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The City of Westminster & Holborn Law Society
www.cwhls.org.uk A company limited by guarantee. PUBLISHER Ian Fletcher Benham Publishing Limited 3tc House, 16 Crosby Road North, Liverpool L22 0NY Tel: 0151 236 4141 Fax: 0151 236 0440 Email: admin@benhampublishing.com Web: www.benhampublishing.com ADVERTISING AND FEATURES EDITOR Anna Woodhams
Introduction 5
News & Events 6
Council Members’ Reports
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CWHLS on the International Front
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“Reshaping Justice”... whilst Maintaining Our Return to Judicial Orthodoxy
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Men Win Equal Pay and Sex Discrimination Case
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Stats Show Law Graduates Choosing Alternative Route to Qualification as Lawyer
DESIGN AND PRODUCTION MANAGER Fern Badman ACCOUNTS DIRECTOR Joanne Casey
The President’s Column
MEDIA NO. 1318
Book Reviews
PUBLISHED May 2014 – © Benham Publishing LEGAL NOTICE © Benham Publishing. None of the editorial or photographs may be reproduced without prior written permission from the publishers. Benham Publishing would like to point out that all editorial comment and articles are the responsibility of the originators and may or may not reflect the opinions of Benham Media. No responsibility can be accepted for any inaccuracies that may occur, correct at time of going to press. Benham Publishing cannot be held responsible for any inaccuracies in web or email links supplied to us. The City of Westminster and Holborn Law Society welcomes all persons eligible for membership regardless of Sex, Race, Religion, Age, Disability or Sexual Orientation. DISCLAIMER All views expressed in this publication are the views of the individual writers and not the society unless specifically stated to be otherwise. All statements as to the law are for discussion between members and should not be relied upon as an accurate statement of the law, are of a general nature and do not constitute advice in any particular case or circumstance. Members of the public should not seek to rely on anything published in this magazine in court but seek qualified Legal Advice.
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Social Media in the Legal Sector
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Running a Limited Company
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Tolley’s Statutory Residence Test Photographs
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Annual Dinner 2014 Property
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Recent Flood Events Call Us All into Action
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It’s Raining Sinkholes! Professional Practice
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Iconic Dogs Trust Slogan Marks Landmark Anniversary
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Estate Administration: the Complete Package
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The SBA – Your Charity
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Expert Reports – Insurance Disputes and Subrogation
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Time is of the Essence Sub-committee Reports
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Land Law and Conveyancing Sub-committee
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Professional Matters Sub-committee
COPY DEADLINES
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Education and Training Sub-committee
Autumn Winter Spring Summer
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Law Reform Sub-committee
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International Sub-committee
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Junior Lawyers’ Division
Issue Issue Issue Issue
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4th July 2014 3rd October 2014 2nd January 2015 3rd April 2014
Members wishing to submit material please contact the Editor, Ivan Ho, before copy deadline. Email: ih@hunters-solicitors.co.uk Anyone else wishing to advertise or submit editorial for publication in the Report please contact Anna Woodhams before copy deadline. Email: anna@benhampublishing.com Tel: 0151 236 4141
Family Law 30
Pre-nups and Needs
President:
Hon Secretary:
Hon Treasurer:
Editor:
Administrator:
Susanna Heley susanna.heley@rlb-law.com
020 7227 7463
Jonathan Cornthwaite jcornthwaite@wedlakebell.com
020 7395 3122
Bruce Clarke bruce.clarke@lbmw.com
020 7222 5381
Ivan Ho ih@hunters-solicitors.co.uk
020 7412 0050
Susie Hust, 1 The Sanctuary, London SW1P 3JT admin@cwhls.org.uk 020 7960 7115
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Introduction
THE PRESIDENT’S COLUMN
President Susanna Heley
The Society held its annual dinner on 7 April at the historic National Liberal Club at One Whitehall Place. A fantastic evening in the great company of CWHLS’ members and their guests was topped by the privilege of hearing Lord Neuberger, President of the Supreme Court, speak about the importance of access to justice and the role of lawyers in society. Those present clearly identified with the sentiments expressed by
DIARY
Lord Neuberger which reminded us of the contribution which English law has made to
May
justice on a worldwide scale and emphasised our responsibility as lawyers to ensure
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that access to justice is maintained. All in all, the evening was a resounding success,
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made possible thanks to our generous sponsors, Willis, Thames Water and 39 Essex Street Chambers.
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I take this opportunity to thank our wonderful administrator Susie Hust for her tireless work in arranging the evening and thanks also go to Bruce Clarke, our honorary treasurer for his assistance and to David Morgan for his support. Looking forward to upcoming events, invitations will shortly be sent for a drinks
LEGAL CHARITIES GARDEN PARTY
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Committee Meeting
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Tavern Tour
reception and we will be having dinner with the legal press in May. We have organised
July
a tour of the Supreme Court and, of course, we are looking forward to the Legal
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Committee Meeting
Charities Garden Party in June - see the calendar for further details of upcoming events. I hope to see as many of you as possible in the near future.
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Committee Meeting
If any of you are looking to get more involved in the activities of CWHLS, most of our sub-committees are actively recruiting members. Simply get in touch with the chairman of any committee which catches your interest. Please do take the time to check out the
October
reports of our sub-committees’ activities detailed in the following pages.
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I shall be attending the Law Society’s Presidents and Secretaries Conference in May
November
and reporting back on news of interest to our members. For now though I leave you to
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Committee Meeting
Committee Meeting
enjoy the news of the Society. I take this opportunity to remind you that we are always very pleased to receive contributions from our members. Do get in touch with news, issues and concerns. SUSANNA HELEY
For further information, please see the monthly e-Report or contact Susie Hust at admin@cwhls.org.uk
PRESIDENT
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News & Events
COUNCIL MEMBERS’ REPORTS FEBRUARY 2014 There were no papers of any significance being dealt with at this meeting other than those to which a claim for confidentiality was made. This state of affairs reduces the profession to a state close to disenfranchisement. You can vote for your Council member but they may not consult with you on the matter for debate and decision ahead of the meeting about weighty matters of Council business. The mood of the meeting was ‘grumpy’. A talk scheduled for the evening before the Council meeting had been cancelled on the very day it was due to take place because it was decided that the speaker, a senior staff member, should address the Council meeting instead. This clearly irritated members who had pre-booked trains and organised their affairs so that they could be in London on the evening ahead of the formal meeting. Discussion and debate around this issue demonstrated how Council members’ time and commitment was valued.
Sue Nelson
In light of the SGM in December, Council discussed improving member engagement. A mechanism was proposed for arriving at a series of proposals to improve engagement but without any time frame or budget. We re-asserted our intention to become a ‘truly
APRIL 2014 Sara Chandler
Every two years the Law Society Council meets in Cardiff and on 2 April 2014 we did so, and reminded ourselves that the Society is the Law Society of Wales and England. Our hosts were very kind and gave us a very warm welcome. As we entered the National Museum of Wales we were treated to a jazz quartet which included a harp. The music was just right to put us in the mood to meet our Welsh colleagues. The hospitality of Cardiff also gave the chance to network with a large number of the Society’s stakeholders including a wide range of Welsh solicitors as well as judges, academics, and Assembly members. For anyone visiting Cardiff, I thoroughly recommend the National Museum, which is full of French impressionist paintings, some Rodin sculptures, excellent china and ceramics and all because two sisters, the Misses Davies, gave their wonderful collection to the nation on their deaths. The Council was addressed by the Right Honourable Mrs Justice Nicola Davies DBE, presiding judge on the Wales circuit, on the importance of recognising the increasingly distinctive nature of the law in Wales. The Revd Professor Thomas Watkin, formerly First Welsh Legislative Counsel, the legal officer principally responsible for drafting the legislative programme of the Welsh Assembly Government under powers conferred by the Government of Wales Act 2006, spoke to Council with a very clear exposition of the development of the legislative powers of the Welsh Assembly Government. Council also heard a report by Council Member David Dixon, on the work of its Wales Committee, for example in pushing for appropriate representation of solicitors with knowledge of Wales on relevant policy committees, as well as the customary reports from the Boards and an update on continuing work to improve internal controls within the Society’s administration. There are a number of Law Society Committees who have members from Wales on their committees, as has the committee which I am proud to chair, the Human Rights Committee.
