Employment Contracts Vs Consultancy Agreements - The Pros & Cons

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How To Staff Your Business

One of the many important decisions for any start-up company or one in the early days looking to grow is how to staff your business. There are different options available to you, so do you employ a member of staff or use a consultant?

Employment contracts v consultancy agreements - the difference between the two

Employment contracts set out the terms on which a company wants to employ a person. This is usually with a view to employing a person on a long term permanent basis, unless you use a fixed term contract for a specific project or tasks to be delivered over a fixed period of time.

Consultancy agreements set out the terms on which a company wants to engage a person to deliver services for the company. Consultancy arrangements are usually temporary in nature and relate to the delivery of specific services, projects or tasks.

There are a number of differences between the two, but some of the important differences for a company when deciding which is the most appropriate to use are:

  • Duties: an employee can be instructed to carry out a number of duties that are reasonable and within the employee’s remit/job description. Whereas a consultant will usually carry out very specific tasks in which he/she has expertise.

  • Control: a company can exercise a greater level of control over what an employee does. Whereas a consultant is expected to deliver the services using his/her own skill, in their own way and often in a time scale chosen by the consultant.

  • Hours of work: an employee’s hours of work are usually set by the employer over a set number of days per week. However, a consultant will usually carry out the services in their chosen timescale, but often with a dedicated number of hours/days per month.

  • Equipment: an employee will usually use the employing company’s equipment. Whereas a consultant will often provide his/her own equipment.

  • Tax: an employee will usually be paid through a PAYE system where appropriate deductions for tax NICS will be made. A consultant on the other hand will be responsible for his/her tax arrangements and he/she may charge VAT.

  • Mutuality of obligation: employers are obliged to offer work to the employee and the employee has to accept it and do the work. Whereas consultants have more freedom to pick and choose the work that they accept.

  • Exclusivity: employees are usually prevented from working for other companies or indeed themselves whilst employed. Whereas consultants will usually be able to work for other companies during the period of engagement with your company.

There are of course other differences, but these are some of the more pertinent considerations.

Which arrangement should you choose?

This is an important decision and the choice will usually depend on a number of factors such as, expertise already within the company; money available to pay a salary or fees; and how much control you want to exercise over those joining the company. It is common for consultants to cost more in the short term because they usually bring an expertise and they do not acquire some of the employment related rights (such as holiday pay, pensions and Statutory Sick Pay).

For technology based companies intellectual property (and how you best protect it) will also be a major consideration whether you choose to employ or engage with people to grow your company.

Whichever arrangement you decide on, it is important to ensure that the relationship is correctly documented in order to protect the company moving forward. Failing to put in place employment contracts or consultant agreements can lead to legal and financial risks in the future, so it is recommended you take advice on both the appropriate choice of arrangement and content of the contract or agreement.

For more help and guidance on the topic, please get in touch to find out more about the fixed fee services that we offer.

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Emma is an experienced employment lawyer acting for a range of clients including public sector, manufacturing and engineering, care providers, and insolvency practitioners.

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Helping employees keep their cool in a heatwave

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This recent heatwave has raised questions surrounding dress code and hot weather policies, particularly for those employees who are working remotely.

With many businesses adopting a more agile working culture, many employees are still choosing to work from home. However, this does not mean that employers can suddenly forget their health and safety responsibilities. Plus, if people are uncomfortable it’s difficult to maintain a productive workplace.

So should re-assessments be made? Here we explore what businesses can do to ensure their employees stay cool, wherever they’re working.

  1. Safe working temperatures

Employers usually rely on air conditioning and ventilation to regulate temperatures within the workplace.  However, employees working remotely may not have this option, with their only means of keeping cool to open windows. This could lead to the potential disturbance from street noise and neighbours when trying to make telephone or video calls, and therefore can make this option impractical.

Businesses should think about what else they can do to be of practical assistance, for example, by providing workers with electric fans if appropriate.

For those employees that have returned to the workplace, although there is a minimum working temperature of 16 degrees centigrade, currently there is no maximum temperature. This is because in some work environments, such as a bakery or foundry, the temperature will reach higher temperatures far quicker than in an office. Therefore, it’s difficult to set an appropriate limit for all.

  1. Legal obligations

Employers have no legal obligation to ensure suitable working temperatures. However, they do have a duty of care over their employees, so must provide a safe environment where staff are not at risk of falling ill from the heat.

With regards to the usual workplace, installing air conditioning or making sure there is always access to cold water, could form part of this.

To protect workforce wellbeing when remote working is in place, employers should follow a sensible plan; this should involve line managers checking in with staff at least once a day and reminding employees to stay hydrated and take proper breaks.

  1. Dress code

For those employees that have returned to the workplace, in hot weather, businesses should consider relaxing the rules around restrictive clothing, such as ties. Employees are unlikely to produce their best work when all they can think about is how warm they are.

It may even be worth introducing a dress-down policy for days when temperatures are considerably above average, and for meeting commitments encourage a more casual dress code.

Employers with a dress code in place for video calls when working remotely should also consider relaxing it.

  1. Flexible working

On days of extreme temperatures, implementing an early start and late finish workday, like those common in hot countries, would allow workers to rest during the worst of the heat and work when it is cooler.

Your employees’ health and safety should always be a priority.

Failing to consider what adjustments could be made to support employees when the temperature rises is not advisable. If staff become ill from the heat, especially those with health conditions which mean they are more susceptible, employers could find themselves involved in a personal injury dispute.

Ultimately, employee safety should always be an employer’s top priority and they cannot force staff to work if temperature and noise levels prohibit them from doing so.

Certain disabilities, such as COPD and arthritis, also make working in high temperatures particularly difficult, so employers need to consider reasonable adjustments that may need to be made to help them do their jobs safely.

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Mike has a strong reputation for helping employers solve difficult employment problems and make choices based on appropriate risk assessment.

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A simple guide to the Quincecare duty in banking claims – What is it and how to bring a claim?

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The Quincecare duty of care was established in the case of Barclays Bank Plc v Quincecare back in 1992, but the authority has only recently received renewed headline attention following the Supreme Court decision in Singularis v Daiwa Capital in 2019. 

What is the Quincecare duty of care? 

The Quincecare duty of care is an implied negative duty imposed on the bank to refrain from making or executing a customer payment when the bank is “put on inquiry” when there are reasonable grounds to believe that instructions may be an attempt to misappropriate funds. 

When a bank is put on inquiry, it has a positive duty to take action and investigate the instruction and any other suspicious/unusual circumstances surrounding the account. 

If the bank fails to make these inquiries then it will be liable for a breach of the Quincecare duty and, as a consequence, this cause of action gives the customer the right to a claim in negligence against the bank. 

There are certain pre-emptive conditions for the Quincecare duty to exist: 

  • The duty is currently only owed to the bank’s business customers, which have a separate legal entity. Consequently, the duty exists to protect a company from the misappropriation of funds by its trusted agent, such as a company director who is normally authorised to withdraw the company’s money; 
  • The existence of fraud is also a precondition for a Quincecare duty claim, and so it provides a helpful and an alternative remedy to recover the misappropriated funds. 

What sort of activity should put a bank on inquiry? 

The objective test is of a reasonable banker and it is fact dependent. A bank will be expected to have sophisticated systems in place to detect the fraud, which might take many forms and can be disguised by some unusual transaction patterns or simply take an obvious form of some questionable payment details.  

These transactional triggers, as well as other obvious signs, should put the bank on inquiry and drive further internal investigations while delaying the payment or ensuring that a receiving bank withholds the payment pending the outcome of these enquiries. 

What about a sole director/owner who controls the company? 

These types of companies are particularly vulnerable to being defrauded by its directors and therefore, banks must monitor these entities and their transactions much more carefully.  

In the particular case of Singularis Holdings Ltd (In Liquidation) v Daiwa Capital Markets Europe Ltd [2019] UKSC, the sole shareholder, chairman and president of the company instructed the bank to transfer $200m to unconnected third parties, which turned out to be unauthorised by the company. The fraud perpetrated by the company director stripped the company of its assets and deprived the creditors of a legitimate claim against the company. 

The Supreme Court decided that despite the fact that the perpetrator of the fraud was the beneficial owner of the company, there was no principle of law to prevent the company from suing a third party, such as a bank for breach of a duty owed to the company. Consequently, the liquidators’ claim succeeded and the company was able to claim its misappropriated funds from Daiwa Capital.  

Can the company’s creditors bring a claim against a bank? 

The short answer is – no. However, administrators and liquidators can bring a claim on behalf of the company, which provides an alternative remedy for the company’s creditors. 

Are there any defences to a Quincecare duty claim? 

Yes, although they are limited. The Quincecare duty can be expressly excluded by a contractual agreement, albeit we are not aware of any successful exclusion defences that have succeeded in the courts so far. 

Alternatively, if it was impossible for a bank to detect the fraud, and the operation of the bank account did not raise any suspicions that would require the bank to perform further investigations/enquiries, that is likely to be a sufficient defence for the bank.   

How realistic is it to expect the banks to be liable when there are millions of banking transactions performed every day?   

It is a matter of public policy and banks are expected to play an active role in reducing and uncovering financial crime. They are expected to have sophisticated systems in place to monitor suspicious transactions and to train their staff to challenge their customers when there are reasonable grounds to do so. If banks fail to investigate suspicious activities, which later lead to the financial losses for the companies, then banks will be held liable for their breach of the duty of care that they owe to their customers. 

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Catherine advises on all aspects of commercial litigation and alternative dispute resolution. She acts for a diverse range of clients in high value and complex cases ranging from contractual disputes, fraud and investigations, financial services disputes, negligence claims and insolvency-related litigation.

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No-Fault Divorce -
Here's what you need to know

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No-fault divorce becomes legislation on Wednesday 6 April 2022

Despite the long awaited Act for “no-fault” divorce being passed in June 2020, it is finally becoming legislation on Wednesday 6 April 2022. It has taken years of discussion to reach this point, providing significant changes to the way couples apply for a legal separation.

This landmark legislation, formally called the Divorce, Dissolution and Separation Act 2020 will allow married couples to divorce without assigning blame. Up until this point, couples had to have been separated for at least two years, or have to blame the other spouse for the breakdown of the marriage, which increases the animosity.

England and Wales have been a step behind many other countries when it comes to divorce with many opting for a more progressive approach. At present, one spouse must issue divorce proceedings against the other, potentially creating unnecessary animosity which can often lead to the divorce being contested by the other spouse.

Under the no-fault divorce system, couples will also be able to apply for divorce jointly which will hopefully lessen the chance of blame creeping into the equation. It will not be possible to contest a divorce, putting an end to traumatic situations such as the Owens v Owens case.

Cases such as Owens v Owens are rare. Removing the option to contest a divorce is a vital step forward, stopping people from being trapped in a marriage that they no longer want to be part of.

A statutory timeframe has been included in the new legislation, meaning that a divorce cannot be finalised in less than 20 weeks. Under current law, it is possible to conclude a divorce in a shorter time frame than this, however, it's rare for this to happen in less than four months.

It is important to remember though that complexities can arise that can add significant time to the process, such as financial claims that require negotiation, or concerns around child custody.

What terminology has changed as part of no-fault divorce?

Divorce terminology is also changing too, bringing the process into the 21st century. Making each element of divorce as clear as possible will reduce confusion and help people to understand the process they’re embarking on a little easier.

