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LEGAL NEWS AUGUST 2010
Stories included a)Secretly obtained documents can not be used in divorce cases b)Forced retirement at 65 to be scrapped c)Father who owes £78,000 maintenance prevented from selling home d)More protection against discrimination in shops and workplace e)Neighbour dispute settled by assessing the lie of the land f)New tax regime could ‘impact on trusts and wills’ g)Abolition of HIPs tempts sellers back into housing market h)Have your say on how to improve the family justice system i)Injury victims subjected to ‘shameful pressure’ from insurers 1 Man wins half share of ex-partner’s home – 17 years after separation 2 Housing market experts want to reform home buying process 3 Fresh evidence gives father new hope for contact with his son 4 Woman leaves £250,000 to taxi driver in her will 5 Better rights for grandparents as Government sets up families task force’ 6 Neighbours see red over colour of boundary railings 7 Will your insurers pay up if catastrophe strikes? 8 Motorcyclist injured in collision receives £250,000 compensation
a)Secretly obtained documents cannot be used in divorce cases A landmark ruling by the Court of Appeal means that couples in divorce cases will not be allowed to use secretly obtained confidential documents to prove their partner is withholding assets. The case involved a wealthy couple who were in the middle of divorce proceedings. The woman’s brother downloaded information which gave details about her husband’s financial affairs. They alleged the documents proved the husband was hiding the true extent of his wealth so he wouldn’t have to give it to his wife as part of the divorce settlement. The husband took legal action saying the brother had no right to download his private documents. He won his case in the High Court which granted an order that the documents should be handed back. That decision has now been upheld by the Court of Appeal. It has never been permissible to obtain documents by force such as by breaking into a cabinet or an estranged partner’s home. However, until now, there was a practice known as the Hildebrand rules which meant that if a husband or wife came across a confidential document proving that their partner was withholding money then they could use it as evidence in court. That practice must now stop following the Appeal Court ruling. Many legal commentators believe the Hildrebrand rules were in need of clarification due to the rapid rise in technology which means information can be accessed from emails or downloaded from a computer. In giving his judgment, Lord Neuberger said: "It follows that nothing in the so-called Hildebrand rules can be relied upon in justification of, or as providing a defence to, conduct which would otherwise be criminal or actionable." The judgment means that if a husband or wife in a divorce case take documents without permission, they could face heavy costs or even criminal proceedings. They can still, of course, apply for a court order to obtain documents or freeze assets. Please contact us if you would like more information about this or any aspect of matrimonial law. b)Forced retirement at 65 to be scrapped From October next year, your employer will no longer be able to force you to retire just because you’ve reached the age of 65. The Government is scrapping the Default Retirement Age (DRA) which means thousands of people will be able to continue working unless their employer can show that there are valid reasons for obliging them to retire. These reasons would have to relate to the nature of the work. For example, an employer might be able to show that an older employee could not carry out the tasks required of certain jobs such as police or fire officers. Ministers are now beginning a consultation process on the issue but have already outlined the timetable for phasing out the DRA. It means that from 6th April 2011, employers will no longer be able to issue any notifications for compulsory retirement using the DRA procedure. For the period between 6th April and 1st October 2011, only people who were notified before 6th April 2011 and whose retirement date is before 1st October 2011 can be retired compulsorily using the DRA. After 1st October next year, the DRA can no longer be used to oblige employees to retire. If employers wish to retire an employee after that date they will have to show that their reasons are objectively justified. Pensions Minister Steve Webb said: “Many older people want to work after age 65 and have a wealth of skills and experience that are not being used. We want to get rid of the Default Retirement Age so that if they want to work they can do so. By spending longer in the workforce they can also have a better pension in retirement.” Please contact us if you would like more information about the issues raised in this article. c)Father who owes £78,000 maintenance prevented from selling home A father