PRESIDENTIAL ELECTION During a break in the formal business of the Council meeting the hustings for the future President of the Law Society were held. Seven Council members who are standing as candidates for Deputy Vice President (DVP) this year spoke for 3.5 minutes each and then responded to questions from fellow Council members. Under the Bye-Laws of the Law Society, the DVP is elected by the Council, and the election is expected to conclude towards the end of the month when we will announce the results.
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News & Events
member-focussed organisation’. This seemed bizarre. At the end of 2013 we had approved a costed business plan which was oozing with membership engagement activity and in which we re-affirmed our commitment to be a first class membership body. We are in a pickle if just 2 months later we need a working party to work out how to become a ‘truly member-focussed organisation’. Setting up a working party is just a distraction from delivering on the business plan. Sadly the Law Society has ceased to be a member-led organisation some years ago, leadership having effectively been ceded to senior staff. The prospects of wresting power back from staff seem close to nil. It was telling that the initial proposal to establish a working party was that it should be comprised only of staff. What is missing at Chancery Lane is an appropriate relationship between management and members. The new
ONGOING WORK ON LEGAL AID PROPOSALS The Government Response to “Transforming Legal Aid: Next Steps” was published on 27 February, accompanied by the independent reports from Otterburn Legal Consulting and KPMG which informed the Government’s proposals. In line with Council’s motion of 24 February the Law Society responded by reiterating firm opposition to fee cuts, stating serious reservations about the proposed contracting model and expressing concern about the challenging future for many of our members. In the response the Law Society recognised that the Government had listened to the concerns raised by members and noted that it was helpful that they had made a number of changes that would mitigate to some extent the impact on solicitors. In addition the Society has been working to provide a package of advice to firms considering bidding for contracts as a consortium. There is a Law Society toolkit for solicitors wanting to raise awareness of the impact of proposed criminal legal aid cuts and to dispel the myth that all solicitors are high earners.
MORE EFFECTIVE ENGAGEMENT WITH THE PROFESSION In order to address concerns about becoming a truly memberfocused organisation, the Law Society has appointed a project manager, and staff will be seconded from across the organisation to manage the day-to-day work. There is a commitment to re-engage with members, better communicate the value of membership of the Society, and, by delivering valued services and products, give all members reasons to recognise that being part of the Society is an essential part of being a solicitor.
OTHER ENGAGEMENT ACTIVITY Council heard about a debate on the Government’s proposals for judicial review organised by the All-Party Parliamentary Group for Legal Affairs, which is co-sponsored by the Society with the Bar Council. The Relationship Management team had arranged
Chief Executive will provide an excellent opportunity to reinvigorate the organisation. It will also offer an opportunity to establish a style of leadership which closes the gap between the members and their organisation. Some years ago we were told by a Complaints Ombudsman that we were drinking in the last chance salon. That bar is now closed and all complaints activity is superintended by LeO. The LSB would cut the Law Society out of regulation tomorrow given half a chance. The Society’s future can only lie in it being a members’ organisation. No one has yet called ‘last orders’ on this aspect of its work but my prediction is that without a very significant change in style, tone and performance that cannot be far off. The Law Society needs to demonstrate – and to do so very quickly – that it understands its role and can rise to the challenges ahead. SUE NELSON
a number of chief executive and officeholder visits at local law society events and dinners in the City, Midlands, North East, North West, South East, Yorkshire and Wales. A dinner for City members and other stakeholders on social mobility was organised, with guest speaker Rt Hon. Alan Milburn. There was also a breakfast for the ten Law Society Council members who work in or represent the City.
RAISING THE PROFILE OF MEMBER SERVICES Council heard that the Law Society will be participating in the National Legal Exhibition & Conference (LegalEx) on 15 to 16 May 2014 in Liverpool. This two-day event will include an 80stand exhibition, eight theatres focusing on topics such as legal technology, how-to sessions, practice growth and legal updates. The Law Society theatre will include seminars on the Conveyancing Portal and CQS and Law Society Consulting, promoting Lexcel, commercial investments and accreditations. Council also heard about the 25th anniversary of the Practice Advice Service (PAS), which had been marked with articles in the Gazette and on the Law Society intranet. The team plans to capitalise on the success of the anniversary and related articles to market the service over the coming year.
DIVERSITY AND INCLUSION CHARTER ANNUAL REVIEW Council heard of increasing participation rates in the annual review process - 239 firms participated in 2013 compared to 177 firms in 2012. The annual review is integral to the commitments firms make under the charter, and the 2013 review demonstrates that the great majority of charter signatories are maintaining momentum on the diversity and inclusion agenda, although further progress remains to be made in terms of the diversity profile of the solicitor workforce, and on training and impact assessment. PROFESSOR SARA CHANDLER
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News & Events
CWHLS ON THE INTERNATIONAL FRONT
CWHLS has a proud history of acting on the European and world front, in conjunction with bar associations from a number of different countries, and organisations of lawyers in the international legal profession. This has benefitted members of the Law Society in a variety of ways, not least in providing open doors and numerous contacts for commercial relations. However, since 2005, CWHLS has acted to support human rights lawyers at risk in Colombia. This is a task which has led to four Presidents, now former Presidents, of our Society, and its predecessors, joining a large delegation of lawyers, between 50 and 70 strong each time, visiting Colombia every two years to support the human rights lawyers at risk. Out of the CWHLS initiatives, the independent charity known as the Colombia Caravana has developed. The sort of risks faced by the lawyers has inspired our members. We do not face death threats from para-militaries, or get physically attacked, shot at or have our offices burgled and sensitive client files stolen. However, our colleagues in Colombia do face these risks every day in their efforts to protect the human rights of their clients, access to justice and the rule of law. Our former presidents, Alison Parkinson, Jeffrey Forrest, Kim Archer and Sara Chandler, together with International Committee Chair, Monika Pirani, joined international delegations in 2008, 2010 and 2012, and a fourth delegation of the Colombia Caravana, will go this August. Over the years around 160 lawyers from 15 different countries have participated in the Caravana, visiting many regions of Colombia to hear testimonies from lawyers and their clients. A surprise for all CWHLS members was the announcement at the end of April, that the Winner of the LUKAS Human Rights worker of the Year is Professor Sara Chandler, member of CWHLS International Sub-Committee, for her work in supporting human rights over many years. LUKAS stands for Latin UK Awards, and is awarded to members of the Latin, Spanish and Portuguese communities in the UK, and those people who work with or are part of the community. CWHLS International Committee continues to maintain relations with the two Bar Associations with which CWHLS is twinned: the Berlin Bar, and the Barcelona Bar. In February, CWHLS President Susanna Heley attended the Barcelona Bar’s festivities in memory of San Raimon de Pennyafort, and spoke in the working
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sessions on cloud computing for lawyers. Committee member Gordon Adam is the link with the Berlin Bar, and Charles SodenBird is the link member for the Barcelona Bar. Two of our distinguished members, David Morgan and Jeffrey Forrest are also active in other international arenas. David Morgan as member representing the Law Society on the CCBE, and Jeffrey Forrest attends the Commonwealth Law Conferences. The Committee also ensures that CWHLS is present at all the twice yearly congress of the FBE (Federation of European Bar Associations). Various members of the Committee are active in the commissions of the FBE, where the work of the FBE is done by member bar associations. CWHLS often provides speakers for the training sessions and main sessions of the Congress. The next FBE Congress will be held in Vienna, from 29th to 31st May and the theme of the congress is “The Independence of Lawyers”. CWHLS members are very welcome to join members of the International Sub-Committee in Vienna. There are reduced rates for trainee solicitors and junior lawyers. Vienna has many attractions, and it is a great opportunity for members to visit in the company of European lawyers who can offer good contacts in many cities with a view to future commercial relations. Please contact Monika Pirani, International Sub-Committee Chair if you are interested. Her email is: mpirani@bishopandsewell.co.uk.