Previous terminology New terminology Description
Petition Application
Petitioner Applicant
Decree Nisi Conditional Order The order by a court of law stating the date on which the marriage will end
Decree Absolute Final Order The legal document that ends a marriage
(Judicial) Separation Decree (Judicial) Separation Order An order which confirms the parties to a marriage or civil partnership are separated
Decree of Nullity Nullity of marriage order A declaration of the court that the marriage is null and void

How will no-fault divorce work?

The announcement means that couples will no longer have to agree to be separated for two years, or have proof of their partner being at fault, in order to file for divorce. Only one person needs to desire the divorce, and their spouse will not be able to refuse the application.

Being able to apply for a no-fault divorce will spare couples the emotional stress and strain of finding blame for an unreasonable behaviour petition or when they can’t, or don’t want to, wait two years to divorce on the grounds of separation or five years if they do not have the consent of the other spouse.

It should be noted that under the new law, the statutory timeframe means that a divorce cannot be concluded in less than 26 weeks. Although it is possible for this to be shorter under the current law, it is still unusual for it to be less than four months, not including the time taken to resolve financial claims. As a result, the overall timeframe of the new system will be largely in line with the existing one. Plus, a fixed timeframe allows parties to reflect on whether the decision to end the marriage is the right one.

What caused the delay?

Following the tireless campaigning of family lawyers, the government has spent a significant amount of time over the past few years trying to make the divorce process simpler.

The Divorce, Dissolution and Separation Act receiving Royal Assent was a real breakthrough moment, with many hoping no-fault divorce would come into play by early 2021 at the latest. However, following delays, the act has now come into force on 6 April 2022. This was to allow time to become familiar with the new process, and for any necessary, IT changes to be made to HMCTS’s online divorce systems so that new process works as intended and is fit for purpose.

No-fault divorces will take a huge amount of anxiety away from the process, benefitting a significant number of people.

How we guide you through the divorce process

The introduction of no-fault divorce is one of the most significant changes in family law in the last 50 years. Ending a marriage is a monumental decision, and that won’t change. It’s important to remember that the actions you take in the early stages can set the tone for everything that follows.

If you’re about to start divorce proceedings, or currently going through the separation process, then speak to one of our divorce lawyers. We’re here to guide you through the maze of emotions and legal responsibilities, every step of the way.

You can also read our step by step guide on how to get a divorce. Find out more here >>.

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Helen works with clients to ensure that they are sensitively guided through the complex area of family and relationship breakdown.

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Protecting your back catalogue

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With the first commercial arcade video game being released over 50 years ago, the ageing games industry is sitting on a potential wealth of dormant intellectual property (IP) waiting to be revitalised for new and nostalgic audiences. So, what rights may still exist in older games, and how can their owners prevent others from exploiting their IP without permission?

The industry appears to be riding on a wave of remakes, remasters and sequels of old classics, with Diablo 2’s resurrection and the remasters of Zelda: Link’s Awakening and Final Fantasy VII just a few successful examples. With many games remaining only in players’ memories, their successful revitalisation requires an understanding of the IP attached to them.

Relying on IP in the video games sector can be controversial though. There’s a difficult balance between using it to genuinely protect creations and using it to stifle the market. However, when used appropriately, IP is a vital business asset enabling developers and publishers to prevent competitors from taking advantage of a game’s reputation and popularity.

How might classic games still be protected?

Registered trade marks are a valuable right to hold in the gaming industry. As long as they are renewed and used, they survive indefinitely, protecting anything from titles, names and music, to sounds, images and colours. By registering for specific goods and services, companies can also protect their mark for alternative income streams, including merchandise.

However, if the mark is unused for a period of five years, it becomes susceptible to being revoked from the register. Even if the mark remains on the register after this time, it will likely be challenged should the owner come to enforce it. If a game is shelved, it is possible that registered marks have been allowed to expire, ending protection.

That said, if a trade mark has expired, there may still be unregistered rights in the UK that can be enforced under the common law of ‘passing off’. Passing off protects a business’ goodwill from damage by third parties seeking to benefit themselves commercially, for example through a similar name or packaging design. Protection can extend to names and logos (brands) as well as aspects of a game such as its look and feel or ‘get-up’.

In some circumstances, goodwill can survive longer than an unused trade mark. Unless the owner has deliberately abandoned its goodwill, if consumers still recognise certain elements of a game, then residual goodwill may still exist even if a trade mark has expired or is susceptible to challenge. For historically popular games, such as Metroid, this would be easier to establish than for a more obscure title with a niche fanbase.

There is also an abundance of copyright within video games, protecting not only the software itself, but other aspects including graphics, sounds and character designs. Usually in the UK, the employer owns the copyright, but where works are commissioned, as is common in the gaming industry, the first owner is the commissioned party. As a result, it’s essential to take assignments from suppliers, whether they be artists, composers, animators or programmers.

If a company is relying on a licence, the terms may not extend to the use of the copyrighted work in reissues, remakes or sequels. Should certain aspects be unusable because of this, it means rights have to be reacquired or risk taking away the nostalgia of a game. For example, imagine a new Sonic the Hedgehog game without the iconic ‘ding’ sound when he collects a ring.

It’s important that companies remember this when buying a business for its back catalogue. By carrying out a full IP due diligence check beforehand, purchasers can ensure they are buying all the rights they need to do what they plan to with the title. For those selling their back catalogue, failing to have IP assignment records could affect the value of the business or even prevent a sale, so it’s vital to document IP ownership.

Copyright is therefore a key tool for companies wishing to protect their historic games. However, using it as a weapon, or being perceived to be doing so, can also be reputationally damaging. In one case, a retrogaming entrepreneur who had purchased the rights to the classic ‘Horace’ game, shut down a super-fan of the largely forgotten title on YouTube, which went down poorly with fans and the media.

While trade marks and copyright are the main forms of IP protection seen in the video game industry, registered designs and patents are also relevant. Registered designs are often used for protecting video game hardware, but can also protect the look of a game, such as its gaming user interfaces and heads up displays. Registrations last for 25 years, if they are renewed every five years, and are simple and cheap to obtain. Proving particularly popular with mobile app developers and publishers, it’s possible that registered designs will be used more commonly to protect vintage games in the future.

In the UK, patents for computer programs are specifically excluded from protection, making them difficult to obtain for video games. However, this is not the case in all territories, such as the United States, where software patents are prevalent. Examples include the ‘ping’ system in Apex Legends, and the split-screen dual reality mode in The Medium. Providing 20 years of protection, they are a powerful IP right to hold, so are worth considering early on in development, despite them being less common within the UK gaming industry.

Best IP Practice

For companies that own a back catalogue of games, it isn’t too late to consider registering new trade marks. It’s also important to secure trade mark protection for all relevant goods and services, such as clothing and merchandise, to provide better protection for these alternative income streams.

For existing trade marks, diversifying the way in which they are used reduces the risk of losing them. For example, Nintendo offers back catalogue NES, SNES, and N64 games via Switch Online. By using the marks, the company is not only reducing the risk of a challenge, but also keeping their goodwill alive.

Registered designs can be useful for filling gaps left by other IP rights. Although unfortunately not an option for protecting old games whose designs have been public for a long time, they are an ideal way to protect aspects of new games long into the future.

Cult games now will one day be vintage, so considering IP protection from the outset is essential. Most importantly, healthy IP rights help to ensure other companies don’t swoop in and take advantage of nostalgic audiences.

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Dan is recognised in the 2021 edition of The Legal 500 as a “Key Lawyer” within Shakespeare Martineau’s Tier 2 ranked Intellectual Property team, and in particular for “[standing] out for his varied caseload, which encompasses IP creation, protection and enforcement mandates.

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New Research - Our Green Homes Report: What buyers want

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More than three quarters (77%) of homebuyers are likely to consider a green home as their next property.

Green homes will have a significant influence on the UK reaching its net zero 2050 targets, but unless homeowners are happy to live in them, there will be little commercial benefit for housebuilders to construct them.

We wanted to understand the opinions, knowledge and demands of those in the market to purchase a new home – having either recently purchased, or looking to purchase a property in the next 12 months.

We asked 500 first time buyers and ‘second steppers’ whether they were likely to purchase a green home, which green features they were willing to pay more for and their reasons for choosing – or not choosing – a green home.

Key findings

  • More than three quarters (77%) of homebuyers are likely to consider a green home as their next property

  • Top reasons for wanting a green home included it’s ‘better for the environment' (39%), it will ‘save me money in the long run’ (27%) and ‘I want to reduce my energy bills’ (35%)

  • Consumers confirm they are willing to pay more for better energy efficiency and renewable energy sources in their homes.

With bills high on the agenda of many homeowners, now is a good time to increase adoption of green home technology, ahead of 2025 building regulations for net zero coming into force.” said Neil Gosling, head of residential development at Shakespeare Martineau.

Our research also shows that buyers are willing to pay more for features like renewable energy sources and energy-saving measures such as triple glazing – indicating a commercial incentive for developers.

More than a third (34%) of homebuyers also wanted to reduce their carbon footprint and get ahead of the curve, stating: ‘I think eventually all homes will need to be green so I will pre-empt this.

Buyers want more information about green homes

Despite a significant uptake, more than 1 in 3 (35%) respondents who were likely to purchase a green home said they wanted to understand more about how it would benefit them in the future, indicating a gap in knowledge and understanding.

Neil added: “Housebuilders should be doing more to emphasise the health and economic benefits of green homes in their marketing.

Not enough green homes in the Midlands

When it comes to availability, however, of those considering a green home, just 14% of respondents in the Midlands1 said there were green homes available in their desired location, compared to 25% and 24% in the North2 and South3, respectively.

The results also show that age, social class and gender are influencing factors in demands and expectations of green homes.

The age group most likely to consider a green home is 35 to 44-year-olds at 84%, followed by 25 to 34-year-olds (78%).

More than three quarters (76%) of 18 to 24-year olds would opt for a green home, in contrast to just 64% of respondents aged 45 and over.

It’s probably no surprise that the millennial generation is most likely to opt for a green home. This leans into the stereotype that younger generations are more concerned about the environment and also reflects the ageing first time buyer population. - Neil Gosling

Why aren’t people opting for green homes?

Six per cent of respondents said they were unlikely to choose a green home and 18% said they were neither likely nor unlikely.

Almost three quarters (72%) of those who were undecided said it was because they didn’t know enough about it, while 29% said they felt ‘indifferently’ about green homes.

When given a detailed description of what a green home is, 76% of people said they would be more likely to consider purchasing one for their next property.

Neil said: “Our results show that not all is lost when it comes to getting more people on board with green homes. I believe those on the fence can be convinced with the right information and education.

“As a sector, we should be leading with messages that hit both hearts and minds to turn the undecided few. But it’s also important we’re building homes with the features people value and in the locations they want.

“Adoption of green homes at scale is a complex jigsaw that will require canvassing of Government, legislative changes and greater financial incentives for both consumers and those delivering the product. More must be done to encourage larger players in the industry to get behind the cause, so that maximum efficiencies are achieved in the future. There is also need for a significant educational and engagement piece with the public and wider supply chain.

“For the short term, the focus should be on fabrication of housing to secure green homes status, but the potential for positive change on a much larger scale is huge, should the pieces fall into place.

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Neil builds long standing working relationships with our clients by becoming an extension of their business. He is forward thinking and progressive in his approach.

