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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

Dispute Resolution

Solicitor Negligence Claims Update
Monday 23rd October 2017

A recent Court of Appeal judgment has found that a firm of solicitors were not negligent in failing to challenge a client’s decision not to pursue a particular part of their claim.

In 2001 Mr. Graham Thomas decided to a claim for vibration white finger (VWF), a mining related condition, and he instructed solicitors to pursue the claim through a scheme set up dealing with VWF claims.  Under the scheme Claimants had a medical examination and then the option to accept an offer for general damages, or to pursue a claim for special damages (i.e. damages for economic losses such as the cost of medical treatment and domestic assistance).

Mr. Thomas underwent a medical examination and then received an offer of general damages.  He met with his solicitor, who explained the scheme in general terms and later sent a letter to him explaining what a claim for special damages would involve.  There was then a second meeting between Mr. Thomas and his solicitor which included a discussion about the process of pursuing a claim for special damages.  At that point Mr. Thomas decided to accept the offer of settlement for general damages.

In 2008 Mr. Thomas instructed another firm of solicitors who commenced a professional negligence claim against the previous firm of solicitors, arguing that the solicitors had failed in their duty to Mr. Thomas by not challenging his decision not to pursue a claim for special damages.  The Judge dismissed the claim and Mr. Thomas was granted permission to appeal.

In September the Court of Appeal dismissed the appeal, and in doing so made the following findings regarding solicitor negligence claims:-

  • The duty of solicitors to advise is fact-specific and may vary with the circumstances of the particular client.  Here the solicitor had met with the client twice face-to-face and he was able to make an independent decision.  The Court held that it was not the duty of the solicitor to tempt him to change his mind.
  • The extent of recoverable costs is relevant to a litigation solicitor’s standard of care.  The VWF scheme applied a fixed costs regime.

The decision is therefore of relevance to Claimants in litigation by demonstrating the importance of taking into account all heads of claim when considering settlement, and also to the parties in solicitor negligence claims regarding the issue of the extent of the standard of care.

The dispute resolution team at Brabners has wide experience of pursuing solicitor negligence claims, and runs the specialist website at www.solicitorsnegligence.co.uk


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Mental Capacity to make a will and mistaken beliefs
Wednesday 11th October 2017

For a will to be valid certain tests must be satisfied.  One of the more obvious tests is whether the individual making the will (known as the testator) has the mental capacity to understand the effect of making a will, the property they are disposing of and to comprehend and appreciate the claims to which they should give effect. 

The important final element of that test is that the testator should not have any disorder of the mind that perverts their sense of right or prevents the exercise of their natural faculties.

An interesting strain of case law has developed around whether a mistaken belief held by the testator can render a will invalid.  There are obviously cases where this will be the case such as demonstrable insanity or memory loss but there are many cases where things are less clear cut.

For example, in the case of Re Bellis [1992] 141 LT 245 the testator made a will from which one of her 2 daughters benefitted more than the other.  The will was successfully challenged on the basis that the testator was mistakenly under the impression that she had been supporting one of her daughters and wanted to redress the balance by her will.  As the support the testator mistakenly considered she had been providing had not been provided the will was set aside.  It is not enough that that there is a mistake made by the testator as to the facts, the mistake has to be relevant to the manner in which the will is prepared and the exercise of the testamentary capacity.

One recent case on this issue is Ball & ors v Ball & Ors [2017] EWCH 1750 (Ch).  In this case 3 children sought to challenge their mother’s will on the basis she lacked capacity due to a mistaken belief.

The facts of the case are that the 3 children has reported their father to the police for sexual abuse and their father had been prosecuted and pleaded guilty to some of the charges.  The mother’s will was made following those events and she was evidently upset by her children’s actions and she excluded them from her will in favour of her other children.

The essence of the case was whether the mother had been misled by her husband as to certain facts.  In reaching his very fact dependent judgment His Honour Judge Matthew did not accept that the mother has been misled and that, when she made her will, she was “not labouring under any significant mistake at all as to the guilt of her husband”.  On that basis, the will was valid and the challenge to it failed.

