Legal Update - April 2009

Welcome to the April edition of our newsletter whereby we look back at breaking legal news and developments to offer you our legal opinion and insight.

What did you think of the Budget? The tax position is summarised here and as expected there were no real shocks on the whole just an indication of the pain we are all likely to experience in coming months and years in terms of the “hangover cure” for excessive lending and toxic debt borrowing which appears likely to dominate the business, financial and political sectors for a decade at least according to some experts.

No doubt your area is like our own-the local Woollies still empty in the high street, many vacant stores and fewer shoppers, “for let” signs aplenty in industrial estates, landlords willing to offer discounted rent, estate agents closed or closing and insolvency practitioners and redundancy experts run ragged. If not you are lucky indeed as this report indicates that merger and acquisition deals fell by 70% compared with the previous year though “pre packs” are the flavour of the month. In our view there are a few cautious buyers out there hunting for a bargain, on their terms of course, being a “buyer’s market” now and there are some signs that lending is increasing though banks remain cautious to any risk whatsoever.

Whilst some “self-cert” mortgage lenders and borrowers have been lambasted by the press for irresponsible lending and borrowing this article on pitfalls for self-employed business loans shows that there can be legitimate reasons for borrowing and when there is careful consideration of any capital allowance claim has to be made.

Disputes between landlords and tenants over what is and what is not proper to include in the service charges paid by the tenants are commonplace and more so in a recession when “every penny counts”. As in all instances, the wording of the tenancy agreement is crucial, as a recent case illustrated. The case involved leading high street retailer Boots and the charges made by the landlord of Manchester’s Trafford Centre.

For those readers with premises they should note that a 17-year-old disabled man from Sheffield has secured a historic legal victory against the Royal Bank of Scotland (RBS) on account of its failure to make adjustments as a service provider to one of its branches in order to accommodate members of the public with impaired mobility. When Mr Allen began receiving Disability Living Allowance, this was paid into his RBS account. The bank’s website indicated that wheelchair access was available at the Church Street branch and the branch displayed a sign advertising the fact. However, Mr Allen found that this was not in fact the case and he was unable to enter the premises. Supported by the Equality and Human Rights Commission, Mr Allen brought a claim against RBS for disability discrimination which he won and Mr Allen was awarded the highest fine ever reported for such disability discrimination and the court granted an injunction to force RBS to install a platform lift at the premises by September 2009.

Disputes of a different nature feature here. A significant change in April occurred when the Employment Act 2008 ended the Statutory Dispute Resolution Procedures in their entirety in terms of treatment of employment disputes. In their place is a revised voluntary Advisory Conciliation and Arbitration Service (ACAS) Code of Practice, which sets out the basic provisions and full details can be found here together with guidance notes to assist. The Code of Practice advises that attempts should always be made to resolve disciplinary and grievance issues in the workplace. Where this is not possible, the use of an independent third party should be considered to help resolve the problem. This need not be someone from outside the organisation but could be an internal mediator, as long as they are not involved in the disciplinary or grievance issue. It is hoped the changes will provide a more flexible solution and will be fairer where in the past minor procedural breaches have led to damages being awarded.

Employers regardless of their size should now be well versed in what documentary evidence and records need to be retained to avoid being fined/imprisoned for wrongful employment of an illegal immigrant. Recent changes in March have also occurred whereby employers must advertise certain jobs to resident workers through JobCentre Plus, for a minimum of two weeks where the salary is below £40,000, before they can bring in a worker from outside Europe.

If you are a partner then this ruling on compulsory retirement for partners may assist any uncertainty. The Employment Equality (Age) Regulations 2006 introduced a new, default retirement age of 65 and allow that provided certain procedures are followed, compulsory retirement at that age will not be discriminatory. However, the default retirement age exemption does not apply to partners in a partnership. In order to justify the inclusion of a mandatory retirement age in its partnership agreement, a firm must be able to demonstrate that this is a proportionate means of achieving a legitimate aim if it is to defeat a claim of age discrimination. In Seldon v Clarkson, Wright & Jakes, the former senior partner of a firm of solicitors claimed that the provision in the partnership agreement that required all partners to resign at age 65 (although they could be kept on by agreement) was discriminatory and the case helped to clarify when such a business decision could be justified and when adopting such a blanket policy might be discriminatory.

Kind regards,

Brian McLelland