All – Private & Commercial Litigation Solicitors | Insolvency Legal Advice | https://www.summitlawllp.co.uk James Edward & Associates Mon, 05 Feb 2024 17:13:00 +0000 en-US hourly 1 https://wordpress.org/?v=6.4.3 https://www.summitlawllp.co.uk/wp-content/uploads/2022/01/cropped-fav-icon-32x32.png All – Private & Commercial Litigation Solicitors | Insolvency Legal Advice | https://www.summitlawllp.co.uk 32 32 The Ultimate Legal Guide To Arbitration https://www.summitlawllp.co.uk/legal-guide-to-arbitration/ https://www.summitlawllp.co.uk/legal-guide-to-arbitration/#respond Mon, 05 Feb 2024 12:03:51 +0000 https://www.summitlawllp.co.uk/?p=20146
In this practical guide, we have outlined everything you need to know about arbitration. This covers all important topics including: how arbitration is initiated, the arbitration process, alternatives to arbitration, and so much more.

What is arbitration?

An alternative to court litigation, arbitration is a method of alternative dispute resolution (ADR). With arbitration, the parties involved in a legal dispute agree to submit their case to a neutral third party called an arbitrator. Subject to what the disputing parties have agreed, an arbitration tribunal may consist of one or more arbitrators. 

The arbitrator (or panel of arbitrators) considers the arguments, examines the evidence, and then makes a binding award. Arbitration differs from other forms of ADR (e.g. mediation and conciliation) in that it provides a legally binding decision. Arbitration is the preferred choice for many businesses – especially where international contracts are involved – as it allows for a final decision and an impartial tribunal for the dispute.

A consensual process that both parties must agree to, arbitration is used in various types of disputes, including commercial matters, construction disputes, and more. While parties can agree to arbitration after a dispute has arisen, many commercial contracts include arbitration clauses. These clauses specify that any disputes arising from the contract will be resolved through arbitration.

In 2023, the international arbitration landscape is dominated by macroeconomic factors. The inflationary pressures combined with price volatility and the use of sanctions by governments following Russia’s invasion of Ukraine have caused serious difficulties for businesses across the globe. This is leading to a proliferation of disputes across a wide range of sectors as businesses seek to recoup some of their pandemic losses through arbitration. Chambers & Partners 2023

Do you need legal advice with arbitration?

Getting to grips with arbitration law can be difficult, and if you are considering arbitration to resolve your dispute, it is easy to get overwhelmed. This is where our specialist arbitration lawyers can step in to support your business and achieve the most desirable outcome.

  • Commercially astute – With an eye on your bottom line, we ensure any disputes are resolved as quickly and cost-effectively as possible. We also provide an affordable service with various flexible payment options.
  • Specialist advice – We use all our skills and expertise to resolve your legal problems swiftly and satisfactorily. Where we do not believe arbitration is right for you and your business, we offer other dispute resolution methods, such as mediation and litigation.
  • Dispute resolution experts – Our highly skilled litigation solicitors know what it takes to get a successful conclusion via arbitration.
  • Industry recognition – We have been awarded the prestigious Lexcel Accreditation status, demonstrating our commitment to client care.

Our expert arbitration solicitors provide legal services for individuals and businesses in London, the UK, and across the globe. To book your free consultation, simply call us today on +44 7441912822 or complete the enquiry form on this page.

The arbitration process

The arbitration process is not necessarily the same in each case. A lot depends on the rules/processes agreed upon, and where the dispute is being heard. Nevertheless, the arbitration process typically involves several key stages, including:

  1. THE ARBITRATION AGREEMENT
    Before the arbitration process begins, the parties involved must agree on the process to be followed, the arbitrators, the legal seat, the language to be used, the parameters for the award, and anything else that might be relevant.

    This is then set out in an arbitration agreement. Things likely to be included in the arbitration agreement are:

    • Who the arbitrators will be, and whether the tribunal will comprise one person or three
    • How the disputing parties will select the arbitrators
    • Where the arbitration will take place
    • The ‘legal seat ‘. This isn’t necessarily where the arbitration will physically take place. Instead, it establishes the procedural laws which will apply
    • The legislative framework. E.g. whether institutional or ad hoc rules will apply. With institutional arbitration, the parties follow the rules of a specific institution, for example, the ICC or LCIA (amongst others).
  2. HOW IS THE ARBITRATION INITIATED?
    To initiate arbitration, a claimant must make a “Request for Arbitration”. The respondent then has a set period to file their response (also referred to as “Answer to the Request for Arbitration”).

    Once the initial paperwork has been served, the tribunal will be appointed and an initial pre-hearing conference will take place to set out the steps and timetable.At this stage, both parties (with the help of their arbitration lawyers) should collate all the evidence needed to present their case at the final hearing, make any necessary disclosures, and finalise the pre-tribunal paperwork.

  3. THE ARBITRATION HEARING
    The arbitration hearing will consider the dispute. Some hearings take place on paper, while others require both parties to attend and make statements. As such, some arbitration tribunals take just a few hours, while others can take weeks or even longer.


    After everyone has presented their case, the tribunal will consider the case and make an award. The arbitrator may make this decision in a day, or it could take considerably longer depending on the complexity of the issues involved. Ideally, the arbitrator should deliver the award within six months.

  4. THE AWARD
    After the hearing, the tribunal will make a final decision. This ruling is known as the arbitration award. The arbitration award is legally binding and sets out the arbitrator’s decision on the issues being considered. The award also determines the rights and obligations of the parties involved.

    A party can ask the court to enforce the award if the other party ignores it.There is no fixed or average amount for arbitration awards. Awards can range from relatively small amounts to significant sums, depending on the specific facts and circumstances of each case. Furthermore, claimants may seek relief beyond monetary damages, such as a specific action or injunctive relief.

    Up until now, the largest arbitration award continues to be the 2014 ruling where Russia was ordered to pay $50 billion to the former shareholders of OAO Yukos Oil Company. You can read more about the Yukos Oil vs Russia case here.

Top 5 benefits of litigation

  1. Discovery.
    Litigation allows for more extensive discovery than arbitration. This can help in uncovering evidence and building a comprehensive case.
  2. Right to Appeal.
    Parties have the right to appeal a court decision to a higher court if they believe there was an error in the legal process or judgment. It is only possible to appeal an arbitration award in very limited circumstances.
  3. Transparency.
    Unlike arbitration, litigation is typically a matter of public record, with court proceedings, filings, and judgments publicly accessible. This provides transparency and accountability, which can be advantageous in certain cases.
  4. Enforcement.
    Litigation court mandates both parties to be cooperative, while arbitration has no inherent power or jurisdiction in commercial disputes. However, the ease of enforcement depends on the legal framework and international conventions in place.
  5. Remedies.
    Certain legal remedies available via the court, such as specific types of injunctions, may not be within the authority of arbitrators.

Can an arbitration decision be appealed

It is only possible to appeal an arbitration award in very limited circumstances. For example, permission to appeal may be sought if:

  • The arbitrator or tribunal did not conduct itself properly
  • Serious irregularities took place
  • A question of law arose.

If the appeal is successful, the award could be set aside, or the case may need to return to the arbitrator for review.

What are the benefits to arbitration?

Arbitration offers several compelling benefits as a method of dispute resolution, making it an attractive alternative to traditional litigation. Some of the key advantages of arbitration include:

  • Control. Unlike with litigation, both parties can collectively choose their arbitrator, the rules governing the process, and the location of the arbitration.
  • Cost-effectiveness. Arbitration can be more cost-effective than litigation. The streamlined process and quicker resolution often result in lower legal fees and expenses. The parties can also save on court fees and other associated costs.
  • Faster.  Arbitration is more straightforward than traditional court litigation. Because everyone agrees to the rules in advance, the process can be streamlined, and parties have more control over the schedule.
  • Expertise. Arbitrators are often chosen based on their expertise in the disputed subject matter, leading to more informed and specialised decisions.
  • Enforceability. Due to international agreements (e.g. the New York Convention), arbitration decisions cannot be challenged except in very specific and limited circumstances.
  • Neutrality. Arbitration provides a neutral forum to resolve disputes. This is particularly useful in cross-border cases. In some cases, arbitrators of different nationalities may be appointed to the tribunal (including one from the jurisdiction of each party).
  • Confidentiality. Unlike with court proceedings, arbitration hearings are usually private, with the evidence and award kept confidential. 

To learn about the key differences between arbitration and litigation to resolve business disputes, please read our dedicated post on “arbitration vs litigation”.

What are the disadvantages to arbitration?

While arbitration offers several advantages, its appropriateness depends on the specific circumstances of a case. We can advise you on the pros and cons of arbitration when including arbitration clauses in contracts, or when looking for the best dispute resolution method.

Disadvantages of arbitration include:

  • Limited right to appeal. The grounds for challenging an arbitration award are more limited than challenging a court judgment, which can be a disadvantage if the award is not in your favour.
  • Difficulties with enforcement. While arbitration awards are generally easier to enforce internationally, the process can still be complicated, especially in jurisdictions that do not fully recognise and enforce foreign arbitration awards.
  • Costs. While arbitration is considered cost-effective compared to litigation at court, mediation can be even more cost-effective and thus more suitable for less complex disputes.
  • Limited remedies. Certain legal remedies available in court, such as specific types of injunctions, may not be within the authority of arbitrators.

Arbitration facts & stats

  • In 2014, an arbitration award of over US$50 billion in damages was awarded in the case of Yukos shareholders v. Russia. As of Jan 2024, this was the largest arbitration award on record, with appeals continuing.
  • Technology and AI are impacting the arbitration landscape, with a proliferation of a new type of dispute involving digital assets, blockchain, and fintech. (Chambers & Partners 2023)
  • The areas that are seeing the most disputes are construction, the energy sector and transport and commodities. Chambers & Partners 2023
  • The number of arbitration cases globally has been steadily increasing over the last few years.
  • Most leading arbitral institutions reported a record – or close-to-record – caseload in 2023. Chambers & Partners 2023

The alternatives to arbitration

Disputes must be resolved as quickly and effectively as possible to minimise the potential disruption. Arbitration is one option that you can use to help do this, but it is only suitable for some situations.

At James Edward & Associates, we provide specialist legal advice to ensure you understand all the options available to you, including:

  1. LITIGATION 
    As arbitral tribunals have no inherent power or jurisdiction in commercial disputes, some companies prefer traditional litigation over arbitration. In addition, there are cases where an aggressive court-based strategy is required. Furthermore, some companies like the procedural safeguard of an appeal, so avoid arbitration due to its final and binding nature.
  2. MEDIATION
    With mediation, the disputing parties try to settle their dispute with the help of an impartial mediator. Both sides will usually be in the room as the mediation occurs. Should an agreement be reached via mediation, it is not legally binding.

How are arbitrators appointed?

The appointment of arbitrators depends on the arbitration agreement between the parties, the institutional rules, and the applicable laws. As the arbitrator must be neutral, standard methods for appointing arbitrators include:

  • The disputing parties choosing one arbitrator each. The two arbitrators select a third neutral arbitrator to form a panel of three.
  • Choosing from a list of qualified arbitrators, provided by an arbitration institution. If the parties cannot agree or the arbitration agreement specifies an institutional appointment, the institution may appoint the arbitrators. 
  • Agreeing a method for appointing arbitrators in the arbitration agreement. This could include selecting arbitrators from a pre-established list, using a particular appointing authority (e.g. the Law Society), or following specific procedures outlined in the agreement.
  • The court can appoint an arbitrator if necessary.

The arbitrator (or arbitration tribunal panel) selected will likely have in-depth expertise in the disputed issues, sector, technicalities, etc.  Appointing a sole arbitrator is the less expensive option. However, in more complex cases, three arbitrators are recommended to ensure the necessary level of strategic thinking, debate, and consideration.

How to commence arbitration proceedings

Depending on whether or not there is an arbitration clause in your commercial contract, steps may have to be followed before arbitration can be initiated. For example, the contract may require informal attempts to resolve the dispute or mediation to take place.

To formally commence the arbitration process, a claimant must make a Request for Arbitration/ Notice of Arbitration. This request will include:

  • A summary of the dispute
  • The parties involved
  • The claim(s) being made
  • The resolution being sought
  • The claimant’s choice of arbitrator(s) and preferred seat and language. 

The respondent has a set period to file their Answer to the Request for Arbitration. This is not an in-depth response, but should include:

  • The initial response to the claimant’s request, including the choice of arbitrators, law, and language
  • Any counterclaims being made (the claimant will then provide a reply to these). 

If you wish to serve a Notice of Arbitration or have received such notice, we can advise you on the next steps.