Of course there are other grounds on which wills may be challenged which may overlap with issues of testamentary capacity – such as where a mistaken belief on the part of the testator is the result of a third party providing false information to the testator either negligently or deliberately.  If deliberate and the third party then becomes a beneficiary under a testator’s will that might give rise to a challenge in undue influence.

For more information on wills, please click here


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Sports disputes - is arbitration a winning formula?
Tuesday 3rd October 2017

It was 2008 and Usain Bolt leapt onto our screens along with three other Jamaican teammates to clinch not only a gold medal but also a world record in the 4x100m relay with an impressive time of 37.10 seconds.

Fast forward almost 10 years and Bolt’s unblemished record of gaining three gold medals (in three different events) at three consecutive Olympic Games has been ruined. Bolt’s teammate, Nester Carter, tested positive last year for a banned stimulant, methylhexaneamine, in a re-analysis of a urine sample from the Beijing 2008 games which has resulted in a disqualification of the 2008 4x100m victory, by the International Olympic Committee.

Legal representatives for Carter confirmed that he would appeal the decision to the Court of Arbitration for Sport (“CAS”) with a hearing scheduled for November this year. CAS is a an independent institution based in Lausanne, Switzerland in which all disputes in connection with the Olympic Games must be submitted, pursuant to rule 61 of the Olympic Charter.

Arbitration has always had its position in resolving disputes within the sports sector. It is often the favoured method of dispute resolution not least due to sports disputes often being extremely technical and requiring expert knowledge within the relevant field. Arbitration also offers an enviable element of confidentiality which litigation is not able to provide. This can be of paramount importance to sports stars, particularly athletes who are reliant on endorsements to make up the bulk of their earnings.

Whilst neither arbitration nor litigation can compete with Bolt’s lightning fast pace, arbitration does offer a more streamlined and efficient path to obtaining a determination of the dispute. Naturally, this is likely to result in a more cost-effective outcome which all parties should favour. Additionally, athletes have a limited period in which they can compete at the top of their game, therefore a lengthy bout of litigation could be a knockout blow to their careers.

With sport being a truly global phenomenon, ordinary litigation would struggle to provide the necessary arena for events taking place in varying locations. Further, a strict application of national law would fail to take account of the specific needs of the sporting world.

The benefits of arbitration over litigation apply not only in relation to disputes in the sports sector; arbitration can also be of great benefit in any commercial dispute which requires technical expertise, a more streamlined process and where the issues are of a sensitive nature.

If arbitration or litigation could assist you, or your company in resolving a dispute please contact a member of the Dispute Resolution Team.


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Hot Gossip - Single publication libel sufficient to secure £20,000 damages
Thursday 28th September 2017

In recent years, defamation lawyers have watched closely for court decisions that grapple with the new concept introduced by the Defamation Act 2013, namely the requirement to show that they have suffered “serious harm” before any valid complaint of libel can be made.

In the very recent case of Singh v Weayou [2017] EWHC 2102 the court considered a single email sent by a hospital employee to a senior manager and the HR manager making allegations of inappropriate sexual harassment against a fellow worker, the claimant.

Following a trial, the court found the allegations to be false and awarded £20,000 in damages to the Claimant.

In addressing the requirement to establish that the single email, sent to only 2 recipients, had caused the claimant ‘substantial harm’, the judge said “I accept that the hospital is a small and close-knit working environment where gossip is likely.” 


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Yet further court closures are expected
Wednesday 27th September 2017

Despite significant increases in the court fees payable in relation to most civil claims in recent years and a programme for the closure of 86 courts in England and Wales, it seems that even further court closures may be on the cards.

On 14th September 2017 the Lord Chief Justice, Lord Thomas of Cwmgiedd, gave evidence to the Justice Select Committee in relation to his annual report for 2017.[1]

In that report, the Lord Chief Justice said that:

There is a surplus in the HMCTS estate which needs to be addressed. This will inevitably involve further court closures which, under the terms of the HMCTS governance arrangements, are decisions for the Lord Chancellor. It will be essential to use the remaining estate more flexibly and efficiently.