News & Events
“RESHAPING JUSTICE”...
WHILST MAINTAINING OUR RETURN TO JUDICIAL ORTHODOXY A RARE AND HISTORIC SPEECH FROM THE INCOMING LORD CHIEF JUSTICE, LORD THOMAS OF CWMGIEDD DELIVERED TO A MEETING OF JUSTICE IN CENTRAL LONDON A REVIEW BY PHILLIP TAYLOR MBE OF RICHMOND GREEN CHAMBERS
JUSTICE JUSTICE was established in 1957 and became the U.K. section of the International Commission of Jurists a year later. The organisation covers representatives from all the main political parties as it seeks to advance the fair administration of justice and to persuade decision-makers by the strength of its legal research. It has a reputation for being far-sighted, independent and practical in its approach to legal reform hence the invitation to Lord Thomas on the latest initiative which is known as ‘Reshaping Justice’.
THE TWO PURPOSES Lord Thomas had two purposes with his address which should be read in full on the judiciary website for all practitioners and advisers involved in litigation. He began his historic speech by saying: “The first is to make clear that our system of justice does need reshaping to deal with the fundamental change that is occurring in the role of the State. It is retrenching. The budget for justice is being reduced substantially. We must ensure that our system remains able to maintain the rule of law by administering justice effectively, speedily and impartially in this new age. The second is warmly to welcome the re-shaping of Justice and to say how very encouraged I am that Justice in its re-shaped form can and must play a vital role in reshaping our system of justice.”
Lord Thomas of Cwmgiedd, the Lord Chief Justice of England and Wales
We heard recently from Lord Thomas of Cwmgiedd, the Lord Chief Justice of England and Wales in the spring of 2014 with what turned out to be a courageous and thought provoking speech on a very big issue of what he called ‘Reshaping Justice’. It is really great to see these senior judicial figures speaking in public outside their courtrooms!
Baroness Helena Kennedy
For it has not really been the norm for a Lord Chief Justice to deliver the type of short address which I saw presented on 3rd March 2014 at a meeting at Freshfields of ‘JUSTICE’ which is a cross party legal organisation chaired by the splendid Baroness Helena Kennedy. Helena never fails to impress with her passion over legal issues whether you agree with her or not and in this instance, there appeared to be full agreement that ‘something must be done’ because of the parlous state of funding legal actions and the way in which we conduct our business.
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Lord Thomas then went into some fine detail which is in the speech and a few journalists have picked themes in the newspapers and journals mainly on the possibility that some form of inquisitorial procedure might be introduced and that a two tier Crown Court might be established. This was basically a revisiting of some controversial topics which have re-emerged since the era of austerity began: this time there is a different and more positive practical approach being adopted by those who run the system as you will see from the speech itself. What was also quite amusing was the attempt (including my own) to ask the ‘Chief’ a question or two – let us be clear, these senior people do not answer questions as I think we really know this, but it is worth trying. Members of the Judiciary have a splendid charm in the exquisite side-stepping of the difficult question although I must say that the Supreme Court members have been much easier to interview!
OUT OF THE SHADOWS The late Lord Chief Justice, Lord Taylor of Gosforth, was the first of the modern ‘Chiefs’ who wished to be as open as possible about giving interview after the extreme reticence of his predecessors such as Lord Lane and others.
News & Events
The reason why this speech was so unusual was that the Lord Chief Justice had actually come out of the shadows to talk about the future of the courts and the way we do our business without damaging the concept of ‘judicial independence’ or talking political money. It had always been the uneasy role of previous Lord Chancellors such as Lord Mackay (another judge who was actually quite easy to talk to) when discussing money and the future of public funding when the legal aid budget went through the ceiling. Here, Thomas gave us a brilliantly professional performance with absolutely nothing given away except the contents of the speech itself, and deft handling of questions. What I liked of the event, apart from the sharp intellect on display, was the presence throughout of some forward thinking. Justice Stephen Breyer, who had given a speech a month earlier at Middle Temple on ‘judicial independence’ and his American colleagues still revere Magna Carta in a way which we British do not – of course, that may change next year with the 800th anniversary. Thomas, however, went further (some would say he had to) by looking at the very basis of how we administer Justice in the future. And with the use of IT! He urged us: “we must do what the Evershed committee did not. We have to keep an open mind even on radical options”. Exactly!
THE WAY AHEAD Time is not on our side unlike Victorian England where 40 years was but a mere blink of the eye, so I came away from the event gratified that our model of ‘judicial independence’ remains intact but I was delighted to see a much more modern approach as to how we will do our legal business in future whilst judicial orthodoxy is preserved, and, as some say, returned to after the Denning years. The final word should come from JUSTICE itself who hosted the speech. It is an organisation which produces work of high quality from evidence-based research. A number of different groups within our profession have already grasped the relevance of ‘Reshaping Justice’ by setting up their own committees to explore the way forward led by JUSTICE. To JUSTICE the issue is about ‘context’ when they declare that the importance of the justice system cannot be overstated. The organisation’s mission statement is that it is at the heart of the United Kingdom’s constitution whereby the rule of law safeguards democracy and relies on an independent, effective and fair justice system to uphold it. Well said, but we have a long way to go and little time to ‘modernise’: Lord Thomas has made the first step and now we need to make the giant leap with all that the new technology can offer the client and the professional in the twenty-first century. PHILLIP TAYLOR MBE RICHMOND GREEN CHAMBERS
THE JUDICATURE ACTS This is when the ears pricked up and reference was made to the Judicature Acts and the length of time it took the Victorians to reform the administration of justice in the nineteenth century. I suspect almost all readers will remember with a student’s fondness, reading about the Judicature Acts and why they were needed. Unfortunately, we do not have the privilege of that length of time for reform this time round, Thomas might have said, as he sailed as close to the financial wind (he had to) as politics and the judiciary would allow, but the words ‘information technology’ appeared in paragraph 14 of his speech.
COMPUTER NEGLECT IN THE ADMINISTRATION OF THE LAW And that is what most of us wanted to hear after the years of paper files and the blocking of the use of new technology generally throughout the court service, and the years of computer neglect within the administration of the rule of law! Since, ‘Reshaping Justice’ has now been introduced as a research topic by a number of legal organisations who have sent up groups to review how we are going to administer Justice in future. The conclusions which we will see over the next year or so should be most illuminating.
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News & Events
MEN WIN EQUAL PAY AND SEX DISCRIMINATION CASE biggest group of men to have launched legal action claiming for equal pay and sex discrimination. Usually, equal pay cases involve female employees seeking pay equal to that of higher paid male comparators. The Equal Pay Act introduced in 1970 even referred to the claimant in equal pay claims as a woman.
Helena Woodward-Vukcevic, Solicitor, Employment Team at Hart Brown
Helena Woodward-Vukcevic from law firm Hart Brown, outlines the situation on equal pay, following the recent sex discrimination and equal pay claim win by a group of men. A group of 23 male workers at a university in Wales who issued a sex discrimination and equal pay claim in the employment tribunal claiming they were paid less than their female colleagues on the same pay grade have received £500,000 in compensation. The case has received a lot of attention in the press as they are thought to be the
The Equal Pay Act 1970 has since been replaced by the Equality Act 2010 which continues to assert the principle that men and women should receive equal pay for equal work. For an equal pay claim to succeed a claimant must be employed by the same employer as a comparator, performing like for like work, or work rated as equivalent or work of equal value. Successful claims can require payment of arrears of back pay for up to 6 years. In addition to this, equal pay claims do not have to just cover pay but also other contractual and even non-contractual benefits such as discretionary bonuses. In most equal pay cases the employer is likely to have far more information than the claimant as to all its employees’ salaries and earnings. Therefore, it is not
always easy for the claimant to identify an appropriate comparator. Where a claimant’s contract of employment has a pay secrecy clause, this can be overridden if they suspect inequality of pay. A claimant can obtain information to identify an appropriate comparator through the use of the statutory equal pay questionnaire procedure or through the new informal question and answer procedure. Where an employee thinks that they are suffering from sex discrimination in contractual pay, but cannot identify an actual comparator, section 71 of the Equality Act makes provision for an employee to bring a claim under direct sex discrimination when it is possible to rely on a hypothetical comparator. Section 71 also allows a claimant to point to an individual and argue that the pay difference is too great, and that the reason for this is sex. Following the successful action brought by the group of men, it will be interesting to see whether we will now see an increase in claims brought by men or in fact any other groups who share a protected characteristic.
