General

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

It goes without saying that preparing a Will is crucial in ensuring your wishes are complied with when you die. However, any such Will is useless if no one knows where it is held. 

In a recent survey conducted by the National Will Register “Certainty” 67% of people said they would not know where to find the Wills of their loved ones.  There really is no point in preparing a Will if, in the event of your death, your loved ones simply cannot find it.     

In an ever-changing world it is unwise to adopt the belief that your Will is safe because it is  stored at a particular law firm and that on your death, this law firm will still be in operation, and your loved ones will be able to approach them and obtain a copy of your Will.  You must keep in mind that law firms do merge with other firms, they do change their names and on occasion they do cease to trade completely.  If such a situation arises, Wills are sometimes transferred to other law firms or other places for safe keeping and clients are not always notified.  This means that when the time comes your Will cannot be found easily or, in some cases, at all. 

This would then mean you are “intestate” and whatever the law happens to be when you die will decide the fate of your assets.

The same goes for Wills held by a Bank. Vaults full of unclaimed Wills have recently been found, with most of the people who made them sadly departed, and deemed to have had no Will.

Without registration, at an already fraught and difficult time for your loved ones, there is the risk that one or more of the below situations may occur:

• It may be assumed that you did not write a Will meaning that the wrong people benefit.

• Your loved ones may miss out on receiving what you would like them to receive.

• The Courts may have to be instructed to decide who receives what from your estate.

• A previous Will may be deemed as your final wishes and

• Family disputes may occur. 

That is why at Cheyney Goulding we register all our Wills with a National database so that, when the time comes, anybody searching for the Will of one our clients will be able to establish where it is and when it was made. This massively increases the likelihood of the Will being used and the person’s last wishes being carried out correctly.  When it comes to Probate, we want to make it as pain free as possible to carry out a loved one’s final wishes and this all starts by ensuring the correct Will is being used.

If you would like to know more about the registration of Wills with the national database or would just like to have a conversation with us about updating or drafting a Will, 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        01483 796008

A Lasting Power of Attorney is a document that allows a person to appoint trusted individuals to make important decisions about care and finances on their behalf, in the event of a loss of mental capacity through an accident or illness such as dementia.

It is by far the most powerful and important legal document an individual can have, because it allows you to pass potentially life-changing decisions about your affairs on to a third party.

At Cheyney Goulding, we make a lot of LPAs for people and here are some top tips for getting the best out of them:

• Plan early – While you have capacity, it’s vital that you get your affairs in order and choose the best people to manage your affairs, in case of an accident or illness. You cannot appoint an attorney once you lose capacity, and then your family will have to make expensive and time consuming applications to the Court of Protection.

• Choose carefully – Think carefully who you want to appoint as your attorney and have an open conversation with them, so they understand your wishes and what their responsibilities will include. Consider appointing more than one person as your attorney so they can share the responsibility.

• Consider appointing a professional – A family member might not always be the best person to act as your attorney, especially if you run a business. Instead, you can appoint a professional, such as a solicitor. They can act as a neutral third party and make unbiased decisions that are in your best interests. Bear in mind this usually involves a cost.

• Think about different circumstances – Consider how you would like your attorney to manage your property and financial affairs in different situations. For example, are you happy for your property to be sold to pay for your care costs?

• Address the difficult questions – Your attorney might have to make difficult decisions about your health and welfare. If you have specific wishes around your care plans, medical treatment, or end of life wishes, make sure you discuss this with them and make your choices clear in your document.

• Seek professional advice – Shop-bought and online LPA kits may be suitable for those with very straightforward financial situations or with considerable legal experience, but for most people, seeking professional legal advice is the best way of ensuring that an LPA is effective, legally robust and safe.

• Keep your plans current – Make sure you keep your LPA updated if your circumstances change. Your choices around the people you want responsible for your finances and wellbeing may change, such as following a marriage or divorce, when children reach adulthood, or if parents pass away.
• The LPA dies with you! Remember that you still need to make a suitable Will to ensure that your estate passes to the right people at the right time when you die. The LPA can only be used during your lifetime.

This is a specialist area of the law, and we recommend that anyone considering an LPA obtains professional advice.

Please contact Christopher Seddon who is the head of our Private Client Team for guidance and an initial free telephone consultation.

Following an increase in the spread of Coronavirus across the UK, on 24 March 2020 the government instigated a lockdown. People are now only able to leave their homes for food, health reasons, exercise and work where the work is essential and absolutely cannot be done from home. For further guidance on these restrictions please see here.

