FCA Launches Project Innovate to Help Regulated Firms with Technological Change

There are a number of existing trends that are going to dramatically affect the way the investment management industry operates in the future.

The financial crisis may have been tumultuous and fostered an onslaught of regulation in the sector but there are other factors at work that are likely to bring even more fundamental change.

Demographics, environmental issues, social values and technology will all play a part as developments in these areas drive evolution in the economy.

Regulation will need to change to keep up with these forces and technology is an area in which the FCA has identified opportunities to be proactive rather than reactive.

Responsibility for Accidents on Your Property

Terrible accidents do occasionally happen to visitors when they are on someone else’s property. The death of a woman hit by a tree branch when visiting Kew Gardens in September 2012 provides a horrifying example of the sorts of freak accidents that can occur.

Such misfortunes serve as a reminder of the risks that property owners and visitors are exposed to by these types of events. In June 2014 the West London Coroners Court concluded that the victim of the tragedy at Kew Gardens, Erena Wilson, 31, from Hanwell, west London died from accidental death but Kew Gardens faced considerable scrutiny over the condition of its trees during the hearing.

Understanding the reasoning of these types of cases can help property owners better understand their responsibilities and hopefully reduce the risks of similar tragedies in future.

Insurance Fraud Figures are Not a Clear Cut Condemnation of Claimants

Insurance fraud figures released by the Association of British Insurers (ABI) in May paint a stark picture of the problem. The report identified nearly £1.3bn worth of insurance fraud claims in 2013 which marked an increase of nearly 18 per cent in one year.

These shocking figures can easily tempt people into lambasting the claims culture that has arisen in the UK, with excessive blame being placed at the feet of much maligned personal injury lawyers. This knee-jerk reaction has the potential to mask the reality of how the insurance industry operates and the more nuanced situation that actually exists.

It is important to note that the vast majority of claimants and insurance cases are brought legitimately and handled properly by insurance companies, personal injury lawyers and others. Those attempting to make a claim should not be put off by such eye-catching headlines; injuries such as whiplash can be genuinely painful and debilitating.

Is a Third Party Service Charge Apportionment Binding on Leaseholders?

The Upper Tribunal (Lands Chamber) recently had to consider this question in relation to a property nestled on the shores of Lake Windermere.

The main question that the Upper Tribunal needed to answer was whether an agreement in a residential lease that the service charge apportionment was to be determined by a third party with that decision being final and binding, was void.

The decision, which rested upon the interpretation of section 27A(6) of the Landlord and Tenant Act 1985, has important implications for residential landlords and property managers.

Employment Tribunal Statistics Shows Falling Claims Trend Continues

The latest employment tribunal statistics released in June showed that the number of claims is falling.

The tribunal statistics quarterly for the period January to March 2014 show a 59 per cent fall in single employment claims compared to the same period in 2013.

The actual number of single employment tribunal claims for the first quarter of 2014 was 5,619 which made up 13 per cent of all claims received by HM Courts & Tribunal Service. The bulk of other claims entering the tribunal system related to social security and child support, and asylum claims.

The employment tribunal statistics are in line with a long-term downward trend in the number of claims being made but specific short term factors are also at work.

Tax Avoidance Schemes: Are You Ready for Upfront Tax Bills Before Litigation?

In Chancellor George Osborne’s 2014 Budget speech a new disincentive was announced for tax avoidance schemes.

That disincentive took the form of an ‘accelerated payments’ provision giving HMRC new powers to collect disputed taxes up front before any legal ruling has been made on the lawfulness of a scheme.

The provision is expected to become law within the next couple of months meaning many people will suddenly have to find large sums of cash in short order.

Court of Appeal Adds Heat to Summer Airline Delays

Holidaymakers flying abroad for their summer break this year have received a double bonus for their peace of mind courtesy of the Court of Appeal.

Two recent consumer cases brought against airlines for delayed flights have bolstered the rights of individuals that face the misery of delays to and from their destinations.

The first case, Huzar v Jet2.com, limited the ‘extraordinary circumstances’ in which airlines could avoid compensating passengers for delays. The second case, Dawson v Thomson Airways, extended the period for bringing compensation claims from the accepted time of 2 years to the contractual limitation period of individual countries, 6 years in the UK.

This is of course good news for consumers but may mean costly compensation bills for airlines.

How Do Service Charge Provisions Operate When a Break Clause is Exercised?

If a tenant decides to end a lease early under a break clause, what happens to funds built up through the service charge for anticipated works that have not yet been carried out?

This is an interesting question for both landlords and tenants that was recently considered in Friends Life Management Services Ltd v A & A Express Building Ltd [2014].

In deciding the case the High Court set out the way in which the service charge should be calculated for the final accounting period in a commercial lease.

