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A landmark court judgment in favour of a firm of solicitors in a case of professional negligence, could have significant implications for future commercial property disputes.
Simon Hough, partner of solicitors Rosling King LLP said: "Although this is a first instance decision, it could influence settlement techniques and tactics in many commercial disputes in future."
According to legal principles, a contract is binding when an offer is accepted. However, if a party’s acceptance of an offer contains any variation of the terms of the original offer, it is considered to be a counter offer and, as such, extinguishes the previous offer.
The dispute between DB Mortgages and Jacobs Solicitors centred around Part 36 of the Civil Procedure Rules (CPR), a procedural code which governs special types of offers. Although there is some crossover with common law contractual principles, Part 36 is a separate set of rules and an offer made under Part 36 remains open until it is withdrawn and will not be extinguished by a counter offer. It must comply with the formalities of Part 36 and be made available for acceptance for a period of not less than 21 days.
The recent case of DB Mortgages v Jacobs Solicitors involved an allegation of negligence made against Jacobs on the basis that they failed to report to DB Mortgages that their borrower was buying a new build property by way of sub-sale. In August 2015, Jacobs made an offer to settle the claim, which was construed in accordance with common law contractual principles because it did not comply with Part 36. This offer was re-stated in March 2016 and again in early May 2016. In the same month, DB issued a Part 36 offer which was not accepted by Jacobs.
DB Mortgages subsequently wrote to Jacobs accepting their offer from August 2015. However, Jacobs disputed this and argued that the claim had not been settled on the grounds that their August 2015 offer had been extinguished by DB Mortgages' Part 36 offer made in May 2016.
The issue for the court to decide was whether the Part 36 nature of DB Mortgages' offer in May 2016 would displace the normal rule that a counter offer extinguished a prior offer.
The Court ruled that the Part 36 offer made by DB Mortgages operated as a rejection of the offer made by Jacobs Solicitors and that, as the 2015 offer was not available for acceptance when DB tried to accept it; the claim had not been settled. The judge held that the common law rules of contract had not been displaced.
However, the Court did affirm that, had Jacobs Solicitors’ offer been a Part 36 offer, the self-contained code would have applied and the normal rules of contract law would have been displaced, leaving the original offer open for acceptance.
The DB Mortgages v Jacobs Solicitors case is now subject to potential appeal, which could take place in summer 2017. Simon Hough commented: "Whether or not the first instance decision is overturned remains to be seen. What is clear, however, is that parties must think carefully about whether an offer they have made remains available months or even years after it has been made and when to use CPR Part 36 to settle their differences.”
(Source: Rosling King)
The majority of the UK’s small and medium sized businesses (SMEs) have no plans to formalise a cloud computing strategy, according to the findings from Close Brothers’ quarterly survey of UK SME owners and senior management from a range of sectors.
Of the 906 businesses that took part in the survey, 464 (51%) answered ‘no’ to the question ‘is your organisation formalising a cloud computing strategy?’, with only 266 (29%) responding positively. The remaining 176 (19%) were ‘unsure’.
Companies in the North East (62%) and Wales (65%) the least likely to have a cloud computing strategy, while 50% of businesses in the capital were clear about the requirement for a strategy.
When asked to rate the importance of having a formal cloud computing strategy, only 9% of businesses said it was ‘very important’, with 24% agreeing it was ‘important’. 14% of SMEs were of the opinion that it was not essential at all.
“Cloud computing is one the key digital developments of the last few years,” said Ian McVicar, CEO, Close Brothers Technology Services. “It’s very important businesses don’t get left behind because it can be used as a competitive advantage.
“The results of the survey are quite sobering and make it clear that there is some way to go before business owners fully appreciate the importance of the cloud. Fundamentally, cloud computing means companies can avoid, for example, purchasing and hosting servers, along with other infrastructure costs. This is not only a cost saving, but means companies can focus on their core business instead of spending both time and resource on establishing and maintaining an IT infrastructure.”
