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A B C D E F G H I J K L M N O P R S T V W Y

The Brief

A quarterly newsletter aimed to keep clients up-to- date with a wide variety of litigation developments ranging from corporate disputes, commercial matter and private client issues.

Latest Issue

In our latest edition of The Brief we look at a negligence claim that couldn't be pursued because it had been caught by terms in a settlement agreement, plus the importance of having proper terms of engagement agreed and what can go wrong if you don't and a selection of our recent blogs.

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Insolvency Update: Increase in Bankruptcy Threshold

Thursday 19th March 2015

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The Brief - Issue 11

The threshold for bankruptcy proceedings or individuals applying for a Debt Relief Order (“DRO”) is set to increase. 

Consultations began in relation to the proposed changes in August 2014 with the reforms anticipated to take effect from 1 October 2015. 

The Changes

  • At present, the threshold for creditors to Petition for an individual’s bankruptcy stands at £750 (Section 267(4) of the Insolvency Act 1986).The proposals see this threshold increase to £5,000.
     
  • Individuals will only be eligible for a DRO if:-
    • They owe up to £20,000 to creditors.The current threshold stands at £15,000;

    • They have assets with a value of £1,000 as opposed to the current threshold of £300.

There will be no change to the maximum monthly surplus income of an individual eligible for a DRO which currently stands, and will remain, at £50.  In addition there will be no change to the 12 month discharge period for DRO’s or the application fee of £90.

Comment

The Insolvency Service have justified these reforms on the basis that the proposed increases reflect today’s cost of living and the corresponding debt owed by the average individual.

Whilst an increase may well have been advisable and necessary, the proposed increase in the threshold for creditors Bankruptcy Petitions is well above the rate of inflation and, it may be said, to have been implemented with the intention of dissuading creditors from using the Bankruptcy process as an aggressive tactic and relatively inexpensive way to collect relatively low levels of debt. 

Whilst this is to be encouraged, one should also view these reforms in tandem with the parallel governmental proposals to increase the court issue fees within civil claims (see link to article). With the increase in civil issue fees, parties may have sought to avoid incurring civil fees by electing to pursue debts via the insolvency route.  The reforms to the bankruptcy threshold sends a clear message to deter parties from taking this view. 

The proposed reforms are subject to Parliamentary scrutiny but are intended to take effect from 1 October 2015.  Therefore, if there are any matters where you may be required to commence bankruptcy proceedings it would be advisable to ensure that any such proceedings are commenced in advance of this deadline failing which, unless the debt is undisputed and in excess of £5,000, the only form of redress will be by the civil courts.

To read more about statutory demands and how they should be used please refer to our additional article in this issue here.

If you would like more information on the increase in bankruptcy threshold or for any other issues you may have, please contact:


Jack Froggatt

Associate
Tel: 0151 600 3338
Email: jack.froggatt@brabners.com


Still droning on – Aviation Authorities on both sides of the Atlantic review Drone Legislation and Enforcement

Thursday 19th March 2015

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The Brief - Issue 11

Despite UK ‘drone legislation’ having been introduced in 2009 (in the form of the Air Navigation Order) until now, the Civil Aviation Authority (“CAA”) has been surprisingly slow to enforce these relatively new rules. However, this relaxed approach is perhaps promisingly indicative of the European approach generally to drone technology when compared with that adopted by American legislators.

In the US, where all but hobbyist drone-use is currently prohibited, would-be commercial drone users were recently somewhat disappointed by the Federal Aviation Authority’s (“FAA”) draft rules for the use of drones in US airspace. Whilst the proposed rules do represent a welcome liberalisation, largely bringing the US in line with some European jurisdictions, on both sides of the Atlantic, there are still requirements which are a cause for concern for organisations hoping that their research in commercial drone-use could give rise to innovations with the propensity to revolutionise an untold number of industries.

Following the FAA announcement, Amazon, which proposes a drone-based automated parcel delivery system, was quick to respond. Vice President of Public Policy, Paul Misener stated that "We are committed to realising our vision... and are prepared to deploy where we have the regulatory support we need."