Driving Disruption: Uber in the High Court

Uber’s smartphone-based pick-up service is just the latest in a line of new businesses that are using technology to disrupt existing markets.

London’s black cab drivers are not going to back down without a fight over their territory though. After Transport for London (TfL) authorised the American business to operate in the capital, a fierce row broke out between TfL, the Licensed Taxi Drivers Association (LTDA) and the Licensed Private Car Hire Association (LPHCA).

TfL issued proceedings in the High Court in June to get a judicial determination on the legality of Uber operating its service. This has now been delayed due to a spate of cases related to the service which are making their way through the magistrates’ courts.

Don’t Let Business Jargon Get in the Way of Good Communication

Entrepreneurs and business managers hardly need reminding of the importance of communicating well. Whether it is dealing with customers, suppliers, shareholders, employees or regulators, good communication is vital and can mean the difference between success and failure.

Business jargon plays a double edged role in the work environment. On the one hand it enables people to display their understanding and belonging to a particular type of group, on the other it can alienate other stakeholders that are just as important to a business.

Seasoned litigators usually have countless tales of disputes that could have been avoided with better communication. So although jargon has its place, its use must be carefully balanced to avoid problems.

Are You Ready For Flexible Working?

Flexible working is now upon us.

From 30 June 2013 British businesses and their employees have become subject to new flexible working rules and those rules are broad in scope.

After 26 weeks of employment, employees have a right to request flexible working which can entail a wide variety of options.

On the face of it what this means is that qualifying employees can now request flexible working once per year and their employer is under a legal duty to provide an answer to that request.

Rising Insurance Fraud Equals Rising Costs

The cost of insurance fraud hit record levels in 2013 with £1.3bn in false claims being made according to the Association of British Insurers (ABI).

The most common type of fraudulent claims were related to motoring which made up a staggering £811m of the total. The number of fraudulent motoring claims came to nearly 60,000 individual cases, meaning tens of thousands of people either exaggerated or made up their claims entirely.

As well as being a criminal offence, insurance fraud imposes costs on both insurance firms and honest insured parties that suffer from increases in their premiums.

It is important to remember though that not all disputed insurance claims imply fraud, there are a variety of reasons that insurers and the insured might clash over payouts.

Can Property Developers Escape Personal Guarantees?

Securing a bank loan to forge ahead with grand property development schemes has been tougher in the post financial crisis world. One element of borrowing that has continued to thrive though is the banks’ insistence upon personal guarantees from directors.

Personal guarantees in relation to business debts are common and it is often the case that those debts are repayable on demand. This can leave business owners and directors personally exposed to a considerable degree of financial uncertainty. However, under normal circumstances personal guarantees are only likely to be called upon by creditors if a default event occurs such as missing an interest payment.

As with any form of contractual obligation, personal guarantees are open to challenge in certain circumstances. If there has been a misrepresentation for example, they may be unenforceable.

Preventing Accidents – No Laughing Matter

Barely a week goes by when a terrible workplace accident or an outrageous breach of health and safety laws is not in the news. Although the worst stories attract attention because of their sometimes Monty Python levels of farce or their particularly unpleasant outcomes, health and safety issues do not need to be dramatic to cause serious problems.

Accidents can happen anywhere and they usually do so suddenly and unexpectedly, therefore individuals and businesses often find themselves unprepared for the ensuing investigations and recriminations. Both criminal and civil repercussions can follow work related incidents so it is important that those involved seek immediate legal advice.

Victims of their Own Success: Brand Genericide

The BBC recently brought attention to the odd phenomenon of brand ‘genericide’. But what exactly is it and who needs to worry about it?

Businesses that own high-profile brands are the ones that mainly need to be concerned about brand genericide but it has implications for wider intellectual property protection.

In some senses it could be seen as a nice potential problem to have as it relies on a brand being hugely successful, but failure to prevent it from reaching its final conclusion could present a serious loss of value to businesses.

The ability of internet platforms such as Amazon and eBay to create almost overnight brand sensations and at the same time to enable infringement on a mass scale means it is a significant legal issue for affected businesses.

Accessing Justice with Limited Family Law Funding

The most senior family judge in the UK, Sir James Munby, recently adjourned a child contact case over concerns that the father’s lack of legal representation could harm the child.

The decision is controversial because Sir James’ comments on the case have been seen as a challenge to the way changes to legal aid have been made. Public funding has been removed from a variety of civil legal claims, including swathes of family law, as the Ministry of Justice has faced cuts to budgets.

Families facing legal difficulties should still seek advice from family solicitors as legal aid may be available in certain circumstances and experienced family lawyers can offer advice on other options that might be available.