Sean Callanan, Director of Technology Services added: “For any business with digital requirements, a cloud strategy can help companies understand more clearly how and when they are going to achieve their business objectives.
“It’s been proven that having applications on the cloud, for example, provides a better user experience along with improved security and performance.
“To help demystify the subject, we’re currently working with IDC, who provide market-leading intelligence and advisory services, on a cloud computing vendor spotlight. The paper presents an overview of IT cloud services, giving end-user organisations guidance and advice on the advantages and challenges involved in the ‘journey’ to the cloud.”
(Source: CBTS)
Misconceptions regarding the ‘typical’ victims of domestic violence are leaving thousands of people in a dangerous situation vulnerable to abuse, legal specialist Percy Hughes & Roberts has warned.
In a survey of over 600 people, Percy Hughes & Roberts asked respondents who they believe to be the most commonly affected by domestic violence, with 79% pointing to women in a heterosexual relationship. Only 7% of respondents said men in a heterosexual relationship, and even fewer participants thought individuals in the LGBT community were at risk. And, while a large majority of domestic violence victims are female, the legal specialist has warned that by failing to offer support for other members of society, their safety is at risk.
Shirley Bennett, a legal executive at Percy Hughes & Roberts, who specialises in domestic violence cases, says: “While abuse cases involving female victims of men are the most widely reported, there are significant portions of society that feel as though they have nowhere to turn if they fall victim to domestic violence.
“Domestic violence has no ‘typical’ victim, and I regularly provide support for men in heterosexual relationships and members of the LGBT community who fear for their safety because of an abusive partner. My concern is that misconceptions about who is most affected by domestic violence could leave thousands of people unable to seek help because they feel as though they have been forgotten about in terms of support.”
Instances of abuse in same-sex relationships are common. Figures published by charity Stonewall reveal that one-in-four lesbian and bi-sexual women have experienced domestic abuse in a relationship, while 49% of all homosexual and bi-sexual men have experienced at least one incident of domestic abuse from a family member or partner since the age of 16.
Cases of abuse against men in heterosexual relationships often go unreported. Figures published by the Mankind Initiative suggest that one-in-six men will suffer from domestic abuse in their lifetime. However, male victims (29%) are over twice as likely as women (12%) to not tell anyone about their situation.
Shirley says: “By assuming that women in heterosexual relationships are the only victims of domestic violence, we leave a significant number of people at risk. Domestic violence in the LGBT community, plus instances of abuse against men in heterosexual relationships, need to be taken seriously. Awareness should be raised to support victims from every part of society.
“It is important that we tell these people that they don’t have to suffer in silence and that there is no stigma attached to seeking help for domestic violence, no matter who you are. There are charities and other bodies out there designed to help individuals affected, so if you need that help, please know that you are not alone.”
(Source: Percy Hughes & Roberts)
Organisations representing and providing services for older and vulnerable people have rallied together to raise serious concerns around the Government’s online tool for creating Lasting Powers of Attorney (LPAs).
An LPA is a powerful legal document that allows a person to appoint trusted individuals to make important decisions about care and finances on their behalf, in the event of a loss of mental capacity through an accident or illness such as dementia.
In May 2014, the Government’s Office of the Public Guardian (OPG) launched its online LPA tool, which it claims allows people to create the documents without the need for professional advice from a solicitor.
But a new report, published by a coalition of organisations led by SFE, warns that anyone creating an LPA without taking specialist legal advice faces a significantly higher risk of being left with an ineffective legal document, incurring additional application fees, and even becoming a victim of fraud or coercion.
The report also raises concerns around the potential of a completely digital system proposed by the OPG, whereby ‘wet signatures’ – the physical signing of the document – would no longer be required.
Lakshmi Turner, Chief Executive of SFE, said: “The prospect of being able to submit an LPA application entirely digitally is extremely concerning, and raises some serious questions around the potential for fraud and financial abuse.”