Whether this statement was intended as a shot across the bows to legislatures remains to be seen. However, the prospect of significant investment and corollary economic benefits stemming from Amazon and others’ research into such a potentially disruptive technology could well be enough to persuade law-makers in some jurisdictions to ditch much of the current regulation in order to lure wealthy drone-developing industry giants.

In the UK, the main provision of the Air Navigation Order 2009, which currently apply to drones, referred to in the legislation as Small Unmanned Aircrafts (“SUA”), are as follows:

s.166 (1) A person must not cause or permit any article or animal (whether or not attached to a parachute) to be dropped from a SUA so as to endanger persons or property.

s.166 (2) The person in charge of a SUA may only fly the aircraft if reasonably satisfied that the flight can safely be made.  

s.166 (3) The person in charge of a SUA must maintain direct, unaided visual contact with the aircraft sufficient to monitor its flight path in relation to other aircraft, persons, vehicles, vessels and structures for the purpose of avoiding collisions.

However, more stringent rules apply to drones equipped with recording devices defined as small unmanned surveillance aircraft (“SUSA”). Section 167 of the Order requires express permission of the CAA before Camera-equipped drones can be used:

  • Over/within 150 metres of a congested area;
     
  • Over/within 150 metres of an organised open-air assembly of more than 1,000 persons which would include pretty much all sporting events;
     
  • Within 50 metres of any vessel, vehicle or structure which is not under the control of the person in charge of the aircraft.

In addition to these onerous requirements, anyone wanting to operate a drone with cameras or recording equipment training course must complete a CAA training course.

The principle complaint about the draft US rules concern the ‘line of sight’ requirement. Clearly, the same criticisms would apply to UK legislation outlined above. However, although first person view technology, allowing the operator to ‘see what the drone sees’, could eventually be the advance which ultimately brings about acceptance of fully remote drone use, as long as examples of misuse hit the headlines, it seems concerned critics will continue to win the argument against deregulation.

One recent incident which caused significant negative publicity was that which occurred in Serbia at Partizan Stadium in Belgrade. A drone was used to carry a highly provocative Albanian Nationalist flag onto the pitch sparking clashes both on and off the field. It has perhaps incidents such as these which have led to the apparent increased willingness of the CAA to prosecute individuals for drone offences. Although, given that many offenders naively upload footage of their exploits onto file sharing websites such as YouTube, the task of the CAA in brining such prosecutions would not appear to be particularly onerous. Practically though, it is anticipated that the increased case law concerning the Order will be of greatest interest to organisers of public events who can, with their legal advisors, act faster than the CAA to take steps to ensure that potential disruption to events (and consequently the stigmatisation of the technology) is minimised.
 

If you would like more information about any of the issues raised in this article, please contact either:
Simon Morris
Associate
Tel: 0151 600 3394
Email: simon.morris@brabners.com
 

 

 


Martin Bloor

Trainee Solicitor
Tel: 0161 836 8827
Email: martin.bloor@brabners.com

 

Read our blog from 26 February: Paris UAV sightings: potential threat or mere ‘game of drones’?

 


Defamation and Media Update - A look at the first Judgments applying to the new laws

Thursday 13th November 2014

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The Brief - Issue 10

It is now over 10 months since the Defamation Act 2013 came into force and the first Judgments applying to the new law are beginning to come through.

The Defamation Act 2013 significantly reformed the law of Defamation, introducing a number of new statutory defences, a new requirement of ‘serious harm’, a new ‘single publication rule’ as well as other new provisions regarding jurisdiction, mode of trial and publication of Judgments.

Serious Harm Test

In the recent case of Cooke –v- MGN, Mr Justice Bean gave the first reported Judgment on the new ‘serious harm’ test in section 1 of the new Act. Section 1 provides that a statement will not be defamatory unless its publication has caused (or is likely to cause) serious harm to the reputation of the Claimant. This is a new threshold test designed to discourage trivial claims.