Arbitration – FAQs

Yes, arbitration clauses are generally enforceable. The Courts recognise arbitration as a valid and alternative means of dispute resolution. However, there are some legal grounds through which a party may challenge the enforceability of an arbitration clause. These include fraud, coercion, lack of capacity, or undue influence during contract formation.
Yes, arbitration hearings tend to be private, with the evidence kept confidential. The parties can also ensure that the arbitrators do not disclose any information. However, if parties want to guarantee confidentiality, they should add a relevant clause in their arbitration agreement. In comparison, court documents and hearings are generally public
Yes, arbitrators may have the authority to issue injunctive relief or interim measures. The extent of this power depends on the applicable law, the arbitration agreement, and the rules governing the arbitration. In some jurisdictions, arbitrators may seek assistance from the courts to enforce or provide injunctive relief.
Generally, the finality of arbitration means you cannot appeal the arbitration award in court. However, there are limited circumstances in which a party may seek court intervention after arbitration. Such circumstances may include fraud, corruption, and arbitrator misconduct.
Yes, arbitration differs from other forms of ADR (e.g. mediation) in that it provides a legally binding decision.
Some arbitration tribunals take just a few hours, while others take weeks or even longer. While most arbitration cases are resolved quickly, some complex and substantial international disputes take over a year.
Yes, arbitration is a consensual process, which means both parties must agree to resolve their dispute via arbitration. This agreement may be set out in a commercial contract, or by entering a separate arbitration agreement.

Contact our arbitration lawyers today

James Edward & Associates’s arbitration lawyers have over 20 years experience settling commercial disputes for our clients. This includes arbitration cases seated in the UK and across the world. Our approach is based around non-confrontational dispute resolution, and we strive to make the process as simple and stress-free as possible.

We can help draft arbitration clauses in new commercial contracts, advise on the appointment of arbitrators, and steer you through the entire arbitration process to ensure the best possible outcome.

For the best arbitration legal advice, book your free consultation today by calling +44 7441912822 or simply complete the enquiry form on this page.

]]>
https://www.summitlawllp.co.uk/legal-guide-to-arbitration/feed/ 0
Arbitration vs Litigation https://www.summitlawllp.co.uk/arbitration-vs-litigation/ https://www.summitlawllp.co.uk/arbitration-vs-litigation/#respond Mon, 05 Feb 2024 11:01:43 +0000 https://www.summitlawllp.co.uk/?p=20110

Finding an efficient and cost-effective resolution for your commercial disputes not only preserves time and resources but also shields you from significant stress. While litigation is a widely recognised approach for resolving such disagreements, it’s not your only option.

Arbitration – a method of alternative dispute resolution (ADR) – offers an alternative avenue for securing a legally binding decision in business disputes. But, when it comes to litigation vs arbitration, which is best?

Unfortunately, there is no straightforward answer to this question. While arbitration offers several advantages, its appropriateness depends on the specific circumstances of each case. And in some instances, a robust court strategy is the best approach.

In this quick guide, we take a look at the pros and cons of arbitration vs litigation to identify the best approach for your particular circumstances.

What is arbitration?

Arbitration is a viable alternative to court litigation. Through this ADR method, parties embroiled in a legal dispute willingly choose to present their case before an impartial third party, known as an arbitrator (or a panel of arbitrators). The arbitrator makes a judgement based on the evidence presented at a tribunal. Unlike other ADR methods, such as mediation, arbitration culminates in a legally binding award.

Many commercial contracts proactively incorporate arbitration clauses, which dictate that any disputes will be subject to resolution through arbitration. If you are subject to such a clause, it is unlikely that you will be able to opt for litigation instead of arbitration.

Today, arbitration is being used to settle a wide range of disputes, and over the last few years, it has become increasingly popular. Indeed, most leading arbitral institutions reported a record – or close-to-record – caseload in 2023.

To learn more about arbitration as a form of ADR, please read our arbitration legal guide here.

Top 5 benefits of arbitration

  1. Choice.
    Both parties can jointly choose their arbitrator, the rules governing the process, the site of the arbitration, and more.
  2. Cost.
    Arbitration tends to be less costly than litigation. The efficiency of the process often results in a speedier resolution, resulting in reduced legal fees and expenses.
  3. Speed.
    Most arbitration cases are resolved quicker than traditional court litigation.
  4. Expertise.
    When pursuing litigation via the court, the appointed judge may not have a complete understanding of the technicalities involved. Arbitrators are often selected due to their expertise in the disputed subject matter.
  5. Privacy.
    Unlike with court proceedings, arbitration hearings are usually private, with the evidence and award confidential.

What is litigation?

Litigation is the traditional and best known method of dispute resolution. It involves one party taking legal action against another. With litigation, a judge will hear your case and provide a legally binding ruling. 

The goal of litigation is to obtain a legal remedy, such as monetary damages, a specific action, or injunctive relief. With litigation, proper legal representation is necessary to ensure all the required documents are in order and to present the most robust possible case in court.

Litigation is often considered to be “the last resort” in dispute resolution, and the courts encourage the parties involved to resolve any disputes between themselves wherever possible. Where efforts are not made to do so, the court may penalise the unwilling party (e.g. make them pay all the legal costs).

Litigation is the traditional and best known method of dispute resolution. It involves one party taking legal action against another. With litigation, a judge will hear your case and provide a legally binding ruling. 

The goal of litigation is to obtain a legal remedy, such as monetary damages, a specific action, or injunctive relief. With litigation, proper legal representation is necessary to ensure all the required documents are in order and to present the most robust possible case in court.

Litigation is often considered to be “the last resort” in dispute resolution, and the courts encourage the parties involved to resolve any disputes between themselves wherever possible. Where efforts are not made to do so, the court may penalise the unwilling party (e.g. make them pay all the legal costs).

Top 5 benefits of litigation

  1. Discovery.
    Litigation allows for more extensive discovery than arbitration. This can help in uncovering evidence and building a comprehensive case.
  2. Right to Appeal.
    Parties have the right to appeal a court decision to a higher court if they believe there was an error in the legal process or judgment. It is only possible to appeal an arbitration award in very limited circumstances.
  3. Transparency.
    Unlike arbitration, litigation is typically a matter of public record, with court proceedings, filings, and judgments publicly accessible. This provides transparency and accountability, which can be advantageous in certain cases.
  4. Enforcement.
    Litigation court mandates both parties to be cooperative, while arbitration has no inherent power or jurisdiction in commercial disputes. However, the ease of enforcement depends on the legal framework and international conventions in place.
  5. Remedies.
    Certain legal remedies available via the court, such as specific types of injunctions, may not be within the authority of arbitrators.

How does arbitration differ from litigation?

Arbitration and litigation are both legally binding methods of resolving legal disputes, but they differ in several key aspects. The primary being that arbitration is a form of ADR, whereas litigation involves going to court.

But that’s not the only distinction. The nature of the process, the decision-makers, and the enforceability of outcomes differ between arbitration and litigation. As such, it’s important to consider the advantages and disadvantages of each before deciding on the most suitable approach for your particular situation.

Here are some other crucial distinctions between arbitration and litigation:

  • The decision maker. While litigation is overseen by a state-appointed judge, the arbitration tribunal is selected by the disputing parties or a relevant institution.
  • The law. With litigation, the law of the country where the dispute takes place will apply. With arbitration, the law can be chosen by the disputing parties. Alternatively, an award can be made according to what the arbitrators perceive to be fair, regardless of any national laws.
  • The process. Litigation is a formal legal process as set out by the courts. Arbitration is more flexible and informal, and it often involves more streamlined procedures and processes.
  • Speed and efficiency. Litigation can be time-consuming, especially when points of law are challenged or an appeal is made. The formalities of the court system may also contribute to a longer timeframe for resolution. Arbitration can be quicker than litigation with agreed timetables, fast-track options and a binding decision (in most cases).
  • Privacy. Court proceedings are generally open to the public unless a court orders otherwise. In most cases, arbitration, the fact it is happening, and the award can be kept private.
  • Enforceability. Litigation court mandates both parties to be cooperative, while arbitration has no inherent power or jurisdiction in commercial disputes. However, The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards facilitates the enforcement of arbitration awards in over 160 countries.
  • Costs. Litigation costs can be high due to formal court procedures, discovery processes, and potential trial expenses. Parties may also incur fees related to court filings and other legal requirements. While arbitration can be more cost-effective, both parties must pay legal fees, the arbitrators, the hearing venue, and other costs.

Arbitration vs Litigation: Which is right for your business?

Determining whether arbitration or litigation is suitable for your business depends on various factors. Arbitration is preferable in certain commercial disputes, while litigation is often more suitable for cases requiring a formal legal process.

You must carefully consider the advantages and disadvantages of each method, but you don’t have to do this alone. At James Edward & Associates, we ensure you understand the pros and cons of each approach.

Amongst other things, we will consider:

  • The nature and complexity of the dispute
  • The likely enforceability of any award
  • Any privacy concerns you might have
  • Your budget and cost sensitivity
  • How the dispute is likely to affect your business
  • Whether you want to maintain an ongoing relationship with the other party.

Ultimately, we will carefully assess your business’s specific needs before recommending the best approach, tailored to your circumstances.

Let us take it from here

At James Edward & Associates, our dedicated team of arbitration lawyers provides experienced, practical, and commercial guidance and representation in arbitration and litigation cases. With a focus on achieving the most desirable result for your business, our team possesses extensive expertise in achieving a swift, successful resolution.

Favouring a non-confrontational approach, we emphasise mediation and arbitration over litigation wherever possible. Our team comprises ADR specialists, and we have stacks of experience helping our clients achieve a favourable resolution without having to go to court.

Ultimately, we aim to ensure a swifter and cost-effective process, allow parties to maintain positive relationships, and ensure a less stressful resolution process for everyone involved.

Our expert solicitors provide legal services for individuals and businesses in London, the UK, Europe, Middle East, South America, and the USA. To find out more, contact us today on 
+44 7441912822 or complete our website enquiry form for your free initial consultation.

]]>
https://www.summitlawllp.co.uk/arbitration-vs-litigation/feed/ 0
A legal guide to property disputes https://www.summitlawllp.co.uk/legal-guide-to-property-disputes/ https://www.summitlawllp.co.uk/legal-guide-to-property-disputes/#respond Mon, 22 Jan 2024 04:26:47 +0000 https://www.summitlawllp.co.uk/?p=20025
Property ownership offers many financial and commercial advantages to businesses and individuals. However, it also comes with the potential for disagreements. A property dispute can be financially challenging and emotionally draining, so resolving any issues as quickly and effectively as possible is essential.

If you are involved in a property dispute – whether you are a developer, an investor, a landowner, a property manager, or landlord – this comprehensive legal guide is designed to help you navigate the intricacies of the situation, and reach a satisfactory resolution.

Key property dispute statistics

Whether it’s a dilapidation dispute between a residential landlord and tenant, a commercial tenant facing rent arrears, a disagreement regarding lease renewal, or a conflict over a boundary or right of way, property disputes have the potential to be both costly and time-consuming.

  • More than half of landlords have had disputes with their tenants. (Statistica)
  • In 2021-22 the three tenancy deposit schemes in England and Wales issued 31,276 adjudications representing an increase of 1,579 from the previous year. (TDS)
  • Over two thirds (67%) of landlords who evicted tenants or asked them to leave in 2021 used a section 21 notice. (Gov.UK)
  • The most common reason landlords ended a tenancy was that the tenant was in arrears (46%). (Gov.UK)
  • 39% of landlords chose to end a tenancy because the property was not cared for and 32% because the tenant engaged in anti-social behaviour. (Gov.UK)
  • Over half of commercial property is let to tenants. (British Property Foundation)
  • 19% of residential landlords are considering commercial property, with more than a third citing diversifying from residential investment as the key reason for doing so (Shawbrook
  • In 2021, the UK saw the average construction dispute value increase to £27.7 million, an increase of 117% from 2019. (Arcadis)

A breach of contract is not a criminal offence. But there are legal steps you can take to resolve the matter by liaising with experienced breach of contract solicitors.

Types of commercial property disputes

Several factors can cause commercial property disputes, and these conflicts can quickly evolve into costly and complex litigation. As such, whether your property portfolio consists of a few units, a large commercial building, or even whole business/retail parks, it is vital to do everything you can to resolve any issues early and mitigate the impact on your operations. Understanding the common pitfalls can help you to avoid such disputes.

  1. Service charge disputes
    Tenants often pay service charges to cover the costs of maintaining and providing services to a property. Set out in a lease or tenancy agreement, these charges are one of the main areas of dispute between leaseholders and landlords – especially as the fees can be variable and unpredictable.

    Typical service charge disputes initiated by tenants encompass issues such as the calculation of service charges, the reasonableness of associated costs, and the quality of services provided.

    Service charge disputes also occur when tenants do not pay the fee on time. Where a leaseholder falls into arrears, the landlord will seek recovery of any monies due to ensure standards are maintained. However, recovering such arrears is not always a straightforward process.

  2. Leasehold disputes
    If you own a leasehold property, you have an agreement from the freeholder to use the home/unit for a set number of years. However, leases are complicated documents to understand, and a lack of understanding over the rights and responsibilities of both parties can lead to disputes.