who owes £78,000 in unpaid maintenance has been prevented from selling his home. It was feared that he wanted to stop the Child Maintenance and Enforcement Commission (CMEC) from taking the property to settle his debt. The man, who cannot be named for legal reasons, has paid nothing to his former partner for nearly 12 years. He failed to respond to letters and phone calls from the Child Support Agency (CSA) which is now part of CMEC. The case is the first to be brought under new powers introduced in the latest child maintenance legislation. CMEC applied to the High Court to impose an order preventing the sale. The orders are designed to stop parents putting assets in the names of relatives and new partners as a way of avoiding their duty to provide for their children. The Chair of the CMEC, Dame Janet Paraskeva, said: “Step-by-step the Commission is closing the escape routes for parents who think they can cheat their children out of money from which they are entitled to benefit. “No longer can houses, cars and other valuable assets be sold off quickly to prevent the CSA taking possession of them. Those who cynically transfer the legal ownership of property into the names of their new partners risk having those transactions reversed.” The new powers have been welcomed by the family lawyers association, Resolution. CMEC has also begun Order for Sale proceedings against 500 properties belonging to parents who have failed to pay maintenance despite repeated efforts to get them to do so. The prospect of losing a home has proved very effective in persuading indebted parents to settle. So far, more than £2m has been recovered but fewer than 15 properties have actually been taken and sold. Please contact us if you would like more information about family law issues. d) More protection against discrimination in shops and workplace The new Equality Act will give people more protection against discrimination in the workplace and in premises where they buy goods and services. The Government has announced that the Act will take effect in October as planned, although not all the new measures will be introduced at the same time. The Act makes it illegal to discriminate against a wide range of people who have what are described as “protected characteristics”. These characteristics are: • disability • gender reassignment • pregnancy and maternity • race – including ethnic or national origins, colour and nationality • religion or belief • sex and sexual orientation. There will be a slightly different way of defining disability which will extend protection to more people. It will be against the law for a restaurant to ask a mother to stop breastfeeding her baby or to move to a more private part of the premises. With the exception of pregnancy and maternity, the protection also applies if a person is unfairly treated because they are wrongly perceived to have a particular characteristic. This might apply, for example, if a person is discriminated against because they are perceived to be gay when in fact they are not. The protection also extends to people who are treated unfairly because they associate with someone who has a protected characteristic. The Act also introduces several changes relating to the workplace and employment law. For example, the Act develops the concept of indirect discrimination, which can occur when there is a rule or policy that applies to everybody but creates a disadvantage for employees with a particular protected characteristic. As with goods and services, there can be no discrimination relating to perception or association. There are also changes relating to harassment and victimisation, and the Act introduces the concept of harassment by a third party. This means that employers are potentially liable for harassment of their staff by people they don’t employ. Not all the changes will be implemented at the same time and the Government is still considering its position on some of the equal pay measures outlined in the Act. Ministers are expected to offer more guidance over the coming months. Please contact us if you would like more information about any of the issues raised in this article. e)Neighbour dispute settled by assessing the lie of the land A judge was entitled to settle a neighbour dispute by assessing the lie of the land when it was unclear from the legal documents where a boundary should be placed. That was the ruling of the Court of Appeal in the case of two neighbours who both believed they owned the stream that separated their properties. Both properties were originally owned by the same person. When the land was split into two and sold separately, the plans and legal documents didn’t make it clear where the boundary lay and who owned the stream. At the time the first property was sold, there was a fence running alongside the stream on the side that would later become part of the second property. The judge at the trial held that a reasonable person would have