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John Wick: Chapter 2(2017)

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Written by Rupert Wright

December 7th, 2016 at 1:55 pm

Brexit – Companies Should Look Systematically At Every Aspect Of Commercial Operations

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Rupert Wright, corporate lawyer with Charles Lucas & Marshall says companies will need to consider the wide ranging implications of Brexit for tax, employment, financial regulations, intellectual property and company law.

Rupert Wright - Corporate Services Specialist

Rupert Wright – Corporate Services Specialist

Until the UK formally leaves the EU, all existing legislation will remain but after Brexit, UK’s Parliament will face a substantial legislative review process.

In the short term, some businesses may pull out of contracts on property and commercial transactions.  There is going to be an extended period of uncertainty and all businesses will need to plan and assess what they need to do and cover all aspects of their operation from data to employment.

The environment in which businesses operate in the UK and Europe is going to fundamentally change as EU and UK law is unpicked and new patterns are established.  In particular, directors need to consider the following:-

Contracts

The Contracts most at risk are those supporting long term relationships, particularly with cross border elements.  Many contracts refer to a greater or lesser extent, to a raft of EU legislation.  Analysis of the clauses dealing with law, compliance with law and changes to law will be essential.  Also, the jurisdiction and payment terms will need to be considered.  The core value and bargain underpinning of a commercial contract may be impacted by foreign exchange and currency issues.  It is possible there might be wild swings in the currency markets following Brexit.

Whether Brexit provides grounds for termination will depend very much on particular terms and specific facts.  Parties could seek to rely on material change or force majeure clauses as grounds for termination.

Employment Law

A significant portion of the UK’s employment law comes from the EU including discrimination rights and collective consultation.  Disentangling the UK from its EU commitments will be a lengthy process.  It is highly likely that EU law will continue to exercise a significant influence even after Brexit since EU employment laws offer subsumed protections that were already provided by the UK, particularly relating to equal pay, race and disability discrimination.  Also, it is likely that the UK will continue to observe EU employment law as there is a need to stay in a close economic relationship with the EU.

Intellectual Property

The majority of registered trade-marks and designs which take effect in the UK are in fact EU registrations.  Following Brexit, certain European wide protections for companies such as European trade marks and design rights might no longer be available.

In summary, UK businesses which have proved very resilient in the past will need effective legal advice from their advisers in order to weather what will prove a fast moving process once Brexit occurs.  Companies will need to systematically look at every aspect of their commercial operations and the legal and financial risks they face after Brexit.

For further information contact Rupert Wright on 01635 521212 or rupert.wright@clmlaw.co.uk

Written by Rupert Wright

July 18th, 2016 at 2:31 pm

Recovering Business Debts -The Use Of Charging Orders

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Paul Trincas

Paul Trincas

In a previous article in the Newbury Business News, Paul Trincas, a corporate lawyer with Charles Lucas & Marshall wrote about how businesses could secure payment of debts and the types of enforcement mechanisms available. Here, he turns his attention to what is probably the most effective and secure method of ensuring debts are paid – charging orders.

What is a ‘Charging Order’?

A Charging Order is an Order of the Court charging a person’s interest in a property or properties, for the amount of the debt owed. It is therefore a type of security, like a mortgage, for the sum owed.

Voluntary Charge

If a debtor ‘agrees’ to a charge over their interest in any property or properties they own, in respect of debts owed, then this can be achieved by lodging the relevant form with the Land Registry. However, this procedure is dependent upon the debtor agreeing to this being undertaken and in almost 99 per cent of cases, such agreement will not be forthcoming. In which event, a Charging Order will need to be applied for through the courts.

Who can apply for a Charging Order?

Anyone owed money can apply to the court for a Charging Order. However, a Charging Order cannot be applied for unless a judgment for the sum owed is first obtained against the debtor. Further the debt owed must be £1,000 or more.

Therefore, the person owed money must first go through the court system and obtain a judgment, and then, on the back of the judgment being obtained, a Charging Order can be applied for.

What is charged?