1. ‘Midlands’ refers to those in the West Midlands and East Midlands regions
2. 'North’ refers to those in the North East, North West and Yorkshire and the Humber regions
3. 'South’ refers to those in the East of England, South East, South West and Greater London regions

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We wanted to understand the opinions, knowledge and demands of those in the market to purchase a new home – having either recently purchased, or looking to purchase a property in the next 12 months.

We answer the following questions

  • What do buyers want?

  • Are there enough green homes in the midlands?

  • Why aren’t people opting for green homes?

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A simple guide to defamation – what is it and how to bring and protect against a claim

Guide

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The law has recognised for well over 100 years that individuals or businesses have a right to have the estimation in which they stand in the opinion of others, unaffected by false statements.  In simple terms, if someone says something untrue or damaging about you then you should have the right to stop them and to undo the damage.

How can a person be defamed? 

There are two ways:

  • Libel which involves words that are printed.  This includes messages written on social media, email,    text messages etc, and
  • Slander where words are spoken about someone.

Although there are some special rules for slander, both are equally serious.

Who can sue for defamation?

Individuals can sue for themselves; or businesses be it companies, partnerships etc subject to certain limitations.

Who cannot sue for defamation? 

Government bodies, political parties or people who have passed away.  The fact that a political party cannot sue does not mean that an individual politician could not bring a claim however, and indeed all too often it is politics that can be the basis of a claim.

What makes someone liable for defamation? 

Anyone who knowingly takes part in the publication of a defamatory statement can be liable for its publication.  Under section 10 of the Defamation Act, that will be the author, the editor of the publisher of the statement – unless that is not reasonably practicable.

There is a particular defence called innocent dissemination.  It protects for example a person working on the printing of a newspaper; or people who might operate an internet page where someone publishes a statement.

What needs to be established to bring a defamation claim? 

There are three key points:

  1. That someone has published a statement to a third party. That means they cannot sue someone who has simply said something only unless there is another party who will have heard or read that statement.
  2. Secondly, it has to be a statement that defames the person wanting to bring the claim.
  3. After the Defamation Act 2013 it now must have caused or be likely to cause serious harm to the reputation of the person wanting to bring the claim. If it a business wanting to bring a claim this last element will require proving some financial loss.

There are special rules that apply to slander.

What does publication mean? 

‘Publication’ has a special meaning and it is not enough that someone simply wrote something or said something; it must be communicated to another person.

Is publication to just one other person enough to lead to a claim? 

Yes it can do, but if it is only one person, proving that enough harm has been done to a reputation becomes more difficult.  Of course the more serious a statement the easier it is to establish that; or the more relevant the individual; but if the scope of publication is very low there is a risk of a claim getting struck out.  It is necessary to understand the scope of publication very carefully.

How is defamation proved if publication does not use a name? 

The test is that a reasonable person who knew the person wanting to bring a claim, would reasonably understand the statement as referring to them.  A claimant need not be referred to by name; or even identifiable by the world in general; that makes sense because if someone does not really know them can a publication really affect their opinion?  Obviously not.  Obviously however the more prominent an individual is, say a celebrity or a politician, the larger the group of people will be able to understand that something refers to them.

Can publication refer to other people as well as the claimant? 

It is still possible bring a claim.  The fact that one person might understand it to refer to someone different does not stop a claim being brought but again be very careful.  In that situation the context of statement can be all the more important.

When is something defamatory or not? 

The answer to this is what do the words used actually mean?  Ultimately the court will determine what words do mean but there are two key things to consider.  What is the natural and ordinary meaning of the words?  If that comes over as something that would make someone think less of the subject then that natural and ordinary meaning could be defamatory.

What if the meaning is not obvious? 

That does not mean that a publication is not going to have a defamatory meaning.  Everyone knows how innuendo or suggestion can be used and if a person would still understand it to be defamatory, then an innuendo meaning can be found.

How can it be established how serious a statement is; or what is possible to publish? 

That will change from case to case but the courts look at how serious a statement is, using three particular levels; the most serious is imputation of guilt or saying someone is guilty of something; the second is that there are reasonable grounds to suspect someone might be guilty; the third and least serious is that there are grounds to investigate someone being guilty.  The more you tend towards the last serious meaning; often the less likely it is that a statement might be defamatory.  Remember though, saying that there are grounds to investigate can still easily be defamatory.

What is a defamatory statement? 

It is a statement which would seriously affect in a negative way the attitude of someone reading or hearing that statement towards the person or business that it is about; or it has a tendency to cause them to do that.  Again that is quite wide and can encompass a huge range of different statements but if it is not sufficiently serious a claim can again be struck out.

What was the defamation law change in 2013?

The changes were significant and section 1 of the Defamation Act requires a claimant to show that a publication of a defamatory statement has caused or is likely to cause serious harm to their reputation. What serious harm means will always potentially vary but assessing harm is now one of the most important things a lawyer must do.

What is different about defamation law affecting companies? 

Where a body ‘trades for profit’ as the Defamation Act defines it the test is whether the publication has caused or is likely to cause the body serious financial loss.  Again what is a serious financial loss will vary from business to business; what is a serious financial loss for an SME would be of little consequence to a large plc potentially.  Again the devil is in the detail and a business needs to consider this very carefully.

Are there any defences to a defamatory claim? 

Yes there are.  Assuming that the statement has been established to have been published; refers to the claimant; had a defamatory meaning and all the other elements are in play, there are still some defences.

The first and most important: truth. If what the statement says is substantially true then that can protect the defamatory publication.  Rarely however is a claim so simple.

There is a defence of honest opinion.  To succeed it must be established that the statement is actually an opinion; why that opinion is formed and crucially it is an opinion that an honest person could have held at the time on the basis of the facts; and where there is not any element of malice in regard to that opinion.

There are some defences even if a statement is defamatory and cannot be protected as either truthful or an honest opinion.  One of those is the public interest defence.  This is where a statement is on a matter genuinely of public interest – not simply something which is interesting to the public which is an important distinction.  Most importantly the defendant must have reasonably believed the publication was in the public interest.  This is a very sensitive and complex defence and it will apply sparingly.

Is there ever a time where someone can say whatever they like and can be protected? 

Occasionally there is something called a privilege defence. Privilege means someone can speak freely without being able to be sued for defamation; these fall into two main categories:

  • Absolute privilege - something enjoyed by someone giving evidence to a judge in a court case; or a member of Parliament speaking in the House of Commons.
  • Qualified privilege – the more commonly used. Importantly however even privilege defences can be defeated by malice.  Qualified privilege effectively means that someone has a social or legal or moral or other duty to make a publication even though it might be defamatory.

How long have you got to bring a claim?

This area of law is very different to others; you only have one year from the date of the first publication by the person you want to sue.

What could be done to put things right if someone has been defamed? 

Here there is a difference between what a court can do and what lawyers can potentially achieve; a court can award damages i.e. a payment of money to the defamed party to compensate for the harm done; and this can include what is called aggregated or special damages in particular circumstances.  A court can require publication of the summary of the judgement to potentially undo some of the damage of the publication; can require publications to be taken down pages for example; and in the most serious cases can grant an injunction stopping further publication where there is a danger of that happening.

Can a court grant an apology? 

This is one thing that the court cannot do albeit there can be what are called offers of amends.  Lawyers acting for you can however potentially secure an apology which often means as much to a claimant as a court judgment.

Is it possible to stop something defamatory being published?

Unfortunately, the answer is usually no.  Ultimately what is called an interim injunction to stop someone publishing will only be awarded in the most exceptional cases.  That does not mean that a potentially claimant should give up and good lawyers can help manage this situation and it may be that someone has that exceptional case.  More often than not injunctions are obtained by the use of other elements of the law such as what is called malicious falsehood; or data processing breaches for example.

Defamation is a very complex area of law.  With the prevalence of social media however and the freedom and impunity with which certain people will feel that they can say what they like about businesses, people and can spread publications far and wide across the globe causing real damage in minutes, action is required.

Of course the best circumstances are for the person publishing to be very careful with what they say; or at the very least take some advice from a lawyer before they publish something that might be controversial or potentially defamatory.

Importantly there are often better and more appropriate options than heading to court, but ultimately however there are times when only court action is the right option.

If thinking of bringing a claim for defamation; or are being threatened with a claim for defamation however it is important to seek specialist advice.  Many solicitors will deal with litigation; few deal regularly with such a specialised area of law where if someone makes a mistake huge costs can be accrued very, very quickly and a reputation actually made worse, not better by litigation.

If you have any concerns about what is being said about you; your business; or what you wish to say, you should take advice as soon as possible.  Our expertise and experience means we can not only advise you as to how to deal with the matter legally but also how to manage a reputation through this and avoid some of the common pitfalls.

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Daniel is a highly regarded experienced specialist commercial litigator and defamation expert.

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Free Guide

The menopause in the workplace –
how best to support staff and our fixed fee policy package

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As the population in general gets older, employers are having to deal with many issues linked to having an older workforce.  One of these issues is the menopause and the difficulties it can cause for staff who are going through it.

Employers have typically been slow to recognise the issues faced by menopausal women, and many women feel uncomfortable discussing it, as it is often seen as a taboo subject.  However, acknowledging these difficulties and assisting women to remain in work in spite of them, will be a significant factor in retaining female staff in this age bracket. Retention of experienced staff (whatever gender) is vital in avoiding the loss of key skills and experience from the organisation. Retention of older female staff can also have benefits in addressing the gender pay gap.

Menopause: The facts

The menopause is a natural stage of life for women, usually in their late forties/early fifties, although it can also happen earlier or later. Part of the process includes the “perimenopause” which is when a woman's body is starting to change.

There are many symptoms of the menopause including: hot flushes; difficulty sleeping and night sweats; feeling tired and lacking energy; mood swings; anxiety and panic attacks; difficulty concentrating and focussing; and migraines and other aches and pains.

It is important to note that the menopause affects every woman differently both emotionally and physically. The impact it has on an individual’s health can affect how they work, their relationships with colleagues and has knock-on effects on absence and productivity.

Menopause: The law

The menopause and perimenopause are not specifically protected under the Equality Act 2010. However, if a worker is treated unfairly because of the menopause or perimenopause, this could amount to discrimination because of, for example, their sex; a disability; and/or their age.

  • Sex discrimination - Unfair treatment of a worker because of their sex could lead to a discrimination claim, for example if an employer treats a woman's menopause or perimenopause symptoms less seriously than it would a male worker's health condition when considering a drop in job performance.

  • Disability discrimination - A disability is a physical or mental impairment that has a substantial and long-term adverse effect on a person’s ability to carry out normal day-to-day activities. This is a broad definition and a worker's menopause or perimenopause could potentially be regarded as a disability by an employment tribunal. If a worker has a disability, an employer must consider making changes to reduce or remove any disadvantages the worker experiences because of it (i.e. reasonable adjustments).

  • Age discrimination - Workers are protected against unfair treatment because of their age. This may include unfair treatment of workers because thy are going through the perimenopause or menopause.

In addition, the Health and Safety at Work Act 1974 says an employer must, where reasonably practical, ensure health, safety and welfare at work.  An employer must minimise, reduce or where possible remove workplace health and safety risks for workers. This will involve carrying out a health and safety risk assessment with a view to ensuring menopausal symptoms are not made worse by the workplace and/or its work practices, and making changes to help a worker manage their symptoms when doing their job.