    Common disputes between leaseholders and freeholders include:

    • Service charge disputes
    • Lease extensions
    • Breaches of lease
    • Lease forfeiture and possession
    • Ground rent arrears
    • Nuisance actions
    • Repairs and maintenance
    • Leasehold enfranchisement

    The UK government is planning to ban leasehold houses, with the housing secretary promising to stop the “feudal” system of freeholders maintaining control over properties. At present (December 2023), the proposed ban does not extend to flats, which currently make up about 70% of all leasehold properties. Nevertheless, under the new legislation, all statutory lease extensions will be for an additional 990 years, rather than the current 90 years for flats and 50 years for houses.

  3. Dilapidations
    A landlord might make a dilapidation claim at the end of a lease, where the tenant has not addressed any disrepair or damage to a property that they are legally obligated to put right. A claim may also arise mid-tenancy for breach of repair covenants.

    Common dilapidation disputes include over the extent of the repairs required or the cost of addressing dilapidations. In most cases, resolving the dispute will require looking at the lease terms and providing evidence of the initial and current condition of the property.

    The Dilapidations Protocol sets out the process for making claims for damages against tenants at the termination of a tenancy. The Protocol aims to help landlords and tenants resolve their dilapidation disputes and avoid litigation by agreeing to a settlement before legal proceedings begin.

  4. Development disputes
    Development disputes may arise between developers, contractors, planners, or other parties involved in the development process. In a dynamic and often challenging environment, development disputes are an all-too-common occurrence.

    Common development disputes may relate to:

    • Delays (leading to associated loss and expense)
    • Outstanding payment/non-payment
    • Boundary disputes
    • Poor quality work or defective workmanship
    • Property damage
    • Changes in project scope
    • Planning permission issues
    • Building control issues
    • Post construction issues.

    With different parties and complex contractual terms in the mix, even a simple matter can escalate to disrupt projects, strain budgets, and sour relationships. Often, the quickest and best way to settle a development dispute is through open communication between the parties. Where that is not enough, legal advice is recommended.

  5. Landlord insolvency
    When a residential landlord becomes insolvent and cannot pay their debts, this can have a profound impact on their tenants. Disputes may arise over the handling of the property, security deposits, and ongoing tenancy arrangements. In some cases, the property may be put up for sale at the liquidator’s request.
    • If the tenancy is binding. The new owner becomes the landlord and will need to go through a separate eviction process under the terms of the tenancy agreement if they want to get rid of the tenant.
    • If the tenancy is not binding. The tenant can delay the eviction by two months to provide time to find somewhere to live. If the lender does not agree to the extra time, the tenant should apply to the court to order the lender to delay possession.

    A commercial tenant will likely hear about their landlord’s insolvency from the appointed insolvency practitioner. Eviction is by no mean the norm following landlord insolvency, but legal advice should be sought by commercial tenants in such circumstances to ensure their rights are protected.

  6. Rent arrears
    Rent arrears disputes occur when tenants fail to pay rent as stipulated in their lease agreements. When a residential tenant can no longer afford to pay and refuses to vacate the property, landlords may take legal action to recover the unpaid rent. However, we advise landlords to first talk to their tenants to attempt to resolve the matter amicably. Where eviction proceedings are necessary, the landlord should contact a lawyer to serve a Section 8 Notice for rent arrears.

    When a commercial tenant falls into rent arrears, a number of remedies are available to the landlord. These include forfeiture, possession proceedings, arrears recovery, eviction, statutory demand, and winding-up proceedings. However, early communication is recommended as some of these options can have devastating consequences for the tenants and their ability to continue to trade.

    While legal action can help persuade the tenant to settle the arrears, if pursued the wrong way, it can irreparably damage the relationship between the parties. Therefore, any proceedings against commercial and residential tenants must be handled correctly.

Common types of residential property disputes

Residential property disputes can be challenging and stressful. But a word of warning! While taking matters into your own hands can be tempting, you must ensure any resolution complies with the latest regulations, or you could find yourself on the wrong side of the law.

  1. Boundary disputes
    Boundary disputes arise when there is disagreement or uncertainty about the exact location of the lines between neighbouring properties. With the ability to negatively impact the value of all the properties involved, these disputes can quickly become emotionally charged.

    While you can sometimes avoid conflict with clear communication, determining property boundaries often requires expert legal support to correctly interpret deeds, historical records, local laws, potential shared rights, and title issues.

     

    Where the disputing parties cannot reach an agreement and the documentation is questionable, early mediation and legal assistance can stop a bad situation from escalating.

  2. Landlord and tenant disputes
    Landlord and tenant disputes can occur over a range of issues, including rental agreements, property maintenance, and other lease terms. Common issues that can lead to landlord and tenant disputes include:

     

    • Rent arrears
    • Property damage
    • Eviction
    • Lease violations
    • Security deposits.

    Mediation can often help resolve landlord/tenant disputes before eviction is necessary.

    The Renters’ (Reform) Bill forms part of the government’s wider levelling-up strategy (and was mentioned in the 2023 King’s Speech). It aims to provide “safer, fairer, and higher-quality homes” for tenants. Landlords and tenants should ensure they understand how the Bill will impact them.

  3. Construction disputes
    Tensions between clients, project owners, contractors, subcontractors, and suppliers can lead to construction disputes. As well as holding up progress and costing a lot of money, such disagreements can damage property projects, business relationships, and reputations. Common construction disputes include:

     

    • Contract issues (usually due to poorly drafted contracts)
    • Non-payment/under-payment
    • Poor quality work
    • Change of finish date
    • Mistakes in design
    • Regulatory disputes.

    With various stakeholders in the mix, the consequences of a construction dispute can have knock-on repercussions. Practical legal support can help you to resolve any disputes quickly, without compromising on the outcome you need.

  4. Restrictive covenants
    Restrictive covenants are legal obligations written into property deeds that limit the way land and buildings can be used. Often, restrictive covenants are introduced when somebody is selling land and wants to restrict what the buyer can do with it.

    The obligation to comply with a property-related restrictive covenant remains, no matter how often the land changes hands or how long ago the covenant was introduced. This can lead to frustration when someone buys the land and wants to change how it is used. Disputes often arise when a property owner violates or seeks to challenge the terms of a restrictive covenant.

     

    It may be possible to remove a disputed restrictive covenant, particularly if it is deemed obsolete due to ‘changes in the character of the property or the neighbourhood or other circumstances’ or if the restriction impedes the reasonable use of the land.

  5. Party wall disputes
    Party wall disputes occur when neighbouring property owners disagree over shared walls, structures, or other boundaries. In 2022, over six million Britons were involved in boundary disputes, with the most common property boundary issues involving a fence, wall, or hedge (31%), a plant or tree (14 %), access issues (13%) (Churchill Home Insurance 2022).

    In England & Wales, the Party Wall Act outlines procedures for resolving such disputes. The Act does not apply to Scotland or Northern Ireland.

     

    Whether you’re a property owner, a real estate professional, or someone involved in a land-related conflict, we have created a helpful guide to help you understand the intricacies of boundary disputes.

  6. Right of way disputes
    An ‘easement’ gives one party specific rights to use or access a portion of a property owned by someone else (e.g. a shared driveway or pathway). You don’t have to have permitted the use of your land, if a neighbour has used your land for 20 years or more, they could have acquired a legal right of way.Right of way disputes occur where there is a disagreement between property owners regarding the right to use a pathway, road, or access route over another’s land.

     

    Such disputes can arise where one or both neighbours are unclear about the nature of the right of way and the benefit or burden that applies to them. Resolution may involve negotiation, mediation, or legal action to clarify and enforce.

The benefits of resolving property disputes early

When property disputes become drawn out, they can become acrimonious. In such situations, the emotional toll can be detrimental to everyone involved. In addition, where a dispute is protracted, costs can quickly mount up.

As such, it’s not only essential to get the proper resolution to a property disagreement, but also to get it as quickly as possible to minimise the long-term adverse effects.

We always recommend seeking an early resolution to keep matters out of court, prevent unnecessary disruption, and save money. And there are a few ways to do this – including via alternative dispute resolution (ADR).

Consider ADR to resolve your property dispute

Whatever type of property dispute you are involved in, whether residential or commercial, there are several options available to you when making a property dispute claim. Legal action is not always the best solution, and depending on the nature and complexity of the matter, ADR may be more suitable.

Helping disputing parties reach a legally binding decision, ADR allows greater flexibility when it comes to the overall resolution (courts are bound by specific regulations and outcomes). ADR can also be less costly than going to court, and resolution can be achieved much quicker.

The most common methods of ADR include:

  1. Mediation
    With mediation, the disputing parties try to settle their property dispute with the help of an impartial mediator. Both sides will usually be in the room as the mediation occurs. Should an agreement be reached via mediation, this is not mandatory. However, if everyone agrees, the decision can be made into a legally binding order.
  2. Arbitration
    More formal than mediation, arbitration provides a final and binding decision to a property dispute. As such, it is often the preferred choice to resolve commercial property clashes. With arbitration, a qualified arbitrator will consider the dispute before making their ruling. The arbitration process will likely occur without both parties having to be in the same room.

When is litigation necessary in property disputes?

There are specific circumstances where litigation may be necessary in property disputes. For example, where:
  • The chances of a settlement/agreement via ADR are very unlikely
  • Attempts at negotiation or mediation have failed to produce a resolution acceptable to both parties
  • There are highly complex legal issues that cannot be easily resolved through alternative dispute resolution methods
  • The parties have opted for litigation to have the matter adjudicated by a court
  • Immediate action is needed, such as preventing construction on a property, addressing urgent maintenance issues, stopping a party from violating property rights, or another form of injunction is needed
  • Disputes arise over the interpretation of legal documents, such as leases, restrictive covenants, or easements, and parties cannot reach an agreement through negotiation or mediation
  • The court is required to enforce a judgment that has already been issued, especially if the other party fails to comply voluntarily.

How does the court deal with property disputes?

In England and Wales, there is a process to follow if you want your property dispute to be handled through the court system.

Pre-Action Protocols
Before initiating court proceedings, the disputing parties are encouraged to follow pre-action protocols. These are guidelines that promote early communication and negotiation to resolve disputes without going to court.

Issuing a Claim
The party wishing to start court proceedings (the claimant) typically issues a claim form outlining the details of the dispute. The claim is then served on the other party (the defendant). Proper legal representation will ensure all the required documents are in order, whether you are issuing or responding to a claim.

Preparation
While you await a court date, you should establish your legal position. While each case is different, typically, this would involve carefully reviewing any contracts to establish the agreed obligations and assessing any damages suffered. It may also be in your best interests to continue to attempt to resolve the dispute amicably through negotiations.

Court action
The court will schedule a hearing where both parties present their cases, aided by their property dispute solicitors. Witnesses and evidence will be used to support each party’s case and assertions. As such, you must keep a record of all relevant communications, including formal meetings and face-to-face conversations (that might be relevant to your case). The judge will consider the evidence and legal arguments presented by each side and make a decision based on the evidence presented.

Do you need legal advice from property dispute solicitors?

Whether you need legal advice from property dispute solicitors depends on the nature and complexity of the dispute, but legal advice is almost always recommended. Here are some reasons why you should consider appointing a property dispute solicitor:

  • To understand your rights and obligations. Property law can be complex, and individuals may not fully understand their rights and obligations without legal guidance. Solicitors can provide clarity on your legal position and help you make informed decisions.
  • To deal with complex disputes. If the property dispute involves complex legal issues, intricate contractual matters, or questions of property rights, seeking legal advice is advisable. 
  • To help with legal procedures and documentation. Property disputes often involve legal procedures, court filings, and the interpretation of legal documents such as leases, contracts, or deeds. Legal professionals can provide guidance on the proper steps to take and help with document review.
  • To reach an early settlement. Solicitors are skilled negotiators and can assist in settlement negotiations. They can advocate on your behalf, ensuring that any settlement reached is fair and protects your interests.
  • To help with ADR. If you are considering alternative dispute resolution methods like mediation or arbitration, legal advice is valuable. Solicitors can assist in preparing for ADR processes, ensuring your rights are protected.
  • To represent you in court. If the dispute reaches the court stage, having legal representation is highly recommended. Solicitors can present your case, navigate court procedures, and ensure that your interests are effectively represented.
  • To prevent future disputes. Legal advice can also be beneficial in preventing future disputes. Solicitors can help draft clear and enforceable contracts, review lease agreements, and provide guidance to minimise the risk of disputes arising.

Unsure whether you need legal advice? Book an initial consultation with our property dispute solicitors today. During this session, you can discuss the details of your case, and our highly experienced team will provide guidance on the best course of action to achieve the desired result.

Whatever property dispute you are involved in, seek advice as soon as possible to increase the chance of a quick resolution. Call us today on +44 7441912822 or complete our website enquiry form, and one of our property litigation lawyers will contact you to discuss how we can help you.

]]>
https://www.summitlawllp.co.uk/legal-guide-to-property-disputes/feed/ 0
A legal guide to breach of contract and contract disputes https://www.summitlawllp.co.uk/legal-guide-to-breach-of-contract/ https://www.summitlawllp.co.uk/legal-guide-to-breach-of-contract/#respond Thu, 14 Dec 2023 10:05:04 +0000 https://www.summitlawllp.co.uk/?p=19947
Contracts are fundamental to business and the legal system. Defining the rights and obligations of the parties involved, and ensuring their interests are protected, carefully written contracts are always recommended because they provide a clear record of the agreed terms.