During a study conducted for the report, participants were invited to create LPAs using the OPG’s online tool and other ‘DIY’ methods. The study revealed that:
June McSparron, a 75-year-old from Cambridgeshire who participated in the study said: “You’re exposing yourself to a lot of risk by filling this form in on your own. There are so many bits that you can get wrong, and you can easily be pressured into making choices that you’re not entirely comfortable with.”
The number of LPAs being registered has increased steadily since the launch of the online tool, with over half a million LPAs being registered in 2015/16 alone. The OPG is actively trying to convince more people to apply for LPAs online, having set a target for the service to comprise 30% of all applications from April 2016 to March 2017. In its latest Annual Report, the OPG even admits it is willing to take ‘risks’ in striking a balance between ‘empowering and safeguarding’.
With the OPG already receiving over 1,000 calls to its contact centre every day, the organisations behind the campaign say the Government body is potentially exposing people to unacceptable levels of risk and in doing so may be compromising its ability to safeguard those who are most vulnerable.
Ms. Turner said: “An LPA is by far the most powerful and important legal document an individual can have, because it allows you to pass potentially life-changing decisions about your affairs on to a third party.
“It’s absolutely right that people should be planning ahead for the future with LPAs, but granting someone this sort of authority over your affairs is an extremely big responsibility for all parties involved. This is a specialist area of the law, and we recommend that anyone considering an LPA goes to a legal expert to ensure they get the right advice, consider all the options, and safeguard themselves for the future.”
Jane Ashcroft, CBE, Chief Executive of Anchor, said: “Decisions like these have huge implications for individuals and they can’t always be answered with online forms, which is why we think it’s crucial that people do plenty of research and seek professional advice where possible.”
Gary FitzGerald, Chief Executive of Action on Elder Abuse, said: “Once a Lasting Power of Attorney has been registered there is little to stop a determined attorney from financially abusing an incapacitated or vulnerable donor. We believe the OPG’s online tool does not sufficiently address, warn against, and prevent the misuse of Powers of Attorney, thereby leaving older and vulnerable people open to accidental or intentional abuse.”
To download the report ‘The Real Cost of DIY LPAs’ go to: www.sfe.legal
(Source: SFE)
The average lawyer is at risk of receiving almost £10,000 less annual income than they want in retirement due to a failure to save enough throughout their working lives, according to research by Wesleyan*.
Although lawyers expect to need a retirement income of £36,852 a year to live comfortably in retirement, lawyers are, on average, currently saving enough to receive just £27,539 a year once they finish work – a shortfall of more than £9,300 a year or £186,000 over a twenty-year retirement.
Research by the specialist financial mutual found lawyers are saving an average of £1,042 a month, with almost three quarters (72 per cent) admitting they don’t know how much to save for retirement at all. The average age for lawyers to start saving above and beyond their basic workplace pension is 29-years-old.
However, lawyers who do delay topping up their pension until that age will actually need to save £1,523 a month, or more than £18,000 a year, to achieve their retirement income ambitions.
This late start also means people are failing to learn from the experience of previous generations. Wesleyan’s research also showed not saving enough is one of the biggest financial regret of lawyers, with almost a fifth (17 per cent) wishing they had started to put money aside earlier.
Vicki Wentworth, Chief Customer and Strategy Officer at Wesleyan, said: “Ensuring you have enough money for retirement is the most important savings plan you will ever have, which is why it is crucial you talk to experts and learn from those who have already been through it.
“Our research tells us that failing to save early enough is one of the biggest financial regrets for lawyers, so it’s imperative people start saving earlier to avoid a shock in later life. With the right support, lawyers can start planning ahead to ensure a comfortable transition into retirement.”
The analysis by Wesleyan was supplemented by further research conducted with its own customers to reveal retirement aspirations**. According to a panel of Wesleyan’s customers who said their top three goals in retirement are to stay fit and healthy, travel and to stop work completely.
Yet despite their aspirations to give up work, more than a quarter of the panel (27%) imagine they will have to take part-time jobs as they transition into full retirement.