Menopause: Your questions answered

Our fixed fee menopause policy

We’re offering a fixed fee menopause policy drafting service. For a fixed price of £950 plus VAT*, our team of experts will prepare a bespoke menopause policy for your business. This includes:

  • A consultation to determine the best approach for your organisation and employees

  • Advice from a dedicated team of experts who will work with you to create a policy unique to your organisation and its ethos

Outside of this fixed fee package, our team of employment law experts are also on hand to work with you once you have your draft policy prepared, including:

  • Consulting with employees, staff associations and unions

  • Advising on how to communicate with staff about the menopause policy

  • Evolving your menopause policy in line with Government policy changes and other developments

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Helen is an experienced employment lawyer, who works proactively with clients to identify solutions to complex HR issues. Helen has worked with a number of client to implement a menopause policy across a variety of sectors.

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A guide to making a privacy claim - what are they and how to succeed

Guide

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It is a common misconception that privacy claims are the preserve of the rich and famous and while often of course it is those sorts of claims that receive the press attention; from Prince Harry and Prince William; to Michael Douglas, a wide variety of the rich and famous have brought important privacy claims.

The truth is however, every individual has the right to a private life and every individual’s private information can be misused.  Bringing a privacy claim will centre, more often than not, on a claim for misuse of private information.  Here is our simple guide to the basics of a privacy claim; the essential elements of it and the remedies that can be obtained.

Like many areas, privacy is a narrow specialist area where expert advice and input is critical.

Is there a right to privacy law in the UK? 

Yes there is and it is a relatively new cause of action based around the Human Rights Act. Everyone has a right to respect for private and family life; and Naomi Campbell and Michael Douglas’ claims in the early 2000s have helped build this area of law.  If someone has used your private information or attacked your privacy, you can do something about it.

Can I stop the publication of confidential information?

Yes you can.  Historically an individual could bring a claim for breach of confidence but the law has since been expanded far beyond that to areas which involve a wide range of matters not limited to publishing information.

What does the law now protect as a result?

The misuse of private information protects two key things.  It protects private information and it protects individuals from intrusion into their private life.  The courts even refer to this as invasion of privacy hence the title.

What do I have to prove to bring a privacy claim and succeed?

There are two key stages.

  • First, does the person wanting to bring a privacy claim have a reasonable expectation of privacy in the information complained about; and secondly, if yes,
  • is that expectation of privacy outweighed by any opposing interest (usually the interest of the party wanting to publish private information).

If the answer to the first is yes; and the answer to the second is no, a claimant has a good claim to protect their private information.

What is meant by the ‘publisher’ of the information?

Any individual, as well as any media outlet or other legal entity, is capable of publishing, in a legal sense, private information. Publishing in essence effectively means making that information known to someone who should not know about it.  For example, there have been a wide range of claims brought by ex-husbands and ex-wives concerning private information that has been thought to be misused.

Should everyone have a right to an expectation of privacy? 

The courts have said that this is what is called an objective question.  It is to take account of all circumstances which include the attributes of any claimant; the nature of the activity; the place it was happening in; the nature and purpose of the intrusion; the absence of any consent; and whether it was known or could be inferred; and the effect upon the claimant; and importantly, the circumstances in which and why the information came into the hands of the publisher.  It is a complicated test.

Is there any guidance on the objective question of privacy? 

There are certain general principles that have arisen mainly about particular types of information. For example, there is not any public interest in a legal sense in disclosure or publication of purely private sexual encounters even if they may involve adultery; additional considerations can give children rights to privacy in circumstances where adults would not; information about health will also normally be treated as private; public figures may enjoy less protection than private individuals; information about how people behave in private places such as their home is likely to have a reasonable expectation of privacy whereas, if an activity takes place in public whether it is private or not will depend upon the full circumstances.

How do I protect my reputation during a privacy claim?

This is a developing area but, there have been important cases where the fact that individuals have been suspected of criminal offences for example and therefore could suffer damage to their reputation, has been relevant. Being accused of a crime and any issues arising from that potentially becoming published need very careful scrutiny.

If I have a reasonable expectation of privacy how can that be outweighed? 

This is a balancing test.  Ultimately, no right, be it right of privacy or right of publication, always takes priority. Key considerations are:

- Does the publication contribute to debated general interest?
- How well known is the person who is the subject of the publication?
- The prior conduct of the parties;
- The manner of obtaining information and whether it is true;
- The content and form of the publication;
- The consequence of publication and the severity of any sanction.

There are therefore a wide range of factors that have to be taken into account and again, expert input is critical.

What remedies are available to me if my privacy is breached or my private information is misused?

There are two key elements; damages and an injunction.

Damages are to compensate you for loss or damage.  These will be for damages arising from the wrong itself; and to compensate for distress, hurt feelings or loss of dignity and importantly, can be increased for aggravating behaviour by the publisher.

Stopping publication via an injunction.  This is probably the primary scenario most people are most interested in.  A key principle here is that injunction will only be granted to restrain publication before a final trial determining matters, if the court is satisfied that the party wanting an injunction is likely (which means more likely than not) to establish that the publication should not be allowed.  In short, if the case is good enough and the circumstances are right, you can stop publication.

This is a guide only and as you can see it is a complicated and fluid area of law that requires specialist advice to navigate.

For more information on privacy claims - please contact Daniel Jennings below.

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What is harassment and how to stop it

Guide

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In this guide, we take a look at what harassment is and how to stop it

Harassment of any type can be a distressing experience if are a victim of it; or a difficult problem to deal with if a family member or employee has been accused of it.

To be able to deal with harassment it is firstly important to understand it,  Our simple guide looks at the different types of harassment, the burden of proof required to prove it and steps that can be taken to stop it.

Harassment – What is it?

The key definition of harassment is found in the Protection from Harassment Act 1997 which provides that ‘a person may not pursue a course of conduct which amounts to harassment of another and which he knows or ought to know amounts to harassment of the other.

There is plenty of scope for bringing various different types of conduct within this definition.

One of the key issues that needs to be determined is what is a course of conduct. This is set out in statute again and it involves, in relation to the same person, conduct on at least two or more occasions; or in the case of conduct in relation to two or more people, conduct on at least one occasion in regard to each of them.

What conduct can count as harassment?

Actions such as stalking, up-skirting and other conduct that has been in the media, are now reasonably well recognised as potential harassment.  However, one of the most important forms of conduct which is not always considered is speech.  This can include written media and most importantly, in the current climate, can include social media publications.

Not only is there a right to be protected from harassment in a written or verbal form, there is a right to freedom of speech.  A court has to perform a balancing act and conduct has to be sufficiently serious before it can be found to be harassment.  For that reason, while claims can be brought for harassment alone, generally people do not regard something truthful being said about them, which is in the public domain and not private, as being harassing.  And for that reason often claims are brought in conjunction with defamation claims; or misuse of private information claims.

How do I make a claim for harassment?

  1. You must be able to show a course of conduct as above;

  2. You must be able to show if it is targeting an individual;

  3. Importantly it has to be calculated to and does cause alarm, fear or distress; and

  4. There must be conduct that is oppressive and unreasonable as opposed to merely unattractive, unreasonable or regrettable.

As mentioned above only two actions can be enough to bring a claim but the content of the action however is still critical to establish a claim for harassment.  It does not mean that will always be the case however and the fewer the events and the longer the time between them the less likely it is that they will amount to harassment. Recent judicial authority uses the helpful terms ‘persistent and deliberate’ and they are a good guide.

What if someone says they didn't know their actions were harassment?

It is not enough for someone to say they didn’t know. There is an objective test and key is often whether someone ought to have known their conduct was harassing.  It is a test however judged against not that specific individual as few defendants will ever say that they knew that they were causing alarm or distress to a claimant.

If a claim succeeds is someone found ‘guilty’?

No, there are three particular defences to a course of conduct which would otherwise be harassing and those are:

  • it was for the purposes of preventing or detecting crime;
  • it was under some rule of law or to comply with some other requirement imposed upon a person; or
  • that in the particular circumstances pursuing that course of conduct was reasonable.

When it comes to defences, inevitably for the vast majority of defendants, it is the third defence that needs consideration.

What does to pursue a course of conduct being reasonable mean?

Again this is an objective test and it is assessed at the time that the conduct took place and because reasonableness depends upon the circumstances of each individual action and it is therefore very much dependent upon specific facts.  For a start however, a court will always look at the exact type of conduct be it physical, publication of words or otherwise; the timing of it; the frequency of the conduct.

What are the consequences of a claim if it is successful?  Is a harassment claim worth bringing or something to worry about? 

The answer is yes.

In the first place financial damages can be awarded for anxiety caused and any financial loss that might have been suffered; but to be a claimant you do not need to have suffered financial loss.

Most people’s main concern is stopping harassment first and getting some sort of recompense second and an injunction is a legal way of saying someone must not do something and is one of the most common remedies people seek.

How do I get an injunction to stop harassment? 

if you are dealing with something not involving speech then it is the traditional requirements for an injunction that must be met, this is a matter of whether there is a serious question to be considered and where the balance of convenience lies – for more information on this burden you can see our guide to injunctions. If it was involving speech then you also engage the right to freedom of speech of a publisher.

Is it true that you cannot get an injunction for defamation where someone says they have a defence.  What is the difference here?

This is a very complicated issue but the ultimate difference is between the form of what is said and the manner in which it is said; this is one reason why claimants and their lawyers have in recent years sought to use claims for harassment; claims for data protection and other rights to succeed in getting injunctions where otherwise they might have failed.

Courts have suggested that (with the assistance of lawyers) that some degree of self-help is potentially to be expected.  The courts address this as follows; the first step is for example some self-resilience trying to shrug off unpleasant messages or comments which are part of day to day irritations and annoyances; secondly if communication is specifically directed towards someone then take advantage of practical options available to prevent unwanted contact – that can relate to the platform on which communications are made or other various tools for blocking content which might mean it is not necessary for a court to grant an injunction unless these have been explored.

So, can I try to get harassment stopped myself?

The short answer is yes but as explained above, people speaking also have the right to free speech and many platforms such as Twitter, YouTube, Facebook or any other platform have to not only respect that but they also set great store by that freedom of expression and generally involvement of lawyers is necessary to succeed; unless the harassment is so blatant and so serious as to be so obvious that a strong claim lies there.

For more information or to consult us about a harassment claim, please contact Daniel Jennings.

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Daniel is a highly regarded experienced specialist commercial litigator and defamation expert.

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Here is our guide to the common types of injunction and what they can be used for

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What is an injunction?

An injunction is a court order, which either requires something to be done (a mandatory injunction) or prohibiting someone from doing something (a prohibitory injunction). They are in many ways the strictest court order, because they are usually accompanied by a penal notice. In short that means, if someone breaches the injunction they can be imprisoned.

Injunctions are usually an “interim injunction”. That means they are in effect to maintain the status quo and protect assets, evidence or other materials that are important to the final determination of a claim. This brief basic guide gives some key points about injunctions, such as freezing injunctions or springboard injunctions.

What are the types of injunction?

Common types of injunction include:

  • Freezing orders.
  • Search orders.
  • Springboard Injunctions.

Injunctions are not limited to these however, nor are they to be seen in isolation. Often will something else from the court will be applied for at the same time, for example an order such as a Norwich Pharmacal Order* to disclose certain information.

Freezing orders (freezing injunctions)

A freezing order (sometimes referred to as a freezing injunction) is an interim injunction granted by the court restraining a party (the respondent) from disposing or dealing with assets. It can apply to both individuals and businesses.

