SUMMER 2024 WHNEWS
WELCOME!
I’m delighted to introduce our first Summer Newsletter, designed to give you a flavour of what we as a business have been up to over the last few months – plus a few articles on legal topics which we hope you find useful
We’ve had many reasons to celebrate this year including being awarded Planet Mark certification in recognition of our commitment to, and our progress in, reducing our carbon emissions; a raft of well-deserved promotions; excellent progress in our gender pay gap; a fabulous Regency Run; and some innovative marketing initiatives including podcasts and a mock employment tribunal
It’s a real privilege to lead this business and to see it and its people grow and adapt to changing circumstances Therefore, it’s always a pleasure to celebrate our yearly round of promotions, and this year is no different As well as three of our trainee solicitors qualifying into the teams of their choice, we also saw promotions to senior associate, associate and senior paralegal, all of whom thoroughly deserved this recognition of their hard work and dedication
We have also welcomed several new members of staff to both our business support and legal teams Perhaps of particular note is our private client team which has been strengthened by the appointment of four key lawyers and a new Head overseeing the wider private client services offering Their particular focus is to offer a coordinated service, working closely with other colleagues to ensure we deliver joined up advice, tailored to a client’s specific needs and stage of life
On the subject of our people, one of the joys of being managing partner is seeing colleagues thrive through collaboration and a genuine commitment to our vision and values Nothing illustrates this better than our gender pay gap which has reduced dramatically over the past three years and which, we are delighted to report, is now negative, pretty much a first in the legal sector and a testimony to the hard work of our people team in delivering our commitment to diversity and inclusion
As you would expect of a firm that’s been around for almost 180 years our involvement in the local community is a critical part of our success In April, it was wonderful to mark our 20-year headline sponsorship of Leamington’s Regency Run with the news that, since its inauguration, funds raised for local charitable causes has topped £444,000 This was made all the better because one of the official charities for 2024 was Young People First, a Leamington-based charity working with vulnerable young people which is also one of our chosen charities, supported through our Charitable Trust and by staff volunteers
Summer had finally arrived, the Euros were in full swing and the election result unknown when I wrote this introduction Whatever the outcome of the tournament – or the election - I hope you enjoy reading our newsletter and do please let me know if there are any topics you would like to see included in future editions.
PHIL WILDING Managing Partner
DATES FOR YOUR DIARY
listed below were correct at the time of publication. Please check our website for the most up-to-date information.
PROMOTIONS: MAY 2024
We are delighted to announce that Wright Hassall has recently had a raft of promotions – including three newly-qualified solicitors who have successfully completed training contracts with the business
We have promoted Neal Patterson to a role which sees him head up the business’s family, farms and estates, private client, medical negligence and residential property teams
“I would like to congratulate everyone who has received a promotion and thank them for their continued contribution to the success of the firm.”
The business has also promoted Rebecca Mushing to Senior Associate in Development, Kash Dosanjh to Senior Associate in Employment, and Katie Deakin, Kezia Morgan and Gemma Clark to Associate in Private Client, Commercial Real Estate, and Employment respectively
Shannon Leering, Grace Beesley and Masuma Ahmed have also qualified as Solicitors in Commercial Litigation, Commercial Real Estate and Corporate, and Richard Phillips and Abigail Boeuf have been promoted to Senior Paralegals in Property Litigation and Medical Negligence respectively
Other colleagues promoted include Jordan Warwick-Tearne and Harriet Perkins who have both moved to Paralegal roles in Debt Recovery, and Mary Stansfield and Emma Cree who have been promoted to Acting Executive Assistant Team Leaders
Image caption: Masuma Ahmed, Grace Beesley, Shannon Leering, Neal Patterson, Gemma Clark, Phil Wilding, Kash Dosanjh, Richard Phillips, Rebecca Mushing, Abigail Boeuf, Katie Deakin, Kezia Morgan
A CHANGE IN FLEXIBLE WORKING RIGHTS
A significant change to worker rights introduced in April ensures flexible working is more accessible than ever before and demonstrates the traditional 95 working pattern is ‘no longer the norm’, according to an employment law expert.
