Cheyney Goulding

Cheyney Goulding Solicitors

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MEDIATION: AN ATTRACTIVE ALTERNATIVE TO COURT IN DISPUTE RESOLUTION

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Mediation has become a popular form of Alternative Dispute Resolution (ADR) in recent years. In many cases, it provides a mechanism for parties to avoid lengthy, expensive court proceedings and reach a settlement of their issues without causing detrimental damage to existing business or family relationships.

Background

Mediation is a process whereby the parties work together with a neutral third party to explore the issues in dispute with a view to negotiating a settlement. It is voluntary and confidential, with the parties retaining control over the process. In that respect, the parties agree to a time, date and venue for the mediation and together they appoint a neutral third party to facilitate the negotiations, called a mediator. The mediator’s role is to facilitate communication and narrow down the points of contention between the parties. The mediator encourages the parties to negotiate however remains impartial throughout, therefore they do not adjudicate on the issues or provide any advice. If the parties reach an agreement on the day, their lawyers can draft a legally binding contract for them to sign and the matter can be settled quickly. On the other hand, if the parties cannot settle the matter they are free to walk away from the mediation at any time.

Benefits

There are many benefits to mediation which make it an attractive alternative to litigation, some of which are discussed below:

  • Communication

By including a neutral party in settlement negotiations, mediation often improves the communication between the parties. The issues are narrowed down and each party’s interests are considered which can bring clarity and a fresh perspective to the matter. Mediators are skilled at handling different negotiation styles to foster constructive discussions. This is especially important where business or family relationships are involved as mediation can help to preserve these important connections.

  • Confidentiality

In the majority of cases, the parties will agree that the mediation should be confidential. This prevents either party from disclosing any information in connection with the mediation without the other party’s consent. The mediator is also bound by the confidentiality agreement. Confidentiality enhances communication and allows the parties to explore the issues without concern that information can be used against them at a later time.

  • Control and flexibility

The entire process is controlled by the parties to the mediation. They are free to select a mediator and organise all aspects of the mediation with the help of their lawyers. The parties control the outcome and are not bound by the process. Either party may walk away from the mediation at any time. It also gives flexibility in terms of their settlement options as they can create an agreement to benefit all parties, in contrast with court rulings which are generally one sided.

  • High success rate

Mediation is a highly successful form of dispute resolution. Many matters settle on the day or in the days after a mediation. Even where the mediation does not bring the dispute to a close, it serves a valuable purpose by pinpointing the issues and giving the parties a better understanding of their position and the overall case going forward.

Other factors to consider

An important issue to take into account when considering a mediation is the cost. Where successful, mediation is a cost effective process and an attractive alternative to litigation, which can become protracted and expensive. On the other hand, if mediation is unsuccessful you should be conscious that you may have to bear the cost of mediation as well as subsequent or ongoing court proceedings.

Where mediation is suggested by another party, it is important to exercise caution when deciding whether to reject that invitation to mediate. If the dispute ends up in court, a judge may deem a refusal to mediate as unreasonable in the circumstances and as a result the successful party may not win their costs in the proceedings. In that regard, even if you believe you have a strong case, it is prudent to give serious consideration to any invitation to mediate to avoid costs consequences later down the line.

Further information

If you are currently involved in a dispute and would like to review your options to resolve the matter, please feel free to contact our office for more information and advice at legal@cheyneygoulding.co.uk.

PEOPLE WITH SIGNIFICANT CONTROL

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The ‘People with Significant Control’ (PSC) register was introduced on 6 April 2016 and imposes obligations on most companies, Limited Liability Partnerships and Societas Europaea to identify and record details of persons who ultimately own and exercise control over the organisation on a public register. The new rules are implemented by section 21A of the Companies Act 2006, inserted by the Small Business Enterprise and Employment Act 2015, and each entity outlined above has its own set of regulations which set out the finer details of the requirements. The register is one of a number of new measures whose purpose is to improve transparency of UK company ownership and increase trust in UK businesses.

Identifying persons with significant control

A PSC is someone who meets one or more of the following five criteria set out in the legislation:

  1. directly or indirectly holds more than 25% of the shares; or
  2. directly or indirectly holds more than 25% of the voting rights; or
  3. directly or indirectly holds the right to appoint or remove a majority of the board; or
  4. otherwise holds the right to exercise or actually exercises significant control; or
  5. holds the right to exercise or actually exercises significant influence or control over the activities of a trust or a firm, which is not a legal entity, but itself meets one of the above criteria at 1 to 4..

Organisations affected by the new regime are under an obligation to take reasonable steps to identify persons with significant control and to maintain a PSC register. The register should be kept at the company’s registered office, available for inspection, and details should also be filed at Companies House.

If the company finds that it does not have any PSCs after its investigations, it is still obliged to report that fact. The PSC register cannot be empty. Failure to comply with the legislation is an offence and is punishable by way of fines or imprisonment.