They are also easier to enforce should a breach of contract occur. That’s important because, no matter how good the relationship between the parties, or how robust the agreement, sometimes you simply cannot stop a breach of contract from happening.

When a contract is breached, it can be very stressful and potentially cost a lot of time and money. Sometimes, it can be tricky to establish whether a legal agreement has been breached, especially as poorly drafted contracts can be complex and frustratingly vague.

Whether you want to pursue or defend a breach of contract claim, this comprehensive breach of contract guide will help you understand the intricacies of contract disputes and what you need to do to reach a satisfactory resolution.

What constitutes a breach of contract?

A breach of contract occurs when one party fails to fulfil their obligations as specified. A contract breach can happen for any number of reasons. For example, where one party:  

  • Carries out sub-standard work
  • Refuses to perform their duties as set out in the contract 
  • Does not pay within the limits specified in the contract
  • Fails to deliver services or goods as contracted 
  • Does not perform their duties in the timescales agreed.

A breach of contract is not a criminal offence. But there are legal steps you can take to resolve the matter by liaising with experienced breach of contract solicitors.

Types of contract breaches

Contract breaches can take various forms, and they are generally categorised into the following types: minor, material, fundamental and anticipatory. How best to deal with a breach of contract depends on the category of breach and the parties involved.

  1. Minor breach of contract 
    A minor breach (also called a partial or immaterial breach) happens when one party does not fully meet their contractual obligations. The offending party may be unaware that they have caused a violation.

    A minor breach does not damage the contract beyond repair and can be simple to remedy. Nevertheless, the innocent party may seek damages for any losses experienced because of the breach.
  2. Material breach of contract
    A material breach happens when there has been a more significant violation of the contractual terms. This type of breach can have severe consequences, and one party may have received significantly less value from the contract than was agreed.

    Following a material breach, the innocent party may seek legal help to resolve the issue. Legal remedies may include suing for damages and, in some cases, terminating the contract. Open discussions and mediation can help both parties to resolve the situation before it escalates.

  3. Fundamental breach of contract
    A fundamental breach is a violation so serious that it becomes impossible for the innocent party to receive the benefits they were promised when signing up to the agreement. With the correct legal advice, the contract can be legally terminated when a fundamental breach occurs, and the innocent party can seek damages.
  4. Anticipatory breach of contract
    An anticipatory breach occurs when one party clearly states or demonstrates that they will not fulfill their contractual obligations. An anticipatory breach may apply to a specific term/condition or the complete agreement. Following an anticipatory breach, the innocent party can treat the contract as if it were already breached and seek damages and or termination.

Common breach of contract claims

Contract breaches can take various forms and cover multiple contract types, including:

  • Building contracts
  • Commercial leases
  • Contracts of sale/hire
  • Financial agreements
  • Franchise agreements
  • Employee contracts

Here are some of the most common types of contract breaches that our solicitors can help you with:

  • Non-Payment. For example, where the non-payment of goods or services, rent, loans, or any other financial obligation occurs.
  • Breach of Confidentiality. For example, where unauthorised sharing of confidential information occurs despite an explicit non-disclosure agreement or confidentiality clause. 
  • Late Performance. For example, where there has been a delay in the delivery of goods, completion of services, or another time-sensitive obligation.
  • Failure to Deliver. For example, where the agreed-upon quantity or type of goods are not delivered as arranged. 
  • Failure to Perform. For example, where the agreed services are not provided, or the quality of those services falls below what was stipulated in the contract. 
  • Quality and Performance Issues: For example, where the delivered goods or services do not meet the specified quality standards or do not perform as expected. 
  • Misrepresentation or Fraud. For example, where one party makes false representations in the formation of the contract. 
  • Repudiation. For example, when one party explicitly states or acts in a way that indicates they will not perform their contractual duties leading to an anticipatory breach of contract. 
  • Change in Terms. For example, where one party makes unilateral changes to the terms of the contract without the agreement of the other party. 
  • Wrongful Termination. When one party terminates the contract without following the agreed-upon termination procedures or without a valid reason.

How to prove a breach of contract

Proving a breach of contract typically involves demonstrating three key elements: the existence of a contract, that the contract was breached, and that a loss was suffered as a direct consequence of the breach.

  1. Proving the existence of a contract
    Proving that a legally binding contract existed is the first step in any breach of contract claim. The simplest way to prove that a contract exists is to have a written document signed by both parties. However, a contract is not always a written document, so a breach of contract can be a verbal, written or implied agreement between parties.To prove the existence of a contract, your solicitor may:
    • Provide evidence showing that an agreement was in place. This may include written agreements, correspondence, or oral agreements if they are legally valid.
    • Show that both parties gave proper consideration to the contract.
    • Confirm that all parties involved had the legal capacity to enter into the contract.
  2. Proving that the contract was breached 
    Once you have established a legally binding contract exists, your solicitor will seek evidence that it was breached. This may involve:
    • Reviewing the contract terms to establish each party’s specific obligations and duties.
    • Gathering documents, correspondence, and other evidence to establish where a breach occurred. This may include emails, written communications, invoices, receipts, and performance records.
    • Clarifying what part of the contract was breached and how.
    • Finding witnesses with firsthand knowledge of the contract and the breach, and gathering their testimony.
    • Bringing in experts with specific technical or industry knowledge to support your case.
  3. Proving that a loss was suffered as a direct consequence of the breach 
    To successfully claim damages or other legal remedies, you must prove that you suffered a loss as a direct result of the breach. To help you do this, your solicitor will:
    • Gather evidence to prove that there is a direct link between the breach and the losses incurred, and how the breach was the primary reason for the damages.
    • Calculate and provide evidence of the actual financial losses suffered as a result of the breach.
    • Where appropriate, show that you made reasonable efforts to mitigate your losses (e.g. seeking an alternative supplier).

    Once a breach has been established, your breach of contract solicitor will advise you on your legal options.

Steps you can take to avoid a breach of contract

When you enter into a contract, there is no foolproof way to prevent a breach because you cannot control the other party’s actions. But you can mitigate the risk.

The best way to avoid misunderstandings and legal disputes is to ensure that all contracts are drafted correctly and that everyone understands what they are agreeing to. Here are some steps you can take to mitigate the risks of a breach of contract:

  1. Clear and robust legal agreements 
    Drafting a precise and comprehensive contract with explicit terms, conditions, obligations, and responsibilities is the best way to reduce the chances of future misunderstandings and disputes.

    So, rather than relying on DIY or off-the-shelf templates, it pays to have your contracts drafted and reviewed by legal professionals. Doing this will also ensure that the terms are legally sound and compliant with relevant laws and regulations.

    You should also include dispute resolution clauses within your contracts to establish how both parties will deal with and resolve potential conflicts or disagreements (e.g. via mediation).

  2. Establish clear expectations 
    If your contract has vague expectations, a dispute will likely arise. To prevent this from occurring, ensure you have thorough negotiations with the other party before finalising the contract, and then clearly define performance metrics, milestones, and deadlines within the agreement.

    Establishing clear objectives and performance standards not only makes it easier to monitor progress, but also ensures that everyone is on the same page.

  3. Keep tabs on contract performance 
    Once the contract is underway, maintain open and regular communication between all parties. Continuously monitoring performance against the obligations outlined in the agreement will ensure everything is on track. Remember to keep detailed records of all correspondence, changes, and actions, which can provide valuable evidence should a dispute arise.
  4. Contract reviews 
    A contract doesn’t have to be static. Allow for flexibility by including provisions that permit reasonable amendments and changes to accommodate evolving circumstances. Regularly reviewing progress, identifying any challenges, and making any necessary contract adjustments can help keep relationships on track.

What are the legal remedies for breach of contract

If you or the other party has breached the terms of an agreement, you need to know the various legal options available. In the first instance, it pays to negotiate an amicable outcome. However, court proceedings may be necessary when a contract dispute cannot be settled this way.

Recission
Rescission involves cancelling or annulling the contract as if it never existed. By voiding the agreement, recission returns both parties to their pre-contractual positions.

Rescission is only available in specific circumstances. For example, on discovering a fundamental mistake, where misrepresentation has occurred, or other valid legal grounds. Contract rescission is a complex legal process, and restoring the parties to their pre-contractual position must be possible before it will work.

Contract rectification
Contract rectification involves correcting a written contract to reflect the true intentions of all parties. Rectification is sought when there is a mistake in the written contract. If there is a dispute about the true intentions, it is up to the party seeking rectification to establish this. Legal advice and court involvement are typically necessary to pursue contract rectification.

Specific performance
Specific performance is a powerful and effective legal remedy that ensures the parties involved adhere to their contractual commitments as initially agreed upon. Specific performance is used when monetary damages are inadequate to compensate the innocent party for the loss caused by the other party’s breach.

Injunction
An injunction may also be used when damages would be inadequate following a breach of contract. A powerful tool that can swiftly enforce the terms of an agreement or prevent further harm, injunctions are used to either restrain a party from taking specific actions (prohibitory injunction/restraining order) or to compel them to perform particular actions (mandatory injunction/order).

Injunctions are granted sparingly and are subject to judicial scrutiny, so legal advice is essential.

Most contract disputes require expert help to resolve. As such, you should seek legal advice as soon as possible to establish your legal position and let the other side know what you want.

In many cases, resolution can be reached early via alternative dispute resolution (ADR) methods such as negotiation and mediation, thus saving everyone time, money, and hassle.

Damages for breach of contract

You may have the right to claim monetary damages following a breach of contract. In most cases, you can claim enough damages to put you back in the same financial position you would have been if the other party had not breached the contract.

A compensation award following a breach of contract may include various elements (depending on the specific circumstances of the breach and the terms of the contract): 

  • General or Compensatory Damages. These compensate the innocent party for any losses resulting from the breach. A claim might include any costs incurred when engaging someone else to fulfill the contract and any loss of profit due to the breach. In the UK, you cannot claim compensation for things such as stress or inconvenience after a breach of contract.
  • Punitive or Exemplary Damages. Punitive damages punish defendants whose conduct is considered grossly negligent or intentional. In the UK, punitive damages are not awarded in breach of contract cases. 
  • Interest. Interest may be added to the damages awarded to compensate the innocent party for the time value of money lost due to the breach. 

The damages you can claim will depend on your specific circumstances. Depending on what you want to achieve, we may also seek a court order to force the other side to carry out their contractual obligations.

Time limits for breach of contract claims

You have six years from the date of the breach to bring a claim for breach of contract. This timeframe is established in the Limitation Act 1980. Early legal advice can help you use this time wisely.

  • If you are accusing another party of breaching a contract, we will look at how to resolve this dispute as quickly as possible.
  • Should you be accused of breaching the terms of a contract, we can advise you on whether we believe this is the case and what your legal options are. Where a violation has occurred, a swift settlement is often in your best interests.

Can you terminate a contract for breach of contract?

A breach of contract does not automatically terminate an agreement. However, it can allow the innocent party to initiate steps to terminate (as long as the correct legal process is followed). Not all breaches of contract warrant termination. Sometimes, it is better to address less severe violations through other remedies.

When deciding whether or not to terminate a contract due to a breach, you will need to consider the following:

  • The severity of the breach. To terminate a contract following a breach, there must be a substantial and fundamental violation of the contract’s key terms.
  • Contract terms. Many contracts contain clauses that outline the conditions and procedures for termination.
  • Legal consequences. Termination of a contract can have legal consequences, and it is important to follow proper procedures to avoid counterclaims or legal disputes.

Breach of Contract – FAQs

If you are unsure if a contract has been breached, our expert commercial solicitors will clarify the situation and advise you on the actions available. Where possible, we always recommend attempting to resolve the dispute amicably through negotiations before starting court action. This can be as simple as a meeting between the parties.
A breach of contract occurs when an obligation/contractual term in a contract is not fulfilled. Quite often, even if you think a clear violation has occurred, the other side may dispute this. A solicitor can help you to establish whether there has been a breach, the seriousness of that breach, and the potential remedies available.
Damages received as compensation for a breach of contract are not usually taxable. This is because they are awarded to reimburse a financial loss rather than being a form of income or profit. However, some exceptions exist (e.g. any interest component is usually taxable). Your solicitor will ensure you fully understand the tax implications of your situation.
A material breach happens when there has been a significant violation of the key contractual terms.
A fundamental breach is a violation so serious that it becomes impossible for the innocent party to receive the benefits they were promised when signing up to the contract.
No, a breach of contract does not automatically terminate a contract. However, a breach can provide the innocent party with the option to terminate, depending on the severity and nature of the violation.
No, a breach of contract does not automatically render a contract null and void. Whether or not you can render a contract null and void following a violation depends on the actions taken by the innocent party and the legal remedies sought. Consult with your solicitor to determine the appropriate course of action in your case.
Misrepresentation happens when one party makes a false statement or representation to encourage the other party to enter into a contract. If misrepresentation is proven, the innocent party may have the right to rescind the contract. They may also be entitled to damages for losses incurred due to the misrepresentation. Misrepresentation differs from most breach of contract claims as it does not involve a failure to perform contractual obligations. Nevertheless, misrepresentation may make a contract voidable.