In this case, the first Claimant, Ms Cooke, was the Chief Executive of the second Claimant, Midland Heart Limited, a Housing Association. Proceedings were issued in relation to an article published in The Sunday Mirror entitled “Millionaire Tory cashes in on TV Benefits Street”.

The newspaper article was published in January 2014 so the new Defamation Act applied. The serious harm test was dealt with as a preliminary issue and the Judge decided that the test is to be applied as at the date on which court proceedings are issued, not at the date of publication of the article.

The newspaper had already published an apology, which remained online. The Judge decided that the apology was enough to minimise any harm caused by the original article. The Judge held that there was no specific evidence that the article had caused harm to the Claimants’ reputations and therefore that the article had not caused and was not likely to cause serious harm to them.

The case therefore failed to meet the serious harm test in Section 1 of the Defamation Act 2013.

This Judgment is good news for Defendants and shows the benefits of making a prompt apology that remains online. Following this Judgment Claimants should consider whether evidence is available to establish the new serious harm threshold – which may, for example, be from specific individuals who had thought less of them as a result of the publication.

It has now been reported that the Claimants have obtained permission to appeal the Judgment to the Court of Appeal. The Appeal is likely to be watched closely by both Claimants and Defendants in Defamation Claims.

Mode of Trial

Another of the major reforms introduced by the new Defamation Act was to mode of trial. Section 11 of the Act removes the previous presumption that all Defamation cases are to be tried by a jury.

 In the case of Yeo MP -v- Times Newspapers Limited, Mr Justice Warby heard an Application brought by the newspaper for trial by jury. The Judge refused that Application and in his Judgment he referred to a narrow category of cases where jury trial may be appropriate, referring to cases involving “a prominent figure in national life” where there would be grounds for concern that a Judge might show involuntary bias towards one of the parties given their status or rank. The Judge said that in those cases a Judge might not appear to be as impartial as a jury and therefore in those circumstances a jury trial would be appropriate.

This Judgment shows that the prospect of a jury trial in a Defamation Claim is now extremely rare.

It remains to be seen how the other changes will be applied by the Courts and all parties to Defamation Claims will watch closely as more Judgments filter through dealing with new Act.

If you would like more information about the new laws or to discuss any issues you may have please contact:


Glyn Lancefield
Associate
Tel: 0151 600 3060
Email Glyn


Penalty Clause or Liquidated Damages?

Thursday 13th November 2014

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The Brief - Issue 10

Parties seeking to agree a contract may decide that if the contract is breached by one of them then the guilty party should pay the innocent party a defined amount of money. Those pre-determined sums of money are often referred to as “liquidated damages”. A simple example would be if Mr Smith agrees with Mr Jones that if he does not deliver 50 tonnes of coal on time then Mr Smith will have to pay £50 per day to Mr Jones by way of damages until the coal is delivered.

The appeal of such clauses is clear, as they can make the recovery of damages by an innocent party easier and the consequences of a breach are clear from the outset, hopefully encouraging the parties to comply with their obligations.

However, liquidated damages clauses need to be used with care. The level of damages to be paid must not be set to act as a penalty to deter a party from breaching the contract. Instead, the amount to be paid must accurately reflect the loss that the innocent party is likely to suffer as a result of the breach. If the purpose of the liquidated damages clause is to act as a deterrent to prevent a breach of the contract then it is likely to be invalid on the grounds that it is a penalty clause.

The question of whether a liquidated damages clause is a penalty or not will be considered by the Court by reference to the date upon which the contract was originally entered into and not the date on which the contract was actually breached.

In the case of Unaoil Ltd v. Leighton Offshore Pte Ltd [2014] EWHC 2965 (Comm) the High Court held that if a contract is entered into and then subsequently amended in respect of the price that is to be paid under the contract, then the question of whether the liquidated damages clause is a penalty or not is to be determined by reference to the date on which the contract was amended, not when it was originally entered into. In that case a reduction in the contract price without a reduction in the liquidated damages to be paid in the event of a breach of the contract resulted in the liquidated damages clause being held invalid as a penalty.