This has caused an unprecedented disruption to daily life and the ability of businesses to function as usual. Many businesses, particularly those in the retail, hospitality and leisure industries have been forced to close by the government leading to concerns about mass unemployment. For those businesses which are still open the lockdown has required a shift in the way they operate with a significant number of the workforce now working from home. To help combat the disruption and uncertainty, the government has introduced a number of temporary measures designed to provide support to businesses as well as their employees.

For details of the measures in place to support businesses please read below.

Coronavirus Job Retention Scheme

On 20 March 2020 the government announced the Coronavirus Job Retention Scheme, a scheme to enable UK employers that use PAYE to pay at least part of their employee’s wages who have already or would otherwise have been made redundant because of COVID-19. Under the scheme, HMRC will reimburse employers 80% of those wages up to a maximum of £2,500 per month per employee. It will cover the cost of wages backdated to March 1st for a period of 3 months for those employees who were on the payroll as of 28 February 2020; this period may be extended. Employers can then choose whether to pay the remaining 20% of wages but they are not required to do so.

To access the scheme, businesses will need to designate affected employees as ‘furloughed workers,’ which is essentially where employees have been asked to stop working but are kept on the payroll rather than being laid off. Whilst employees are furloughed they must not undertake any work for their employer.

As changing an employee’s status is subject to existing employment law, it will need to be agreed with each employee. It is anticipated that most employees will agree to such a change as the alternative would be for them to be made redundant. Businesses will then need to submit information to HMRC about furloughed employees through a new online portal, details of which will be provided by HMRC in due course.

HMRC have stated that they are expect the first grants to be paid within weeks. However, since the grants under this scheme are not immediately forthcoming, if your business is having short term cash flow problems a Coronavirus Business Interruption Loan may be the solution.

Coronavirus Business Interruption Loan Scheme (CBILS)

CBILS is designed to support smaller businesses (SMEs) who don’t meet a lender’s normal lending requirements for a fully commercial loan or other facility, but who are considered viable in the longer-term.

The scheme is available through the British Business Bank’s 40+ accredited lenders which are listed here. The guidance recommends that businesses contact their current lender first and only approach other lenders if they cannot access the finance they need. CBILS supports a wide range of business finance facilities, including term loans, overdrafts, asset finance and invoice finance although not every lender can provide every type of finance listed.

To be eligible to apply for this scheme, businesses must meet the following requirements:

1. be UK based with an annual turnover of no more than £45 million;
2. the application must be for business purposes;
3. the facility will be used to support primarily trading in the UK;
4. they wish to borrow up to a maximum of £5m for a term of up to six years for term loans and asset finance or for a term of 3 years for overdrafts and invoice finance facilities.
5. their business must generate more than 50% of its turnover from trading activity

SMEs must also have a borrowing proposal which, were it not for the COVID-19 pandemic, would be considered viable by the lender, and for which the lender believes the provision of finance will enable your business to trade out of any short-to-medium term difficulty

Deferment of VAT and Income Tax payments

VAT payments will automatically be deferred for all UK businesses from 20 March 2020 until 30 June 2020. Businesses will have until the end of the 2020/2021 tax year to pay any liabilities that have accumulated during the deferral period.

For the self-employed, payments due on the 31 July 2020 under the Income Tax Self-Assessment will be automatically deferred until the 31 January 2021 but you can choose to still make payment by 31 July 2020 if you wish to do so.

Self-employment Income Support Scheme

In addition to the above support for the self-employed, the government has recently announced the Self-employment Income Support Scheme (SEISS) for self-employed individuals (including members of partnerships) who have lost income due to coronavirus. Those individuals will be able to claim a taxable grant worth 80% of their trading profits up to a maximum of £2,500 per month for the next 3 months.

The requirements for this scheme are that individuals must:

• have traded in the 2019/2020 tax year;
• be trading when they apply, or would be except for COVID-19;
• intend to continue to trade in the 2020/2021 tax year;
• have lost trading/partnership trading profits due to COVID-19; and
• have submitted their Income Tax Self Assessment tax return for the 2018/2019 tax year. This is essential as HMRC will use these returns to identify who is eligible for the scheme. Individuals who have not yet filed their tax return for the 2018/2019 tax year should do so by 23 April 2020.

One of the following conditions must also apply:

• trading profits/partnership trading profits in 2018/19 must be less than £50,000 and these profits must constitute more than half of an individual’s total taxable income
• average trading profits in 2016/17, 2017-/8, and 2018/19 must be less than £50,000 and these profits must constitute more than half of an individual’s average taxable income in the same period.

The scheme is not open yet, however, HMRC will contact those who are eligible in due course to invite them to apply.