What information is recorded?

The information to be added to the register for an individual includes their name, nationality, service address, country of residence, date of birth and the nature of their control in the company. For a relevant legal entity, the register should include the firm name, registered or principal address, company register details and number and nature of control.

The information must be kept up to date and should be filed at Companies House annually together with the companies confirmation statement.

For more in-depth information regarding the application of the PSC regime in relation to companies and LLPs the Government has published detailed guidance on its website, which can be accessed at: https://www.gov.uk/government/publications/guidance-to-the-people-with-significant-control-requirements-for-companies-and-limited-liability-partnerships.

WARRANTIES IN SHARE PURCHASE AGREEMENTS

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The case of  Idemitsu Kosan Co Ltd v Sumitomo Co Corp was decided by way of summary judgement.  It held that when a party produced a Share Purchase Agreement in which it is expressly stated that the party is only giving a warranty, this party does not, by concluding the contract, make any statement to the counter party that could be taken as a misrepresentation.

The decision is a reminder as to the importance of suitable wording in the Share Purchase Agreement to cover the question as to whether warranties can also be taken as misrepresentations.  Depending on the circumstances, the remedies for misrepresentation (that is, damages calculated on a tortious basis and possibly rescission) may be preferable to the remedies for breach of contract.

TRADEMARKS POST BREXIT

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Following the Brexit vote it is uncertain what arrangements are to be made to ensure that EU trademarks continue to provide protection in the UK.  One potential issue is the validity of a challenge over non-use of a trade mark in the EU.

Trade marks can be challenged if they have not been used within a jurisdiction for five years. Should a party have an EU trademark but exclusively use this trade mark in the UK, this trade mark may be susceptible to a post-Brexit non-use challenge.

It may, for the sake of future planning and protection, be sensible for businesses who have EU trade marks, to ensure they also register a UK trade mark

UBER RIDES INTO WORKER TERRITORY

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An Employment Tribunal panel has held that Uber drivers fell within the definition of a ‘worker’ and were entitled to the national minimum wage, holiday pay, and protection of whistle-blower rights.  Uber argued that it merely ran a technology platform connecting drivers to passengers and in response the Judge stated that “the notion that Uber in London is a mosaic of 30,000 small businesses linked by a common platform is …faintly ridiculous.”


The Judge continued:“ Any organisation (a) running an enterprise at the heart of which is the function of carrying people in motor cars from where they are to where they want to be and (b) operating in part through a company discharging the regulated responsibilities of a PHV operator, but (c) requiring drivers and passengers to agree, as a matter of contract, that it does not provide transportation services ( through the Dutch UBV company or the UK Uber London Ltd) and (d) resorting in its documentation to fictions, twisted language and even brand new terminology merits we think a degree of scepticism.
“Our scepticism is not diminished when we are reminded of the many things said and written in the name of Uber in unguarded moments which reinforce the Claimants’ simple case that the organisation runs a transportation business and employs drivers to that end…that it is unreal to deny that Uber is in business as a supplier of transportation services…it is not real to regard Uber as working for the drivers and that the only sensible interpretation is that the relationship is the other way around.”

The tribunal panel held that the large degree of control that existed by Uber over the drivers was synonymous with that of a worker and not as Uber asserted as a status akin to that or being self-employed. “The drivers fall full square within the terms of the 1996 Act s230 (3) (b) (Employment Rights Act 1996).”

“This is not a contract at arm’s length between two independent business undertakings…they (the drivers) are recruited by Uber to work as integral components of its organisation.” 

An appeal may yet be forthcoming from Uber.

EMPLOYMENT LAW CHANGES – AUTUMN 2016

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  1. Apprenticeships

From April 2017, all large employers will be required to pay an apprenticeship levy set at 0.5% of the employer’s paybill. The money gathered will be distributed to fund the cost of apprenticeship training and assessment. The term “apprenticeship” will be protected and training providers will be unable to describe a course as an apprenticeship if it is not a statutory apprenticeship.

  1. English language requirements

Workers in the public sector will need to speak English and Welsh fluently (where appropriate) if their job requires them to speak to members of the public. A code of practice has been published for public authorities.

  1. National Minimum Wage and National Living Wage – NMW and NLW – new rates wef 01.10.16

Apprentice rate- £3.40ph

Under 18 but no longer of compulsory school age- £4.00ph

18 to under 21 £5.55ph

21 to under 25- £6.95ph

Over 25- £7.20ph

NLW- £7.20ph

Future NMW and NLW changes will take place in April starting in 2017.

  1. Immigration skills charge comes into force – April 2017

The Government wants to reduce employers’ reliance on migrant workers by imposing a visa levy on organisations that sponsor workers from outside the European Economic Area and Switzerland.