If you would like any further information or to discuss any penalty or liquidated damages clauses in your contracts please contact either:


Oliver Andrews
Solicitor
T: 01772 229810
Email Oliver

 


Stuart Irons
Head of Litigation, Preston 
T:  01772 823 921
Email Stuart


Who should pay the costs of Will disputes?

Thursday 13th November 2014

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The Brief - Issue 10

The Courts have a broad discretion in relation to who should pay the costs of disputes relating to wills.

Say, for example, that Mr Jones, a widower, dies leaving a will and there follows a dispute between his sons, James and John, in relation to the interpretation of the will. Both James and John have arguable cases and act reasonably, but the Court finds in John’s favour.

So, who should pay the costs, which could be substantial?

The normal rule in litigation is that the loser (in this case James) will be ordered to pay the costs of the winner (John). However, the Court has a discretion to order, for example, that the costs of all parties be paid out of the estate, and that is a common result where all parties have acted reasonably. The potentially large costs of such disputes, and the modest size of most estates, is therefore a significant factor in influencing settlement of such disputes.

The recent case of Marley v Rawlings provides a useful, if slightly unusual, illustration of the Court’s discretion on costs in operation. Marley v Rawlings attracted a great deal of attention earlier this year because of the unusual facts, which we covered in February’s Issue 8 of The Brief.

Mr and Mrs Rawlings had instructed their solicitor to prepare identical wills, in which each left their estate to the other (if still alive) and, failing that, to their adopted son, Mr Marley. The wills were drafted and signed but, crucially, Mr and Mrs Rawlings accidentally signed each other’s wills, and no one noticed this for many years.

If the wills were valid, Mr Marley would benefit. If they were not, Mr and Mrs Rawlings’ two natural sons (“the Respondents”) would inherit the estate on an intestacy (which operates where there is no valid will).

The case proceeded all the way to the Supreme Court, which found in Mr Marley’s favour. The question of who should pay the costs of the litigation then had to be considered.

Mr Marley argued that the losers, the Respondents, should pay all his costs (including his costs in the High Court, Court of Appeal and Supreme Court). The Respondents argued that all parties’ costs should come out of the estate, or be paid by the solicitor who had prepared Mr and Mrs Rawlings’ wills (as it was the solicitor’s error that had led to the litigation). The Supreme Court’s decision must be seen in light of the fact that the Rawlings’ estate was modest, being approximately £70,000.

The Supreme Court decided that the solicitor’s insurers should pay the costs of both parties in the High Court and Court of Appeal and that, in relation to the costs in the Supreme Court, the insurers should pay Mr Marley’s costs, the Respondents’ solicitors’ disbursements and the fees of the Respondents’ barristers (provided that the barristers did not claim a success fee under a conditional fee agreement, which the barristers agreed to do).

This was an unusual case and probably required such a creative decision in relation to costs. The role of Mr and Mrs Rawlings’ solicitor was a significant factor, as Mr Marley would have had a claim against the solicitor. If the Court had ordered the costs to be paid out of the estate, the solicitor (or their insurers) could have had to reimburse the estate in any event. The modest size of the estate was also a factor.

The Marley decision provides a useful reminder of the considerable discretion that the Court has in relation to who should pay the costs of disputes relating to wills. This discretion does however create some uncertainty for parties in such disputes, which in turn provides an incentive to settle will disputes before they reach a final hearing.

If you need any advice or further information about will disputes please contact:  


Jeff Lewis
Solicitor
Tel: 0161 836 8872
Email Jeff

 

Will Review

It’s important to review your will at regular intervals as laws and tax rules can change as well as family circumstances. This is particularly important for those in later life as highlighted in our recent article in our Wealth Protection bulletin Issue 13. For a will review or to discuss the plans you have in place please contact our Private Client team

 


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The Brief - Issue 6 July 2013


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The Brief – Issue 5 April 2013


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