concluded that this fence formed the boundary of the first property and the stream was therefore part of that property. The owner of the second property appealed saying that the judge had been influenced by inadmissible evidence and should not have looked beyond the legal documents. The Court of Appeal dismissed this view, however, saying the judge’s approach had been justified. Lord Justice Mummery said: "As the plan is insufficiently clear about the position of the boundary, this was a case in which the judge was entitled to take the plan in hand and look at the physical features of the land on the ground as at the date of the conveyance." Please contact us if you would like more information about the issues raised in this article. f) New tax regime could ‘impact on trusts and wills’ Recent changes in the tax regime could have an adverse effect on many trusts and wills. The new Government’s first budget increased Capital Gains Tax (CGT) to 28% for higher rate taxpayers. The Law Society has warned that this new rate “will charge any gains made while an estate is being administered and also gains for the duration of a trust”. Will trusts, which are often created for the benefit of children, are particularly vulnerable to the changes. The President of the Law Society, Robert Heslett, said: “Many hardworking families will often look to create a protective tax regime for their children in the event that they are orphaned at a young age by leaving assets in trust until the children are old enough to manage the assets without the guiding hand of their parents. “There is a real danger of trust assets being eroded through a combination of income tax at 50 per cent, CGT at 28 per cent and the impact of the changes to the inheritance regime introduced in 2006. “Personal representatives, trustees and anyone else appointed to set up a trust and settle assets within it should urgently seek advice from their solicitor to ensure that arrangements are structured as tax efficiently as possible for the benefit of these vulnerable beneficiaries in the light of these new developments.” Please contact us if you would like more information about wills and trusts. g)Abolition of HIPs ‘tempts sellers’ back into housing market The Government’s decision to get rid of Home Information Packs (HIPs) led to an increase in the number of people putting their homes up for sale, according to new research. The Property Activity Index produced by Agency Express – the company that produces nearly a quarter of the UK’s house ‘For Sale’ signs – reported a 1.8% increase in new properties coming on to the market in the month following the abolition of HIPs on 21st May. This was in contrast to Scotland which reported a 14.8% drop in new properties coming on to the market. Scotland has retained its version of HIPs which are called Home Reports. The Managing Director of Agency Express, Stephen Watson, said: “The Property Activity Index data confirms what we all suspected – that HIPs were an unnecessary and inhibitive addition to the house sales process.” HIPs had been widely criticised since their introduction in 2007 and the decision to abolish them was broadly welcomed across the housing market. However, sellers should remember that they still have legal obligations when they put their home up for sale. For example, they still have to provide an Energy Performance Certificate which grades the property’s energy efficiency. Please contact us if you would like more information about any aspect of buying a selling a property. h)Have your say on how to improve the family justice system The Government has invited people to express their views on how to improve family justice procedures to protect children and help families deal with their problems and disagreements. The ‘Call for Evidence’ has been launched by the Family Justice Review Panel, which has been set up to conduct a fundamental review as outlined by the Government in the coalition agreement. It’s intended that the review should be wide-ranging and should consider ways to improve mediation services and provide better contact rights for non-resident parents and grandparents. The panel wants anyone interested in the family justice system to express their opinions on key areas such as: · How can the justice system focus more on helping family members to reach agreement rather than pitting them against each other? · How best can the courts working with other agencies support children involved in the care system? · How best can the system provide greater contact rights to non-resident parents and grandparents? The Chairman of the Review, David Norgrove, said: “The launch of this call for evidence is the start of a dialogue with all those involved in the system – from the children and families who use these services, to the wide range of professionals.
“We are ambitious in what we want to achieve; we would encourage as many people as possible to be ambitious in their responses.”