* Research based on a survey of 100 lawyers by Censuswide on behalf of Wesleyan, conducted in February 2016
** Additional research is based on a panel of 118 of Wesleyan’s customers, conducted in July 2016
*** Full calculations available on request
(Source: Wesleyan)
Michael Hodgson, Employment Law Solicitor at Thorntons, comments on the attempt by Deliveroo couriers to gain union recognition.
A number of Deliveroo couriers have announced they are seeking legal action in the hope to achieve trade union recognition and other workers’ rights. This marks the first serious union attempt to challenge the so-called gig economy following October’s employment tribunal for taxi service Uber.
The Uber case established that the company’s drivers are workers for employment law purposes and not self-employed.
Given the considerable publicity given to the decision, it is hardly surprising that others working in the gig economy would look to test whether they too could benefit from the Uber decision.
While Deliveroo and Uber have different commercial focuses, both have traditionally categorised those who work for them as independent contractors. To justify this, both companies argued they merely provided a platform through which individuals could further their own businesses: Uber by identifying taxi customers and Deliveroo by providing fast food delivery customers.
For Deliveroo riders, this means they are paid only for deliveries actually completed. This differs from a traditional delivery driver, employed by a company, who is paid for their time spent carrying out deliveries.
From Deliveroo’s perspective, being able to categorise their riders as self-employed represents a significant cost-saving. They do not need to provide riders any annual leave, the statutory minimum wage, the protections of whistleblowing legislation, the right to claim unfair dismissal or trade union recognition rights.
Whether Deliveroo will adhere to the union’s request or be compelled by an employment tribunal is yet to be seen. Either way it demonstrates that the tide may be turning against the gig economy and unions will not stand silent as those who are truly workers are deprived of the most basic employment rights.
(Source: Thorntons)
Given that the US is often seen as a barometer for trends in the UK and much of the rest of the world, the US presidential election is of massive interest to our business community.
The UK200Group – the UK’s leading membership association of chartered accountancy and law firms – has asked its members, who collectively act as trusted business advisers to 150,000 SMEs, how Donald Trump’s election victory is likely to affect the UK’s economy.
Liz Ward, Principal at UK200Group member firm Virtuoso Legal said: “I have real concerns that the US will harden its position on international trade and it will become more difficult for overseas businesses to take their goods and services to the US market. The US already makes it difficult for the importation of some goods, especially software and some cutting-edge technologies such as pharmaceutical products and things such as biosimilars (synthesised human hormones etc.). A more protectionist President won’t seek to reduce barriers, he will seek to increase them. This will set back technological advances by years and harm much of the intangible capital the UK has to offer.
“I also suspect that a Trump administration will undermine real progress in green technology generally. Trump has already dismissed global warming and there will be no encouragement of reducing carbon emissions under his administration. Again, this is another area where the UK has leading scientific advancement to offer.”
Fellow UK200Group member Charles Olley, Partner of accountants Price Bailey said: “I am delighted that Donald Trump has been elected. Career politicians who spend their lives inventing policies and rules for everyone else again feel the wrath of the voters, just as they did or should do with the Brexit vote. There is so much waste to come out of both the US and UK administrations and wider public economy, and I feel sure Donald will find some of it. Perhaps he will be able to point Philip Hammond at some of ours.”
Tim Watkins, Managing Director of UK200Group member accountancy firm Randall & Payne said: “The business community thrives on certainty, and at the moment we have a number of doubts about the future which we are all doing our best to deal with. A victory for the Republicans may mean we are nearer the front of the queue for a post-Brexit trade deal but perhaps we can expect an element of isolationism on the part of the US going forward.”
Peter Duff, Partner at law firm Morisons LLP and Vice-President of the UK200Group, said:“Post-Brexit UK businesses, in particular the SME market, are facing a period of uncertainty with which it is difficult to cope. The election of a president who has no political experience and has never operated at the top level of international politics, who is viewed with scepticism by the markets, will create further uncertainty until we see what experience he can garner around him.”