STATS SHOW LAW GRADUATES CHOOSING ALTERNATIVE ROUTE TO QUALIFICATION AS LAWYER The latest statistics from the Chartered Institute of Legal Executives (CILEx) show that law graduates are continuing to choose this affordable route to become qualified lawyers. The CILEx January 2013 exam results released today show that the CILEx Graduate Fast-track Diploma (GFTD) qualification is proving a viable alternative to the Legal Practice Course (LPC), with nearly 50% more students sitting for this one year qualification. CILEx’s GFTD qualification is the equivalent of the LPC or the Bar Professional Training Course (BPTC) but enables students to become lawyers without undertaking a training contract or pupillage. Instead, these students need to complete three years’ qualifying employment to become a CILEx lawyer, during which time they gain the experience to meet the CILEx Fellowship criteria. It is also very affordable, and typically costs £2,500 including all exam, exemption and membership fees. This will be welcome news to law students who heard this week that the average cost of the BPTC has risen by more than £1,000 in two years with the most expensive passing the £18,000 mark.
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William Cason, a trainee at Jackamans Solicitors took the GFTD and said: “It’s a fantastic programme that enabled me to get qualified while I worked and helped me secure my dream career. It was also considerably cheaper than the LPC.” A comparison of applications for the course between October to December 2013 to the same period in 2012 shows a 47% increase in students opting to take this route. University graduates with a law degree or the Graduate Diploma in Law (GDL) conversion course can take CILEx’s graduate route to qualification. Thousands of other CILEx students will also be celebrating this weekend as nearly 4,000 will receive the results of their January exams: 70% of CILEx students will learn they have passed their Level 3 Professional Diploma in Law and Practice units and 35% of those have attained a distinction. The Level 3 units are set and assessed at A level standard. For the Level 6 Professional Higher Diploma in Law and Practice exams, 56% of students passed their exams, which are set and assessed at honours degree level.
William Cason, trainee at Jackamans Solicitors
Head of qualifications at CILEx, Alison Hollyer, said: “Year upon year, CILEx students continue to demonstrate the flexibility, affordability and accessibility of the route into law that we offer. Our qualifications truly widen access to the legal profession and now with the inclusion of Legal Services Apprenticeships, there has never been a better time to choose CILEx for your route into a career in law.”
Book Reviews
SOCIAL MEDIA IN THE LEGAL SECTOR
RUNNING A LIMITED COMPANY
A SPECIAL REPORT
EIGHTH EDITION
By Nathan Smith ISBN: 978 1 907 69872 9 The Law Society www.lawsociety.org
RUNNING A LAW FIRM? GET SET TO GO PROFITABLY SOCIAL An appreciation by Phillip Taylor MBE and Elizabeth Taylor of Richmond Green Chambers New from Law Society Publishing and produced in management report format, this publication flies the flag quite vigorously for social media as, collectively, an effective and potentially profit generating business development tool for law firms. ‘As far as law firms are concerned, the future has now arrived,’ says the author, Nathan Smith, ‘and it’s called social media.’ This latest Law Society how-to title offers a succinct, yet comprehensive guide for solicitors and barristers as well, to best practice in such key media platforms as Facebook, Twitter and LinkedIn (in reverse order of importance we would say, for professionals). Nathan Smith is a social media PR consultant who has provided social media training to such organisations as the Institute of Directors, Microsoft (do they need it?) and HSBC. His enthusiasm for social media is boundless and quite rightly too. ‘The potential of these media for law firms,’ he says, ‘particularly in reputation management and marketing – is immense.’ Just how immense is revealed page by page, chapter by chapter! Contemplate and absorb a reasonable percentage of
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the contents and you’re well on the way to attracting more work, happier clients and ultimately, enhanced profits. Smith’s immediate task, which he tackles with relish, is to persuade the more skeptical members of the legal fraternity that social media as marketing tools really do work if you work them properly... and to this end, he reveals an impressive ability to show you how. First, he sets out to demystify social media for the uninitiated and demonstrates its effectiveness as a business development tool, not to mention a brand builder and recruiter. Using real-life examples, he provides best practice guides to using the key platforms which offer the best businessbuilding potential for the legal sector. Specific chapters focus on why, for example, YouTube, Google (obviously) and Flickr are each ‘good for business’ and lists the drawbacks too. One of the major benefits of the book are the case studies which reveal how specific named law firms harness the various social media to their advantage. Read, note and learn these bits and, predictably, you too, may similarly profit. Another notable feature for practitioners, particularly if you are a compliance officer, is the Appendix which is a Law Society Practice Note on Social Media. In short, acquiring this book could confer on you a level of expertise in these new, yet now well established media which is really quite impressive and you would do well to add this special handy volume to your professional library.
By David Impey and Nicholas Montague ISBN: 978 1 84661 742 3 Family Law/Jordan Publishing limited www.jordanpublishing.co.uk
ESTABLISHING OR MANAGING A LIMITED COMPANY? HERE’S THE ESSENTIAL INFORMATION YOU NEED An appreciation by Phillip Taylor MBE and Elizabeth Taylor of Richmond Green Chambers Why set up a company? This book tells you not only why, but how and occasionally why not, depending on your aims and circumstances. Aimed at lawyers, company directors, company secretaries, accountants and other officers of a private company, it contains detailed and authoritative advice pertinent only to companies registered in England and Wales, Scotland or Northern Ireland. Now it its eighth edition from Jordan Publishing, this well established and reliable work of reference functions admirably as an affordable, practical, plain English guide to the various requirements you may face as an officer, or shareholder of a private company limited by shares. Be warned by the authors though, that ‘running a limited company can be a complicated business’ and not, we might add, for the faint hearted, the uninformed or the misinformed. If you by chance fall into the latter two categories, this book can spare you many or all the pitfalls you are likely to encounter, although it does counsel you to get professional advice.
Book Reviews
TOLLEY’S STATUTORY RESIDENCE TEST
Armed with the information contained in this book, you are better able to know which questions to put to your advisers, saving yourself both time and money. The key, say the authors, is knowing when advice is needed (before it is too late), and when it is not! Usefully, the book’s ‘star-rating system’ indicates the degree of need for professional advice, from one star ‘desirable’ to three stars ‘crucial’. This new edition contains much new material, taking into account the significant amendments to the Companies Act 2006, described by the authors as ‘the longest Act that Parliament has ever produced’. The resulting changes (too numerous to mention here) including ‘codified’ directors’ duties and other changes which affect the way shareholders of a private company make decisions. Also note the wider powers for companies and their shareholders to communicate electronically. To this end, check out Chapter 14, as succinct a summary as you’ll find anywhere on the power of the internet for marketing as well as communicating information. Indeed, the book is a concise and effective survey of all aspects of running a company, from directors’ duties, accounting, taxation, strategy and planning through to insolvency. Whether you are a lawyer or a layman, if you are involved in the management of a limited company, or you are thinking of establishing one, this is the book you need. The law is stated as at 1 August 2013.