The Flexible Working (Amendment) Regulations Act 2023 came into effect on April 6 and removes the current 26-week qualifying period to make a flexible working request.
Instead, employees have the right to make a flexible working request on the first day of their employment, and can make two requests within 12 months – double previous limits
Employers, in turn, must respond to an employee’s request within two months instead of three and must also engage in a consultation with the employee
‘Flexible working’ refers to the working patterns of employees – including part-time, flexi-time, term-time, condensed hours and start and finish times – as well as the place of work, be it in an office or another location such as home
Tina Chander, Partner and Head of Employment Law at Wright Hassall, believes the legislative change will provide employees with greater flexibility on where and when they work and help to open conversations around accessibility to work
She said: “Covid-19 has resulted in a huge shift in workplace dynamics and many employers have embraced a change in working patterns as it can lead to increased workforce engagement, productivity, and staff retention
This change heightens the conversation and will lead many employers to reassess their flexible working model to ensure they not only have a happy workforce which helps to retain staff, but can also attract a wider talent pool
“It also recognises the fact that the traditional 9-5 working pattern is no longer the norm as many look for a greater worklife balance or alternative arrangements due to external factors such as childcare
“The new legislation also removes the requirement for employees to explain what effect the request will have on the employer and, in addition, employees no longer must explain how any changes can be dealt with
“It’s a big win for employees as it opens up doors, and whilst it’s not removing the right for employers to say no, it is taking away boundaries and leading to a more open conversation around accessibility to work.
“Ultimately, while this may lead to employers opening up more roles for flexible working when recruiting, there will always be roles that cannot accommodate flexible working
“Employers need to manage flexible working requests carefully, as whilst the new legislation still permits employers to reject flexible working requests based on the existing eight reasons, the ability for an employer to reject a request outright will be removed and employers must consult and discuss alternative arrangements. Employers need to ensure their processes are compliant ”
This article was written by Tina Chander, Partner and Head of Employment Law
WH UPDATES
GENDER PAY GAP
At Wright Hassall, we’re committed to building an exceptional place to work, and to ensuring that diversity and inclusion is built into everything that we do and that we are seen to be leading the way in our practices.
We aim to be a diverse and inclusive business where our people feel empowered, supported and, above all, treated fairly, and in line with our FAIR values
As part of this commitment, we voluntarily published our gender pay gap report for January 2024 The full report is available to read on our website
PLANET MARK
We announced in April this year that we achieved Planet Mark Business Certification, furthering our commitment to reduce our impact on society This is an incredible achievement involving the entire business
In order to achieve this sustainability certification, we followed a robust three-step process: measuring our impact, engaging everyone in the business and communicating our progress We have measured our own carbon footprint and will continue to take responsibility for our carbon emissions to have a positive impact on the planet and society
Our entire business has contributed to our achievement in becoming Planet Mark certified, and every individual will continue to play an important role in our sustainability commitment
In just 4 years, we have reduced our median gender pay gap from a high of 40 3% in April 2020 to an incredible -22% (according to Jan 2024 data) We are fairly confident that we are one of the only legal services businesses able to say we have a negative gender pay gap We also have a Senior Leadership Team and a Partner group that has a 50:50 male/female ratio
UK IMMIGRATION POLICY UPDATE – THE TOUGH GETS GOING FOR POINTS-BASED SPONSORSHIP
New hiked up skill and salary thresholds have since April put the brakes on workrelated immigration. Tougher criteria apply, but as always, it isn’t straightforward, and employers may struggle to make sense of the new landscape.
Matthew Davies, Partner and Head of Business Immigration and Tracie Udall, Partner put the latest changes into context and perspective, and set out the key points
What is the Government doing with skilled immigration, and why?