A freezing order is discretionary and a court will exercise that discussion if the following tests can be met:

  1. the applicant must have a cause of action, justiciable in England and Wales;
  2. the applicant must have a good arguable case on the merits; and
  3. there must be a real risk of the respondent's assets being dissipated.

What can a freezing order be applied to?

Almost any asset can be frozen subject to meeting the tests. Commonly an order will cover things such as bank accounts, valuable machinery or vehicles or other valuable item. A freezing order is to prevent assets being dissipated; or in simple terms the freezing order is so that, in the event that the defendant needs to satisfy a court order following trial, the defendant has the funds to satisfy that very court order.

Search orders

A search order / injunction requires a defendant to allow the claimant's representatives to enter premises and search for, copy, remove and detain documents, information or material. The key purpose of such an injunction is to preserve documents or materials that will constitute evidence in a claim to be determined later.

Invariably an independent solicitor (not associated with the case) will be appointed by the court to supervise the search and ensure that it is conducted fairly.

Springboard injunctions

This is an injunction to deprive a party of the benefit of an ongoing unfair competitive advantage obtained as a result of earlier unlawful conduct.

Commonly these have been used against former employees / contractors who have unlawfully taken confidential information from a business; however their use has grown in recent years to include breaches of fiduciary duties or breach of duties of fidelity.

Although it may seem to reverse matters in fact this again is to preserve the status quo – how matters would be if confidential information for example had not been taken and used. The test for a springboard injunction are:

  • That there has been unlawful behaviour by the subject of the injunction;
  • That an unfair competitive advantage has been obtained;
  • That the nature and period of the competitive advantage justifies the court intervening;
  • That the advantage still exists at the date when the springboard injunction is sought and will continue unless the relief is granted.

Each specific injunction has a number of special requirements BUT there are some key guiding principles that should be considered:

  • If you are concerned about something and that there might be urgency seek advice immediately. Injunctions are always time critical. If you do not act and seek advice it can either be too late practically, because assets can have been disposed of or destroyed; or it can be too late legally. Act now or you may miss the chance
  • If you are applying for an injunction, in a commercial case, an applicant for an interim injunction must typically undertake to pay the respondent whatever the court may later order by way of compensation, if it is later held that the interim injunction was wrongly granted.
  • Whether to grant an injunction will usually depend upon whether it would be "just and convenient" to do so.
  • The balance of convenience is very often the determining factor and there is a three-part test:
    • Would damages be an adequate remedy were the applicant to succeed at trial?
      • If yes then an interim injunction will not usually be granted.
      • If no, then would the applicant's cross-undertaking in damages provide adequate protection for the respondent if, on final determination, it transpires that the interim injunction should never have been granted?

If no, that suggests interim relief will not be granted.

Injunctions are powerful weapons, and require expert assistance. If you are considering an injunction, or simply think you might have an urgent situation act and enquire immediately.

*  A Norwich Pharmacal Order (NPO) is an order which compels an innocent third party to provide information about another party who may have been mixed up in “wrongdoing

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Daniel is a highly regarded experienced specialist commercial litigator and defamation expert.

Litigation & Dispute Resolution Solicitors | Shakespeare Martineau

Litigation & Dispute Resolution

If a dispute has begun to escalate and your attempts to resolve have been left unheeded you may feel the time has come to escalate matters.

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Abbey Healthcare (Mill Hill) Ltd v Simply Construct (UK) Llp

29 Jun

Real Estate & Planning

Abbey Healthcare (Mill Hill) Ltd v Simply Construct (UK) Llp

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Agriculture: diversifying or leasing your land to create habitat banks

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Teachers’ Pension Scheme – strategic issues independent schools need to think about

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Guides & Advice

Holiday requests: managing the festive season

After last years 'Christmas bubble', workers will undoubtedly want to get together in big groups this Christmas. But what does this mean for managing holiday requests and still taking precautions in the pandemic?

With many employees wanting to make the most of this time, pressure has been put on employers to manage an influx of holiday requests while keeping business running as usual.

So, what do employers need to keep in mind?

 

Implement a company holiday policy

Many employees will want to make the most of the upcoming holiday plans this year. However, this leaves employers having to balance holiday and flexible working requests with the need to have enough staff and resources.

To reduce the pressure this causes, the company holiday policy may need to be reviewed. Should a business be at its busiest over Christmas, a holiday policy that puts certain restrictions on booking this time off may be the best choice.

No matter what policy is in place, it’s important to clearly inform every employee of its contents to ensure everyone is on the same page.

 

Don’t jeopardise the relationship

Putting the relationship between employee and employer at the top of the list is much better for business in the long run. Talking holiday requests through with individuals will foster a culture of fairness and consistency, which is especially important where holidays during the festive season are concerned.

 

Precautions post-festivities

When returning to work, having a positive relationship with employees is key to avoiding unplanned absences, whether COVID-related or not. Clarifying employee rights on leave due to illness, as well as company sickness policies, will ensure that the workforce knows their rights and obligations, with the aim being to avoid any disciplinary proceedings.

Another thing to bear in mind post-holidays is a potential increase in the likelihood of positive cases of COVID-19 in the workforce. By following Government guidelines and putting some creative ideas in place, such as work ‘bubbles’ or staggering returns to the office, businesses can reduce this risk and protect their employees.

 

Your employees’ health and safety is key

Taking care of staff is paramount, especially in the present situation. So, whether that means having to prepare for the possibility of a rise in infections, set out a clear holiday policy, or maintain open lines of communication, organisations must balance the wellbeing of their employees with business as usual if they are to overcome Christmas in the times of COVID-19.

 

We’re here to help

If you’d like advice on effectively managing resource during key periods of your business year, or need support with any employment-related issue, speak to a member of your local employment team.

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

 

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Agriculture: diversifying or leasing your land to create habitat banks

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What are the options for the consolidation of special purpose vehicles (SPV’s) for a university?

Guides and Advice

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Special Purpose Vehicles and consolidation

When it comes to corporate restructuring and insolvency, there are various options for universities wanting to consolidate.

Many universities will have incorporated separate companies to carry out certain operations, such as the provision of catering supplies or nursery services, with many operating profitably and providing a service to students, staff, and the local community.

Similar special purpose vehicles (SPVs) may also have been set up to deal with a particular piece of research work or to work alongside external bodies in a joint venture arrangement.

Some of these SPVs may be lying dormant after a research project or specific initiative has fulfilled its objective or come to a close. Keeping these companies on the books can increase administration costs for accounts and compliance teams unnecessarily, or the SPV could be sitting on valuable cash or assets that could be reinvested into new projects.

Taking the time to tidy up the corporate structure of a university can have many benefits and there are three options;

  • strike the company off from Companies House
  • a members’ voluntary liquidation
  • creditors’ voluntary liquidation.

Strike off

If a company has been inactive for at a period of least three months and satisfies certain other criteria, it can simply be removed from the register of companies and dissolved by a simple application accompanied by a small fee payable directly to Companies House.

This procedure is quick and inexpensive but may not be the right option, particularly if the company in question has outstanding liabilities to third party creditors.

Any application to strike off must be given to all creditors of the company and will also be advertised in the London Gazette. As a result, any creditor could object to the striking off process.

If the company has valuable assets, striking off is not advisable either as any assets will vest in the Crown bona vacantia following the dissolution. Striking off will not, therefore, benefit shareholders where assets remain within the company or creditors if the company has significant liabilities.

If the company has a combination of both assets and liabilities, the more appropriate route is likely to be a formal insolvency process led by an insolvency practitioner as liquidator.

There are two alternative routes for a voluntary liquidation process. Both are initiated by the directors of the company (as opposed to compulsory liquidation, which is commenced with a winding up petition).

Members’ voluntary liquidation (MVL)

A members’ voluntary liquidation (MVL) is a “solvent liquidation”. It can only take place if the directors of the company are able to swear a statutory declaration of solvency whereby they must confirm that all liabilities of the company (including employee claims, debts to suppliers, HMRC, or joint venture partners), together with interest if applicable, will be paid off within 12 months of the declaration of solvency.

An MVL may help simplify corporate structures or have the advantage of allowing a tax efficient distribution of assets as part of a reorganisation process. Once any creditors’ claims have been settled, any surplus in terms of assets can be distributed by the liquidator to the university or individual shareholders and at the end of the liquidation process, the company will be dissolved.

Directors must exercise caution when swearing a declaration of solvency as making a false declaration can lead to criminal proceedings against the director(s).

Creditors’ voluntary liquidation (CVL)

If the directors are aware the company is not able to pay its liabilities from the realisation of its available assets, it is effectively insolvent and the process to place the company into creditors’ voluntary liquidation should be followed.

This is a procedure where the company’s creditors have an active involvement, including the choice of the liquidator and participation in decisions regarding the liquidator’s remuneration and strategy.

How can we help?

We are able to advise you on the most appropriate route in any restructuring exercise and can provide you with the relevant legal advice covering real estate, corporate and taxation issues that frequently arise.

We work regularly with the leading insolvency practitioners with expertise in the sector and can assist you in making the right choice of the most suitable liquidator, dovetailing with them to ensure any corporate reorganisation is ultimately successful.

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Sean’s practice is focused on restructuring and insolvency, covering complex investigatory work as well as transactional and advisory assignments.

Education

Working with higher and further education institutions, independent providers, academies, and schools, our full-service team can advise on any legal issue that an education institution may have. This includes regulatory and policy work, employment issues,  student matters, governance and constitutional questions, partnerships and collaboration, disputes, large-scale capital projects, and estates master planning.

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Abbey Healthcare (Mill Hill) Ltd v Simply Construct (UK) Llp

29 Jun

Real Estate & Planning

Abbey Healthcare (Mill Hill) Ltd v Simply Construct (UK) Llp

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Agriculture: diversifying or leasing your land to create habitat banks

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Teachers’ Pension Scheme – strategic issues independent schools need to think about

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Guides & Advice

Our latest edition of Life Times magazine

Our Autumn Edition of Life Times is Out Now

We bring you the autumn edition of Life Times magazine - a round-up of insightful and informative content.

From looking at how to access the First Homes scheme, to resolving relationship disputes out of court, and Inheritance – A gift or a curse? The autumn issue is packed full of useful tips and information.

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What To Expect from Your Conveyancer When Buying A House

Guides & Advice

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Buying A House - Conveyancer Tips

The Seven Important Steps to Buying a House

Step 1: Instruct a conveyancer

Your conveyancer (solicitor) plays a very important part in your buying process. It can be a stressful and exciting time, but your solicitor will be able to answer all your questions and guide you through the process. 

Step 2: Confirm instructions to your conveyancer and pay search fees

Having instructed your conveyancer, you will need to provide full details and pay search fees.  Searches are the enquiries made to find out information about the property you are buying.  Searches will include: local authority, water and property and environmental.  It can take a couple of weeks for the searches to be completed. 

Step 3: Have your funding in place, i.e. your mortgage, if one is required 

Make sure you have your finances in place.  Eg have a mortgage offer in place, have investigated Help to Buy, First Homes or any other type of loan you may be using.  Having the finance in place and ready to go will speed up the whole process. 

Start to make enquiries if you are using a removals company and compare quotations. 

Step 4: Your conveyancer / solicitor will report all the findings back to you.

A good conveyancer will stay in constant communication with you, to report their findings once they have completed the necessary steps, such as; 

  • Received and reviewed your contract
  • Reviewed/completed the searches

Once you are happy with all the findings and any discrepancies/issues have been discussed you will be asked to sign your sales contracts and mortgage if applicable. 