By Carolyn Steppler and Jane Scott ISBN: 978 0 7545 4801 0 Tolley/ LexisNexis www.lexisnexis.co.uk
DEMYSTIFYING HMRC’S NEW STATUTORY RESIDENCE TEST An appreciation by Phillip Taylor MBE and Elizabeth Taylor of Richmond Green Chambers True to the traditions of Tolley’s, this latest publication from LexisNexis sets out, successfully in our view, to demystify and de-complicate an otherwise complicated new regulation. This one – introduced in 2013 by HMRC – is the new Statutory Residence Test, which determines the residence status of an individual for tax purposes. Authors Caroline Steppler and Jane Scott, both at Ernst and Young LLP, have extensive experience in this field, providing expert advice mainly to private clients, many of them non-domiciled individuals and families. They point out that the statutory residence test, introduced by the Finance Act 2013, ‘is arguably one of the most significant changes to personal taxation in recent years’ adding that ‘for the first time in UK law, residence is determined by reference to a comprehensive statutory code and no longer relies primarily on case law and HMRC guidance’. This means that while the test may make it easier for a person’s residence status to be determined, certain ambiguities and areas of uncertainty remain.
A major benefit of the book, therefore, is that it applies precise and understandable definitions of terms used in the legislation. How do you define – legally – the terms ‘partner’ and ‘home’, for example? According to the authors, ‘there are places where quite similar terminology is used, but the definitions may be different’. In taking this and other conundrums into account, you need to be careful when applying the three parts of the SRT (yes, there are basically three parts) to individual circumstances, If you as a practitioner need to explain the new rules to your clients, this up-to-date title is almost without a doubt, the answer to your prayers. To help you navigate through the thickets of confusion which, some might say, bedevil the new legislation, the book begins with an introductory overview of the test, followed by an examination of the practical problems and of course, further insights into the meaning of key terms. Numerous illustrative examples show how technical principles may be applied in real circumstances. With numbered paragraphs throughout, the book is easily navigable over 14 chapters, the last one featuring HMRC guidance and practice. There is a table of cases, a table of statutes and an extensive index at the back. For tax practitioners dealing in particular, with internationally mobile clients, this book should be considered an essential purchase. The publication date is cited as at February 2014.
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ANNUAL DINNER 2014
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Property
RECENT FLOOD EVENTS CALL US ALL INTO ACTION THE FLOODING MAY BE SUBSIDING, BUT WE CAN’T AFFORD TO LET THE MEMORIES OF ITS IMPACT DO THE SAME There is no denying that in recent times the world has experienced some pretty extreme weather events. Last year was Australia’s hottest in living memory, in the Philippines Typhoon Haiyan became the strongest typhoon ever recorded, there were record high temperatures in Scandinavia, heatwaves and intense rainstorms across Europe and South America, and much of the US came under the grip of a polar vortex with a big freeze bringing many regions to a halt. Here in Britain we saw the stormiest December in 44 years. The hostile winter continued into January and February 2014 with high winds and storm surges causing widespread coastal, river and surface water flooding, substantially impacting on individuals, businesses and infrastructure. The Met Office confirmed at the end of February it was the wettest winter in England and Wales since records began 250 years ago. Although severe storms in the UK are not unknown, the relentlessness of recent events is certainly unusual with the full catalogue of flooding – tidal, fluvial, pluvial and groundwater flooding – all being experienced over a period of seven or eight weeks. Around 6,000 properties were flooded and politicians raised concerns about future flood strategy with the Prime Minister, David Cameron, calling the floods “a tragedy for all those affected” while urging the insurance industry to process claims as quickly as possible. We are all acutely aware from the extensive media coverage of the floods that the impact on residents and their property can be hugely detrimental, not to mention the potential blight on a home’s value, but as awareness grows around the potential for flooding do homebuyers know who is responsible for advising them on flood risk? A survey commissioned by Landmark Information Group revealed that only 42% of people investigated their flood risk before buying their home, while 55% of property owners in the UK expected solicitors to automatically investigate a property’s flood risk as part of the conveyancing process. Clearly there is an expectation from homebuyers to be assisted in discovering the level of risk, not least so they can look to mitigate this if required. It is imperative that buyers know about any potential flood risk as early as possible and have appropriate insurance in place before contracts are exchanged and they become fully responsible for the property. Until Flood Re comes into force in 2015, properties found to be ‘at significant risk’ of flooding may prove extremely expensive, if not impossible, to insure. If a property cannot be insured, the solicitor will be unable to provide the necessary Certificate of Completion to the lender to release the mortgage funds and therefore the buyer will be unable to complete the purchase.
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WHERE DOES THIS LEAVE THE LEGAL PROPERTY PROFESSIONAL IN TERMS OF REQUIRED DUE DILIGENCE AND COMPLIANCE? According to the Law Society Practice Note launched last May, conveyancers have a key role to play. The Practice Note states that ‘In all conveyancing transactions, when acting for a prospective buyer, tenant or lender, you should mention the issue of flood risk to your client and, if appropriate, make further investigations’. There have been some concerns over what ‘appropriate’ means, but with 200,000 homes built on flood plains between 2001 and 2011 and surface water flooding meaning risk is not exclusive to properties near the river or sea, it seems that ‘appropriate’ is becoming an increasingly inclusive term. As the Practice Note concludes ‘it may not always be obvious that a property is at risk of flooding’. The cost of a desktop flood report (around £20), with a risk assessment by accredited consultants, is inexpensive and could save thousands, if not tens of thousands, of pounds in the long term. It will clarify your client’s level of risk and help them identify the measures they could take to protect their future exposure to flood, while at the same time satisfying the Law Society Practice Note. Let’s all hope that we have seen the back of the floods this year, in the meantime we can be working together to ensure we are playing our part in mitigating the risks for all stakeholders, especially the homebuyer. JOHN PICKFORD, SEARCHES MANAGER, THAMES WATER PROPERTY SEARCHES Thames Water Property Searches are experienced national providers of due diligence searches and training to legal property professionals. They protect conveyancers and their clients with a comprehensive range of products and a proven dedication to quality customer service. A member of their team would be happy to discuss how they can assist you with your conveyancing search and training requirements. They can be contacted on 0845 070 9148 or by emailing twps@thameswater.co.uk. Alternatively, visit www.thameswater-propertysearches.co.uk.
Property
IT’S RAINING SINKHOLES! Whether or not you believe that climate change is occurring, the last decade or so has shown some significant changes in rainfall patterns in the central and southern parts of the country. These changes have influenced ground instability resulting in the recent spate of “sinkholes” that occurred in February. Looking back at the rainfall statistics (www.metoffice.gov.uk) it is apparent that since 2000 the mean annual rainfall figures in southern and central areas have increased. In the past there were some notable ground collapses in the early and mid 2000s when intensive rainstorms locally produced rainfall of over 50% to 100% higher than usual. Higher than average rainfall was also a feature of 2008 to 2010. By contrast 2011 was a much drier year than normal and this pattern continued into early 2012. During this time few ground collapses were taking place. As 2012 progressed rainfall greatly increased from April onwards producing a wetter than average year. 2013 also started with average rainfall interspersed with drier months but got wetter during the autumn to winter period, continuing into the very wet months of January (>200% above average) and February (>270% above average) this year. The cumulative effect of the rainfall reflects the incidence rate of subsidence as follows: • 7 subsidences in 12 months in 2012 • 17 subsidences in 12 months in 2013 • 13 subsidences in just 2 months in 2014
SIZE ISN’T EVERYTHING! Fortunately in Britain ground collapse is rare and not as dramatic as examples from places like Florida, South Africa, Guatamala or China, but even so the holes can be reasonably large and dangerous. In late December a collapse over old mine workings at Foolow, Derbyshire produced a hole about 50m across and 40m deep. This occurred in a rural area but only endangered local sheep and walkers! By contrast a number of smaller holes that occurred further south in February caused alarm to residents and structural damage – fortunately none of it causing injury! • At Walter’s Ash, High Wycombe, a hole (circa 4.5m diameter, 9m deep) swallowed a VW Lupo car parked on the drive outside a house. • At Upper Basildon, near Reading, a hole (circa 3m diameter, 3m deep) opened up beneath a car as it travelled along a driveway, but luckily the vehicle spanned across the hole allowing the family to get out safely. • At Hemel Hempstead, another hole (circa 10m diameter, 6m deep) appeared below housing causing significant structural damage and evacuation of residents. • At Nettlebed, Oxon, a fourth hole (circa 5m diameter, 6m deep) occurred within woodland, needing fencing off to
secure it safely. • At Gillingham, Kent, a large hole (4m diameter, 9m deep) formed within the grounds of a school. Since the collapses occurred some of the holes have been backfilled with foamed concrete to make them safe while ground investigations are carried out to determine their cause. Over 200m³ (or 20 concrete lorry loads) of foamed concrete were used to infill the holes at each of Hemel Hempstead and Gillingham.
