General

An “unless” order is an order that, unless a party performs an obligation by a specified date or within a particular period, they will be penalised by the sanction set out in the order. The Court’s power to make an unless order is contained in the Civil Procedure Rules (CPR) 3.1(3).

The Courts will consider both the breach that led to the rise of the unless orders and the breach of a unless order when deciding whether to grant applications for relief from sanctions.

There are three types of breaches where there has been little scope for ambiguity:

• Failure to act at all: 
  • If an order requires a party to take a positive step and has done nothing at all, this is a breach of the order.
• Failure to act before a deadline:

A breach occurs if the requested action is not completed within the deadline specified in the order. The considered date of service, not the date the document was received, is used to determine compliance where unless order specifies a deadline for serving the document.  If a party does wish to operate based on the actual date of receipt rather than the deemed date of service, there will need to be an express written agreement.

• Failure to pay a sum of money:
  • This is where the sum of money has not been paid in full. 

The consequences of breaching an unless order and making an application for relief

The case of Marcan Shipping v Kefalas [2007] from the Court of Appeal confirmed that a failure to comply with the terms of an unless order will result in the sanction prescribed in the order taking effect automatically and if an application is made to enter judgment under CPR 3.5(5), the Courts will consider whether the order should be made to reflect the sanction already in effect.

CPR 3.9 came into force on 1^st April 2013 and CPR 3.9(2) requires an application for relief to be supported by evidence. Applications for relief are generally made under CPR 23 by application notice and supporting witness statement.

Once a breach has been established, the sanction will take effect even if the defaulting party takes steps to comply at a later date.

Any applications for a breach of sanctions had often suffered harsh decisions and unjust consequences. The judgment in Denton v TH White [2014] changed all of this and led to the creation of the Denton Test and application for a breach of sanction became far more proportionate. There has become an encouragement of parties to co-operate and address any minor defaults between themselves. 

Therefore, under CPR 3.9 it sets out the circumstances that supports the Denton Test stating that the Courts should:  

“Consider all the circumstances of the case, so as to enable it to deal justly with the application, including the need:

(a) for litigation to be conducted efficiently and at proportionate cost; and

(b) to enforce compliance with rules, practice directions and orders.”

The Dentons Test

The Denton Test was established in the Court of Appeal following Denton v TH White [2014] with a three-stage test:

1. The seriousness or significance of the breach

This is essentially a matter of judicial discretion regarding whether a breach is serious or significant. A breach may be considered serious even if it does not affect the progress of litigation. Breaches that cause a trial date to be vacated are also likely to be considered serious and significant. 

• The Court will consider why the default occurred

The failure to comply with an unless order suggests a serious and significant breach, but the Court will also consider the underlying breach and not just solely upon the breach of the unless order. 

• The circumstances of the case

This will enable the Court to deal with the application fairly. They will take into consideration the two criteria set out in the Civil Procedure Rules (CPR) 3.9 

When is relief from Sanctions needed?

A party may require relief from sanctions if they do something wrong, such as a breach or a failure to comply with directions. As soon as a party has realised their error, they should apply to the Courts for relief from sanctions as a matter of urgency. The Court will then take into consideration using the Denton Test if there should be a relief from sanctions. 

This guide is for general information only and does not constitute legal advice. If you would like to discuss anything in this article, please get in touch. 

What is intellectual property?  

Intellectual property refers to creations of the mind. Having the right type of intellectual property protection can prevent others from stealing or copying your inventions and creations; such as the name, design or look of your products.

It is important for businesses to be aware of the different types of intellectual property rights to ensure the ultimate protection for their creations and to maximise their competitive position within the market.

Intellectual property rights are divided into two main categories (in the UK):

• Registered rights: Registered rights are granted on application to the UK Intellectual Property Office. With registered rights, owners can stop others from using their creations without permission. These include trademarks, patents and registered designs.

• Unregistered rights: Unregistered rights arise automatically and give protection on the creation of your work. These include confidential information, copyright, unregistered design rights and unregistered trademarks.

Different types of intellectual property protections include:

Copyright

Copyright protects original works of authorship such as literary, artistic, musical and dramatic works. Copyright also protects computer software, sound recordings, broadcasts, films and architecture. Essentially, it protects the expression of an idea. It does not protect against independent development of the same idea(s).

Copyright arises automatically and lasts for 50 to 70 years depending on the creation of work.

Patents

Patents protect new inventions and innovative technical features of products and processes. An inventor is not entitled to a patent as an automatic right, as a grant of a patent is not automatic. It is necessary to file an application for a patent in order to have this protection. Patents can provide a high level of protection for businesses that are ready to commercialise a new product.