Step 5: Agree a date for completion with your conveyancer

Once your documents have been signed and your deposit is paid to your solicitor / conveyancer, you will be asked to confirm a date for completion. Your completion date is essentially your moving day and this must be agreed on by all parties involved in the process.  

Step 6: Contracts can now be exchanged 

Once contracts are exchanged, it is vital that you understand that you are now committed to buying the property. Once contracts have been exchanged with your seller, the property is yours and if you fail to pay, the seller can take legal action and it can be a very costly situation.  

Please take time to run through your paperwork one more time before contracts are exchanged.   

Step 7: Completion Day!

The buying process is now complete and the property is yours.  This is the day you can officially take ownership of your keys and begin the process of moving into your new home. 

Congratulations! 

How long can it take to buy a house?

The buying process from instruction of a solicitor (conveyancer) to completion takes on average 8-12 weeks.  This can be dependent on your circumstances – ie if you are a first time buyer or if you have a property to sell, how long the buying chain is etc. 

How to choose a solicitor/conveyancer

Do your research, ask for recommendations, talk to your estate agent and find someone you trust.  Some estate agents may have an established relationship with a particular solicitor/conveyancer – but you are under no obligation to go with this firm. 

Get quotes and compare costs.  Compare conveyancing fees with a couple of companies to ensure you are paying a fair rate  

You can only instruct a conveyancer once you have agreed the sale of your home / purchase of your new home but do the research and make your decision so that this does not hold up the process.    

 

Residential Conveyancing

Our Residential Property team is a dedicated team of over 50 experts across all of our office locations in the UK.

They provide a specialist service to clients who are looking to sell or buy their own home or are looking to invest in residential properties and begin or expand their existing property portfolio.

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Abbey Healthcare (Mill Hill) Ltd v Simply Construct (UK) Llp

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Agriculture: diversifying or leasing your land to create habitat banks

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Teachers’ Pension Scheme – strategic issues independent schools need to think about

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Guides & Advice

To vaccinate or not to vaccinate – that is the question…

Updated 14 September 2021 

Following a pivotal clinical trial earlier this year, the Pfizer vaccine gained European regulatory approval for use on children aged 12 to 15.  The chief medical officers of all four nations have now recommended extending it in a one job form to those children 12 – 15yrs of age.  

Although the news is largely positive, from a family perspective, a spike in parental disputes is likely. 

As family lawyers, at the beginning of the pandemic we saw a significant number of cases relating to children disputes, where COVID was a real obstacle for separated parents who were sharing care of children. For example, if one parent was living with their elderly parents, there would inevitably be worry about a child moving between households and transmitting the virus. Or a child would maybe have symptoms, meaning the self-isolation period would prevent them from seeing the other parent. 

With the vaccine roll-out for children now added into the mix, there’s likely to be an influx of disputes between parents who cannot agree on whether to vaccinate their children or not. 

Disagreements too between separated families about holiday arrangements are also set to increase as international travel begins to open up. 

However, with the right approach, most of these issues can be dealt with so that there is a mutually agreed resolution. 

 

Do I need to vaccinate my child to travel? 

Issues around vaccinating children aren’t new but, with a vaccine being a prerequisite for travel at the moment for adults, it’s more likely to become a hotly debated topic. 

 

What if my ex and I can’t agree on whether to vaccinate our child? 

If the parents can’t agree, then one of them can make an application to the court for a Specific Issue order, so the court will have the final say. This is sometimes unpalatable, given that effectively a decision about one’s own child is given to the state to make. 

There is, however, specific case law in this area, which the courts adopt for guidance. In the case of M V H (Children represented by their Children’s guardian) [2020] EWFC 93, the judgment of the case makes it clear that in instances where parents disagree on vaccinating their children, the court is likely to view that the vaccination is in the child’s best interest and make an order in favour of the child receiving the vaccine, if it is approved for children/on the NHS vaccination schedule. 

It was also noted in the non-legally binding comments from the judge that if the COVID vaccine is approved for use in children (which it now has), then the court is likely to view it as being in the child’s best interest also. 

 

Do I have to let my child go abroad with my ex-partner if I don’t want to? 

Issues around holiday arrangements are rising. If one parent wants to consider a holiday abroad, the other parent may be reticent about the child having COVID tests. 

If one parent has a child arrangements order stating that the child lives with them then they can take that child abroad for up to 28 days without requiring permission from the other parent (this is of course unless the court says otherwise). 

However, if both parents have parental responsibility, then both must give their consent before a child goes on holiday. 

If the other parent does not give their express permission, then an application will need to be made to the court for an order for leave to remove the child from the jurisdiction. 

 

How can we reach an agreement? 

Early communication is always the best first option, but reaching an agreement isn’t always easy. With the right approach, most of these issues can be dealt with so that there is a mutually agreed resolution and without involving the courts. 

Seeking professional advice can be helpful too, or consider using alternative dispute resolution methods such as mediation to allow both parents to have their say in a controlled environment. The very last resort is court action. 

As life continues to slowly move back to normal, being vaccinated is a requirement to do some ‘normal’ things, such as travel, so we may see more of these disputes arise. 

How we can help you

If you would like any further information or advice on the areas discussed in this article, please do not hesitate to contact Nikki Aston or another member of the family team in your local office.

Our family team is ranked as a Top Tier Firm in the Legal 500 2021 edition.

Our updated guide to recovery and resilience covers everything you need to navigate your way out of lockdown, unlock your potential and make way for a brighter future. Further advice in relation to COVID-19 can be found on our dedicated coronavirus resource hub.  

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333

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Agriculture: diversifying or leasing your land to create habitat banks

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Recruitment challenges lie ahead for the social care sector

Guides and Advice

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Recruitment and the social care sector

Recruitment and retention have been ongoing challenges for the social care sector for many years, and the end of free movement means they’re unlikely to improve any time soon.

Historically, workers from the European Economic Area (EEA) have been a lifeline for the sector but with further barriers created for those living abroad, this may be about to change. As well as causing difficulties for applicants, the new immigration scheme has significantly increased the amount of administration involved for care homes.

Obtaining a sponsor licence

It is now essential for applicants to be sponsored by their employer, in order to gain a work visa.

This is an additional responsibility for care homes, which will be tasked with applying for and maintaining a sponsor licence, which can be renewed every four years. Having a licence will require additional compliance for employers and failure to meet their responsibilities may result in scrutiny, UK Visa and Immigration sponsor team.

Financial implications

It should be noted that a sponsor licence isn’t free. Alongside the Government visa fees, the total cost for a single applicant working for a medium to large organisation could cost and employer a minimum of £5,500.

There is also the issue of the minimum salary threshold for work visas, which is currently set at £25,600. Many of the roles in the social care sector would fall below this figure, meaning care homes would need to increase salaries to fill the gaps.

These significant financial considerations now raise the question of whether sponsoring someone from outside the UK is financially viable for organizations. Especially when it cannot be guaranteed how long a worker will stay in the role.

The Government’s stance

In 2020, the Government did introduce a specific Health and Care Worker visa to reduce the issues affecting the sector, but this is largely targeted towards those working for the NHS and many care workers will not be eligible.

However, the Shortage Occupation List may provide some much-needed support if difficulties continue. Once a job role is placed on the list, applicants can trade points against a salary that is up to 20% below the minimum salary threshold, preventing the need for increased salaries. The Home Office has commissioned Migration Advisory Committee (MAC) to undertake an independent review of the impact of the immigration changes on the adult social care workforce that closes on 29 October 2021. Over the next few months it is vital for employers and representative organisations, who are facing extreme recruitment difficulties to engage with MAC to ensure their voice is heard.

Mandatory vaccination

Despite a social care recruitment drive recently being launched, there are many issues still deterring people from working in the sector, such as low pay and high stress. The introduction of mandatory COVID-19 vaccinations from 11 November 2021 is also unlikely to help.

Although the reason behind making the vaccine mandatory is reasonable, it does run the risk of putting more people off the care sector. While employers are able to rely on a legislative basis for dismissing staff who refuse to have the vaccine, it would still leave them in a tricky situation.

Mandatory vaccines will also result in further administrative tasks for care home operators, with robust policies needed to clearly define the requirements of both workers and visitors.

This could be even more complicated for foreign workers, as every country has its own vaccination process. While there is the potential for Home Office-approved clinics being set up in each country, which would allow visa applicants to get a certificate to confirm that they’ve been vaccinated, this would come as an additional cost to the employer.

The social care sector faces some considerable recruitment challenges moving forward, and gaps will need to be filled. Having an understanding of the new immigration system is vital, helping to avoid any further difficulties later down the line.

Get in touch with our  healthcare or business immigration team to find out how they can help.

Watch our Immigration Webinar

Recruiting post Brexit? This webinar provides employers with an overview of how the new system will shape our future recruitment practices and provide practical solutions to support businesses to prepare today.

Get In Contact

Tijen works with global UK businesses advising on strategic international recruitment and supports with immigration compliance facilitating assignments and relocation.

Business Immigration

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First Homes – A new form of discounted housing: the pros and cons

Executive Summary | Residential Development

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On June 28 2021 a new type of affordable housing product known as “First Homes” was launched on to the UK market.  First Homes is the latest government initiative to help more people make the move into home ownership.

What is First Homes?

First Homes are new homes to be sold to first time buyers with a minimum 30% discount off the market value. There are various qualifying criteria including a requirement to be a first time buyer, have an income of no greater than £80,000 per annum (£90,000 in London) and the home value may not exceed £250,000 (£420,000 in London) once the discount has been applied. Local Authorities are also free to set additional “local” criteria (such as residency criteria) if they wish, and may increase the level of discount if they can demonstrate a need.

First Homes will be secured via Section 106 obligations on new schemes being brought forward for planning and should be reflected in local and neighbourhood plans. However, there will be exemptions for schemes where planning is already in place or under consideration, and for local and neighbourhood plans which are already at certain stages of preparation and publication. In addition, 100% affordable schemes will be exempt.

So what do registered providers need to know about First Homes?

In very basic terms, First Homes will need to be provided on all new schemes where the above exemptions do not apply and there is an expectation and requirement that 25% of affordable homes will be First Homes. This will form the government’s new preferred tenure over and above social rent. Social rent proportions are required to remain unchanged, however, meaning that the remaining tenures (for example affordable rent or shared ownership) will have their comparative proportional share of the development reduced as a result. This is likely to have a significant impact on the availability and viability of schemes for registered providers, due to the priority being given to it in the proportions of housing tenures required.

Therefore the big concern for registered providers is the reduction in the number of shared ownership properties that have long been used by providers to cross subsidise the provision of new social rent and affordable rent properties. There is the distinct possibility that this initiative could result in some developments becoming financially unviable to many registered providers. It is also likely that this could pose particular problems for smaller providers who concentrate on smaller s106 schemes and do not self-develop.

Further concerns include the negative impact on the desirability of shared ownership (reducing demand and returns accordingly) and the fact that this product is less affordable than the standard shared ownership model (which only requires a mortgage for the initial share while First Homes require a mortgage of at least 50%).

What should registered providers do now?

Read our summary Q & A and talk to us. We’re here to guide you through this new initiative, including all the planning and policy implications via our experienced planners in our planning team. It could and should be good news for buyers – let’s make sure it works for registered providers too.

In this webinar we discuss the opportunities building close to a town or city centre can offer the retirement living sector.

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Kevin works with clients on a wide range of real estate maters to facilitate the delivery of their affordable housing developments.