WHAT IS A SINKHOLE? Strictly speaking a sinkhole is a collapse of ground over a naturally formed void at depth. They occur where the ground below the surface has been dissolved away – they are typically found in areas underlain by chalk, limestone, gypsum and salt. In southern and eastern England, sinkholes are associated with areas where sand, gravel and clay layers overlie chalk. PBA is currently investigating and stabilising several sinkholes on chalk where structural damage has occurred in areas like Reading, Marlow, Maidenhead, Beaconsfield, the Chalfonts, Grays and Hertford. The recent collapse in Ripon, underlain by soluble gypsum, is another example of a sinkhole that caused significant structural damage. However, many of the recently formed holes are suspected to have originated as a result of ground collapse over man-made voids in the ground i.e. mine workings. This type of collapse is referred to as a “crown hole”. There are large numbers of unrecorded historical mine workings across the country, liable to intermittent subsidence depending upon weather or leaking drains that reveal their presence each year. PBA is currently investigating possible mined ground and collapses at Gillingham, Nettlebed, Upper Basildon, Hemel Hempstead and Chalkhouse Green.
SOLUTIONS FOR SINKHOLES After backfilling the sinkhole to prevent it enlarging either a series of exploratory holes are drilled into the ground at close centres around the feature or the surrounding ground can be surveyed using geophysics. Geophysical survey techniques that can be useful, subject to conditions, include microgravity, resistivity, conductivity and GPR. Depending upon the setting investigation techniques such as dynamic probing or rotary drilling may be used. The aim of the work is to be able to create a 3D ground model of the cause of the collapse at depth in order to design a suitable remedial stabilisation scheme. Remedial stabilisation techniques used from the surface can include grouting (using cement and/or resin), soil reinforcement (geogrid installation), piling, capping and excavation/replacement. Sometimes safe access into the collapsing void can be achieved and the infilling or reinforcement works can be carried out in situ.
WHAT ACTION SHOULD CONVEYANCING SOLICITORS TAKE? Given the potential impact on a property, ground instability risk is clearly something for which conveyancing solicitors should be checking as part of their due diligence process. Environmental reports – both residential and commercial – all contain data from multiple sources (both manmade such as mining and underlying natural conditions) in order to provide a risk screening and next steps.
Walter’s Ash, High Wycombe
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Blog prepared by Dr Clive Edmonds, Peter Brett Associates LLP, a leading specialist in the recording, investigation and stabilisation of geohazards and Landmark Information Group.
Professional Practice
ICONIC DOGS TRUST SLOGAN MARKS LANDMARK ANNIVERSARY ‘A DOG IS FOR LIFE, NOT JUST FOR CHRISTMAS®’ HONOURS 35 YEARS OF RELEVANCE Last autumn, the nation’s largest dog welfare Charity, Dogs Trust, commemorated thirty five years of its iconic slogan – ‘A dog is for life, not just for Christmas®’. The impactful slogan is one of the UK’s most memorable phrases of all time and is now firmly cemented in the public consciousness - perfectly delivering the powerful message of responsible dog ownership to the masses and continuing to significantly reduce the number of abandoned dogs after the festive period. In 1978 the Charity estimated that 20 per cent of dogs were given as gifts, which has since reduced to less than 2 per cent today. Although the figure has dropped significantly, it means that around 16,000 dogs are still being purchased as gifts every year. Sadly, with the rapid increase in dogs being bought on impulse online, it is clear that the slogan remains as relevant today as it did 35 years ago. The slogan was created in 1978 by Dogs Trust current CEO Clarissa Baldwin OBE unlike most other iconic slogans which are created by advertising agencies. One evening, Clarissa was sat at the kitchen table chatting to her husband about the urgent need for a campaign to stop puppies being gifted at any time of the year but specifically at Christmas when she had a light-bulb moment and the slogan was born - proving that charity really does begin at home! Clarissa has since been awarded an OBE in 2003 for her work in animal welfare. Her success with Dogs Trust, coupled with the longevity and popularity of the slogan, has meant a ‘paws-itive’ improvement in dog welfare across the nation.
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Professional Practice
ESTATE ADMINISTRATION: THE COMPLETE PACKAGE When it comes to estate administration, it is vital to ensure that nothing is overlooked. By handling each case thoroughly and with meticulous attention to detail, our services are designed to help you minimise your risks, maximise the value of the estate and achieve high levels of client satisfaction. When potential case information such as a family tree has been submitted by family and friends of the deceased, it is important to check that the information you have been given is correct. Checking it is essential, and this will avoid any mistakes further down the line when the estate is being distributed. It is important to determine whether or not there are any gaps and/or inconsistencies which may require more extensive research. As part of the Free Research Assessment, for each potential referral, we look at the current family tree as it stands and assess whether or not it is complete and accurate.
PROPERTY MANAGEMENT SERVICES In many cases, the most valuable asset of an estate is the property and as always when dealing with property there is a great deal to think about. Whether you are dealing with just one property or a complex portfolio, probate valuations, empty property insurance and property management & security can become complex, so why not leave it to us?
PROBATE INSURANCE It is important to protect yourself and your firm and speed up the estate administration process. It is always advisable to take out Missing Will Insurance when a valid Will is located on an estate believed to be an intestacy, or a more recent valid Will is found on a testate estate, after distribution. We can also arrange Missing Beneficiary Insurance, so that if an unknown beneficiary comes forward after the estate has been distributed, you will be protected.
MISSING BENEFICIARIES NIL RATE BAND DOCUMENT SERVICE It is possible to transfer any unused portion of a predeceased spouse or civil partner’s inheritance tax threshold known as the ‘Nil Rate Band’. To prove the transferability of this Nil Rate Band allowance, the following documentation is necessary: the predeceased partner’s death certificate, the predeceased partner’s probate (or a statement that none was found) and/or the couple’s marriage certificate.
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When dealing with an estate, you will often find the need to locate missing heirs either in the UK or overseas. Each case is unique so it is important that you have the opportunity to choose from different fee options. We have an in-house team of Case Managers and Researchers, alongside a worldwide network of agents to undertake overseas research. To find out how we can help, call 020 7832 1430 or email legal@fraserandfraser.co.uk.