Only the debtor’s ‘interest’ in the property or properties can be charged. So, for example, if a husband and wife jointly own property in equal shares, then it is only the debtor’s 50 per cent interest in the property that can be charged.

When is payment made under a Charging Order?

Although a Charging Order on a property secures the amount owed, this does not mean that the monies owed will be paid immediately.

Generally, there are three trigger points when the sum secured by way of Charging Order, will be paid. They are:

  • If the debtor dies, provided he/she is the sole owner.
  • When the property is sold.
  • If the person who has the benefit of a Charging Order applies to the court for an Order for Sale of the property.

Under the first two, it may be years before these trigger points are reached. However, the person owed money will be entitled to interest on the initial sum charged, currently, at 8 per cent per annum, from the date the Charging Order is made.

Under the final trigger point, the courts will generally only order a sale of the property if the amount of the debt is large.

For more information please contact Paul Trincas on 01635 521212 or paul.trincas@clmlaw.co.uk.

Written by Paul Trincas

February 17th, 2016 at 12:12 pm

Update on Consumer Rights Law

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  • Sale of Goods Act 1979
  • Unfair Terms in Consumer Regulations 1999
  • Supply of Goods and Services Act 1982

The aim of the new Act is to update all the previous legal rulings into one Act for customers to refer to if they run into trouble. These are the key changes:

  1. Terms and conditions have to be in clear English and in a form easily understood by consumers. Therefore, microscopic small print is banned. If certain conditions are hidden away or couched in impenetrable language, the business cannot rely on it if the product fails.
  2. Any attempt to limit liability needs to be carefully considered. Therefore traders cannot generally aim to exclude liability for unforeseeable losses such as indirect and consequential loss.
  3. Any rate used to calculate interest payable on late payments cannot be excessive. The rate to be used should be ideally set at base rate.
  4. Rules dealing with the provision of digital content have been introduced. Paper or digital content have not been addressed in the past. Paper or digital content must now be of satisfactory quality, fit for purpose and as described.
  5. Consumers’ rights for any late deliveries have changed significantly as have the legal rights available for defective goods. Therefore if consumers buy an item which turns out to be faulty, the consumers generally get an automatic refund if it is returned within 30 days.

This is a brief overview of some of the key changes. Generally, companies who deal with consumers do now need to check their terms and conditions to ensure they are fully compliant.

For further information contact Rupert Wright on 01635 521212 or rupert.wright@clmlaw.co.uk

 

Written by Rupert Wright

December 1st, 2015 at 12:10 pm

Commercial Contracts – Try to Keep It Simple

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In many legal jurisdictions there is an overriding duty of good faith between contracting parties. However, the English Courts have consistently refused to adopt such a vague and subjective concept: there is no implied duty of good faith between contracting parties. The starting point is that each is free to take advantage of the other unless, for instance, there is a fiduciary duty.

Rupert Wright

Rupert Wright

The general rule when drafting contracts is to keep it simple if possible and conventional. Over- elaborate deal structures are fraught with difficulty. It is important to agree the main elements of the contract before drafting a written contract and to involve lawyers at an early stage.

Lawyers should also be managed and should be discouraged from agreeing the points in too fine a detail since commercial decisions are best left to the client not the lawyer. It is also important to plan ahead and allow time and space to negotiate the final contract.

As regards fiduciary duty in commercial contracts, an exception seems to exist for ‘relational contracts’ which can exist where the parties have a long term relationship and in such a situation, good faith, co-operation and loyalty are more likely to be implied.

This is probably easiest to prove in an employment context where the Supreme Court has recently confirmed that employers should be subject to a more objective stand of reasonableness when making decisions that affect their workers. In essence, employers must avoid capriciousness, perversity or irrationality. As was stated recently in the Supreme Court, the existence of an employment relationship may justify a more intense scrutiny of the employer’s decision-making process than would be appropriate in some commercial contracts.

This approach can be implied into more straightforward commercial contracts. A recent High Court decision has caused some comment by deciding that a commercial contract involved a ‘relational contract’ and that there was therefore an implied term to act with integrity and honesty although that seems to be a narrower concept than good faith.

