, especially if the business has proved to franchise well and has resulted in a good business.

As with all commercial contracts the terms are negotiable. How much so will largely depend on how much bargaining power the parties have. A franchisor with a good business model that has piloted well and a franchisee who does not want to lose the business they have spent a year or two developing means that the franchisee may not have the same bargaining power as they had pre-pilot.

On the other hand, if the pilot business hasn’t worked out as well as it was hoped, the franchisee may decide to cut their losses after the expiry of the pilot franchise. In this scenario the hope is that as a result of initial negotiations the initial fee was relatively small.

Find Out More

If you are involved in, or considering, a pilot franchise contact our Franchise Department who will be happy to discuss your agreement.

Support & Networking Group

If you are a franchisee please join our newly launched Franchisee Support & Networking Group, aimed specifically at franchisees looking for ideas, support and help on any issues. The event will be hosted by Amy and leading franchise barrister Paul Strelitz from Hardwicke. Click here to find out more.


The contents of this article are for the purposes of general awareness only. They do not purport to constitute legal or professional advice. Specific legal advice should be taken on each individual matter. This article is based on the law as at November 2015.

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Enforcement of Education Supervision Orders

school
If a child refuses to attend school the Local Authority can impose and enforce an education supervision order (ESO).
 
Children of compulsory school age should receive full time education and Local Authorities (LAs) have a statutory duty to determine whether education (in school or otherwise) is being provided. If not, an LA can apply and implement education supervision orders (ESOs) to improve a child's poor school attendance. There are consequences of breaching an ESO.

If a parent fails to get their child to regularly attend school, LAs can make reasonable efforts to resolve the problem and have a range of strategies for dealing with poor attendance such as:
  • investigating the reasons for the pupil's absence
  • meeting with the parent
  • sending a written warning to the parents
  • completing a Common Assessment Form
  • holding a formal Attendance Improvement Meeting with the parents and their child
  • or interviewing the parents under caution, in accordance with the relevant provisions of the Police and Criminal Evidence Act 1984. This interview will enable the gathering of evidence for a possible prosecution of parents.
A prosecution should be of last resort although the LA may apply for an ESO at the same time as carrying out a prosecution. An ESO cannot be made where a child is already in the care of a LA.

A court may only make an ESO where it is satisfied that a child of compulsory school age is not being properly educated and it considers that making an order would be better for the child than making no order at all, having given consideration to their age, ability, aptitude and any special educational needs.

The court will assume, unless the contrary is proved, that a child is not being properly educated where they are subject to a school attendance order (SAO) that has not been complied with or failing to attend at the school where they are a registered pupil.


Welfare Checklist

When a LA applies for an ESO, they must address and consider a statutory welfare checklist including the ascertainable wishes and feelings of the child; the physical, emotional and educational needs of the child; the likely effect on the child of any change in his circumstances and whether making an ESO will have a positive effect on the child; age, sex, background of the child that the court considers relevant; and the capability of each of the child's parents to meet their child's needs.

The effect of an ESO is for the court order to appoint the LA to supervise a child's education at school or at home for a specified period, usually a period up to 12 months. The ESO can help where parents find it difficult to exercise control over their child and where the child has developed a pattern of irregular attendance. An ESO does not involve criminal proceedings and is not designed to punish the parents or child. Where an ESO is made, the child can be required to attend a school regularly, allow the supervisors to visit their home and meet on a regular basis.


Appeals against an ESO

Anyone with parental responsibility for the child, or the child themselves, can appeal the decision to make an ESO and the LA have duties and obligations to satisfy a court that it is required to make an ESO.


Breach of an ESO

Parental breach

A parent of a child who persistently fails to comply with directions given under an ESO is guilty of an offence and can be liable to prosecution. Documentary evidence must be provided for a LA to prove a breach of an ESO. Parents can defend such an action if they can prove that they took all reasonable steps to comply with the direction given, or the direction was unreasonable or impracticable.