Immigration has hardly been one of the headlines because of the troubled progress of the controversial and eye-wateringly expensive Safety of Rwanda (Asylum and Immigration) Bill, which was eventually passed into law at the end of April However, the real immigration focus for business and employers has been elsewhere
Back in December, the PM and Home Secretary tried to seize back the agenda with the 5-point plan for economic migration (see article) The basic idea is to cut reliance on, and access to, immigration to staff UK businesses Brexit was supposed to enable us to “take back control of our borders” by decoupling from EU law and free movement but in reality net immigration has increased and is perceived as a problem; Illegal boat crossings hit record levels and the Independent Chief Inspector of Borders and Immigration was sacked after criticising a “dysfunctional” system
What is changing and when?
A Statement of Changes brought key changes in the sponsored skilled worker category, many of them with effect from 4 April 2024
From 4 April, the default minimum salary threshold for a Skilled Worker visa application rose to the higher of £38,700 or the “Going Rate” set out in an Appendix to the Immigration Rules
Going Rates are determined by reference to the SOC (Standard Occupational Classification) codes published by the Office for National Statistics These will move to SOC 2020, instead of the increasingly outdated SOC 2010 Many SOCs commonly usually used by sponsors will change and some will see a major base salary increase.
To set these salaries, the 50th percentile of the 2021 survey of hours and earnings will be used instead of the 25th, which bring the actual minimum salary threshold for many codes well above the default £38,700.
For those already in the Skilled Worker category, transitional salary rates will be used when they apply to extend their permission or change sponsor in the UK For them, the minimum salary threshold will be the higher of £29,000 (up from £26,200) or the going rate for the type of role
The shortage occupation list is replaced by the pared down Immigration Salary list There is no longer a 20% reduction in minimum salary levels for those roles that made it to the new list
The Home Office will retain the “new entrant” salary discounts for those applying for a Skilled Worker visa in defined circumstances These include students switching to Skilled Worker and applicants under 26 years old. The new entrant discount reduces the Skilled Worker minimum salary threshold to the higher of £30,960 per year or 70% of the going rate
The Global Business Mobility / Senior Specialist Worker base salary threshold increases from £45,800 to £48,500; and if it is higher than that, the updated SOC Code going rate applies
What else is happening?
Alongside this are more changes:
Workers on family visas – the minimum household income requirement rises incrementally to £29,000, then £34,500, then £38,700. This will be a significant factor in dissuading many dependent family members of British, Irish and permanent residents from coming to live and work in the UK
The mandatory Immigration Health Surcharge is already up from £624 to £1,035 per person per year
A revised Code of Practice on preventing illegal working: Right to Work Scheme for employers has been in force from 13 February There are major increases in civil penalties for employing an illegal worker – i e a person subject to immigration control who does not have permission to be in that role – from £45,000 to £60,000 per illegal worker
The Graduate visa route is “under review” by the Migration Advisory Committee - and its reform or removal may limit access to the graduate labour market for those with student visas
This article was written by Matthew Davies, Partner and Head of Business Immigration and Tracie Udall, Partner in our Business Immigration team
THINKING OF SELLING YOUR BUSINESS?
Exploring options for selling your business can be a daunting task. Understanding your motivations for sale (e.g. retirement, derisking or seeking additional funding for growth) will be a great start to determining how to approach the project Establishing this key factor will often drive which process or method of exit is the right choice for you
In this article, we discuss the different types of exits that we regularly see in the M&A community and VAT considerations
Trade/competitor purchase
This is the most traditional method of sale It is where the business is marketed to and ultimately sold to a trade purchaser This may be a competitor, an expanding company or an overseas operation looking for a UK enterprise.
This is perhaps considered the cleanest transaction and often allows owners to realise their value at completion and walk away from the business in its entirety This process will allow the market to determine the price and potential buyers who see strategic benefits often make great bidders and can pay well
It is often a very flexible way of exiting a business as all commercial terms including funding options can be bespoke and negotiated.