The case involved a contract between a Police Authority and a vehicle recovery company and the important factor was the number of transactions between the parties and the length of their contractual relationship which led the Judge to describe it as a relational contract par excellence.   This High Court decision has raised concerns in the legal community because it does potentially open up a wider duty of care where there is a long established relationship between the contracting parties even if integrity and honesty is not as wide as good faith. This could well lead to judgements by the English Courts towards a more generalised duty of good faith between contracting parties.

For further information contact Rupert Wright on 01635 521212 or rupert.wright@clmlaw.co.uk

 

Written by Rupert Wright

August 14th, 2015 at 11:01 am

IR35 CONSULTATION

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HMRC are looking at new ways to improve the efficiency of the IR35 legislation and to reduce the tax advantage for individuals hired through a personal service company (PSC) rather than as hired directly as employees. Current suggestions are for administrative changes and increasing the involvement of engagers to ensuring the correct amount of tax is paid. 

For further information please visit:

http://www.gov.uk/government/consultations/intermediaries-legislation-ir35-discussion-document

COMPANY PENSIONS REMINDER

Auto-enrolment. From the 1st June 2015 we have now reached the staging dates for automatic pension enrolment for employers with fewer than 50 employees. The overall staging period for this group runs until the 1st April 2017. If you have not already checked the staging date for your business and have a staff pension plan in place for implementation, you need to do so now.

You can check your date on the on the Pensions Regulator’s website:

http://www.thepensionsregulator.gov.uk/employers/staging-date.aspx

TAX TREATMENT OF TERMINATION PAYMENTS

The government has announced a consultation to review the income tax and National Insurance contributions on Termination Payments with the intention of making this easier and fairer. The consultation is seeking views on such matters as whether to remove the different treatment for contractual and non-contractual payments, which exemptions should remain, and whether any new exemptions should be introduced.

You can find out more here:

https://www.gov.uk/government/consultations/simplification-of-the-tax-and-national-insurance-treatment-of-termination-payments

GUIDANCE: ACAS has issued a new guide for small employers covering the basics of employment law regarding pay and wages. It includes summaries of different types of pay systems, wage slips, dealing with absences, overpayments and managing deductions.

You can see the guidance here:

http://www.acas.org.uk/index.aspx?articleid=1366

For further information please contact Andrew Egan on 01635 521212 or andrew.egan@clmlaw.co.uk

Written by Andrew Egan

August 11th, 2015 at 9:06 pm

Charles Lucas & Marshall – Business Team Newsletter – Summer 2015

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Business Team - Summer Newsletter

Business Team – Summer Newsletter

 

 

 

 

 

 

 

 

 

 

 

 

Written by Rupert Wright

July 10th, 2015 at 10:55 am

Tips for Small Businesses Sales

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Rupert Wright

Rupert Wright

Small businesses are generally defined as family businesses or businesses which are owned and managed by a single individual or by a small group of people. Rupert Wright, corporate services lawyer with Charles Lucas & Marshall, provides some pointers for buyers and sellers.

Due Diligence.  The small business may not have the time or resources to do a detailed due diligence exercise into the business it is buying.  In practice, an accountant often needs to be involved to check accounting issues.  However, the due diligence process includes checking supply contracts, the existence of litigation or disputes and employee issues.

Tax issues.  Stamp Duty and VAT will need to be checked.  In particular, VAT is not charged on assets sold as part of the transfer of a going concern.  However, both the seller and the buyer must be registered for VAT purposes.

Stock and work-in-progress.  Both parties must agree the value of the stock.  The simplest course of action is for the parties to agree on an expert valuer to carry out the stock valuation.  The most usual formula is for the valuation to be at the lower of cost and net realisable value.

Business Contracts.  The parties need to consider what action needs to be taken to transfer business contracts to the buyer.  To the extent that the buyer wants to have the benefit of a contract, this can be assigned to him by the seller.  The ideal solution for the seller is to seek to have contracts novated.