The panel’s report based on the feedback it receives is expected to be published next year. Please contact us if you would like more information about family law issues. i)Injury victims subjected to ‘shameful pressure’ from insurers Insurance companies are being accused of pressurising accident victims into accepting reduced compensation awards before they get independent legal advice from their own solicitor. The Association of Personal Injury Lawyers (APIL) says insurers can approach victims within days of the accident when they are often confused and vulnerable. The high pressure tactics have become so widespread that APIL has sent a dossier to the Financial Services Authority highlighting several cases where insurers have tried to settle claims at far below their true value. Muiris Lyons, the president of APIL, said: “We have heard about quite shameful pressure to settle being brought to bear on vulnerable and injured people. “The insurance industry is now euphemistically calling this ‘third party assistance’, but what many people won’t realise or remember, often because they are shocked and vulnerable at the time, is that insurers’ primary duty is to their shareholders, not the injured person. “This obviously puts them in direct conflict with the victim.” One of the main problems is that most people know little about the compensation system and so are unable to assess whether a settlement offer from an insurance company is fair and reasonable. That is why it is essential that anyone injured in an accident through no fault of their own should seek advice from a solicitor who specialises in personal injury claims. That way they can be sure that they will be properly compensated. They should not have to pay for this independent legal advice as the solicitor’s fee can be recovered from the other party and their insurers. Please contact us if you would like more information about making a personal injury claim. 1 Man wins half share of ex-partner’s home – 17 years after separation A man has won a half share of his former partner’s home – even though the couple separated 17 years ago and she had paid the mortgage during that period. The couple had bought the property in 1985 in joint names and had joint beneficial interests. The woman had provided the deposit and the mortgage payments were shared. The man moved out in 1993 when the couple separated. The woman remained in the house with their two children and made all the mortgage payments herself. Twelve years later, the man asked for his half share of the property. The woman responded by seeking a court declaration that she owned the entire beneficial interest. The court eventually decided on a 90/10 split in her favour. However, that ruling has been overturned by the Court of Appeal. It held that the property had been bought in joint names. That had created joint beneficial interests and the couple had not done anything to change that when they separated. The passage of time alone was not enough to displace the man’s beneficial interest, even though the woman had paid the mortgage and covered all the maintenance costs. If the couple had intended that his interest should diminish after separation then they should have taken steps to make that happen. They did not do so. The court added the advice that couples buying a home, especially if they are not married, should consider what would happen to their beneficial interests if they were to separate. Please contact us if you would like more information about the issues raised in this article. 2 Housing market experts want to reform home buying process Some of the main professional organisations involved in the buying and selling of homes have been discussing ways to provide a better service to the consumer. The Building Societies Association (BSA) chaired a meeting which included solicitors, estate agents, surveyors and consumer bodies to develop strategies to improve the system. Most professionals welcomed the Government’s decision to abolish HIPs but said more still needs to be done. Paul Broadhead, Head of Mortgage Policy at the BSA, said: “The new Government has acted swiftly since coming to office suspending HIPs within its first few weeks. Work must continue to ensure customers receive better value and an improved experience. A key component in reforming the process remains providing the right information to the right person at the right time." Christopher Hamer, the Property Ombudsman, said: "It is clear that a lack of consumer understanding and poor information on a wide range of issues from roles, terms of business and the process overall place consumers in a weak position." The Law Society says that it has always supported the idea of buyers receiving information up front about a property they wish to buy but HIPs had not properly addressed the issue. It said: “Concern about the additional cost to sellers and lack of benefit to consumers has prompted the Law Society to propose a complete and comprehensive set of documents, prepared by a solicitor, who has the benefit of specialist legal training and professional responsibility. “The Society is recommending that the information be provided in a standard format to bring proper value to consumers and improvements in the process whilst at the same time reducing cost.” The president Robert Heslett added: "The professional integrity and legal skills which solicitors have traditionally brought to the housing market are probably more important now than they have ever been. “The marked increase in property fraud, including registration fraud and mortgage fraud, means that the role of the solicitors as the gatekeeper in the process