James Abbott, Managing Director at accountants Abbott Moore and President of the UK200Group, said: “With such a polarising result, I am concerned by the implications of having such a significant part of the USA that adamantly disagrees with the outcome of this election. I don't want to over-emphasise the significance of that, but it must affect behaviour. That creates the risk of more uncertainty, which has implications for economies the world over.”
Next week the UK200Group will come together for its Annual Conference, held at the Ageas Bowl, Southampton, S030 3XH from 16 to 18 November 2016. The latest international news will be a hot topic of conversation.
(Source: UK200Group)
PwC comments ahead of 'Equal Pay Day' in the UK - which marks the date designated by the Fawcett Society that women are effectively working for free from 10th November to the end of the calendar year due to the gender pay gap.
Laura Hinton, executive board member and head of people at PwC, said: “It’s unacceptable that at this rate it will take over 60 years to close the gender pay gap. Until we tackle the underlying causes of the gap, progress will be slow. This is about more than just publishing pay gap data - organisations need a plan for how they’re going to close it. This means setting gender and ethnicity targets, challenging recruitment processes, making more jobs available flexibly, encouraging more men to take shared parental leave and getting more experienced women back into work after career breaks.
“Our experience shows you need a razor sharp focus to ensure pipelines to senior roles are balanced and diverse. That’s why alongside our gender pay gap we’ve published our gender and ethnicity targets as delivering on these goals will go a long way towards closing the pay gap.”
Ed Stacey, head of employment law at PwC, said: "The fact Equal Pay Day is only one day later than last year shows there is still much more work to be done to close the gender gap. The introduction of mandatory gender pay gap reporting from April next year is a positive step and should go some way to improve this position. However, there are concerns that these new requirements do not go far enough."
(Source: PwC)
Before UK and EU officials get down to the detailed work of unpicking laws and drafting the transitional measures to govern Brexit, they may first have to deal with 40 billion euros the UK should pay into EU coffers to serve out its time as a full EU member.
The money is expected to become a negotiating chip with UK officials under pressure to curtail payments to a club it will no longer be a member of.
UK premier Theresa May is planning to start formal exit talks by the end of March next year, triggering two years to negotiate divorce terms. Those talks will have to resolve questions over UK businesses’ continued access to the EU market and restrictions on the movement of EU citizens on British soil.
Curbing immigration and ensuring full market access are often presented as a trade-off, forming the main axis to the negotiations. More of one means less of the other. But this misses the point. A much more incendiary area will be the outstanding bill the UK has to pay.
MLex understands officials are working on a figure of potentially 40 billion euros covering the period to the end of 2019, when the country is expected to leave the union.
EU leaders have stressed that during negotiations, the UK will remain a full EU member, enjoying all the same rights and being subject to the same obligations as other states. This clearly means it must pay its bills.
But in reality, the UK government could put the budgetary contributions at the forefront of negotiations, in the hope of gaining leverage. At least, that’s what Brussels officials are expecting.
The EU will be keen to obtain the funds, but May will come under public and political pressure to scale back payments.
According to a “landscape” assessment from the EU’s Court of Auditors published in November 2014, the EU’s “debts” — comprising undelivered spending commitments, purchases and staff pensions — ran to 326 billion euros. The spending is not covered by the current seven-year budget.
The UK’s contribution to the total EU budget is 12.3%, which puts its share at 40 billion euros.
There are two clear types of payment at stake: one to settle its outstanding liabilities up to the end of EU membership, and another that may feature future payments after Brexit.
The latter could cover the costs of access to the EU’s single market or the UK’s continued participation in certain European programs for, say, research and development or regional support.
In reality, negotiations are likely to blur the distinctions between those two pots.
A central plank of the Leave campaign in the referendum was the claim that EU membership cost UK taxpayers 350 million pounds a week. Leaving the EU would mean UK ministers could themselves choose how to spend this money, the Leave camp argued.