There is however no guarantee that the business will make it to sale and/or the process may take an extended period Depending on how the sale progresses it may also become market knowledge that the business is for sale, which can lead to some uncertainty
Private equity
A sale to a private equity group is a sale to a private investment fund who acquire the shares in the company Typically, private equity groups will buy mature proven businesses with demonstrable growth strategies
Selling to private equity is often an exit strategy for an owner that wants to realise the value in a business but remain actively involved It is often a great option for businesses in rapid growth markets as private equity purchasers will, in effect, be buying a business in order to sell it again in a few years at an increased value or by way of listing.
Private equity can bring bags of experience to the table and often have proven track records for growing businesses However, private equity funds can be notoriously tough and often require long tie-in requirements for selling shareholders and the management team Indeed, they often insist on including their own management within the company after purchase
Management buyouts
A management buyout (MBO) is an acquisition of a company by its existing management team often supported either by private equity finance or by traditional institutional debt finance
An MBO can have many benefits for both you as seller and the management team purchasing
MBO’s are often seen as an excellent option to preserve the legacy of the business and incentivise an active management team. The management team will have an in-depth knowledge of the business and established relationships with the businesses stakeholders making the sale transition much easier It can also mean that the transaction may, on occasion, be undertaken in a shorter time-frame than a regular arm’s length sale and the market does not become actively aware of the sale as it is handled internally
However, an MBO can be costly The management team will need to fund the purchase Whilst available options include securing private equity backing or traditional institutional bank lending these may be time consuming and ultimately difficult to achieve
How to approach the market?
If you are considering a sale to either your management team or your employees, engaging experienced advisors early in the process is always desirable Sales to employees often afford tax benefits for all involved so a thorough assessment of the best methods should be undertaken From this point it is often time for a frank round table discussion with the parties involved Management teams may have considered the move before being approached but they will of course need time and opportunity to analyse the transaction and deal with their own challenges including funding for the purchase and ongoing ownership structures Similarly, EOT purchasers will need to assess the prospects of the transaction so early engagement with these parties is often key
If the general market is the correct place for you to market and ultimately dispose of your business, there are several methods to obtain a purchaser. You may feel comfortable approaching potential interested parties yourself or you may wish to consider additional advisors to broker the deal Business sale brokers will assist with marketing the business, much like a property estate agent Details of the business will be put to market, and they will assist in passing information and scheduling meetings with prospective buyers Corporate Finance lead advisors (usually trained accountants) however provide a very different, bespoke service They will undertake initial financial due diligence providing the financial basis of the valuation of your business They then research and identify potential bidders and confidentially approach targeted parties to consider your sale. They will then broker the negotiation of the terms of the sale and provide financial and commercial support throughout the project They will also act as the drivers in the transaction, project managing the lawyers and other transaction teams
VAT considerations
VAT should be considered when selling a business An error in VAT can lead to losing 20% of the sale price, or the entire deal can be jeopardised if the buyer finds VAT risks within the business. Over the years, we have assisted clients in preparing for sale, in addressing specific concerns and in negotiations
Some examples will illustrate the risks:
Buyers do not like businesses where VAT has not been properly considered We undertake VAT due diligence “health checks” for sellers, preferably well in advance Any issues which are found can then be resolved before making a strong tender to the market. Examples of VAT issues identified include VAT not being charged correctly e g in respect of the supply of rented property, digital supplies, transport, locum doctors, agency, and so on The buyer either walks away or negotiates down the price and presses the seller to make (and pay) hasty concessions to HMRC A seller intending to sell their business should undertake a ‘VAT health check’ at an early stage in their exit strategy
For sales of assets (rather than shares, e.g. in order to obtain a business with a ‘clean’ history), a buyer prefers a VAT-free purchase This is achieved by implementing a Transfer of a Going Concern (TOGC) The TOGC rules are awkward and we have provided advice in numerous scenarios, such as where the seller’s structure is unclear and the buyer was unable to replicate this for TOGC purposes; or where the wording proposed by the buyer would have collapsed the TOGC; or where deposits were paid in advance of required statements being made, which would have resulted in additional VAT and SDLT charges in respect of real estate assets.