Commercial Property Development

Even when working on the most complex of real estate projects, we propose commercially sound strategies that deliver results for our clients and address any issues that arise quickly.

Our  commercial real estate development team takes a full-service approach to development work, advising on matters as diverse as financial structures, environmental law and property litigation so that all angles are covered.

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Guides and Advice

Getting investment-ready: 7 tips for start-ups

Tech companies have recently skyrocketed in value, and with plenty of cash looking for a suitable home, start-ups need to know how to land the best investor.

  1. Scope out interest

Reaching out to professional networks is a great first port of call for start-ups. From bankers to accountants, many existing connections will have established relationships with potential investors that could be beneficial. All it takes is an introduction and a good first impression.

  1. Take a deep dive into the sector

Knowing the sector and its trends inside and out is a great way to target the right investors. By exploring which investors are currently buying up similar companies, through speaking to successful counterparts or simply reading trade magazines, a selection of targets can be drawn up.

  1. Know what type of investor to target

There are two major types of investors: venture capital investors, who prefer more mature businesses, and business angels, who are willing to take risks and support new businesses with big ideas. There are also a range of alternative funding options such as crowdfunding, pension funds and venture capital trusts (VCTs).

  1. Remember that the business is more than just tech

Innovative tech alone is not enough to guarantee great investment. Choosing to invest in operations such as talent acquisition and IP protection, gives the business a stronger backbone, adding security for investors.

  1. Establish other sources of revenue

Having a diverse and long-term source of income can not only provide extra protection in the form of financial cushioning, but can also demonstrate to potential investors that the business is moving towards healthy growth.

  1. Prove what makes the business unique

In a saturated market it’s important to stand out. Positive publicity, including industry-focused awards and press features can cast a spotlight on the business and attract more investment.

  1. Carry out an internal review

Completing due diligence checks shows investors that the business is fully aware of the risks and opportunities that it holds. By undertaking a thorough internal review early on, start-ups can prepare themselves for any questions or requests from potential investors, keeping them on side and maximising value.

Specialist legal advice can help with this process, giving start-ups the peace of mind that they are investment ready.

Emerging tech start-ups have plenty of investment opportunities to pursue but finding and retaining the right one can be challenging. Robust preparation and future-proofed plans are essential when it comes to securing the perfect investor.

Get in touch to find out how our corporate team can help your start-up take the next steps on its business journey.

We have launched our guide to recovery and resilience, helping to support businesses and individuals unlock their potential, navigate their way out of lockdown and make way for a brighter future. Further advice in relation to COVID-19 can be found on our dedicated coronavirus resource hub.

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

 

 

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333

SHMA® ON DEMAND

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Fixed-Fee Service

Home workspace loans | Future of flexible working

Home workspace loans for employees | An employer's guide

The pandemic has revolutionised how employees work. As lockdown in the UK lifts, it is likely that flexible home working will permanently become the norm for many organisations.

However, the need for employers to ensure that they are supporting their staff wherever they work has not changed. Now is the perfect opportunity for employers to review how they continue to support home working, and the benefits they have in place. 

A new and innovative option for employers is to introduce interest-free home workspace loans into staff benefit packages, enabling employees to create an appropriate working environment at home. Find out more below. 

What is a home workspace loan?

A home workspace loan is an interest-free benefit that employees can opt into as part of their benefits package, providing them with the funds they need to set up a home office of their choosing – from larger loans to cover bigger expenses such as the construction of a garden office or convert a garage, to smaller loans to purchase items such as office furniture.  

What are the benefits of introducing this type of benefit?

This innovative staff benefit has multiple benefits for both your organisation and your employees.  

For employers who are looking to continue full- or part-time remote working on a more permanent basis, it is a low-cost option to help make employees feel supported in both their mental health and financial wellbeing. It ensures that employees have a safe and healthy space in their working environment, and helps to set clear boundaries between home and work-life balance. 

For employees, this has clear knock-on benefits. A home workspace loan presents the opportunity to invest in creating a more permanent working setup that suits them, helping to boost morale and promote wellbeing. The loans are interest-free and repayments are made through salary deductions, meaning it is a simple, effective and low-cost option for employees. 

Is a home workspace loan a suitable option for my organisation?

Our team of experts work with you to assess the suitability of introducing a home workspace loan benefit into your organisationGet in touch with a member of our team using the button below or contact Eddie Flanagan to find out more.

How our fixed-fee service can help

For a fixed fee, our team of consumer credit experts work with you to set up a home workspace loan benefit for your employees quickly and efficiently, including:

  • Carrying out a no-obligation assessment of the suitability of implementing home working space loans for your organisation.

  • Working with you at every step of implementation and delivery, from loan documentation and FCA regulation requirements, to compliance agreements and communications with employees.

  • Offering expert advice on putting strict provisions in place when offering employee loans, helping you to navigate the potential complexities with ease. Above all, we help you to focus on what’s important: your employees.

Want to find out more or have further questions?  Contact us today using the button below.

Helping business prepare for the future of work post COVID-19

The workplace is going to look very different now that most restrictions have been lifted, for many reasons.
Make sure that your business is prepared for the challenges and opportunities that will face us all.

Visit our future of work hub on how we can help:

  • Draft vaccination and flexible working policies.
  • Review your flexible and hybrid working policies.
  • Implement new additional benefits to employees.

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Guides & Advice

Your Guide to Commercial Landlord and Tenant Dispute Resolution

Helping commercial landlords and tenants resolve rental disputes following the COVID-19 pandemic.

Introduction

Over the past 15 months, since March 2020, commercial rent arrears have increased to unprecedented levels in the UK. And, with Government restrictions still being applied to some of the usual remedies to recover rent arrears for commercial landlords, it’s all the more important for landlord and tenant disputes to be settled quickly, through negotiated agreements for the future.

Recent announcements have indicated that new legislation is likely to be published in the coming months, which could force landlords and their tenants into binding arbitration rather than going to Court. This will impact any arrears discussions and potentially put landlord and tenant relationships and enterprises at risk.

Given this situation, our expert team of property litigation and debt recovery specialists will work with both parties to try and achieve mutually beneficial agreements and will provide support during these negotiations. As such, we’ve put together this useful guide to give you all the information you need as a commercial landlord or tenant, to help you take the necessary steps to avoid further financial complications and build a lasting relationship that protects both of your enterprises.
 

The current situation

The Coronavirus Act 2020 initially gave a three-month moratorium on forfeiture of lease due to rent arrears in respect of commercial property in England, Wales and Northern Ireland. This was due to expire on 30 June 2021, but following the Government’s announcement on 16 June, this has now been extended to 25 March 2022. The current moratorium on action by landlords to recover rent arrears via bailiff action under the CRAR process has been similarly extended. These extensions mean commercial landlords are now faced with further delays in rent collection for arrears accrued during periods of enforced closure during the pandemic.

It’s important to note that the moratorium does not excuse tenants from paying their rent during the pandemic. All commercial tenants remain liable for payments due since March 2020.

So far, many commercial landlords have been successful in negotiations with their tenants for new, improved lease agreements that align better with current financial situations. It is possible these successful rent concessions could have followed the Government’s publication of The Code of Practice for Commercial Property Relationships in June 2020. A key takeaway from this documentation was that tenants were (and still are) required to be transparent with their landlords regarding their finances, although the code itself has not been seen as a mandatory order.

 

Binding arbitration

In the Government’s recent announcement, it was declared that new legislation will be introduced in the coming months to ring-fence arrears which have built up while commercial tenants were forced into temporary closure due to successive pandemic lockdowns. It is still expected that landlords and tenants will try to negotiate agreements in terms of all arrears relating to COVID-19, but naturally, not all negotiations will result in success. To address this, the Government advised that a new legally binding arbitration process will be introduced for landlord and tenant disputes that have yet to be resolved.

No date has yet been given as to when this proposed legislation will be published but it is expected in Autumn 2021, which is why we strongly encourage commercial landlords and tenants now to seek legal advice early on in their negotiations. It is expected that tenants who can pay should pay. We understand the difficulties involved with securing early settlement of these types of disputes between landlords and tenants, but it is even more important to try to achieve this quickly, otherwise, both parties risk being forced into binding arbitration later this year.

Find out more about our
rent dispute resolution service

Our property litigation experts work closely with both commercial landlords and tenants,
to help both parties reach commercial solutions, provide legal advice and support during any negotiations.

We have worked with a variety of landlords and tenants and have a market-leading property disputes teams
who can support you at all stages of your dispute.

What can commercial landlords do?

We understand the importance of generating income quickly and efficiently, particularly given the financial crisis following COVID-19. We also know it’s crucial for any commercial landlord to protect their capital value and maintain bank interest covenants; it’s a case of striking a balance between these that can be challenging at the moment.

 

Commercial landlord remedies for non-payment of rent

Any commercial landlords facing rent arrears resulting from the pandemic have a number of options to consider. As a commercial landlord, the remedies for non-payment of rent currently include starting Court proceedings to recover rent arrears. Nevertheless, it is always better to first explore with your tenant whether both parties can find a solution which they can agree to commit to.

Problems can occur when tenants assume/expect their landlords to offer reduced rent (under false assumptions that they can afford to do so). This risks placing landlords into a negative cash situation with their tenants. These are the sorts of issues that can cause disagreements between both parties, which could put successful negotiations at risk.

 

Risk of insolvency

Many landlords will accept that negotiations and rental concessions are crucial to long-term financial stability. Being able to reach mutual agreements is important to allow tenants to continue their business, given that finding replacement tenants who can afford to pay (and who aren’t still reeling from the pandemic) can be challenging.

If landlords were to lose tenants to insolvency in this current climate the costs of going through the insolvency process are high, and they would potentially need to survive with empty premises and be liable for business rates.

 

Debt recovery

Some landlords may nevertheless choose to adopt a debt recovery strategy. It’s widely known that many commercial landlords or tenants do not look upon debt proceedings favourably, as reputational damage can be a factor. There is currently no bar on landlords starting debt proceedings in the Court – and they may decide to still do so and risk them being stayed to arbitration if they are not concluded by the time the proposed new legislation becomes law. Landlords will normally be able to include within their proceedings a claim that their tenant pays their legal costs as well.

We have a team of debt recovery specialists who can help if you wish to start the recovery of debt proceedings against your tenant.

How we can help

Our solicitors are highly experienced in commercial landlord representation.

  • We can help commercial landlords negotiate new terms, so both parties can come to an arrangement for commercial rent arrears recovery that minimises the impact on their business.

  • We have a team of experts in property litigation and debt recovery, who can provide legal advice for negotiations with your tenant.

  • We can give specialist support to help you find a commercial solution, or equally, we’re able to represent you throughout any commercial rent arrears recovery proceedings.

To discuss your options and to find out how we can help you and your business call us on 0330 024 0333 or request a call back, and one of our rent dispute resolution experts will call you.

What can commercial tenants do?

Many commercial tenants have felt the financial strain of the pandemic lockdowns, and equally the strain it has posed on relationships with their landlords. We understand the priority for all tenants is their business, and how important it can be to ensure they can keep trading from their current premises to enable business as usual.

Throughout the moratorium, tenants have been encouraged to pay as much as they can afford and give their landlords as much financial transparency as possible. The Code of Practice says as much, with the concept of enabling landlords to provide appropriate support wherever they can, to avoid any insolvency proceedings or bad faith between parties. Unfortunately, the Code as we know does not have any teeth as it is not mandatory legislation.