Professional Practice
THE SBA – YOUR CHARITY
Michael Gillman, Chairman of the SBA The Solicitors’ Charity
Following my year as President of the Society some years ago I was invited to join the board of the SBA, The Solicitors’ Charity, and now find myself Chairman. I have become increasingly concerned at how little known the solicitors’ own charity is amongst the profession at large. So I hope that what follows will bring the work of the SBA to a wider audience. It’s common to associate occupational ‘benevolent’ funds with support either for retired people, their widows or widowers. There is certainly no doubt that charities like SBA provide a vital lifeline for the elders of their professions, many of whom eke out a meagre existence on a basic state retirement pension. For its own beneficiaries, SBA (formerly known as the Solicitors’ Benevolent Association) is always on hand when homes are damaged by flooding or stair lifts need installing. Where circumstances warrant, the Association also provides regular additional income to help supplement slender means; such a modest boost in funds can make all the difference in living - and, sometimes, dying - with dignity. Two thirds of SBA’s beneficiaries are actually below pension age. A quarter have children under the age of 18. These individuals and families are usually facing some kind of personal crisis, be this bereavement, sudden serious illness (cancer, bipolar disorders and MS, to name but three), family breakdown, alcohol or drug dependency or poor
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mental health caused by stress burnout in the workplace. As all lawyers know only too well, when adversity strikes, it is often severe and multi-faceted; coupled with financial hardship, the resulting pressures can be overwhelming. Thanks to face-to-face contact with members of our volunteer network of Area Representatives, the provision of tailored grants and loans and specialist helpline advice and support from our partner, LawCare, SBA can help bring breathing space for individuals and families who are coping with burdens that many would find intolerable. Joining the more typical ‘welfare’ cases is a newer class of beneficiary; these are solicitors whose lives are being profoundly affected by new entrants to the profession and cuts in legal aid. Although they are desperate to work, these colleagues cannot find enough chargeable hours to sustain themselves or their families through their practice. Grants and loans are not the only solution in such cases. This is why SBA now provides funded access to bespoke solutions to personal insolvency problems as well as holistic career coaching, job-search and outplacement services, delivered by experienced career coaches and counsellors. These initiatives are designed to foster self-help and greater independence, and prevent increasing numbers from plunging into deeper misfortune. SBA’s work is only made possible through generous subscriptions, donations and legacy income from individual solicitors, as well as support from local law societies and firms of all shapes and sizes across England and Wales. One important source of funds is unclaimed client balances, which are treated as ‘conditional donations’. The SBA can guarantee return of these monies by indemnifying the firm passing on funds according to current SRA requirements. This is a key feature of SBA’s reserves policy; we can always repay should the entitled legal owner re-appear. In the meantime, SBA is ideally placed to put these dormant sums to productive use in the form of loans (usually secured) to assist individuals and families in desperate need. The other side of the coin is to ensure that those who need our help know that we are there and willing to give assistance. We need your help in making the potential beneficiary pool of over approximately 500,000 aware of our existence. You may know who and where they are; if so, we welcome your help in bringing the Charity to their attention. To find out more, please visit the SBA website at www.sba.org.uk, email to bensec@sba.org.uk or telephone on 020 8675 6440.
Professional Practice
EXPERT REPORTS –
INSURANCE DISPUTES AND SUBROGATION TONY SYKES OF IT GROUP LOOKS AT SOME RECENT INSURANCE DISPUTES AND SUSPECTED FRAUDULENT CLAIMS AND DISCUSSES A NUMBER OF AREAS WHERE HI-TECH EXPERTISE CAN BE OF ASSISTANCE. As IT experts most instructions we receive from lawyers are in relation to IT disputes and whether software or systems are fit for their purpose. We also get instructed regularly in Intellectual Property disputes particularly with regard to software copyright and IP theft. The combination of our IT consultants and our fully equipped forensic IT facility also means we offer a range of services to Insurance companies and their lawyers when fraud is suspected. The personal injury “cash-for-crash” style claims are well understood now and techniques including mobile phone tracking and analysis, social network unravelling and metadata analysis of photographs have all combined to reduce the spread of this drain on insurance funds and a commonly cited reason for high motoring insurance premiums. We have recently added Sat Nav interrogation and forensic analysis to our arsenal of forensic tools and this has been instrumental in dismissing “ghost” accident claims by showing that the vehicle was nowhere near the alleged crash scene at the time of the reported “accident”. At the other end of the insurance spectrum, when large software systems fail or cause outages or loss of service, we are noticing an increased interest in the need to analyse the cause not just for a potential subrogation claim but also because the terms of the insurance premium deductible can be significant when software (or computer hardware) fail a number of times in quick succession. Not only is the root cause analysis vital to apportion blame, but opinion on whether there was one outage or two may support a view that there is one deductible or two. When deductibles can be as high as several million pounds, this is an area where intense scrutiny and robust analysis is sought by both the Insurer and the Claimant.
by a person or by some additional software or hardware been more appropriate or faster, there may not have been a loss. Under these and other similar circumstances, the establishment of the correct root cause may be vital in determining blame and, if the problem seems to have reoccurred over time, in establishing whether there was one root cause or more than one unrelated event. With many larger software suites operating from multiple platforms sometimes across continents, it is possible that a single bug could cause outages in a number of locations thousands of miles apart and possibly insured under different policies and jurisdictions. Proper root cause analysis is essential but may only be a small part of a much more complicated assessment. Tony Sykes, Senior Partner in IT Group is a Chartered IT Professional and a Chartered Electrical Engineer. He is a Fellow of the Academy of Experts He has more than twenty years’ experience as an IT and Electrical Engineering Consultant and is an experienced Expert Witness. IT Group provides a broad range of consultancy services including Insurance assessment, forensic IT/telecoms/ Electrical systems examination eDisclosure and expert services. www.itgroup-uk.com
The attacks on the World Trade Centre in New York in 2001 brought the matter of whether there was one incident or two into sharp focus. More than a decade later, there are still a number of schools of thought and opinion is still divided on this most shocking of events. Defects in software can be functional or non-functional. Actual “bugs” present an immediate challenge. There are schools of thought that say no bugs are acceptable and in some controlled applications this may be right but with the explosion of software enabled products and the invasion of Microsoft©, Apple© and Google© operating systems into a multitude of devices from the ubiquitous mobile phone to the data-centres in Canary Wharf, it is no longer possible to support the tenet that software has to be free of defects to be fit for its purpose. But if a defect is known about but not yet addressed it is reasonable to assume that a risk analysis has been done and the presence of the bug has been determined to pose an assessed threat. If that then in turn leads to an outage and some form of loss leading to a claim, is the root cause the bug or the decision to leave it unattended? Is the root cause simply a poor risk assessment? Non-functional software defects can also be the cause of an outage. Software that either cannot handle a peak load or that causes a blockage leading to similar effects may not contain a bug but may just be poorly written. The incorrect response to an incident may lead to an outage where, had the response either
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Professional Practice
TIME IS OF THE ESSENCE Royal Mail’s aim to deliver 93% of First Class post by the next working day is not quick enough... at least for some. Advances in mobile technology have increased the speed at which we communicate and people are reluctant to allow the requirement to sign a hard copy of a document to slow them down. Welcome the electronic signature. An electronic signature, or e-signature, is defined as anything in electronic form which is incorporated into or logically associated with an electronic communication and which purports to be used for the purposes of establishing the communication’s authenticity or integrity. Common examples are: • Tick boxes – accepting, for example, the terms and conditions of an online retailer; • Scanned signatures – a wet ink signature which is scanned and converted into digital format; and • Digital signatures – created using an electronic pen and pad.
To create a simple contract there must be offer, acceptance and an intention to create legal relations by the parties. The result of failing to satisfy these requirements is a contract that is not valid between the parties. It is therefore acceptable for an electronic signature to satisfy the requirement that a person must “sign” a document. Although possibly avoided in property transactions, it seems very likely that the demand for this method will increase as technology continues to develop. The above option should be distinguished from deeds and those documents requiring registration at the Land Registry. A transfer or creation of an interest in land must be made by deed. In addition, in order to comply with the Law of Property (Miscellaneous Provisions) Act 1989, a contract for the disposition of land must be: in writing; signed by or on behalf of each party; and incorporate all the terms that have been expressly agreed.
The Electronic Communications Act 2000 (in force since July 2000) provides that electronic signatures and related certificates are admissible in evidence in legal proceedings in respect of any question regarding the authenticity or integrity of an electronic communication. What does this mean in practice?
At present, it is unclear whether a deed can be validly executed using an electronic signature and as a result solicitors will continue to err on the side of caution. Additionally, the Land Registry does not currently accept documents (be that contracts or deeds) electronically signed and these must continue, therefore, to be made in hard copy and signed by way of a wet ink signature.
The Law Commission published an advice paper to the government in 2001. The Law Commission’s view was that changes are not necessary in relation to statutes requiring signatures, as the test for whether signature requirements are met is whether the conduct of the wouldbe signatory indicates an authenticating intention to a reasonable person.
It seems this is another example of legislation having to catch up with the technology available. However, with the time and cost benefits available from going paperless – and the Land Registry’s aim to create an electronic conveyancing system – it may not be too long before the humble pen is gathering dust at the back of the desk draw.