Breach by child

Where the child persistently fails to comply with directions given under an ESO, the LA will investigate the child's circumstances and ascertain if added services should be provided. In a serious situation where the child is potentially at risk, the appropriate LA may apply to the family court for a care or supervision order.


Need more advice?

If you/ your child want to discuss or appeal an ESO please contact our Dispute Resolution team This email address is being protected from spambots. You need JavaScript enabled to view it.We offer a number of alternative dispute resolution (ADR) services including:
  • Without prejudice meetings
  • Mediation
  • Arbitration
It is very often worth exploring ADR to see if a sensible agreements can be negotiated before this is progressed to prosecution for a breach of an ESO. For more advice on 01708 229444 or email This email address is being protected from spambots. You need JavaScript enabled to view it.



This article was written by Kerry Hull, an Associate Solicitor in our Alternative Dispute Resolution Department at Pinney Talfourd Solicitors. This article is only intended to provide a general summary and does not constitute legal advice. Specific legal advice should be taken on each individual matter. This article is based on the law as at September 2015.


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Resolving disputes in 2015

JacksonReport
"The Jackson Reforms" look set to continue to change the litigation landscape in 2015. Head of Dispute Resolution, Stephen Eccles, looks at what to expect.
 
There have been key changes in the rules of litigation over the last couple of years and new rules and procedures are currently working through the civil justice system. These have become known as “The Jackson Reforms”

It is the development of these new rules and procedures that represent change anticipated through 2015.

THE MOST RELEVANT CHANGES TO COMMERCIAL DISPUTES ARE:

  • the expansion of permitted contingency fee arrangements
  • increases to damages where a Defendant fails to beat a Claimant’s settlement offer
  • cost budgeting
The rules of procedure (CPR) have been amended to promote the avoidance of delay and a saving of legal costs. There will be a much stricter approach to 'parties to litigation' complying with each and every part of Court Orders made in the management of cases with stricter deadlines and timetables.

COURT COSTS 

The reforms have resulted in a vast increase in applications to the Court, an unfortunate and unintended consequence of the reforms. This comes at a time when the County Court system is suffering considerable difficulties in dealing with existing workloads and no additional resources for the County Court system, indeed rather the reverse.

We do not expect to see any increase in the funding of the Court system save through the increase in Court fees. We expect to see Court fees increase significantly both for issue of proceedings, and all applications, including Trial fees. The government’s aim is to make the Court system self-funding through the Court fee structure.  It is a particular worry that the Court system will not be able to cope and we are seeing considerable delays in the Court system in obtaining dates for hearing of applications and Trials. 

ALTERNATIVE DISPUTE RESOLUTION

There continues to be considerable emphasis by the Judiciary on attempting to settle disputes without recourse to the Courts via alternative dispute resolution (ADR) which includes both arbitration and mediation. 

The Judiciary have made it clear that parties unreasonably refusing to mediate may well face cost sanctions. Cost sanctions are the primary method by which the Judiciary will seek to limit litigation and encourage parties to use ADR.

CONCLUSION

It is more important than ever to obtain legal advice at a very early stage in dispute resolution. If litigation is commenced, the combination of cost sanctions and the Jackson Reforms mean that a case must be ready to proceed to Trial on issue. Therefore we expect to see much more pre-action correspondence and fewer issued cases as prudent litigators will not wish to issue proceedings prematurely.

Where proceedings are issued, we expect to see much more detailed timetabling by the Courts which, combined with the much greater sanctions available for non-compliance with Orders, will substantially discourage the issue of speculative or under prepared litigation cases.

I will keep you up to date on developments with these reforms in the monthly Pinney Talfourd newsletter. If you are not already on our mailing list you can subscribe here.

In the meantime, if you need to discuss what these reforms will mean for any of your current disputes please contact me.

 
This article was written by Stephen Eccles, Partner and Head of Dispute Resolution at Pinney Talfourd Solicitors. This article is only intended to provide a general summary and does not constitute legal advice. Specific legal advice should be taken on each individual matter. This article is based on the law as at February 2015.
 
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