Do you need legal advice from breach of contract solicitors?

While you don’t necessarily need a lawyer to make a breach of contract claim, seeking legal advice is highly beneficial and advisable.

With an expert breach of contract solicitor on your side, it may be possible to resolve contract disputes quickly and cost-effectively. And you are far more likely to achieve a favourable resolution without expensive and time-consuming court proceedings.

Here to help with all your breach of contract needs, with particular expertise around complex and high value matters, please contact our breach of contract lawyers on +44 7441912822 or complete the enquiry form on this page.

]]>
https://www.summitlawllp.co.uk/legal-guide-to-breach-of-contract/feed/ 0
A legal guide to boundary disputes and land disputes https://www.summitlawllp.co.uk/legal-guide-to-boundary-disputes-and-land-disputes/ https://www.summitlawllp.co.uk/legal-guide-to-boundary-disputes-and-land-disputes/#respond Tue, 07 Nov 2023 04:41:26 +0000 https://www.summitlawllp.co.uk/?p=19686
Land and boundary disputes arise where there is conflict over land ownership, usage, possession, or boundaries. Such disputes cover a range of issues, including:
  • Encroachment
  • Easements and Rights of Way
  • Shared Amenities
  • Adverse Possession Claims
  • Land Use Changes
  • Unclear or Conflicting Boundaries
  • Ownership Claims
  • Inheritance
  • Land Grabbing
  • Neighbour Relations.

Land and boundary disputes are usually complex and require expert legal intervention. Whether you’re a property owner, a real estate professional, or someone involved in a land-related conflict, this guide will help you understand the intricacies of boundary disputes and what you need to do to reach a satisfactory resolution.

What is a boundary dispute?

In simple terms, a boundary dispute is a disagreement between neighbours about the boundary between their properties. But in reality, such disputes are rarely simple.

The cornerstones of land ownership, determining property boundaries, ownership rights, responsibilities, and usage, is rarely straightforward, especially where various deeds, historical records, local laws, and title issues are in the mix. As such, boundary disagreements often become complex. And, if not dealt with swiftly, can lead to litigation. The most common boundary disputes fall into the following four categories:

  • Territorial. Disputes relating to the location of property lines
  • Positional. Disagreements that arise when one party asserts that a fence, structure, or any other enhancement has been situated incorrectly, potentially encroaching on their property
  • Functional. Disputes over the use or purpose of a property. For example, if a residential property is being used for commercial purposes
  • Resource. Debates over shared amenities, access to common areas, etc.

Common types of boundary disputes

Boundary disputes often arise when there has been a change of ownership, a change in use, or when someone wants to develop or extend their home.
  • Over a fifth of UK homeowners have been involved in a boundary dispute with a neighbour
  • In 2022, over 6 million Britons were involved in boundary disputes
  • The average space people argue over is just two per cent of the average garden
  • The most common property boundary issues involve a fence, wall or hedge (31%), a plant or tree (14%), access issues (13%)
Here are some of the most common types of boundary disputes our property litigation solicitors have helped our clients navigate successfully:
  • Encroachment Disputes. For example, when a structure, such as a fence, hedge, wall, or recently built building, extends beyond the agreed-upon boundary onto a neighbouring property
  • Disputed Boundaries. Commonly relating to the precise location or demarcation of a boundary line. Such disputes are more likely to occur when there are conflicting property deeds, unclear historical records, or survey inaccuracies
  • Easement Disputes. An easement gives one party specific rights to use or access a portion of a property owned by someone else (e.g. a shared driveway or pathway). Some owners apply to the Court to remove a historical easement.
  • Adverse Possession Claims. When one party claims ownership of a piece of land due to their continuous, open, and unchallenged use of it over a specific period.
  • Shared Amenities Disputes. Usually relating to conflicts over maintenance responsibilities, costs, etc.
  • Property/Land Usage Disputes. For example, short-term rental disputes due to platforms like Airbnb.

How to determine a boundary line

Figuring out exactly where a property’s boundaries are, especially in complicated situations, might need more than just the ability to understand legal documents like title deeds. Historical records, local regulations, potential shared rights, and issues related to property titles may also be required to establish who owns what.When looking at the facts of a case, the Courts will usually consider the following:

Title Deeds, Property Plans and Related Documents
Deeds, property descriptions, the original conveyance, details about past transactions, and any recorded agreements or restrictions related to the property provide the starting point for any boundary dispute. Things like fences, walls, trees, and streams may be mentioned in deeds or historical records, giving evidence of the boundary. When these documents are clear, it may be possible to settle the boundary dispute early.

Other Supporting Evidence
The disputing parties should establish whether there are any historical legal disputes or agreements related to the property – both formal and informal. This information can provide valuable insight into boundary matters. Maps and other historical records may also shed light on a property’s past boundaries, and local regulations can prove its intended usage and where its boundaries are defined. Photographs, including aerial and historical snapshots, can support arguments about property boundaries. Evidence in the form of witness statements, including from residents and others with knowledge of the position of the borders, can also be extremely valuable.

Surveys
In boundary disputes, it is common for the parties involved to appoint their own independent surveyor. These surveyors use specialised equipment to determine a property’s boundaries based on legal descriptions and markers. However, it is not uncommon for surveyors to disagree on where the boundaries lie. Appointing a suitably qualified surveyor with sound experience in boundary disputes will help you present the best possible case at Court.

Possible defences for boundary disputes

When taking a boundary dispute case to court, you should be prepared for the opposing side to present a robust defence. The defence used will depend on the issues and circumstances involved. For example, if you want to stop your neighbour from using land that belongs to you, they could use one of the following defences:

  • Adverse possession. If your neighbour can prove that they have been using a part of your land openly and consistently for a certain period (usually ten or twelve years), they could claim ‘adverse possession’ and make a claim to your land.
  • Profit à prendre. Profit à prendre grants your neighbour the right to enter your land and remove a product or resource. For example, if you, or a previous owner, gave your neighbour the right to harvest crops on your land. If your neighbour has used your land this way for 30 years or more, they could claim profit à prendre if you attempt to stop them using your land.
  • Rights of Way. If your neighbour has used your land for 20 years or more, they could have acquired a right of way.
  • Necessity. If there used to be one piece of land, which was subsequently split, and now your neighbour has to cross your portion to reach their land, they could have a claim based on ‘necessity’.

Boundary disputes protocol in England & Wales

A non-binding pre-action protocol, theProtocol for Disputes between Neighbours about the Location of their Boundary (The Boundary Disputes Protocol) was developed to encourage parties to work together to resolve their boundary disputes early.

The Protocol applies to residential and commercial properties and assumes that there have been attempts to resolve the dispute through informal discussions, but these negotiations have failed. The Protocol provides a structured dispute resolution process to help ensure that the neighbours involved:

  • Exchange sufficient information in a timely manner to minimise the scope for disputes between them
  • Understand the importance of appointing professional advisers to make sure that their position is protected (where necessary)
  • Are aware of alternative dispute resolution (ADR) methods to enable them to readily resolve their disputes.

In short, the Protocol aims to resolve boundary disputes quickly and keep litigation costs to a minimum. If your case does proceed to litigation, the Court will expect there to have been some constructive discussion and negotiation before getting to that stage. The Protocol has the support of the Property Litigation Association.

How to resolve boundary disputes

Boundary disputes can quickly escalate, so knowing what to do and when is vital. In England and Wales, resolving a boundary dispute usually involves the following steps.

Communication with your neighbour
Attempting to resolve the dispute informally with your neighbour is encouraged in the early stages of any boundary dispute. You should also appoint a professional land surveyor to conduct a thorough survey of the property, which can help to clarify the boundaries. However, you should know that surveying methods can vary, often leading to different conclusions about boundary locations. Should early and informal negotiations fail, you should familiarise yourself with the Pre-Action Protocol for Property Disputes.

ADR
It is vital to seek legal advice ASAP when it is clear that a resolution is only possible with help. Your property litigation lawyer should then recommend an Alternative Dispute Resolution (ADR) method, such as mediation, to help both parties come to an agreement. Agreements reached via mediation are not legally binding, but they can be made so if both parties agree.

Litigation
Formal legal proceedings may be required where mediation is unsuitable or has failed. Litigation should always be the last resort unless it is the only viable option. There are two ways to use the Courts to resolve your boundary-related issues.

  • Make an application to the Land Registry. If your neighbour objects and mediation does not resolve the matter, your case will be referred to the Land Registry Division of the First-tier Tribunal (Property Chamber).
  • Issue proceedings at a County Court.

Where litigation is the best route to resolve your case, our specialist boundary dispute solicitors will fight your corner and help you achieve the best possible outcome. With many years experience covering all types of property disputes, our experienced litigation lawyers understand the nuances of the law and what it takes to achieve our client’s goal. Contact us today for your free initial consultation by calling +44 7441912822.

How to win a boundary dispute

Winning a boundary dispute – or reaching a fair settlement – requires gathering evidence, effectively presenting your case, and understanding the legal process.Here are some top tips to increase your chances of success:

  • Seek legal advice ASAP. Appointing an experienced property litigation solicitor early in the process will ensure you understand your rights, obligations, and any potential legal actions you can take.
  • Collect all relevant evidence. Clear and convincing evidence is crucial to winning your boundary dispute.
  • Hire a professional land surveyor. A well-prepared survey can provide strong evidence for your case.
  • Adhere to the Pre-Action Protocol for Property Disputes.  This has been designed to encourage parties to work together to resolve their boundary disputes early.
  • Attempt to resolve your case through negotiation and mediation. Be open to negotiation and mediation as a first step. This may help you reach a mutually agreeable solution. A willingness to compromise can also help to resolve your case quicker. However, you should be sure that the agreed-upon solution works for you.
  • Take Court action if necessary. Should negotiations fail, a strong case, backed by clear evidence and expert testimony, can help win your boundary dispute.

The legal process can take time. So you must stay patient and persistent throughout the boundary dispute resolution process.

Average cost of boundary disputes

There are many determining factors that influence costs relating to boundary disputes. The potential costs involved in a boundary dispute include:

  • Legal Fees. At James Edward & Associates, we offer a range of flexible payment options, including retainers, fixed fees, and hourly rates
  • Surveying Costs. These costs vary based on the property’s size and the survey’s complexity
  • Expert Witness Fees: In some cases, expert witnesses might be required to provide opinions on property boundaries, historical use, or other relevant matters
  • Court Fees. If the boundary dispute goes to court, fees will apply.

Of course, the longer the boundary dispute case goes on, the more it will cost, so it pays to find a resolution as quickly as possible. Likewise, costs are likely to be lower if the boundary dispute is settled via mediation rather than litigation. If the matter gets to Court, whoever loses the case is usually expected to pay the legal costs.

Boundary Disputes - FAQs

Although you can sell a house with a boundary dispute, legal issues will likely impact the home’s marketability and sale price. It’s important to know that you must provide full and honest information about any boundary disputes to potential buyers. Potential buyers might also face challenges obtaining mortgage approvals for a property with an unresolved boundary dispute. As such, and wherever possible, it’s usually advisable to try to resolve the boundary dispute before listing the property for sale.
In England and Wales, the time limit for boundary disputes is 12 years. Certain situations might affect this limitation period, so legal advice is recommended.

Contact our boundary dispute solicitors today

Boundary disputes can be stressful, there’s no doubt about that. When such disputes arise, it’s important to seek early legal advice from experienced property litigation solicitors. Our specialist litigation lawyers have unrivalled experience with boundary disputes and have successfully negotiated many favourable outcomes for our clients.

In addition to resolving neighbour quarrels quickly and cost-effectively, our considered and sensitive approach stops them from escalating. Here to help with all your boundary dispute needs, including where there are complex and sensitive issues, please contact our boundary dispute solicitors on +44 7441912822 or complete the enquiry form on this page.

]]>
https://www.summitlawllp.co.uk/legal-guide-to-boundary-disputes-and-land-disputes/feed/ 0
Search and Seizure Orders – 5 things to be aware of before choosing a Supervising Solicitor. https://www.summitlawllp.co.uk/5things-to-be-aware-of-before-choosing-a-supervising-solicitor/ https://www.summitlawllp.co.uk/5things-to-be-aware-of-before-choosing-a-supervising-solicitor/#respond Tue, 10 Oct 2023 05:57:47 +0000 https://www.summitlawllp.co.uk/?p=19485 Introduction

The purpose of this guide is to explain the role of the independent supervising solicitor and the key aspects to look at when choosing the right person for the job.

I am going to give you some free top tips based on my 25 odd years’ experience, what you need to look out for, the pitfalls and what can go wrong on the day.

What is the role of an independent supervising solicitor?