SEAN LOGAN IS A SOLICITOR IN THE COMMERCIAL PROPERTY DEPARTMENT OF HART BROWN. HE TRAINED IN CHELTENHAM BEFORE MOVING TO GUILDFORD TO JOIN THE COMMERCIAL PROPERTY TEAM IN 2011. WWW.HARTBROWN.CO.UK
“It’s clear that electronic communications have affected and will continue to affect the use of the post. However, long-established practices mean that the legal sector, in particular, continues to be reliant on efficient postal services. Lawyers and their clients continue to be unsure of the legal validity of electronic communications and concerned about the information security and their data protection obligations. For this reason, DX has been developing electronic products that will help the legal profession use electronic communications both efficiently and securely, whilst providing the peace of mind they’re used to from physical postal services.” JAMES TIMBERLAKE, DIRECTOR AT DX
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Professional Practice
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Sub-committee Reports
LAND LAW AND CONVEYANCING SUB-COMMITTEE Matters which came to our attention at the meeting held in January included the following: 1. The Law Society’s guidance on the importance of utilising the correct UTRN when paying SDLT. Although obvious its absence is not uncommon and leads to payment identification problems.
have suggested to the Society that it should consider a response at least to the latter consultation but the Law Society has taken up the cudgels in that respect and it is not thought that we could have expanded on their response. Apart from these matters a few reminders seldom go amiss: a) CRAR. The new rules came into force on 6th April.
2. HMRC’s guidance on SDLT payable on de-enveloping transactions. It is important to establish whether consideration is deemed to be payable by the company’s shareholders with a consequential liability for SDLT arising where there is an outstanding debt liability to a third party. 3. The grant by the Supreme Court of permission for AIB Group (UK) Limited to appeal against the decision of the Court of Appeal in favour of the solicitors is of considerable importance to the profession in the context of lender’s breach of trust claims. 4. Two consultations relevant to HM Land Registry were tabled: one issued by the Land Registry itself seeking to extend its powers and take over the provision of local Land Charge services and the other promulgated by the Department of Business Innovation and Skills suggesting the introduction of a Land Registry service delivery company. In afterthought given the subsequent critique of both suggestions we might
b) New mortgage rules came into force on 26th April. While it is anticipated that most of the changes will affect the premortgage offer stage so that most transactions will not impact on the conveyancing process there are key points for conveyancers to note. Full information can be obtained from the FCA and CML websites. c) The City of London Law Society has issued a protocol for discharging mortgages of commercial property. It recommends a standardised procedure which it is hoped will be widely adopted so as to reduce arguments and transactional delays. d) Although presumably already well known to practitioners it is important to be aware of the second change in the rules for claiming capital allowances effective from 1st April 2014 so as to include a new “pooling requirement”. There are numerous publications summarising the new rules. ADAM MABERLY
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Sub-committee Reports
PROFESSIONAL EDUCATION AND MATTERS TRAINING SUB-COMMITTEE SUB-COMMITTEE Both the Solicitors Regulation Authority (SRA) and the Legal Services Board (LSB) continue to issue consultation papers, but often in practice do not allow much time to respond. We submitted a strong response to SRA Consultation: “Proposal to increase the SRA’s internal fining powers”. In our view the SRA’s proposals (which are probably over-influenced by its powers relating to Alternative Business Structures) would completely undermine the existing balance of powers between the SRA and the Solicitors’ Disciplinary Tribunal (SDT). The Legal Services Act gave the SRA a limited power to fine up to £2,000 but a power to the SDT to fine without limit. The intention of Parliament was clearly to permit the SRA to deal with “minor” offences but to leave the majority of offences to be heard before the SDT. It is important to remember that the SDT is a court that applies the criminal standard of proof. The SRA applies the civil standard of proof and does not provide the legal safeguards provided by the SDT. These additional powers would enable the SRA to apply massive pressure on firms to come to a settlement even though the SRA’s evidence might not stand up in court. We agonised over the SRA Consultation: “Introduction of a minimum financial strength rating requirement for Participating Insurers”. We recognised that restricting the choice of professional indemnity insurers to those with a rating would have an adverse effect on small firms and reduce competition, with a consequent likely rising of premiums. On the other hand recent failures of unrated PI insurers were worrying and created massive problems. None of our members would have wished their firms to use unrated insurers. On balance the majority thought that the SRA’s proposals were sensible, whilst recognising that if the SRA imposed too stringent regulation solicitors might choose to practise not as solicitors but under other regulators (which did not insist on commercial insurers for Professional Indemnity cover) such as the Council for Licensed Conveyancers or the Chartered Institute of Legal Executives. On this issue however a major difficulty was not the SRA but the prejudice insurers had against smaller firms.
At the time of going to press there is nothing to report from the Education and Training Sub-committee.
LAW REFORM SUB-COMMITTEE Please read the article written by Arthur Weir on page 30.
INTERNATIONAL SUB-COMMITTEE Please read the article on page 8.
We are currently considering two short consultations from the SRA: • In the first consultation, the SRA proposes to carry out the keeping of the roll exercise only when there is a regulatory need (no longer annually), reducing the cost for those no longer practising. A major advantage is that from 2015 nonpractising solicitors would not have to apply every year to stay on the Roll and pay £20 for doing so. • In the second consultation, the SRA are proposing to increase the level of residual client account balances solicitors can donate to charity without applying for permission from £50 to £500. The deadline for responses to both consultations is 26 May 2014. They both seem sensible, and we are proposing to submit responses supporting them. JULIAN AYLMER
JUNIOR LAWYERS’ DIVISION At the time of going to press there is nothing to report from the Junior Lawyers’ Division.
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Family Law
PRE-NUPS AND NEEDS On 26th February the Law Commission published its keenly awaited report on Matrimonial Property, Needs and Agreementsi. As widely reported in the legal press, it recommended that certain nuptial agreements – usually ‘pre-nups’ – be made enforceable as such in the courts. The draft bill however imposes exceptionally stringent requirements on the creation of such an agreement. It must be by deed. It must be accompanied by a written statement by each party that he or she understands its consequences. It must be executed at least 28 days before the marriage. Each party must have disclosed all such information as would require to be disclosed on divorce, and if he (or she but usually he) cannot later prove he has done so the agreement cannot be enforced against him. Most importantly, each party must have received advice from a qualified lawyer. As to its later effect, the agreement, valid though it be, will never operate to restrict a party’s needs. Arthur Weir
UNDUE INFLUENCE DOESN’T COUNT There is a further requirement that the agreement must be enforceable under the ordinary law of contract. But here, interestingly, the contract rule about undue influence doesn’t count. This topic is of course all about situations where influence – due or undue – must usually be presumed. So there must be a different technique to prevent unfairness. Fairness cannot wholly be ensured by any system. However under the proposals personal freedom is preserved to make bad choices which a divorce court in the past might have overruled. Lord Broadacres and Miss Barmaid, embarking on a pre-nup, are to be provided with legal advice, but it remains their right to decide how far they wish to take it.
RULES AND MATHEMATICS Much more importantly, the Report makes recommendations that promise greater clarity in rules for determining needs of the spouse and children. In our paper during the consultation we stressed the need for clear guidance that would enable litigants and lawyers to do actual calculations themselves, and work out themselves the margins within which to negotiate an agreement. We had hoped that there might be some rules and even mathematical formulae which at least might be used as a starting point. The Commission proposes that it should become a function of the Family Justice Council to develop and publish just such guidance, and also (if possible) formulae based on future research.
MOVE NOW, MINISTERS It will be some time therefore before we can actually see any published guidance that will be so important to all who work in this field. On the other hand, that part of the Report requires no legislation. Work on the project may start as soon as the government accepts the proposals and provides the modest financial resources. That must now happen quickly. ARTHUR WEIR
FOOTNOTE i http://lawcommission.justice.gov.uk/docs/ lc343_matrimonial_property.pdf
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