The Lord Chief Justice further elaborated upon this issue when he gave his evidence to the Committee. He acknowledged that in circumstances where a town or city has multiple court or tribunal buildings already then some streamlining of these so that buildings and facilities are used more cost-effectively would not be controversial. However, the much more politically controversial issue is where there are court closures resulting in a town or city losing its court completely. He said that “it is a question of how radical are we prepared to be in providing a much better service or do we spend the money on maintaining buildings which are under-utilised”.

It remains to be seen how far reaching any such further closures may be (or if, indeed, they will happen at all) but it is certainly something that we will be watching with interest. Whilst increased efficiency in the court system is to be welcomed, especially in terms of reducing the amount of time taken for processing claims, the obvious concern is whether the loss of some local courts may make it more difficult for certain people to have their cases heard and get access to justice.   

 


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Debt claims are changing – for better or for worse?
Monday 18th September 2017

Back in May, we wrote about the new Pre-Action Protocol for Debt Claims (“the Protocol”) and considered the impact that it will have on both business creditors and consumer debtors. As the Protocol comes into force on 1 October 2017, there are now less than 2 weeks remaining to prepare for the changes afoot.

Protection for consumers

It is clear that the protection of consumers was a major consideration in the drafting of the Protocol. The new rules provide for individual debtors to be given, at the outset of the dispute, all of the information that they would need to fully understand and respond to the claim being brought against them. Creditors will also have to provide debtors with various standard form documents to assist the debtor in responding to the claim, and debtors will have ample time (without having to worry about proceedings being issued against them) to consider those documents and information before having to take any action to respond to the creditor.

Problems for businesses

The biggest issue for businesses is likely to be the length of time that must pass before proceedings can be issued. After the requisite initial ‘Letter of Claim’ has been sent to a debtor, a creditor will have to wait 30 days before issuing proceedings. Given that many businesses will offer a standard 30-day credit period before invoices must be paid, this potentially doubles the length of time that must pass before the creditor can take action to recover the debt.

If a debtor responds to a Letter of Claim within 30 days (and savvy debtors will quickly learn to do so at the end of that period) the creditor must wait a further 30 days from the date of the response before issuing proceedings. In terms of cash flow, particularly for small businesses, the additional 2 months that may be required before debt recovery action can be taken could be fatal.

What do I need to do to prepare?

This, of course, depends upon which side of the fence you are sat on.

Creditors that deal with their own debt recovery against individuals will need to familiarise themselves with the Protocol in order to avoid being penalised by the Courts for failure to comply with the new rules. Similarly, lawyers will need to understand the new rules and ensure that they are followed in cases where they will apply (for example, take note that the Protocol will not apply to business-to-business debts, unless the debtor is a sole trader).

Individuals who anticipate a debt claim being brought against them should also understand their rights, and the obligations upon the creditor, under the Protocol.

If you have any concerns about the Protocol or what impact it may have upon you or your business, our commercial litigation team can provide you with expert advice and guide you through the process.


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Get a round in, but be careful what you agree to
Monday 18th September 2017

A recent High Court Judgment is of interest to parties to contractual disputes, and in particular to those engaging in contractual negotiations at their local.

The Judge himself said that the case of Jeff Blue v Mike Ashley was “a lot more interesting than some other cases”, and it involved lengthy evidence of the business practices of the Defendant Mr. Ashley, the owner of Newcastle United and founder of Sports Direct.

The case centred on discussions in the Horse and Groom pub in central London in January 2013.  Mr. Blue, a former investment banker, alleged that during what was described as a “big night out with the lads”, Mr. Ashley said that he would pay him a £15 million bonus if he could help increase Sports Direct’s share price from £4 to £8.  Mr. Blue said that he agreed, and the share price reached that figure in February 2014.  A £1 million bonus was paid to Mr. Blue but Mr. Ashley said that this was unrelated to the alleged deal in the pub.  Mr. Blue commenced Court proceedings seeking the balance of £14 million.

One of the requirements of a contract in English law is that the parties intend to create legal relations.  In determining this issue the Court considers the objective conduct of the parties as a whole, and not their subjective states of mind, and in commercial situations there is a rebuttable presumption that the parties intended their agreement to be legally binding.