During negotiations, buyers will rely on perceived VAT risks to reduce the price of a business It is important during negotiations that VAT issues are argued confidently by the seller to maintain a proposed selling price We have supported sellers where the buyer doubted that VAT liabilities had been calculated correctly, such as in respect of residential lettings, partial exemptions, financial service exemptions, and so on
Sellers will also experience wider VAT implications. The sale of shares in a company is exempt, usually resulting in irrecoverable VAT in respect of professional fees It does not have to be this way Careful planning and carefully documenting intentions can result in the VAT on professional fees being recoverable, as was illustrated in the recent case of Hotel La Tour Ltd [2023] UKUT 178
This article was written by Freya Summers, Partner and Kevin Hall, Partner and VAT specialist in our Corporate team
PRIVATE CLIENT UPDATE
We have recently strengthened our Private Client team with four key appointments.
Richard Dundee joined from Wills & Trust Solicitors and brings with him a wealth of knowledge in all private client law, with a particular expertise in trust management
Siobhan Sibley handles a variety of private client matters including wills, powers of attorney, and estate and trust administration, and joined from Hancocks Solicitors
Hannah Lloyd arrived from Knights and possesses an in-depth knowledge of agriculture and equine issues and deals with trusts and probate, alongside corporate issues around wealth management and with a particular focus on high-net-worth individuals and complex estates
Michelle Harvey has particular expertise in probate and administration of estates, joining from Wadsworth Solicitors
Wright Hassall’s Commercial Real Estate team advised the freeholder of a SIPP Pension Fund and the subsequent letting from the pension fund to the commercial tenant on Citation House in Worcester city centre
The Grade II building was a former headquarters office block The project was a challenge due to its historical nature and a large modern extension on the rear of the building. The site, which had been almost untouched since the 1980s, required various viability tests and surveys, once this research concluded, it was agreed that a residential focus with mixed usage capacity would be the best option which targeted professional millennials
This article was written by Kylie Cooper, Partner in our Commercial Real Estate team centres. Many of these regeneration projects have a mix of residential and commercial spaces with social and economic growth being at the heart of it.
Throughout the project, the building’s historical features were considered with the Georgian frontage being restored Two additional levels were added at the rear extensions to create a five-storey building, allowing for the designed 38 affordable dwellings, a mix of studios and one and two bed apartments, to be created. Further to the dwellings, community style living was key to this project, with a shared courtyard and garden space, reception and gym being created
living wall and timber fins being added to the building to bring the outside in. Deep balcony spaces for residents were built to allow them to have a view of this natural environment
Furthermore, to add commercial value to the building, part of the ground floor was retained in the listed building section for office space to be built. With the building located centrally and within a couple of minutes’ walk from the train station, it makes for an ideal location for businesses to use this space alongside residents
The above case demonstrates the everchanging landscape across the country. Buildings that were once tired offices are being transformed into beautiful and adaptable spaces that reflect the demands of modern-day living through green-incentives and a balanced lifestyle with a bigger focus on health and well-being, whilst still being commercially viable through an office space offering It is a fine balance of having a mixed use space, but it is something that we are certain will emerge more as the years go on
BEYOND ROMANCE: PRACTICAL REASONS WHY COUPLES SHOULD MAKE A WILL
Furthermore, imagine a situation where a cohabiting couple has amassed a collection of valuable sentimental items, such as heirlooms or artwork Without a Will specifying who should inherit these cherished possessions, disagreements among family members or disputes with estranged relatives could arise causing unnecessary turmoil
Moreover, without a designated executor named in a Will, the administration of the estate can become chaotic In cases where there are no clear instructions on asset distribution or estate management, surviving family members may struggle to navigate the probate process, leading to delays and confusion
Finally, beyond asset distribution, the absence of a Will can have profound implications for dependants, such as children If parents pass away without appointing guardians for their children in a will, the fate of the children becomes uncertain. This situation can create emotional turmoil for the children, as well as prolonged legal battles among relatives vying for custody Additionally, the children may be placed in temporary or foster care until a suitable guardian is appointed Making a Will and appointing guardians is essential to ensure that the children are cared for by trusted individuals who can provide them with love, support, and stability in the event of their parents' passing
Helpful checklist for making a Will:
List all assets, including property, investments, savings, and personal belongings.