  1. Using foreign workers illegally and face closure

New powers are introduced to serve employers with a closure notice  where illegal working is suspected, preventing access to the firm’s site for 12 months.

  1. Gender pay gap reporting

Employers with over 250 employees will be required to publish details of their gender pay gap and gender bonus gap on a yearly basis. The first reports will need to be published by April 2018.

  1. Exits from the public sector

If they earned £80k or more per annum, employees who return to work in the public sector within one year of leaving will need to repay any exit payment made by their previous public sector employer. A new cap of £95k will be set for the amount of public sector exit payments.

  1. Trade union law

Trade Union Act 2016 brings in new voting thresholds for industrial action. There is no confirmed date of implementation at the time of writing.

  1. Tax-free childcare – early 2017

In families where both parents work and each parent earns less than £100k pa and a minimum weekly income at least equivalent to 16 hours at the rate of the NMW, the Government will pay 20% of their yearly childcare costs capped at £2000 for each child.

  1. Sunday working rights protected – start date to be announced

Shop workers will be given greater protection under new rules. Shop workers will be able to object to working more than their normal hours on a Sunday and there will be a reduction in the notice that workers need to give if they want to opt out of working (in the larger shops) on Sunday.

BUSTING THE EU EMPLOYMENT LAW MYTHS

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  1. Myth: leaving the EU after 43 years will bring an end to statutory holiday and sick pay

Entitlement to annual leave is set out in the Working Time Regulations 1998 (“WTR”) which are derived directly from EU law. Entitlement to annual leave is set out also in the employee’s contract and cannot just be taken away. The UK opted to increase the amount of holiday from the EU minimum of 20 days to 28 days in the UK. In theory the UK could remove this when leaving the EU but it would be regarded as unlikely. Sick pay is not directed by the EU only in case law such as HM Revenue & Customs v Stringer and others (“Stringer”) and Pereda v Madrid Movilidad SA (“Pereda”) in terms of entitlements when off sick.

  1. Myth: we should dismiss EU national employees and expect the same treatment to British workers in the EU who will have to return

To do so would be unfair dismissal and discriminatory. We are still in the EU until Article 50 is invoked and until (currently) the two years have elapsed after the Art 50 process has been instigated. There will be free movement until the UK leaves.

  1. Myth: the ECtHR (European Court of Human Rights) will have no further influence on the UK once we exit

Yes it will due to the fact that the UK signed up to the Council of Europe which is entirely separate from the EU. All cases involving human rights will still be heard by the ECtHR. What will change is the referral of cases to the European Court of Justice (ECJ) to ask the ECJ if the UK has implemented EU law correctly or interpreted a case properly on issues inter alia TUPE, collective consultation, discrimination or working time.

  1. Myth: once we leave the EU we will no longer have to abide by laws that originate in the EU

Remember that a law passed by Europe does not have direct effect on the UK until legislation is passed here. Therefore although the laws may have originated in Europe, laws have already been passed in the UK to reflect them and until these laws are repealed we must abide by them. It is difficult to understand how the government will cope with the amount of negotiation needed to unravel all of the trade deals and changing employment laws immediately is unlikely to be at the top of the implementation list.

REASONS TO MAKE OR REVIEW YOUR WILL.

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Careful preparation for end of life is required to provide peace of mind for yourself and your loved ones, that your wishes will be respected after you have gone. A Will clarifies what happens to your assets after you die, who will receive what, when they will get it and it can also include details on how these assets are managed. If you do not make a Will, your property will be shared out according to certain rules. These are the rules of intestacy, and they may not give you the result that you would wish for. A properly drafted Will ensures that any gifts you wish to leave are given to the correct beneficiary. Without a Will, it may be legally necessary to sell items or could even lead to a family dispute.

With more unmarried couples living together, it is important to ensure that your partner will not be at risk should you die without a Will. The issue here is that the Intestacy Rules do not provide for cohabitees. These relationships do not have legal recognition and a ‘common-law’ partner has no automatic right to your possessions following your death. We can help tailor your Will to suit you.

Have you recently reviewed your will?

Not only should you make a Will, it is important to review your Will regularly and ensure it still reflects your wishes.

What could need to be updated?

  1. Changes in your relationship or family deaths:

If you have had further children or grandchildren, then you may wish to change or update your Will accordingly. If you have married, remarried or registered a civil partnership then your Will is void. If you have got divorced since you last signed a Will, your Will is not void, however your ex partner will not usually be able to claim anything after you have gone. You should consider making changes to your Will however as ex-partners can contest Wills if they are still mentioned in them and this way it can avoid disputes.

  1. Changes in assets:

If you no longer have the assets previously gifted in your Will or you own new ones since your Will was made, a new Will should be made.

  1. Your Spouse passes away:

If a spouse were to pre-decease you, you may wish for your assets to go to another relative. You may also wish to distribute your assets in a different manner.