assumes a greater importance. “This role falls to solicitors as the most highly regulated professionals in the process. Solicitors can help consumers understand the residential conveyancing process, the role of the solicitor and others in the buying and selling market and to make informed choices." We shall keep clients informed of developments. In the meantime, please contact us if you would more information about buying and selling a home. 3 Fresh evidence gives father new hope for contact with his son A father who has been prevented from seeing his 12-year-old son has been allowed to seek a fresh investigation into the case after new evidence from a doctor and child welfare officer became available. The father had previously accepted that the boy should live with his mother but applied to the court for a contact order. A report by CAFCASS, the service that looks after the welfare of children in court proceedings, said the boy was opposed to having contact with his father. The father submitted that the boy’s hostility was due to the mother’s influence. The judge declined to grant the order on the basis that the mother agreed to promote contact voluntarily. He then made an order preventing the father from making a new application for a specified period. Despite the voluntary arrangement, the relationship between the two parents deteriorated and the mother alleged that the father had broken an agreement that he would not see their son without her prior knowledge. This meant the father could not see his son and was also prevented from making a fresh application for contact because of the prohibition order. He then took the case to the Court of Appeal saying fresh evidence had emerged which could help his case. This included reports by a doctor and a CAFCASS officer which showed the father in a more positive light. The Appeal Court said the fresh evidence meant the father should be allowed to apply for a fresh judicial investigation into the case. Please contact us if you would like more information about contact orders or any issues relating to family law. 4 Woman leaves £250,000 to taxi driver in her will An 86-year-old woman has left all of her £250,000 estate to a taxi driver who took her shopping and drove her to and from the doctors. Mary Watson was one of Don Pratt’s regular customers for more than 20 years. They often chatted and Mr Pratt used to carry her shopping into her home in Newquay. She told Mr Pratt that if she lived longer than her husband then she would remember him in her will. Mrs Watson moved to Northampton ten years ago but kept in touch with Mr Pratt until about two years before she died. He says he didn’t really believe her when she said she would leave him something but then he got a phone call out of the blue from her solicitor. "I couldn't believe it when we found out she had left us everything. "I'm not sure how her family feel about it, but the solicitor was clear that she wanted me to have what she left." Mr Pratt has now been able to sell his taxi business and retire. Few people will want to leave everything to their taxi driver but everyone can have control over who inherits their estate. If you want to ensure your money goes to the people who matter to you then it is vital that you make a will. If you die intestate, that is without having made a will, then your estate will be divided in a way decided by the law. However, if you do make a will then you can specify exactly who gets what from your estate. That way you can ensure that the people who matter to you are properly provided for – whether it’s your spouse, your children, your favourite charity … or even your taxi driver. Please contact us if you would like more information about wills and probate. 5 Better rights for grandparents as Government sets up families task force The Government has set up a Childhood and Families Task Force to look at ways of providing better support for children, parents and grandparents. It will be chaired by the Prime Minister David Cameron and will examine ways to provide better protection for children in the event of a family breakdown. It will also cover several key areas that could help to improve family life including shared parental leave, extending the right to request flexible working and greater support for disabled children. The move was announced by the Deputy Prime Minister in a speech to Barnardo’s. He said: “Separation and divorce can be deeply traumatic for any family. We need to look at how we can protect children in the event of family breakdown; preventing breakdown where we can, making it as painless as possible where we can't.” There is already a review of family law underway which is looking at ways to use mediation between couples as a way of reducing the trauma both for parents and for their children. The Task Force will also look at ways to provide greater contact rights to non-resident parents and for grandparents too. As the law stands at the moment, grandparents have no automatic right to have contact with their grandchildren. This means they can face a difficult battle if a family breakdown means they are denied access by a son or daughter-in-law or even in some cases by their own children. The Task Force will try to address this. There is already evidence that the courts are increasingly willing to recognise the valuable role that grandparents can play in their grandchildren’s lives. In a major case, the Supreme Court recently ruled that a child would be better off living with his grandmother rather than be returned to his biological father. In another separate case, a grandmother won the right to be paid the full carer’s rate for looking after