Mr. Ashley defended the claim on the basis that he did not recall the conversation but if it took place it would have been simply “drunk banter”.

Mr. Justice Leggatt held that a legally enforceable contract could form during a conversation in a pub, but that on the facts of this case there was no such intention.  The Judge’s reasoning included the purpose of the meeting, the vagueness of the offer, the lack of commercial sense, and the evidence of the three investment bankers present who did not think that Mr. Ashley was being serious.


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Landlord’s rights over tenant’s belongings
Monday 11th September 2017

The relationship between landlord and tenant can sometimes be a fickle one and, even in the most amicable of landlord-tenant relationships, it is not unusual for disputes to arise.

One frequent cause of disagreement is the question of how to deal with a former tenant’s belongings which remain on the property after a lease has ended; whether it’s a landlord who is unsure what to do with belongings left by a former tenant, or a former tenant whose items are being held to ransom by a landlord seeking payment of rent arrears.

First, it is necessary to distinguish between chattels and fixtures. Items that are ‘annexed’ (fixed) to the property are likely to be considered to be fixtures (particularly if their removal would cause any damage to the property). In most circumstances, these constitute part of the property and belong to the landlord.

Chattels are moveable items, such as personal belongings. Once a lease has come to an end (whether by expiry, forfeiture or otherwise), the law is clear regarding chattels belonging to the former tenant – the landlord has no rights over them.

Where a tenant has vacated a property leaving behind personal belongings and owing the landlord money in respect of rent, many people believe that the landlord is entitled to sell those belongings to recover the unpaid rent. The true position is quite different; the landlord becomes an ‘involuntary bailee’ of the items and owes a duty to the former tenant. The landlord must not deliberately or recklessly damage or destroy the items and, if attempting to return the items to the former tenant through a third party, must ensure that the third party has the owner’s authority to receive them.

There is an exception to this rule: if the former tenant has abandoned the items at the property, then the landlord can claim ownership of them and dispose of them as he pleases. However, it can be difficult to prove that the items have been abandoned.

Treating the items as abandoned is therefore not a step that should be taken without caution. The landlord should serve statutory notices (under the Torts (Interference with Goods) Act 1977) on the former tenant requiring the tenant to collect the items and stating that the landlord intends to sell the items after a certain date (specified in the notice) if they have not been collected by that date. The notices must give the former tenant a reasonable amount of time to arrange to collect the items before they are sold and, if the landlord is claiming any money from the former tenant in respect of e.g. storage or delivery costs, that period must be one of at least 3 months.

If the landlord receives no response from the tenant to the notices and proceeds to sell the items, it is important to remember that the items still belong to the tenant (and, as such, that the landlord will be liable to account to the former tenant for the proceeds of sale). The landlord should therefore ensure that he obtains a proper price when selling the items, and he should hold onto the proceeds of sale until such time as it can be reasonably assumed that the items have been abandoned.

There is a degree of uncertainty as to how long a landlord must wait before assuming abandonment and claiming possession of the items (or proceeds of sale), and this will depend on the circumstances of the case. For high value or unique items, or those with obvious sentimental value to the tenant (such as photo albums), it would be more difficult to prove abandonment (and the landlord would have to wait for a longer period) than for low value items. The landlord should document all action taken in case evidence is required to defend a claim for damages by the tenant (for conversion) and/or to establish a defence of abandonment.

Our dispute resolution team has a great deal of experience in landlord and tenant disputes (as well as all other areas of dispute resolution and litigation). For further information or advice regarding anything in this article, please contact us on 0161 836 8800.
 


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Making a Claim when a Company goes into Administration
Monday 4th September 2017

Recently, the fashion label Rare London announced its administration on Facebook on 31st July stating that the administrators from Duff & Phelps Ltd ‘had to take the unfortunate decision to cease to trade the Company with immediate effect making all staff redundant’.

Following the announcement, many customers took to social media to complain that they had not received ordered items or refunds for returned goods. So what can you do if find yourself in this position?

As a customer, you will be what is known as an unsecured creditor as you do not have any security over the Company’s assets and your claim against the Company will rank relatively low as can be seen from the order of priority below.