Commercial Tenants

The government has announced that Commercial Tenants across England, Wales and Northern Ireland who cannot pay their rent up until 30 June 2020 because of the Coronavirus cannot be evicted. During this period, landlords will be prevented from exercising a right of re-entry for non-payment of rent which will include any sum payable under a commercial lease such as any service charge.

Whilst they cannot be evicted, tenants will still be liable for the rent once this period is over as this is not a rent holiday, merely a moratorium.

Sick Pay

If an employee is off sick due to coronavirus they will be entitled to receive contractual sick pay and/or statutory sick pay (SSP). A person who is self-isolating to prevent the spread of coronavirus and who is unable to work from home will also be eligible for statutory sick pay. Currently SSP only applies from the fourth day in a row that an employee is off sick, however, the emergency COVID-19 bill which is currently making its way through Parliament will enable employees to get SSP from the first day of self-isolation. This will apply retrospectively from 13 March 2020.

This emergency legislation will also allow UK based businesses with fewer than 250 employees, as of 28 February 2020, to reclaim Statutory Sick Pay (SSP) paid for up to 2 week’s sickness absence per employee due to COVID-19.

Employers will need to keep records of staff absences and payments of SSP, but employees will not need to provide a GP fit note. It is possible for those with symptoms of coronavirus whose employers require evidence to get an isolation note from NHS 111 online and for those who live with someone that has symptoms to get a note from the NHS website.

Details of how this scheme will operate will be revealed once the emergency legislation has passed.

Retail, hospitality and leisure businesses

The government is planning to introduce a business rates holiday for retail, hospitality and leisure businesses in England for the 2020/2021 tax year. This holiday will automatically be applied to those businesses’ next council tax bill in April 2020. However, local authorities may have to reissue bills automatically to exclude the business rate charge, which they should do shortly.

The Retail and Hospitality Grant Scheme has been set up to provide businesses in England in the retail, hospitality and leisure sectors with a cash grant of up to £25,000 per property depending on their rateable value.

• Businesses will receive a grant of £10,000 if their property has a rateable value of up to £15,000.
• Businesses will receive a grant of £25,000 if their property has a rateable value of between £15,000 and less than £51,000.

No action is required for this scheme as the relevant Local Authority will write to each eligible business.

For both the business rates holiday and the Retail and Hospitality Grant Scheme, the properties that will benefit will be occupied hereditaments that are wholly or mainly being used:

• as shops, restaurants, cafes, drinking establishments, cinemas and live music venues
• for assembly and leisure
• as hotels, guest & boarding premises and self-catering accommodation.

This is an overview of the measures the government has announced as of 27 March 2020. More guidance on the existing schemes as well as details of any new schemes will undoubtedly be forthcoming over the following weeks and months.

This article is for general commentary only and does not constitute legal advice. If you would like to discuss any of the issues discussed in this article, please contact Tom Marshall – tmarshall@cheyneygoulding.co.uk, or another member of our team.

Cheyney Goulding LLP, solicitors in Guildford, Surrey

The Coronavirus (COVID-19) pandemic has created unprecedented challenges for everyone. We have made a number of changes to our working methods to ensure continuity of service to our clients in a safe working environment.

All visitors to the office must make an appointment in advance. All members of staff are able to work remotely, and you will be able to contact us by telephone, email or video conference (including Microsoft Teams and Zoom) in the usual way.

We operate a digital first policy which means all our IT systems are designed for a remote workforce.  Our documents, processes and resources can all be accessed and managed securely online by staff.

When attending the office please note:

• all visitors are kindly asked to wear a mask on entry and sanitise their hands using the hand sanitiser provided;
• we may ask to take your temperature before entering the building;
• all meeting rooms have screens, which means visitors can remove their masks once they enter the meeting room if they wish to do so;
• QR code posters have been displayed around the office for the NHS track and trace app;
• hand sanitiser and facemasks are available and provided throughout the office; and
• the office is cleaned every evening including all touch points.

If you are not sure who you need to speak to or do not have their contact details, please get in touch with one of the following:

• Tom Marshall: tmarshall@cheyneygoulding.co.uk 07702 806 382 (company and commercial);
• Graham Young: gyoung@cheyneygoulding.co.uk 07967 333 328 (litigation and dispute resolution); or
• Christopher Seddon: cseddon@cheyneygoulding.co.uk 07596 227 305 (wills, trusts, probate and residential property).

Please get in touch if you would like to discuss the best way we can work with you.  This could be instant messaging or video conferencing as an alternative to face to face meetings.

Should you have any queries, please contact Tom Marshall

Cheyney Goulding turns 25 in 2020.