Trademark

Trademarks protect symbols, words, phrases that distinguish products or services of one party from another. Registration of a trademark is not required however it does confer certain advantages.

It is possible to apply for a trademark in most jurisdictions. A UK registered trademark will only be enforceable in the UK, while an EU trademark will be enforceable throughout Europe.

Design Rights

Design rights protect the appearance of a product. This can be the appearance of the whole product or part of the product. A registered design right lasts a maximum of 25 years, which requires a registration renewal every 5 years. Unregistered design right, on the other hand, will give a right against copying and under the UK design right, this protection will last for ten years from its first marketing.

Confidential Information – Trade Secrets

It is also possible to protect information that is considered to be sensitive to your business, through confidential information rights. This will cover know-how and trade secrets. These are not strictly intellectual property rights however they will protect sensitive information, both commercial and technical and they do not need to be registered. 

We can assist you with various aspects of intellectual property rights, from identifying these rights and guiding you through the registration process.

With our day-to-day functions, jobs and memories now taking place online, the question of what will happen to your social media once you are no longer here has become increasingly important.

It is worth thinking about how you may want to save your digital content for family and friends who might want to access it after your death. A lot of platforms, including Facebook, YouTube and Twitter have good tools that enables you to download everything that you have on that platform. 

The reason for doing this is that once you are gone, your family and friends may find it a lot harder to access your account than they anticipated. Many social media platforms, especially now, have lengthy terms of service agreements that prevent others from accessing your account.

Sites such as Facebook now have “legacy contacts” which enables you to set who can access and manage your account once you die. They can choose whether they leave your account active to keep a picture bank of your memories, a memorial account or to permanently delete the account.

A legacy contact can:

• Change their profile and cover photos
• Respond to friend requests
• Pin tribute posts to their Facebook memorial page
• Request to remove the page

A legacy contact cannot:

• Post as the deceased
• Send messages on their account
• Remove existing friends or send new friend requests
• Remove any posts, shared items, or photos
• Add a new legacy contact

The danger of not doing anything can impact the sites algorithm in an upsetting or unsettling way. There can also be a lengthy process when deleting the accounts after your loved one has passed. You may need to:

1. Contact social media sites – to let sites know that the individual has passed away, you will need the following information:

• Their social media username
• Their email address
• Their full name
• Proof of death – a death certificate, obituary or death notice
• Proof of your identity – driver’s licence or passport
• Proof of your relationship with the deceased – a copy of the will if it names you as an administrator or beneficiary, or a birth or marriage certificate

2. Send a death certificate – you may need to send a copy of the death certificate to the social media site as confirmation.

3. Log in and download or save everything you want to keep – you’ll need their username and password to do this. Ask a friend to help if you’re not sure how to log in, or if it’s too upsetting for you. If you can’t decide whether to keep something, save it anyway.

Please keep in mind that different social media accounts may require different information to allow you to access or close a profile.

This guide is for general information only and does not constitute legal advice.  If you would like to discuss anything in this article, please get in touch.

What is ‘Mediation’?

Mediation is a voluntary and confidential form of alternative dispute resolution (ADR), in which a neutral third party assists parties to work towards a negotiated settlement of their dispute. The parties retain control of the decision on whether or not to settle and on what terms.

In mediation, both parties agree on the choice of a neutral mediator. The mediator’s role is to facilitate the discussions between the parties themselves, exploring options and taking account of individually important factors. This allows the parties to craft arrangements that are right for them whereas a court can only make a narrow range of orders which it imposes but which neither party might choose. By definition, mediation is constructive. The mediator cannot advise but is there to help.

Mediation can be used in almost any kind of case, from small claims through to complex high value multi-track disputes and appeals. Parties to litigation must consider any offers to mediate or attend settlement discussions very seriously and be able to justify reasons for refusing such offers to avoid cost sanctions.

What happened at a typical Mediation?

The mediator will greet the parties on arrival and show each party to its own private room. Usually, the mediator will formally open the mediation with a joint session, attended by all parties and their lawyers. During this session, the mediator provides an overview of the process, their role and the procedure. Each party then has an opportunity to make an opening statement, giving its perspective on the dispute and highlighting points of particular concern. After the opening, the mediator will have private discussions with each party to assist in the negotiating process.

Ultimately, this may result in the parties reaching a settlement that is either documented at the mediation or shortly thereafter, usually in the form of a settlement agreement. Mediation does not always result in a settlement but it generally has a high success rate.

What are the benefits of Mediation?