In short, the supervising solicitor is an independent officer of the court and must also be independent of both the applicant, respondent, and their respective solicitors. As an officer of the court, the supervising solicitors job, as the name suggests, is to independently supervise and ensure that the search order is properly executed.

The moment the search order has been served on the respondent; the supervising solicitor’s job is to explain the order in everyday language to the respondent so that they understand what it means in practical terms. The exact wording of the search and seizure orders will differ but generally the respondent must be advised of:

  • Their right to obtain legal advice.
  • Their right to apply to vary or discharge the order; and
  • The fact that they may be entitled to claim legal professional privilege or privilege against self-incrimination.

Once you read this guide, I invite you to apply for a complimentary no-cost “independent supervising solicitor consultation” with me to discover how I can use my experience to make sure that the court order is executed smoothly and in accordance with the terms of the order.

Wishing you every success.
James Edward.
Solicitor and Partner.
James Edward & Associates.

TIP 1: Do not make the mistake of thinking you can read the Order on the way to the subject premises-be prepared!

This reminds me of the military adage, the 6P’s: proper planning and preparation prevents poor performance. A great deal of time and expense is invested in the court application process by the Provisional Liquidator and the evidence seized could help uncover millions of pounds worth of assets, whether through a provisional liquidation or otherwise. Accordingly, it’s paramount to invest time getting your ducks in a row.

Any supervising solicitor worth their salt must be familiar with the terms of the order as there certainly won’t be time to read the order on the job. An order and the appendices, which have been carefully crafted by the applicant provisional liquidator, their solicitors and counsel, could be 20 pages long.
So, when you have been up at the crack of dawn to travel to the premises, that is not the time to start reading through the detail of the order.

The reason for this is that in my experience things can happen very quickly. One never knows what will happen on an early morning ‘raid’. Some respondent directors will be in shock, others sensible and compliant, whilst other directors may overreact and panic. If you are ill prepared and have not absorbed the dos and don’ts of the court order you may find yourself becoming overwhelmed by what’s happening on the ground and this is when mistakes are likely to happen.

Having supervised the execution of numerous search and seizure orders at James Edward & Associates we understand the importance of being familiar with the terms of the order so that we can quickly defuse volatile situations in a professional manner. This naturally assists with the administration of justice ensuring that provisional liquidators are able to extract and safeguard key evidence in a cost effective and efficient way.

The last thing you want to see happen is for the seizure order to be declared invalid and open to criticism from the court or the respondent director’s lawyers, and the evidence seized ruled inadmissible. Another point on the preparation front is to ensure that the provisional liquidator has a list of the company’s mobile phones to avoid any arguments on the day as to whether or not they are company property. Have a list of the numbers to hand and any phone bills addressed to the company.

If things go wrong and the search and seizure order is wrongly executed, just think of the costs thrown away, of the lawyers’, their agents and of course not to mention the creditors time such as HMRC.

Preparation also means being familiar with the technical side of knowing the relevant rules. Search orders are often prepared on short notice and therefore cannot reasonably be expected to cover every prospect which arises on the day of the search.

Disputes can arise between parties on the day of the search in respect of the scope of the order which cannot be resolved save with a determination from the court. Part of the supervising solicitor’s role is to ensure that the search is limited to the specific documents and parameters in the order.

They must prevent any unauthorised search beyond the scope of the order. Should a dispute arise, the supervising solicitor, can exercise reasonable limited discretion in relation to the execution of the search pursuant to CPR PD 25A.7.5(13) or may refer such issues to the court for resolution taking any items which form the basis of the dispute into safekeeping in the absence of an agreement between the parties.

From the outset, it is crucial to ensure that the supervising solicitor you instruct has the required expertise in these situations and who has prepared thoroughly through meetings with colleagues and the lawyers concerned to try and manage the risk of things going wrong on the big day.

TIP 2: Expertise and good communication skills with the respondent director.

There is no real science behind the latter, and I’m certainly not a psychologist but knowing how to deal with a director and how to read them can be highly advantageous. The respondent directors may not have a good command of English or understand the terms of the order, so it’s very important to remain patient and explain the order in detail. If you don’t, you will certainly not be doing your job properly and it may mean that vital evidence is not seized.

By way of example on one occasion, a director refused to hand over his company mobile phone to the provisional liquidator’s agents. I decided to take the director aside and have a private conversation where we were not overheard to hear his objection to delivering up the company’s mobile phone. It turned out on this particular occasion that he had private photographs which he did not wish to share. My advice to the director was that under the terms of the order the phone had to be delivered up to the provisional liquidator. The director did not like the advice but I explained the consequences of breaching the order, including the penal notice and what was meant by contempt of court.

The best solution I have always found it is to obviously treat the respondents with the utmost respect, keep calm and explain the order in terms they will understand and to emphasise that as an officer of the court I am neutral and not working for the provisional liquidator.

TIP 3: Ensure you have colleagues on hand who have previous experience.

Trying to learn on the job when supervising a search and seizure order is extremely difficult. This is because there are too many moving parts. It’s not uncommon, to have a small team of process servers barging through the company premise’s front door weighed down with boxes of evidence, with receptionists and other staff from the respondent company startled, all wondering what on earth is going on.

Then there is the company director to deal with who as I say, might be in shock, compliant or react aggressively.

Accordingly, it’s vital to have well trained and experienced colleagues who know how to handle the situation who have all learned from previous searches.

That’s why at James Edward & Associates we will sit down together before the date of the execution and talk through the terms of the order and discuss what the order does and does not permit. We even rehearse what might happen on the day and we ask ourselves what could go wrong on the big day of the search.

By way of example, on one occasion I was supervising the execution of the order part of which included the seizure of various mobile phones on business premises. An argument broke out between the company staff and provisional liquidator’s agents.

I had been in another part of the five storey business premises watching a server being digitally copied and analysed, but fortunately an experienced James Edward & Associates colleague was able to calm the situation down with the company staff, until I was able to join him to explain the order to the employees.

If you turn up with colleagues with no prior experience it is more likely that if things go wrong, they will not be able to react in the correct manner.

Tip 4: Be ready for the unexpected.

Risk management is all about trying to reduce the threats of things going wrong. Of course, notwithstanding the former sometimes with all the planning in the world, the unexpected can happen.

With all of the time and expense invested in the application for the search and seizure order it’s important to have an experienced supervising solicitor and their team who are able to deal with the unexpected.

On one particular search and seizure case, where I was acting as the independent supervising solicitor, there were numerous members of the provisional liquidator team. These consisted of lawyers, process servers, security, and digital computer experts. The group probably consisted of 20 or so people which meant that we had to travel separately in our vehicles to the company’s premises in a busy high street with no parking.

Whilst I was parking and unbeknown to me it came to my attention that one of the provisional liquidators team was extremely keen to start seizing evidence and was going to do so before I had even arrived at the premises and read the order to the respondent director. Obviously it would have meant that I was not supervising the gathering of the evidence or available to deal with any queries from the director about the terms of the order. The impact of the latter could again have been extremely costly.

Do not assume that a provisional liquidator’s team will understand your role. Talk them through what is going to happen, paint a picture for them so they can visualise the steps that will be taken on the day.

Tip 5: keep detailed and contemporaneous notes.

A key aspect of the supervising solicitor’s role is advising the respondent in respect of the terms and effect of the search and seizure order including any rights they have pursuant to the latter. How this information is communicated is crucial and the respondent must be advised in plain English.

Attention to detail

Under CPR Practice Direction 25A, the supervising solicitor also has a vital role in precisely recording events on the day of the search by way of a report filed at court shortly after the search.

The supervising solicitor’s report sets out compliance with his/her duties but can also be a crucial document for either party following the search should a dispute arise in respect of compliance with the order. Supervising solicitors must also ensure compliance with their other technical duties such as compiling a list of materials removed from the premises and allowing the respondent to check the list and have a copy of the same.

What happens after a search has taken place?

After the search and seizure, the supervising solicitor will submit their report to the court before a second hearing takes place, which both the applicant and the respondent will attend. The Respondent can address the court and ask that the search order be discharged. In either event, the matter will then proceed to trial following the usual course.

It’s Time to Take Action!

If you are planning to seek a search and seizure order it’s important to plan ahead to make sure that your chosen supervising solicitor is available. To do this please call us on +44 7441912822 to make an appointment or email me on jb@jamesedwardassociates.com

About the author

James Edward L.L.B (Hons) is a solicitor and partner and an expert in insolvency law who specialises in insolvency litigation. He has acted as an independent supervising solicitor on numerous occasions. James has also acted for and advised the UK’s most experienced and largest firms of insolvency practitioners when they pursue directors. James is regularly asked to write articles for leading publications and to provide talks on insolvency related matters.

So why should I instruct you and not another solicitor? What’s in it for me if we hire you?

James Edward & Associates are insolvency litigation specialists; we have a wealth of experience and knowledge to draw on.

What others say about us?
“I was appointed as the provisional liquidator and James Edward was the independent supervising solicitor, appointed by order of the court. We had a very early start but under Jeremy’s expert supervision, the search and seizure was handled professionally throughout. It certainly took a lot of pressure out of the situation on the day.”

“James Edward was the independent supervising solicitor on a provisional liquidation I worked on. James was extremely professional, calm and collected in supervising the order and in dealing with the director” Head of Investigations.”

“James Edward and the team at James Edward & Associates has been completely supportive and helped us to navigate a very negative 9-month legal problem. Their attention to detail and common-sense approach to tackling heated legal questions with a cool perspective, ultimately saved us 100,000’s! They cared enough when our chips were down to help us get out of a bad deal…thank you James Edward & Associates!”

“I first contacted James Edward & Associates late on a Friday morning. At the start of a bank holiday weekend. I had received by email that morning an instruction that a court hearing had been made related to an issue that I was involved with. After preliminary discussions with James Edward (Senior Partner) about the case I decided to instruct James Edward & Associates to represent my interests at the court hearing. In effect this only gave us 1 full working day to prepare our submissions, appoint council and be prepared. The Summit team were super-efficient and kept me up to speed on all aspects of the case. The barrister selected was professional and efficient. Our challenge to the hearing was successful and we were awarded costs. This was an important decision that we were obliged to fight at very short notice. Without the commitment of the whole team at James Edward & Associates I am sure the outcome of the copyist proceeding would have been vastly different. Their attention to detail, professionalism, speed of action and importantly communication was exemplary. Thanks to all concerned.”

]]>
https://www.summitlawllp.co.uk/5things-to-be-aware-of-before-choosing-a-supervising-solicitor/feed/ 0
Crypto Assets in Cross Border Insolvency (A Perspective from England & Wales) https://www.summitlawllp.co.uk/crypto-assets-in-cross-border-insolvency/ https://www.summitlawllp.co.uk/crypto-assets-in-cross-border-insolvency/#respond Fri, 06 Oct 2023 05:11:17 +0000 https://www.summitlawllp.co.uk/?p=19441 Introduction

Crypto assets are currently a hot topic in the insolvency world and one with which IPs are engaging across the globe.

There are increasing numbers of cases worldwide where either a crypto business has failed, crypto assets form part of an insolvent Estate or assets in an Estate are converted into crypto assets with a view to avoiding payment to creditors.

What are Crypto assets?

A crypto asset is a cryptographically secured digital representation of value or contractual rights that uses a form of distributed ledger technology and can be transferred, stored, or traded electronically. A record of transactions is held on a “blockchain”.

The term “crypto asset” is wider than crypto currency and includes, for example non -fungible tokens (“NFTs”). NFTs are a type of crypto asset whereby users purchase a cryptographic token of a particular asset (it can be either physical or digital), which cannot be swapped directly for other NFTs (ie they are non fungible).

They allow owners to cryptographically prove the authenticity of their asset and their ownership of it through the blockchain, giving it a perceived value.

NFTs are valuable because they verify the authenticity and ownership of a non-fungible asset. NFTs can digitally represent any asset such ds digital artwork.

The Law Commission has recently published a report on Digital Assets which provides further detail and a copy of this is here.

Why are so many crypto exchanges failing?

The cryptocurrency market went through a “crypto winter” at the end of last year when prices fell and a number of crypto exchanges filed for bankruptcy in the US.

A high profile example is FTX which filed for bankruptcy in November 2022 notwithstanding pre-bankruptcy valuations in excess of $30 billion. FTX’s founder and CEO, Sam Bankman-Fried, is currently being prosecuted for fraud.

What are the considerations for an IP who is appointed in respect of an insolvent crypto exchange?

Once appointed, an IP will need to review the position with any crypto assets to determine whether the assets in question belong to a creditor or whether the assets are held on a creditor’s behalf (which would mean that the creditor would rank as an unsecured creditor).

Any IP appointed should therefore review any terms and conditions related to the assets on this question and should seek legal advice on this.

What should an IP in England and Wales do initially where there are crypto assets in an insolvency?

An IP appointed in England and Wales has a duty to collect in and realise any assets in the Estate and this includes any crypto assets given the broad definition of ‘property’ in section 436 of the Insolvency Act 1986.