This means there are still many tenants who are yet to agree on concessions with their landlords. From our perspective, it’s advisable that any commercial tenant looking to negotiate in this way should take note of what the Code outlined, and to consider providing details of their financial information to their landlord in negotiations.

We also strongly advise commercial tenants to get in touch with our team, so we can give appropriate legal advice to support them throughout the negotiation process.

It’s worth noting the importance of trust here too. If trust is broken down between landlord and tenant due to unwillingness to share information or at least trying to negotiate properly with transparency, this is likely to form a barrier to success.

 

What happens after 25th March 2022?

Regardless of the moratorium, tenants are still expected to pay their rent whether it fell due during the pandemic or afterwards. The impending arbitration process will only apply to pandemic arrears, and there is every chance that the actual legislation (once published in the Autumn) may include various exemptions so that some tenants may still be at risk of action for pandemic arrears. There will naturally be questions from both parties, and unfortunately in the meantime, the Courts are choked with a significant backlog of rent proceedings. There is a large value of unpaid rent locked up in those proceedings.

It is clear that commercial tenants are expected to “sort out their differences” by early negotiations with their landlords themselves, otherwise, they risk facing the consequences of either Court action or forced arbitration.

It’s important to note all tenants could still be sued for arrears accrued for non-payment of rent during the pandemic. If a tenant and their landlord are forced into binding arbitration, this process is only likely to cover arrears accruing due throughout the pandemic. That also means tenants are still liable to face proceedings for post–pandemic rental payments (as they are not likely to be subject to the arbitration process in any event) which could leave them in a worse financial state than if they’d agreed to concessions with their landlord.

 

Breathing Space: The Debt Respite Scheme

On 4 May 2021 the Government introduced “Breathing Space”, a debt respite scheme that gives some debtors legal protection from their creditors. Standard breathing space is available to anyone with problem debt; it gives them legal protection for up to 60 days. There is also breathing space available to certain individuals on mental health grounds.

Some commercial tenants who are individuals may qualify for this.

Find out more about the Breathing Space Debt Respite Scheme >>

How we can help

Our solicitors are highly experienced in commercial tenant representation.

  • We can help commercial tenants negotiate new terms, so both parties can come to an arrangement for commercial rent arrears recovery that minimises the impact on their business.

  • We have a team of experts in property litigation and debt recovery, who can provide legal advice for negotiations with your landlord.

  • We can give specialist support to help you find a commercial solution, or equally, we’re able to represent you in terms of resisting any debt recovery action.

To discuss your options and to find out how we can help you and your business call us on 0330 024 0333 or request a call back, and one of our rent dispute resolution experts will call you.

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Guides & Advice

No one likes a copycat: how can brands protect their products?

From the Lidl ‘Hampstead’ gin to Aldi’s Cuthbert the Caterpillar cake, ‘copycat’ products have recently taken the spotlight, with brands looking to remove them from supermarket shelves. However, copycat stores having successfully used this business model for many years, and the attack of the clones is likely to continue. So, how can brands protect themselves from these lookalikes?

What is a ‘copycat’ product?

Essentially, these products are imitations made to look like the original, but with a few key differences. By copying aspects such font or colour rather than brand name, these products tiptoe carefully around the realm of trade mark infringement, making it harder for brands to take action.

Proving consumer confusion

Usually, a trade mark infringement case will centre on a name or a logo and the potential to cause confusion for consumers. The problem comes when proving this confusion, as it can be difficult to establish, especially if the name or logo isn’t identical to the registered mark.

As such, copycat cases often revolve around ‘passing off’, meaning that another brand is using the positive associations of the original to sell their own lookalike product (such as colour, shape, designs – known as “get up”). However, this can be just as hard to prove as trade mark infringement.

For example, when entering Aldi or Lidl, customers are fully aware that they won’t be buying the real thing. As a result, it could be said that some copycat products are merely legitimate competition.

Brand dilution

As well as a reduction in sales being a cause of concern for brands, copycats can also dilute well-established names. If a number of products are using the same colour scheme or font, a ‘family’ of similar products is created, increasing the chance that shoppers will buy an imitation.

Should the copycat be of poor quality, this can then damage the reputation of the original brand through association.

Protecting your product

The more comprehensive a brand’s IP portfolio, the more likely a copycat court battle will fall in favour of the original product. Although registering trade marks for fonts and colours is more challenging, this should still be considered. – along with design right protection and copyright.

Another way to protect a product’s market position is to boost its visibility through effective marketing, showing consumers why it is better than its competitors.

Unless there is a substantial legislation change to include a concept such as “unfair competition”, brands will have to continue to battle against the onslaught of copycat products. However, by creating a strong IP portfolio, businesses can give themselves a fighting chance in court.

Contact us

Learn more about our intellectual property team and find out how they can help you.

We have launchedourguide to recovery and resilience, helping to support businesses and individuals unlock their potential, navigate their way out of lockdown and make way for a brighter future. Further advice in relation to COVID-19 can be found onourdedicated coronavirus resource hub.

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. VisitSHMA® ON DEMAND.

Our free legal helpline offers bespoke guidance on a range of subjects, from employment and general business matters through to director’s responsibilities, insolvency, restructuring,fundingand disputes. We also have a team of experts on hand for any queries on family and private matters too. Available from 10am-12pm Monday to Friday, call0800 689 4064.

How can we help?

Our expert lawyers are ready to help you with a wide range of legal services, use the search below or call us on: 0330 024 0333

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Guides & Advice

Sexual misconduct and the use of NDAs. Are you ready for the new academic year?

A recent tweet from Michelle Donelan MP, the Minister of State for Universities, has resulted in further communication with HE institutions this month regarding the issue of sexual misconduct and harassment within the HE sector.

"Victims of sexual harassment must be protected and supported. I had written to all higher education providers making clear that the use of NDAs in sexual harassment cases is wholly inappropriate & hiding workplace harassment or withholding details of complaints is unacceptable."

The letter, although reasonably wide ranging, serves as a reminder of the attention the Government is giving to the use of Non-Disclosure Agreements (NDAs) in particular. This renewed focus is viewed partly as being in response to the continuing allegations that have been raised on the Everyone’s Invited website, a website dedicated to highlighting instances of sexual abuse and misconduct across schools, colleges and HE institutions.

What is an NDA and how are NDAs used?

An NDA is a contract through which parties agree not to disclose information covered by the agreement, and were a controversial topic during the #Metoo movement, where NDAs were criticised as essentially being used to silence victims of sexual misconduct and harassment. An NDA can be a stand alone contract, or more commonly NDA clauses can be included in wider agreements, often covering settlements of threatened or actual litigation, for example settlement agreements terminating the employment of employees.

What does the government intend to do?

In response to this criticism, which included coverage about the use of NDAs by HE institutions, the government consulted about the misuse of confidentiality provisions in 2019, and announced it would legislate so that:

  • disclosures could still be made to the police, health professionals and lawyers;
  • the limitations of non-disclosure provisions were clearly identified in settlement agreements and employment contracts;
  • independent legal advice received by individuals signing workplace non-disclosure agreements was enhanced; and finally
  • the government also intends introduce enforcement measures for workplace non-disclosure agreements that do not comply with legal requirements.

The draft legislation is yet to be brought forward, and the minister highlighted in her letter that she was seeking to “explore options for going further in this area, to ensure that HE providers have robust mechanisms for reporting incidents of harassment”.

What should HR institutions be doing?

HE institutions must continue to be vigilant in tackling sexual misconduct and harassment, updating their systems, policies and procedures that deal with these issues ideally before the beginning of the next academic year – just eight short weeks away.  Confidentiality provisions will remain a feature of most settlement agreements for exiting employees but the parameters of these post employment restrictions should be carefully considered on a case by case basis (particularly where the restriction relates to any allegations of sexual misconduct).

We’re here to help

If you would like further information or advice please contact Tom Long, head of further education, or another member of our specialist education team.

Our education team is ranked as a Top Tier Firm in the Legal 500 2021 edition.

Our updated guide to recovery and resilience covers everything you need to navigate your way out of lockdown, unlock your potential and make way for a brighter future. Further advice in relation to COVID-19 can be found on our dedicated coronavirus resource hub.

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

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Guides & Advice

What do RPs need to know about the Leasehold Reform (Ground Rent) Bill?

The new Leasehold Reform (Ground Rent) Bill means that new long residential leases will be free from ground rent and leaseholders will no longer be subject to unexpectedly high costs payable annually. However, its implementation has the potential to impact on registered providers (RPs) guaranteed income streams.

Who will the Bill affect?

As the Bill currently stands, existing leases with ground rent included in the contract will remain unchanged. However, new leases, including those on existing developments, will have to be sold with a lease that has zero ground rent.

At present, only shared ownership leases are exempt. However, landlords and leaseholders should bear in mind that this could be subject to change as the House of Lords wants to include measures to protect shared ownership leaseholders. This will now be considered at the Committee stage.

Financial considerations

While not all RPs charge ground rent, it can be a vital source of income for those that do and helps to fund future social housing projects. However, once the reforms have been implemented, major changes to the way RPs fund developments may need to be considered. Currently, if an RP has sold off every flat in a building with a ground rent, the freehold land can then be sold onto a third party who can continue to generate an annual return from the rent.

Moving forward, with no ground rent to be included in new leases, the value of the freehold will be substantially reduced, and RPs will receive no ongoing revenue from the land, other than from the delivery of the management services. Once the flats have been sold to the tenants, they will no longer serve a social purpose and may become a drain on the RP’s resources, where these could be focused on their newer social housing stock.

The impact on social housing

The later living sector is also likely to be impacted. Currently, ground rent charges in retirement developments fund communal areas and additional services. Without them, funding will have to be found elsewhere. While the Government initially agreed that retirement homes would be exempt from the Bill, they have only instead chosen to delay implementation until April 2023 for this sector.

However, not all is doom and gloom. RPs that acquired flats in blocks from developers in the future, would most likely have found themselves owning properties with doubling ground rents, which they would have to pass on to their tenants, creating a further barrier to affordable housing. As a result, for RPs buying housing under Section 106 agreements following implementation, the Bill is a positive.

Moving forward

As existing leases aren’t impacted, RPs will still be able to collect ground rent to some extent, but they will need to factor in this loss of revenue with any future housing projects.

The changes mean that it is essential for RPs to review the viability of their current housing models. Purchasing or building flats with a view to selling on the freehold asset for a capital sum may no longer be a practicable option, so further innovation to generate revenue will need considering.

Although a welcome step for leaseholders, these reforms are yet another hurdle to jump for providers of affordable housing, removing an income stream that has historically not been crippling for its residents, but instead has provided a regular income stream to help in the delivery of their affordable housing products..

Contact us

Get in touch to find out how our Building Communities team can help.

We have launched our guide to recovery and resilience, helping to support businesses and individuals unlock their potential, navigate their way out of lockdown and make way for a brighter future. Further advice in relation to COVID-19 can be found on our dedicated coronavirus resource hub.

From inspirational SHMA Talks to informative webinars, we also have lots of educational and entertaining content for life and business. Visit SHMA® ON DEMAND.

Our free legal helpline offers bespoke guidance on a range of subjects, from employment and general business matters through to director's responsibilities, insolvency, restructuring, funding and disputes. We also have a team of experts on hand for any queries on family and private matters too. Available from 10am-12pm Monday to Friday, call 0800 689 4064.

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