Some of the potential benefits of mediation include:

• Communication problems between the parties can be overcome. The mediator is a neutral third party who can act as an intermediary between the different personalities and negotiating styles of the parties.
• The mediator can help the parties work through a deadlock situation that can be created by competitive or positional negotiation.
• Business relationships can be preserved or enhanced by mediation. Long-term relationships, arrangements in small or sensitive markets, joint ventures and similar relationships can be restored.
• Confidentiality and privilege are cornerstones of the mediation process. Agreements to mediate usually provide specific protection for confidentiality and privilege. The private nature of mediation also ensures that negative or embarrassing precedents are avoided.
• The parties have complete choice over the selection of the mediator and can therefore choose the mediator who is most appropriate for the dispute. Conversely, the parties cannot choose a judge if the matter goes to full trial.
• The legal costs, lost opportunity costs and management time can be reduced through mediation.
• Mediation can produce outcomes that might not be possible via determination by the court or arbitration. The limited scope of legal remedies in court or arbitration may be inappropriate to resolve the wide range of business or commercial issues that might arise (for example, the need for new financing). The result can be new business opportunities and restructuring of old relationships.
• The client’s personal, commercial and technical needs, interests, aims and objectives can be achieved through mediation. The process helps the client to identify underlying interests and the implications that various alternative outcomes may have on those interests.
• The process is entirely flexible and can be tailored to meet the parties’ needs and all issues.
• The clients have active participation in the mediation process and control the outcome.
• Mediation is voluntary. The parties can withdraw from, or terminate, the mediation at any time. The mediator has no coercive powers.
• The process is culturally sensitive and adaptable. A team of mediators can be employed, representing the diverse cultural backgrounds, in multi-party cases. A bilingual mediator can establish credibility and authority in a case involving language obstacles.
• The mediation process provides a tool for project managing large, complex or multi-party disputes.
• Mediation can provide a speedier resolution. It can be arranged quickly, often within a few days or weeks.
• A mediation can take from a few hours to one or more days. Mediations rarely take more than a few days, even in relation to complex or multi-party commercial disputes.
• The mediation process is low-risk; there is “nothing to lose” by attempting a mediation.
• Mediation has a high success rate and produces durable results. The statistics vary, but range from 65% to 85%, representing cases that settle at mediation, and some mediators advertise success rates in excess of 90%. The outcome is likely to be more palatable to clients than any solution that a court or arbitration tribunal imposes, as the clients themselves have responsibility for creating it.

Our firm are committed to using mediation whenever possible, to avoid the need for costly litigation. Our dispute resolution lawyers are all experienced in organising and conducting a mediation.

This guide is for general information only and does not constitute legal advice.  If you would like to discuss anything in this article please get in touch.

The day-to-day management of a company is typically carried out by the appointed directors.  These individuals exercise all powers of the company and make decisions at meetings of the board of the directors. 

Shareholders do not necessarily have any direct say in the day-to-day management of the company; however, the interests of the members are safeguarded by the Company Act 2006.  Certain corporate decisions are reserved and require approval from the shareholders.  It should be noted that these provisions must always be read alongside the company’s own articles of association which may prescribe a different procedure, such as approval from a higher majority or unanimity of eligible shareholders.  

Shareholder approval is sought by either of two types of resolution:

1. Ordinary Resolution – passed by a simple majority (i.e over 50%) of the members voting in favour; and
2. Special Resolution – passed by a majority of not less than 75% of votes.

Below, are a selection of matters the Companies Act 2006 require a private company limited by shares to pass an Ordinary or Special Resolution:

ORDINARY RESOLUTIONS

• Approval of a director’s long-term service contract, i.e a contract which guarantees a director’s employment for more than 2 years.
• Approval of loans to directors.
• Ratifying a director’s breach of fiduciary duty, except where the acts were dishonest or where the relevant act was unlawful or unauthorised.
• Removal of directors from office against their will.
• Approval of payments compensating directors for loss of office.
• Approval of ‘substantial property transactions’.  This is when a director, or someone connected to them) buys from or sells to the company a non-cash asset, the value of which is either more than £100,000; or more than 10% of the company’s net assets and the asset’s value is more than £5,000.
• Authorise directors to allot shares (unless the company’s articles already empower directors to do so).
• Approving the company to buy-back its own shares.

SPECIAL RESOLUTIONS

• Amend the company’s articles of association.
• Change the company’s name.
• Disapply pre-emption rights, i.e the obligation for shareholders selling/transferring their shares to initially offer to all other existing shareholders.
• Reduce the company’s share capital.
• Approve the purchase of the company’s own shares using the company’s own capital, as opposed to distributable profits.  The Directors will also need to provide a statement that the company will remain solvent for 12 months following the purchase.

Please note, this guide is for general information only and does not constitute legal advice.  If you would like to discuss anything in this article, please get in touch. 

Inheritance Tax is a tax on the estate (the property, money and possessions) of someone who’s died.