Faced with a situation where crypto assets may form part of an insolvent Estate, an IP should commence an investigation into their whereabouts.

Liquidators can utilise the provisions in sections 234 — 236 Insolvency Act 1986 to apply to Court to obtain books and records, compel witnesses to give evidence or make an enquiry into a company’s dealings.

Before any application is issued, a formal legal letter should be sent to the proposed Respondent giving them reasonable time to respond.

Trustees in Bankruptcy have similar powers pursuant to sections 336 and 337 Insolvency Act 1986 to compel the bankrupt and/or witnesses to give evidence or to produce documents which may assist their investigations.

In addition (or alternatively), an IP should also look to appoint an expert who should be able to try to obtain access to the blockchain to ascertain the record of any transactions.

If the above exercises are carried out, then it may also uncover further potential recoveries!

What legal action can be taken by an IP in England and Wales?

Once crypto assets are found, then lawyers should be instructed to advise on how to take any action for their recovery.

There is case law which establishes, for the purposes of interim relief, that crypto assets such as NFTs and bitcoin constitute property for the purposes of the law of England and Wales.

Accordingly, it is possible to:-

  • Obtain proprietary injunctions in respect of crypto assets;
  • Obtain worldwide freezing orders in support of claims relating to crypto fraud;
  • Enforce judgments against crypto assets.

How are cases dealt with in the Courts of England and Wales, are there any defining features?

The Courts have developed significant expertise in dealing with crypto assets and it is possible to bring insolvency related claims in the Insolvency and Companies List in the High Court.

IPs can also consider bringing civil claims in the Courts and these are commonly dealt with in the London Circuit Commercial Court.

The most interesting and unique feature about these cases is that very often the party making the application will attend the Court without notice to the other side. This does mean that the decisions are not binding authorities per se but the Courts do generally follow an approach which is consistent with previous interim decisions.

What Issues arise when these cases are before the Courts?

The main issue which arises for an IP is to identify whether a crypto asset exists and if so, its whereabouts. This will often require the engagement of forensic blockchain investigators.

It is possible to obtain an injunction/judgment against “persons unknown” in appropriate cases.

When making an application for an injunction without notice, the applicant has a duty of full and frank disclosure and this Is particularly relevant to digital asset disputes, see the decision in Piroozzadeh -v- Persons Unknown, Binance and others [2023] EWHC 1024 (Ch).

IPs should act quickly in any action due to the potential volatility of crypto assets and the risk that these may fall in value or dissipated/destroyed which may affect the outcome of any action and the ultimate recoveries made.

I’m an overseas IP, what can I do in respect of crypto assets in England and Wales?

If you are an overseas IP and wish to recover crypto assets in England and Wales, then you may be able to make an application to the Courts in this jurisdiction for a Recognition Order pursuant to the terms of UNCITRAL Model Law.

Broadly speaking, this will be possible in the following cases:-

  • Where the owner of the crypto assets can be said to reside in the jurisdiction;
  • An underlying contract specifies that the matter is to be dealt with in the English Courts or English law applies;
  • The assets are located here;
  • Any losses are suffered in England and Wales.

If a Recognition Order is obtained, it will give access to remedies available to litigants before the Courts of England and Wales.

If you are located in certain countries, then you may alternatively be able to apply to the Courts of England and Wales for Assistance pursuant to $426 Insolvency Act.

The Courts will usually grant assistance and this will give the office holder the option to apply English law or the law of the country where the IP is appointed (this has the scope to broaden out the remedies available).

Alternatively, if you have obtained a judgment in an overseas Court already, it is an option to apply for this to be recognized in the Courts of England and Wales so that it can be enforced in this jurisdiction.

If you would like any advice on any of the issues raised in this article, then please contact Evelyn Austin to find out what steps can be taken on al@jamesedwardassociates.com or (020 7467 39986).

The information provided in this document does not, and is not intended to constitute legal advice. Instead, all information is for general informational purposes only. Should you wish to obtain legal advice in relation to the matters raised, please do not hesitate to contact us.

]]>
https://www.summitlawllp.co.uk/crypto-assets-in-cross-border-insolvency/feed/ 0
Is it safe to dismiss an employee with less than two years’ continuous service? https://www.summitlawllp.co.uk/is-it-safe-to-dismiss-an-employee-with-less-than-two-years-continuous-service/ https://www.summitlawllp.co.uk/is-it-safe-to-dismiss-an-employee-with-less-than-two-years-continuous-service/#respond Mon, 27 Mar 2023 05:53:26 +0000 https://www.summitlawllp.co.uk/?p=17314

Many employers believe that it is safe to dismiss an employee with less than two years’ continuous service on the basis that they do not have ordinary unfair dismissal rights.   It is certainly true that the  general rule is that an employee requires two years’ continuous service to bring a claim of ordinary unfair dismissal in the employment tribunal.

The current requirement for employees to have two years’ continuous employment has been in force since 2012 and before this it was 12 months.  The period tends to extend or shorten depending on the Government of the day.

However, it is important for employers to realise that are circumstances where employees can bring a claim for automatic unfair dismissal.    These are day one rights whereby employees do not require two years’ continuous service to bring claims for automatic unfair dismissal.  

An automatic unfair dismissal is also a dismissal that is so inherently unfair that an employee is not in most cases required to prove that they have two years’ continuous service.  It is a special protection afforded to such employees in circumstances where their basic employment rights are violated.

There are now a number of potential automatic unfair dismissal reasons and these are set out in the Employment Rights Act 1996.   Some of these include the following situations:-

  • Dismissing an employee for whistleblowing or making a protected disclosure, for example in an employee alleging that there has been a breach of a legal obligation or that a criminal offense has been committed in the work place.
  • Dismissing an employee due to pregnancy, childbirth, maternity or because they wish to exercise their parental leave rights. This could also trigger a sex/pregnancy discrimination claim.
  • Whereby employees assert their statutory rights under the National Minimum Wage Regulations or the Working Time Regulations.
  • Dismissing an employee because they have raised a health and safety issue. An example is where an employee has reservations about working in the office due to Covid and has care responsibilities for a vulnerable relative.  This can include where an employee refuses to return to work because they reasonably believe that they or a member of their household is at risk of serious and imminent danger of contracting Covid.
  • Taking leave for family emergencies or to care for dependents.
  • A shop worker or betting shop worker refusing Sunday working.
  • Dismissing employees for an economic, technical or organisational reason as a result of the sale of the business to another entity under the Transfer of Undertakings ( Protection of Employment ) Regulations 2006.
  • Making a request for flexible working.
  • Carrying out Jury Service
  • Trade union membership or non-membership, or any dismissal linked to participation in Union activities or protected industrial action.
  • Dismissing an employee because they perform functions as a pension trustee or an employee representative during a TUPE transfer or a collective redundancy.
  • Dismissing an employee due to their part-time or fixed term status.
  • In asserting statutory rights to be accompanied at disciplinary or grievance hearings.
  • Breaching any exclusivity clause in a zero-hour contract.
  • In asserting statutory rights in relation to working tax credits
  • A reason relating to pension auto-enrolment.

Unlike ordinary unfair dismissal, procedural unfairness will not be relevant where an employee has been automatically unfairly dismissed as is the position with say a performance or conduct dismissal. An employment tribunal will not be required to determine whether the employer acted reasonably in its decision to dismiss or assess the procedural fairness.

Another important thing to bear in mind is that in the event of an automatic unfair dismissal that is related to whistleblowing or health and safety, then there is no financial cap on the amount of compensation that an employment tribunal can award.

In terms of time limits any employment tribunal claim for automatic unfair dismissal must be filed within three months less one day of the date of the dismissal, and that ACAS Early Conciliation must be undertaken and concluded in the first instance.

Do remember as well that employees do not require two years’ continuous service to bring claims for discrimination under the Equality Act 2010, for example sex, race, disability, age, sexual orientation, religion and belief to name a few protected characteristics.

If you have any questions about automatic unfair dismissal or have concerns then do contact Michael Stewart – Partner and Head of Employment on 020 7467 3988 or by e-mail se@jamesedwardassociates.com

]]>
https://www.summitlawllp.co.uk/is-it-safe-to-dismiss-an-employee-with-less-than-two-years-continuous-service/feed/ 0
HMRC Bounce Back Loan Investigation https://www.summitlawllp.co.uk/hmrc-bounce-back-loan-investigation/ https://www.summitlawllp.co.uk/hmrc-bounce-back-loan-investigation/#respond Fri, 28 Oct 2022 05:25:20 +0000 https://www.summitlawllp.co.uk/?p=15705

Introduced by the government in April 2020, the Bounce Back Loan Scheme (BBLS) provided rapid access to finance for small businesses affected by the coronavirus pandemic. Through the scheme, SMEs could borrow between £2,000 and 25% of their turnover, up to a maximum of £50,000.

While businesses took advantage of the BBLS, it wasn’t without controversy. In June 2021, it was revealed that basic fraud checks were disregarded in the rush to ensure vulnerable businesses were protected at the start of the pandemic. As a result, the scheme was open to fraud, defaults, and error. Nearly half of the loans taken out won’t be repaid, and because they are government-backed, the taxpayer is left picking up the tab.

HMRC is now investigating which businesses deliberately abused the BBLS. Cracking down on those guilty, the repercussions for directors who acted fraudulently are severe. Bankruptcy restrictions and director disqualification undertakings have already been issued against some UK businesses.

Do you require Bounce Back Loan legal advice?

Bounce back loan investigations are on the rise. If you have received a letter informing you that an investigation is underway, contact our director disqualification lawyers today for a free initial consultation to discuss how we can help to protect your position.

We’ve helped hundreds of directors, just like you, avoid disqualification proceedings brought against them by the Secretary of State. If you’re in a position of uncertainty and require specialist legal advice, contact us today on +44 7441912822.

  • Proven experience – we’ve successfully persuaded the Insolvency Service to withdraw proceedings against our clients.
  • Fast service – we seek the earliest possible resolution to reduce the stress and disruption.
  • Best results – our expertise helps to ensure our clients get the best results possible, every single time.
  • Flexible funding – we offer a range of flexible payment options, including retainers, fixed fees, and hourly rates, to meet the needs of our clients.

Bounce Back Loan Fraud - Key Stats

For many businesses, the BBLS offered an essential lifeline. According to the British Business Bank, initial analysis shows that up to 500,000 businesses could have permanently ceased trading in 2020 alone if the scheme had not been in place.

Today, the government is working with the National Investigation Service (NATIS) and the Insolvency Service (IS) to investigate instances of fraud and, where appropriate, recover fraudulent loans and penalise guilty parties.

Here are some key stats:

  • During its tenure, almost 1.56 million businesses were approved for finance.
  • A cumulative value of around £47.4 billion was provided via the BBLS.
  • Some £17 billion won’t be repaid due to fraud and defaults.
  • NATIS has opened 273 investigations into BBLS fraud with a total value of £160 million (Sept 2022).
  • 78 suspects have been dealt with, and 49 arrests have been made (Sept 2022).
  • The Insolvency Service had issued 242 director disqualifications, 101 bankruptcy restrictions and one criminal prosecution for BBLS fraud (Sept 2022).

Why was the Bounce Back Loan Scheme introduced?

In Spring 2020, the potential scale of the Covid-19 pandemic became clear. Strict public health measures such as lockdowns and restrictions significantly impacted businesses across the UK. With no end in sight, many were at risk of closure.

To help businesses during unprecedented circumstances, the government introduced several loans (the Covid-19 Loan Guarantee Schemes):

  • Coronavirus Large Business Interruption Loan Scheme (CLBILS). For mid-sized and larger UK businesses with a group turnover of more than £45m.
  • Coronavirus Business Interruption Loan Scheme (CBILS). For smaller businesses with a turnover of less than £45m looking for up to £5m in finance.
  • Bounce Back Loan Scheme (BBLS). For SMEs, micro-businesses and other businesses requiring smaller loans of between £2,000 and £50,000.

The BBL scheme came to a close at the end of March 2021.

What was the eligibility criteria for Bounce Back Loans?

Available through a range of accredited lenders and partners, including high-street banks, to be eligible for the Bounce Back Loan Scheme, a business had to confirm:

  • It was engaged in trading or commercial activity in the UK at the date of application.
  • It was a company or limited liability partnership incorporated or established in the UK, or tax resident in the UK.
  • It derived more than 50% of its income from its trading activity.
  • It had been adversely affected by the coronavirus (COVID-19) pandemic.
  • That the loan would be used for the economic benefit of the business and not for personal use
  • Whether or not on 31 December 2019 it was a ‘business in difficulty’ and does not breach state aid restrictions. If it was a ‘business in difficulty’ then, in addition, the facility will not be used for export-related activities.
  • It was not in bankruptcy, liquidation, or similar at the time of submitting the application.
  • It was not a bank, building society, insurance company, public sector organisation, state-funded primary or secondary school, or an individual other than a sole trader or a partner acting on behalf of a partnership.