her granddaughter. These were important landmarks in recognising the role of grandparents and the new Task Force will try to improve the situation further, to the benefit of children, parents and grandparents. We shall keep clients informed of developments. In the meantime, please contact us if you would like more information about any aspect of family law. 6 Neighbours see red over colour of boundary railings A neighbour dispute that began as a disagreement over the colour of some railings on a boundary wall has been taken all the way to the Court of Appeal. The two families lived next door to each other in houses separated by an elevated area which was divided by the wall and railings. The two neighbours could not agree on a colour to paint the railings and this led to a dispute about who owned the wall and where the boundary lay. They could not agree and so the case was taken to the County Court. The judge decided in favour of one of the neighbours but that didn’t end the matter. The losing neighbour decided to continue with legal action. He took the case to the Court of Appeal which overturned the County Court decision and ruled in his favour. The issue was resolved by detailed analysis of the original deeds from the time the properties were built. The main issue for many people, however, will be how did such a relatively small disagreement lead to such prolonged and expensive court proceedings. Disagreements between neighbours are likely to occur from time to time but usually it is far better for all concerned if they are settled in an amicable way out of court. It is usually better if both sides consult a solicitor for legal advice as soon as it becomes clear that they cannot reach agreement between themselves. Solicitors will be able to advise on the legal position and this is often enough to help people make sensible decisions that prevent matters getting out of hand. If the two sides still can’t resolve the matter then a solicitor will be able arrange mediation so an agreement can still be reached that is fair to both sides and which prevents costs from spiralling out of proportion to the issue at stake. Please contact us if you would like more information about the issues raised in this article. 7 Will your insurers pay up if catastrophe strikes? A recent case in the Court of Appeal involving a landlord who lost thousands of pounds through fire damage because his insurance policy turned out to be invalid highlights the dangers of ignoring the small print in important documents. The landlord had insured one of his properties with a large insurance company. When the building was later ravaged by fire the insurers refused to pay out. It pointed to a clause that had asked if the premises were protected by a sprinkler system. At the time the policy was taken out it had been so the landlord answered yes. However, the tenant who rented the building from the landlord later disconnected the sprinkler system and it was inoperative at the time of the fire. The insurers were able to point to a clause in the policy which stated: “This insurance shall cease to be in force if there is any material alteration to the Premises or Business or any material change in the facts stated in the Proposal Form.” The landlord submitted that switching off the sprinkler was not a “material change” to the premises but the Court of Appeal ruled against him and so his insurance is invalid. Thousands of people find themselves in this position every year. Polices are taken out and conditions are agreed, but over time our circumstances can change and we may forget to keep up with the terms of our policies. For example, many people now have smoke alarms in their homes and this can help keep down insurance costs. However, you then have to make sure the alarms are kept in working order or your insurance could be affected. The same thing applies when you tell your insurers you have a burglar alarm. You should remember to put it on when you leave the house or you may find your policy is invalid if you are then burgled. Similarly, you could face problems if you tell your insurer that you keep your valuables in a safe but then leave them on the coffee table overnight. If you tell your insurer that your car is kept in a garage every night then make sure you abide by that. If you park it on the street because the garage is full of clutter then you may have problems if it is stolen. It’s easy to forget the exact terms of a policy as time goes by but it’s worth taking the trouble to check it occasionally. Otherwise, it could let you down just when you need it most. 8 Motorcyclist injured in collision receives £250,000 compensation A motorcyclist who was seriously injured in an accident when he was only 18 years old has been awarded £250,000 in compensation. The young man was crossing a roundabout when his machine collided with a car which had failed to give way. He fractured his scaphoid, a small bone in the wrist joint. He underwent bone grafting surgery and internal fixation but still found it difficult to perform simple tasks such as opening jars or using a knife. He took legal action on the basis that the car driver had been negligent in failing to give way on the roundabout. Liability was admitted. Compensation of £250,000 was agreed in an out-of-court settlement. This was to cover such things as suffering and loss of amenity, future loss of earnings and future care costs. Anyone who is injured as a result of someone else’s negligence is entitled to claim compensation. Please contact us if you would like more information about making a personal injury claim. |
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