1. Debts secured over the company’s assets by fixed charges;
2. Fees and expenses of the administrator
3. Preferential debts;
4. Floating charges;
5. Unsecured creditors; and
6. Shareholders

Therefore as an unsecured creditor the best option is to contact your bank/credit card holder or PayPal to ascertain whether they are willing to provide a refund. Unfortunately, if you paid on a debit card or a refund is unavailable then you will need to make a claim against the insolvent estate.

In order to make a claim against the insolvent estate, you must have a provable debt as defined within the Insolvency Rules 2016. In this scenario the most likely ground is that the Company must have been subject to the debt or liability when it entered the relevant insolvency process (rule 14.1(3)(b) IR 2016).

Once this is established you will need to complete a proof of debt form which can be obtained from the administrator and returned upon its completion. Insolvency proceedings can be a lengthy process and it may be some time before your claim is dealt with by the administrator.

Once all the claims have been considered by the administrator they will consider what assets are available (if any) to the unsecured creditors of the company. As stated above, unsecured creditors are low in priority in the order of distribution. It is therefore not unusual for unsecured creditors to be paid on a pro-rata basis and if there are very few assets, unsecured creditors may not be paid at all.

If you are a creditor concerned about the financial situation of a debtor company, you should first check Companies House to ascertain whether any insolvency proceedings have been commenced and if so the details of the administrator or liquidator appointed. Should you require assistance with pursuing a debt please do not hesitate to contact a member of our litigation team.


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Are non-compete restrictive covenants valid where employees cannot have any interest in competitors?
Wednesday 30th August 2017

It is established law that restrictive covenants in contracts of employment that try to prevent an outgoing employee from competing can be void if they are too broad.  The majority of the cases concerning these clauses concern the duration of the non-compete period, the geographical area where competition is restricted or the type of business that is considered to be competition.

In Tillman v Egon Zehnder Ltd [2017] EWCA Civ 1054, 21 July 2017 the Court considered a more unusual argument.

Ms Tillman was employed as a consultant with Egon Zehnder Ltd.  The employer trades in several jurisdictions primarily locating senior executives for recruitment by their customers.  Ms Tillman rose to become co-Global Head of the Financial Services Practice Group but did not sign new contracts of employment with each promotion.  Her contract of employment contained restrictions on competition with her employer for a period after termination of her employment. 

In particular, Ms Tilman’s contract provided that she could not hold or have any interest in any shares in any company which competes with her employer or any group company.  The only exception to this was for shareholdings of up to 5% of the issued shares in publicly quoted companies and for investment purposes only.  

When Ms Tillman resigned her employment she was not required to work her notice and she informed her former employer that she intended to work for a competitor.  Her former employer sought an injunction from the Court on the grounds that the employment contract restricted competition.

In addition to arguing that the geographical area of restriction was too broad Ms Tillman also raised an interesting argument in defence of the injunctive application that not being permitted to be "interested" in any competing business was too wide a restriction and the competition restriction should not be enforceable. 

The general rule is that restrictive covenants must protect a legitimate interest and they must be no more than is reasonable.  If a less onerous obligation can give the same level of protection to the employer then that should be adopted.

The High Court upheld the contract of employment but Ms Tillman appealed.  The Court of Appeal disagreed with the High Court and found that the restrictive covenant was not enforceable.  The argument centred on whether a shareholder is ‘interested in’ the company in which they hold shares.  The Court of Appeal concluded that the drafting of the contract meant that Ms Tillman could not have held any shares in competitors without breaching her contract.  Therefore, the restriction on competition was too broad to be enforceable. 

Due to the way the contract had been drafted the offending wording could not be severed from the clause leaving the remaining part enforceable against Ms Tillman.  The Courts are generally reluctant to delete parts of the wording of restrictive covenants to create a restriction that had not been intended by the parties.

This decision is a harsh decision for the employer.  It was never suggested that Ms Tillman had ever wanted to acquire a small interest in one of her employer’s competitors.  The fact that she could not do this meant that that the restrictions that her employer had tried to impose on her were too onerous for the Court to allow them to have effect.

The lesson to be learned from this is that careful consideration of the minimum required restrictions on employees to protect an employer’s business interests is essential.


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