A business applying to the BBLS would also be subject to the standard regulatory checks (e.g. Anti-Money Laundering (AML) and Know Your Customer (KYC)). However, in response to concerns that the funding was taking too long to reach struggling businesses, the government allowed companies to self-certify their eligibility, viability, and creditworthiness – thus increasing the fraud risk associated with the scheme.

What constitutes Bounce Back Loan Fraud?

There are different types of BBLS misuse. In many cases, fraud occurred where the money supplied was used for personal use rather than to support the business. For example, where:

  • Funds were used to purchase personal assets.
  • A lump sum was transferred to a personal bank account.
  • Some or all of the money was given to a friend, family member, or another third party.
  • The money funded a substantial increase in directors’ salaries or dividends.

BBLS fraud also occurred when a director:

  • Exaggerated turnover to obtain funds.
  • Did not disclose the company was in financial difficulty when applying for the loan.
  • Dissolved the business in an attempt to avoid repaying the loan.

Other examples of BBL fraud are where criminals:

  • Made multiple or fake applications for loans.
  • Created a new company or acquired a shelf company to make a fraudulent application.

Consequences to directors who abused the BBL Scheme

Using the money fraudulently or knowingly providing false information to secure a BBLS loan could result in several fraud offences. These include false accounting, conspiracy to defraud, abuse of position, failing to disclose information, false representation, and money laundering.

If found guilty, the possible consequences include fines, imprisonment, compensation and confiscation orders, director’s disqualification, and Serious Crime Prevention Orders (SCPO).

The first Bounce Back Loan fraud prosecution

In the first criminal prosecution case of BBLS fraud, a company director was disqualified for seven years. In this case, the director applied for a £20,000 loan but failed to disclose that the company was undergoing dissolution. When the loan was due to be repaid, the company had been dissolved. The director gave their family around £14,000 in cash and used the remaining to purchase a car and insurance.

Pleading guilty to charges of fraudulently claiming Covid-19 financial support, the director admitted that they had no intention of using the loan for business purposes.

The Insolvency Service Response
In June 2022, two directors received 11-year bans after applying for £100,000 worth of Bounce Back Loans to which the company was not entitled. In this case, the directors did not declare the company was in a company voluntary arrangement. In August 2022, five individuals were separately made subject to bankruptcy restrictions totalling 48 years.

In each of these cases, bounce back loans were either:

  • Wrongfully obtained through overstating turnover.
  • Acquired by a company that had already ceased trading before the pandemic.
  • Misused for personal use.

The Insolvency Service continues to identify and tackle abuse of the BBL scheme.

Furthermore, due to recent changes to the law, directors of companies with outstanding debts (including BBLs), which were dissolved without first being placed into liquidation, can also expect to be investigated. And due to The Ratings (Coronavirus) and Directors Disqualification (Dissolved Companies) Act, retrospective investigation and action can be taken against directors suspected of misusing bounce back loan funds.

HMRC Bounce Back Loan Investigation - FAQs

  • BBLS fraud happened when someone deliberately applied for a loan they were not entitled to or where they used the money in a way that did not meet the purpose of the loan (e.g. to buy personal assets). However, some directors are facing BBL fraud investigations due to honest mistakes made when applying for the loan (either by themselves or someone else in the business).
  • No. Bounce Back Loans were made on the condition the recipients did not use them for personal purposes. However, you could use a BBL to purchase assets that would benefit the business (e.g. a vehicle).
  • Yes, if found guilty of misusing BBL funds, directors may be held personally liable. As well as being made to repay the outstanding balance, they could face other penalties, fines, and director disqualification of between 2 and 15 years.

  • If you miss loan repayments or your business enters liquidation or administration, you will likely face an investigation over the use of the loan. In such cases, directors must demonstrate that the bounce back loan was acquired legitimately and used for the economic benefit of the business. Directors struggling to meet BBL repayments must take legal advice as soon as possible.

Have you been affected by the HMRC Bounce Back Loan investigation?

Whether you are the director of a going concern, are in financial difficulty, or have dissolved your company since taking out a Bounce Back Loan, being the subject of an investigation can be stressful and disturbing.

At James Edward & Associates, we are experts in defending director disqualification claims – including in cases of suspected BBL fraud. In many cases, we have successfully persuaded the Insolvency Service to withdraw proceedings. Bounce Back Loan fraud charges could result in serious personal consequences. So, even if you have only received an initial letter or phone call from your bank or the Insolvency Service, you must contact us immediately.

For your free initial bounce back loan fraud investigation consultation, please call our experienced lawyers today on +44 7441912822.

]]>
https://www.summitlawllp.co.uk/hmrc-bounce-back-loan-investigation/feed/ 0
Is long covid a disability in law? https://www.summitlawllp.co.uk/is-long-covid-a-disability-in-law/ https://www.summitlawllp.co.uk/is-long-covid-a-disability-in-law/#respond Fri, 15 Jul 2022 11:06:27 +0000 https://www.summitlawllp.co.uk/?p=15328 A Scottish Employment Tribunal has recently held that an employee with long covid was disabled under the Equality Act 2010. This is the second authority this year which has addressed whether long covid is a disability in the United Kingdom.

Before we look at the facts of the Scottish authority it is important to remind ourselves about the law on disability.

The Law

A person is defined as having a disability if they have a physical or mental impairment which has a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities. They must meet the threshold as set out under section 6 (1) Equality Act 2010.

The word ‘substantial’ is important as it means more than minor or trivial and can include the time taken to complete a task. The impairment must also have a long-term effect and last at least 12 months or for the remainder of the worker’s life if terminal.

It is also not necessary for an impairment to have a medically diagnosed cause. This is on the basis that it is the effect of the impairment that matters as opposed to the cause.

The impairment also has to have a long-term adverse effect on day- to -day activities and this means things that people undertake on a regular basis. Things like attending and taking part in social activities, walking, travelling, cooking, shopping, eating. It can also include the ability to get dressed, shower, and other domestic activities that we take for granted.

Earlier this year the Equality and Human Rights Commission sent out a tweet that stated that long covid should not be treated as a disability. This surprised many and caused consternation for many, so much so in fact, that it issued a clarification statement. It stated that long covid was not a deemed disability and that not all cases of long covid will pass the disability test. They went on to also say that “This does not affect whether long covid might amount to a disability for any particular individual – it will do so if it has a substantial and long-term adverse effect on their ability to carry out normal day-to-day activities” It also recommended that employers make reasonable adjustments where necessary for those deemed to be disabled.

No alt text provided for this image

What is Long covid?

After being infected with Covid, many people find that their symptoms reduce within 7 days to 4 weeks. Some people on the other hand experience symptoms for longer periods of time, and in some cases many months after their first diagnosis.

The NHS suggests that Long covid can take two forms. The first is referred to as ‘Ongoing symptomatic covid’ which is where symptoms continue for more than 4 weeks but less than 12 weeks. Then there is ‘Post covid syndrome’ which is where symptoms continue for more than 12 weeks and cannot be explained by another condition.

There are in fact many symptoms of long covid and some examples are as follows:-

  • Fatigue
  • Brain fog (loss of concentration, loss of memory)
  • Breathlessness
  • Palpitations
  • Insomnia
  • Dizziness
  • Pins and needles/numbness
  • Nausea
  • Loss of taste and smell
  • Muscle pain/Joint pain/abdominal pain
  • Diarrhoea
  • Skin rashes

The Office for National Statistics also suggests that 3.1% of the UK population have symptoms of long covid and that it was greatest in people between the ages of 35 to 69.

The recent Scottish authority

This involved Mr Burke who was a caretaker at Turning Point Scotland where he tested positive for Covid-19 in November 2020. At first his symptoms were mild, but then Mr Burke developed severe headaches, fatigue, anxiety and joint pain. He had difficulty in showering and dressing himself and this would involve him having to lie down to rest from sheer fatigue and exhaustion. He was also unable to undertake domestic activities such as cooking, ironing and shopping because he had a lack of energy.

Mr Burke remained off sick from work and as a consequence his pay ceased in June 2021. Mr Burke issued a series of GP fit notes and he was sent to Occupational Health where their reports made reference to the fact that he was suffering from long covid and post viral fatigue syndrome. Initially they suggested that Mr Burke was able to return to work and that it was unlikely that he was disabled. However Mr Burke was unable to return to work because of the fatigue that he was experiencing.

Unfortunately Mr Burke was dismissed by his employer in August 2021 on the grounds of incapacity and ill-health and they cited his continuing absence from work.

The dismissal letter stated that “having reviewed the capability report including occupational health opinion closely, and taken the details of our discussion into consideration, it is my view that you remain too ill to return to work…….and there appears to be nothing further we can do to adjust your duties or work environment that would make your return more likely. In addition, there does not appear to be a potential date on which there is a likelihood of you being able to return to full duties in the future.”

As a consequence of being dismissed, Mr Burke issued proceedings in the employment tribunal including disability discrimination. One of the issues at the Preliminary Hearing stage was to determine whether Mr Burke was disabled under section 6(1) Equality Act 2010 which was one of the hurdles that he would need to satisfy in order to pursue his disability discrimination claim. Unfortunately, the employer did not concede on the issue of disability and argued that Mr Burke was not disabled in law, and so it was left to the employment judge to determine the issue.

At the Preliminary Hearing the employer suggested that Mr Burke was exaggerating his symptoms, and made reference to the brevity of his GP’s fit notes. They also suggested that the reason Mr Burke failed to return to work was to avoid an internal restructuring exercise within his team.

During the course of both Mr Burke and his daughter’s evidence, the employment judge was satisfied that they had both given evidence of his ongoing symptoms and noted that there were severe restrictions at the time, on being able to secure face-to -face consultations with a GP. The employment judge also accepted that people suffering from long covid are likely to have good days and bad days.

It was also noted that the employer’s attempt to suggest that Mr Burke was over-exaggerating did not follow the rational that was set out in the dismissal letter which stated that he was “still experiencing symptoms of extreme fatigue” and which suggested that he remained “too ill to return to work”.

The employment judge held that Mr Burke’s suffered from impairments that had an adverse effect on his day-to-day activities and that overall the effects were substantial (notwithstanding the fact that he had good and bad days). It was also held that the effect’s of Mr Burke’s condition were also likely to be long-term.

This means that now it has been held that Mr Burke’s long covid condition has now been classed as a disability his case can now proceed to a full merits hearing where his substantive claims can be heard.

[Burke -v- Turning Point Scotland [2022] ET 4112457/2021]

What is best practice for employers in dealing with workers who are suffering from long covid?

Although the Burke authority is non-binding in law, it is the second of its kind on long-covid and confirms and re-iterates the section 6(1) hurdles that need to be overcome. It is clear that not every long covid sufferer will be classed as disabled if they do not overcome those hurdles and that as is usually the position, each case will be judged on its own facts.

Overall it is important that employers should tread carefully and be aware that a worker with long covid symptoms could be disabled in law and will have employment rights that they can pursue. There is also a duty to make reasonable adjustments in law and a failure to do so can be used against an employer in a disability discrimination claim.

Here are some pragmatic tips for employers to consider when dealing with workers who have long covid or indeed any long term illness.

Investigate and communicate Gather as much information as possible about the worker’s medical condition and prognosis. Collate GP’s fitnotes, all correspondence, notes of return to work meetings. Keep the situation under constant review and ask for more information from the worker’s GP (with their consent). Take time to communicate with the worker the nature of their symptoms, and any patterns they experience, and how they feel that their symptoms are impacting on their ability to work including travel to work.

Specialist advice Consider obtaining advice from an Occupational Health specialist, or an external medical specialist to keep updated on the worker’s condition. Bear in mind that the worker’s condition may change from time to time, as will their ability to meet section 6(1) thresholds. Be careful to ensure that you accurately set out the worker’s health symptoms and ask the specialist to provide a view as to whether they are disabled making reference to the effects on day-to-day activities and whether the effects are substantial.

Follow up Where specialist advice is unclear or is contradictory with other medical advice, then do follow up and seek further medical advice.

Make adjustments Where the employer has information which suggests that the condition might be long-term then consider if any adjustments can be made, for example providing additional rest breaks, agreeing flexible working arrangements, introducing part-time hours and homeworking, changing the worker’s role and/or adjusting their workload, offering counselling, refraining from taking disciplinary action for sickness absence.

Training Provide training to managers as to how they can best handle sensitive discussions around health and how to manage workers who are suffering from long covid. Ensure that written policies are understood and followed.

Policies Review relevant policies for example equal opportunities, health and safety, reasonable adjustment, disability, sickness absence, flexible working to ensure that they are up-to-date, and are fit for purpose and above all are non-discriminatory. You could even introduce a covid policy for the workplace.

We are now seeing a number of cases being heard by employment tribunals relating to covid, and it is certain that more authorities and developments will follow. As ever it is a case of watch this space.

If you have any questions relating to long covid and long-term sickness absence in general then please contact Michael Stewart (Partner and Head of Employment) at James Edward & Associates. Tel: 020 7 467 3988 E-mail: se@jamesedwardassociates.com

]]>
https://www.summitlawllp.co.uk/is-long-covid-a-disability-in-law/feed/ 0