Married couples can, with proper planning, pass on up to £1m tax free, but many with personal wealth above this amount are voluntarily paying over the odds by failing to make good decisions and missing out on the various tax breaks on offer. Estates worth more than the £1m pay three-quarters of all death duties, a collective tax bill of more than £5bn a year.

Recently, there has been a huge increase in the number of families paying 40% inheritance tax on their loved ones’ estates.  This means over £1 billion pounds passes unnecessarily to HMRC rather than to the deceased’s own relatives.

What most people do not know is that there are simple ways of reducing this extortionate charge. 

HM Revenue & Customs have confirmed that in 2017-18 almost half of the money that was tied up in inheritance tax-paying estates was invested in shares or held in cash. This amounts to around £1.2 billion pounds. This money could have been better placed into tax-saving schemes or gifted away tax-free. 

At Cheyney Goulding our specialist solicitors understand that the subject of inheritance tax and any attempt to reduce the same can be a minefield.   This is why we are on hand to assist you in reducing any inheritance tax bill by providing practical solutions to this increasingly common issue. To give you but a few examples we can explore the following with you:

1. Simple Will planning
2. Marital status and the impact this may have on any future tax payable.
3. Use of uncomplicated Trusts
4. Gifts in general
5. Charitable donations

There are of course other options available to you and we would be delighted to discuss these in more detail going forwards. 

Don’t leave your hard-earned money to the taxman, leave it to your family. 

If you would like to know more about inheritance tax and the various tax-saving schemes, please do not hesitate to contact Christopher Seddon, who is the head of our Private Client Team for guidance and an initial free telephone consultation.

Email: cseddon@cheyneygoulding.co.uk

Telephone: 01483 796008

What happens to my iTunes account when I die?

Today’s world is a world that is very much reliant on technology.  Technology and online accounts are fantastic all the time you can access it/them but imagine for a moment what would happen if you were to pass away … Would your family know what digital assets you hold and how to access them?

Digital assets are something that almost all of us own. If you use a computer, a smartphone, or a tablet that you are very likely to have some digital assets. 

To name but a few, digital assets include:

• Bank Accounts
• PayPal
• Social Media- Twitter, Facebook, Snapchat
• Email accounts
• Cloud storage
• Online auction sites- eBay
• Cloud storage/Drop Box

Digital assets do not always have a monetary value, but they may have a huge sentimental value, for example photographs stored electronically.  On a person’s death all a person’s digital assets need to be unlocked so their monetary value can be released to the person’s estate, to enable an executor to manage an estate, to assess liabilities and to enable photos or other personal items to be saved and usable by the next generation.

If you would like to know more about dealing with your digital assets and ensuring that your loved ones can get access to them after your death, please do not hesitate to contact Christopher Seddon, who is the head of our Private Client Team, or Lucy Stockill, one of our Private Client Solicitors, for guidance and an initial free telephone consultation.

The Financial Conduct Authority (FCA) has succeeded in its appeal to the Supreme Court in its test case seeking urgent clarity as to the requirement of insurance companies to pay policyholders for business interruption (BI) losses arising from the COVID-19 pandemic.

The Supreme Court’s decision provides useful guidance on the meaning, effect and application of certain common non-damage BI insurance clauses, including “Disease Clauses”, “Prevention of Access Clauses”, “Hybrid Clauses”, and “Trends Clauses”, in the context of COVID-19. These are categorised as follows:

• Disease Clauses – clauses which provide cover for business interruption losses resulting from the occurrence of a notifiable disease, such as Covid-19, at or within a specified distance of the business premises;

• Prevention of Access Clauses – clauses which provide cover for business interruption losses resulting from public authority intervention preventing or hindering access to, or use of, the business premises;

• Hybrid Clauses – clauses which combine the main elements of the disease and prevention of access clauses;

• Trends Clauses – clauses which provide for business interruption loss to be quantified by reference to what performance of the business would have been, had the unexpected event not occurred

In its judgment, the Supreme Court held each of the above categories of clauses should properly be interpreted as providing cover for business interruption which can be shown to be caused by Covid-19. This decision will, therefore, benefit many businesses.

Those businesses who have suffered losses as a result of the pandemic should undertake a review of their insurance policies to determine whether they are eligible to recover under the terms. Also, those businesses who have previously had an affected claim rejected by their insurer, should now be considering requesting their claim be reconsidered.

If you require further information about this test case, a copy of the Supreme Court judgment can be found here: https://www.supremecourt.uk/cases/docs/uksc-2020-0177-judgment.pdf

If you require any assistance, or advice in respect of the validity of a potential business interruption claim, please contact Graham Young on 01483 796002 or email gyoung@cheyneygoulding.co.uk