Computer Contracts.  Most small businesses are dependent on computers for their day to day operation.  Computer hardware is frequently leased rather than acquired outright.  Software can also pose contractual issues which need to be dealt with.  Also, the transfer of the rights in a website to the buyer need to be considered.

Restrictive covenants.  The buyer normally needs to have a restrictive covenant to prevent the seller opening a competing business or poaching valuable customers or staff.  The timescales for such restrictive covenants would need to be considered and generally two years is a sensible time period.

Employee rights.  The rights of employees are governed by the TUPE rules which provide that Contracts of Employment of employees are automatically transferred to the buyer.

Warranties and Vendor protection.  The buyer should seek reasonable warranties from the seller.  Sellers should ensure that they have protection from potential claims, particularly as to the amount that can be claimed.  Also, buyers should seek specific indemnities on key matters.

In summary, it is essential for both sellers and buyers of small businesses to involve a specialist business lawyer to assist with the asset purchase agreement required.

For further information contact Rupert Wright on 01635 521212 or rupert.wright@clmlaw.co.uk

Written by Rupert Wright

February 24th, 2015 at 6:23 pm

BOUNDARY DISPUTES

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Boundary disputes can prove emotive and difficult to resolve where both parties are entrenched in their views as to where the boundary should be.

Paul Trincas

Paul Trincas

A recent Court case (Acco Properties Limited -v- Mr and Mrs Severn) has provided a useful reminder as to the principles which apply to disputes of this nature.   The judge in this case provided the following guidance:

In cases of registered land, filed plans show the general position only and are not determinative as to the exact boundary line.

The starting point in determining the matter is the original Conveyance (or equivalent document) and any plans which might be attached.

Topographical features which existed when the boundary was first established may be of relevance (in this case, regard was had to a raised bank).

The conduct of the ‘original’ landowners may be of probative value in establishing their intentions as to where the boundary fell.  Likewise, the conduct of later proprietors of the land might have resulted in a binding boundary agreement (whether express or implied).

Where there is evidence of the boundary features having moved over time, title to the land appropriated may now vest in the neighbouring owner by virtue of the doctrine of adverse possession.

The Court should consider what a ‘reasonable layman’ would have thought he was buying when purchasing one or the other of the properties involved.

In this particular case, the Court found that the boundary line fell midway between where the Claimant and Defendant said the boundary should be.  The judge based this decision on the existence of an informal boundary agreement, which arose out of the Defendants having felled two trees on their side of the boundary.  The Court held that in discussions which took place between the Defendants and the Claimant’s predecessors-in-title at the time, both parties acknowledged that the trees were on the Defendant’s land.

For further information please contact Paul Trincas on 01635 521212 or paul.trincas@clmlaw.co.uk.

Written by Paul Trincas

December 3rd, 2014 at 12:40 pm

Lawyers Call for Reduction in Red Tape

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Thames Valley lawyers, Charles Lucas & Marshall say small businesses are spending too much time on administration and feel swamped by the volume of regulations they have to comply with.

Rupert Wright

Rupert Wright

Rupert Wright, a corporate lawyer at Charles Lucas & Marshall, says the over-riding and consistent message from small to medium sized business clients, is that they feel overwhelmed by a ‘compliance-led’ environment which consumes too much of their time.

“More businesses feel under pressure to appoint compliance officers or add to their administrative capacity – and yet these are not productive roles,” says Rupert Wright. “There are so many hoops businesses have to jump through which are a distraction from their main business.”

In recent years, businesses have had to accommodate legislation in areas such as employment, the environment and health and safety. This has created growing pressure with businesses often feeling they do not have the resources to deal with the quantity of regulation.

“Appointing people to deal with responsibilities in these areas is expensive,” added Rupert Wright. “Often they are appointments at a senior level and remuneration has to reflect this.

“As lawyers we can hold our clients’ hands to some extent and yes, there will be fees involved, but it is invariably more cost effective than appointing full-time personnel.”

For further information contact Rupert Wright on 01635 521212 or rupert.wright@clmlaw.co.uk

Written by Rupert Wright

January 17th, 2013 at 11:01 am

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