To date, Theresa May and her ministers have conspicuously said nothing about whether the UK will continue to make payments to the budget.
Asked about budget payments, May’s spokeswoman said she would not give “a running commentary on all the minutiae” of the negotiations, which will cover “a whole range of issues and angles to our relationship.”
But given the Leave campaign’s spending promise during the referendum, the prospect of continued payments of any size into EU coffers after Brexit could be politically unpalatable for many pro-Leave lawmakers.
May’s spokeswoman said that a pre-condition is that “the decisions on how British taxpayers’ money is spent should be a decision for the UK.”
That may leave on the table a scheme like Norway’s. Oslo pays billions into social reform and climate schemes in eastern and southern Europe as an entry fee for access to the single market. Unlike normal EU spending, however, the schemes are directly approved and audited by Norwegian officials.
And if the UK is prepared to pay its 40 billion euro bill, or commit to continued payments into some EU programs, it could win some leverage in exit negotiations.
Spending under the EU’s seven-year budget is pushed to its upper limits, with the migration crisis and terrorism producing lengthy bills. The hard truth is: Brussels needs the money and the UK is one of the largest net contributors to the EU budget.
Written by Lewis Crofts and Matthew Holehouse at MLex, the regulatory newswire.
(Source: MLex)
The timescales proposed by HMRC for the implementation of Making Tax Digital (MTD) is unrealistic and poses a substantial risk to SMEs, according to ICAS, the professional body for chartered accountants.
While ICAS supports the overall objectives of MTD, which is set to become mandatory from April 2018, it has significant reservations about the planned rollout, timescale and the mandatory approach, particularly for small and medium enterprises.
ICAS is therefore calling for a slower and phased implementation of the programme over a three to five-year period.
ICAS is also calling for:
Stronger risk management by introducing Making Tax Digital on a phased basis
A non-mandatory start beginning with larger businesses
A single threshold for VAT and cash accounting
To abandon the proposal to have 'HMRC GAAP lite' accounts.
The role of tax agents in bringing positive change to be fully recognised.
Charlotte Barbour, ICAS Director of Taxation, said: "We're concerned that the Government has pushed HMRC on this unrealistic timescale.
"SME business is the life blood of the UK economy. It needs to be encouraged, supported and freed from administrative burden. The technology here is still in its infancy, and it will take time for most business and their advisors to work such systems into their current work process'.
"ICAS is calling for a slower phasing in of this project to ensure we don't end up in a muddle for British business."
Commenting on the consultation closure for Making Tax Digital, Dawn Register, partner, BDO Tax Dispute Resolution, looking at some of the proposals, said:
“The timetable for the 2020 implementation deadline set by HMRC looks extremely ambitious given the extent and impact of the MTD proposals. Especially given the huge volume of responses HMRC will receive by today (7th November 2016) and the level of anger and concern amongst many professional bodies. We recommend the timetable for implementation is subject to ongoing review and that the Government considers a delay if the systems and guidance are not ready in time.
“Asking businesses for voluntary tax payments is one of the more controversial proposals, with many rightly pointing out that tackling historical tax fraud and reducing debts owed to HMRC would be a better use of resources. The ongoing squeeze of those ‘in the system’ and trying to pay the right tax, may of course backfire and increase the ‘black economy’. The burden of tax compliance and the complexity of rules may only serve to motivate some to stay ‘out of the system’ and risk getting caught.
“There is little detail to address how HMRC will prevent fraudulent digital accounts being set up. At first glance, the scope for say false refund claims looks like a gaping hole in the proposals. Many practitioners express overall concerns about ‘rubbish in, rubbish out’ when it comes to digital tax accounts. Most of us embrace the digital world with online shopping and banking, but the nature of these transactions is usually very simple. For example, my wages come in and my bills go out. UK taxes are now the subject of nearly 20,000 pages of legislation and distilling these rules into simple online checklists and boxes appears a rather impossible mountain to climb.”
(Source: ICAS, BDO Tax Dispute Resolution)