Avoiding Professional Negligence Risks on Property Purchases

There is plenty of anecdotal and statistical evidence to show that the latest property boom has led to falls in the quality of professional advice.

When professional advisers such as surveyors, solicitors and agents are suddenly inundated with much higher quantities of work, there is always a risk that those with weak internal procedures and controls will suffer falls in the quality of their output.

The wide availability of cheap fixed-price conveyancing online can be tempting for property buyers unaware of the importance of high quality advice. But making short term savings on such a high value purchase can be false economy if problems occur later on. Many buyers are only finding this out when it is too late.

Property laws in the UK can be very complex and subject to ancient quirks that can still affect your purchase today so it is essential that you sure you use the services of an experienced solicitor. If professional negligence is suspected then independent advice is required.

Innovation or Unlawful Copyright Infringement?

The ease of copying digitised media caused traditional media businesses serious headaches when file-sharing websites began to proliferate across the internet during the dotcom boom years.

The apparent lack of regulation and a disregard or ignorance of intellectual property rights among a new wave of young entrepreneurs and online media consumers left the record majors reeling. The difficulty of applying existing intellectual property laws to an era of digital media led to new legislation such as the Digital Millennium Copyright Act in the US and, more recently, the Digital Economy Act 2010 in the UK.

The law has done a great deal of catching up in the last decade with high profile casualties such as the original Napster and Kim Dotcom’s Megaupload bringing notoriety to the online file sharing phenomenon.

That has not stopped online innovation but it has brought into focus the finer details of what is and is not on the wrong side of the intellectual property line.

Pacifying Problem Neighbours with Poetry

Barking dogs, overgrown trees, antisocial parking, noisy activities and adjoining walls have all led neighbours across the thresholds of the courts. But ending up in court over what are often minor issues that have boiled over into major annoyances is the last thing most neighbours want to do.

Although it cannot always be avoided and is sometimes necessary, litigation should certainly not be seen as the first strategy for dealing with nuisance neighbours. Taking legal advice early can save a lot of problems though. An experienced solicitor can help guide you towards resolving a problem informally without creating even more issues if it escalates to legal proceedings later on.

As French writer Marcel Proust found when writing his novel In Search of Lost Time, delicately worded letters directly to your neighbour may be all that is required.

Dealing with Mistakes in Contracts

What happens if you make a one-off order for a large amount of capital goods and someone gets the measurements wrong?

The French national railway operator SNCF has found that it can mean finding an extra 50m Euros to sort out the problem. SNCF ordered hundreds of trains that were too big to fit into many stations after it failed to verify measurements provided by network operator RFF.

In certain circumstances the English courts can apply the legal doctrine of mistake in contract law. Unfortunately the law of mistake is unlikely to be helpful in a case similar to that of SNCF unless the other contracting parties knew about it beforehand.

How Will the Right to be Forgotten Work in the Real World?

The huge power and limited responsibility that giant tech companies are perceived to wield over individuals’ private information has faced a major challenge. The full ramifications of the European Court of Justice’s recent ruling against Google are yet to be fully felt but it is seen by many as a first step towards a regulatory framework for the internet.
The effects are likely to be far reaching. For example, most of the commentary has focused heavily on historic information about parties that are still alive. However, the ruling is also likely to affect the management of the online legacies of those who have passed away. Wills and probate lawyers can attest to the fact that this is a growing issue.
The scope for this ruling to affect all personal information that is available online is the reason it has generated so much interest from privacy advocates, freedom of expression advocates and anti-censorship groups.

Do I Need a Lasting Power of Attorney?

Dementia and other forms of mental impairment are increasingly common as our population ages but many people are unprepared for the effects it can have on their lives.
Although it is not a comfortable topic, it is worth thinking about now so that if something happens and you cannot make your own decisions, a trusted relative or friend can make them for you without having to go through a lengthy court process.
A lasting power of attorney is usually appropriate for people concerned about having diminished responsibility at some point in the future. This is not the same as an ordinary power of attorney which can be used for a wide range of purposes at any time but is automatically revoked if the donor loses mental capacity.
It is important to note that a lasting power of attorney does not mean that you immediately lose control of your affairs.

Purchase Mortgage Approvals Steady in May but Remortgage Approvals Fall Again

Ray Boulger, of leading independent mortgage adviser John Charcol, comments on today’s mortgage approval numbers from the Bank of England.

“Following comments I made to the Bank at the beginning of this month about the wide divergence between the seasonally adjusted mortgage approval figures announced in its monthly press releases and the actual numbers (which it refers to as “non seasonally adjusted”), it has responded with very credible alacrity by including a link on its press releases to the table on its web site (Table A5.4) which has full a details of mortgage approvals, including tables for the number and sterling value of approvals on both an actual and seasonally adjusted basis.