Decide who you want to inherit your assets and specify their shares
Consider appointing guardians for any minor children or dependants
Choose an executor to manage your estate and carry out your wishes
Include instructions for the distribution of sentimental items or family heirlooms
Specify any funeral wishes or arrangements
Review and update your Will regularly, especially after major life events such as marriage, divorce, or the birth of children
In conclusion, while romance forms the cornerstone of relationships, practical considerations such as estate planning should not be overlooked Creating a Will enables couples to safeguard their partnership, assets, and loved ones, ensuring that their wishes are honoured and their legacy is preserved
This article was written by Richard Dundee, Partner in our Private Client team
AN ACCELERATED PLANNING SYSTEM: A REALISTIC PROPOSITION?
In March 2024, the government launched a consultation on introducing an accelerated planning system with the objective of speeding up the delivery of housing, commercial and infrastructure projects as part of the levelling-up campaign The consultation closed on 1 May and with no set timetable for a response and a general election in the interim, the outcome is unlikely to be known for several months. In the event of a change of government, it may end up in the pending tray indefinitely. Nonetheless, a summary of the proposals as well as a canter through some of the responses submitted to date may be useful if only to highlight areas that are worthy of additional consideration by the new Secretary of State.
Accelerated Planning Service
The government proposes that local planning authorities (LPAs) should offer an Accelerated Planning Service (APS) for major commercial developments (exceeding 1000 sqm of new or additional employment floorspace) whereby a decision is made within 10 weeks rather than the 13-week statutory limit, in exchange for a higher application fee which would be refunded if the deadline is not reached The proposal also explores whether going down the APS route for applicants that meet the qualifying criteria should be discretionary or mandatory EIA developments will be excluded from this process
Views from the front line
In its submitted published response, the Country Land & Business Association (CLA) has stated that it has ‘sympathy with the principle’ but in practice is concerned that, with the increasing pressures on LPAs, it will lead to a two-tier service, with those developments outside the scope of the APS being even further delayed It suggests alternative approaches such as more use of permission in principle for smaller sites The Royal Institute of Architects (RIBA) points to underresourced LPAs as the cause of many delays and is equally concerned about a two-tier system being created
On the question restricting applications to developments over 1000sqm, the CLA is firmly against, believing that valuable, smaller-scale developments, particularly relevant in rural areas, will be overlooked In contrast, RIBA believes attracting applications from large commercial developments is sensible initially but believes that if the process proves successful (and is properly resourced) should be extended to residential developments (the CLA does not agree). Both organisations believe that use of the APS route should be discretionary The Local Government Association (LGA) believes that a 10-week limit is unrealistic for applications that usually take 28 weeks
Extension of time agreements
The consultation notes that ‘extension of time agreements can also be used by authorities to compensate for delays in decision-making, which masks poor performance and does not incentivise local authorities to determine applications within the statutory time limit ’ The proposal is to reduce the number of extension of time agreements by introducing a new method of measuring how quickly LPAs determine applications within the statutory time limit LPAs must determine a minimum of 50% of major applications within the statutory time limit, and 60% of non-major
Mixed
reaction
The CLA and RIBA gave opposing answers to the question about introducing a new performance measure The CLA agreed with the proposal – but without further comment, whereas RIBA answered no on the basis that without a commitment to fund the service properly, this type of performance measure would be unachievable. The LGA believes that the increased use of extension of time agreements is a reflection of the increased complexity of planning applications which cannot be sensibly determined within ‘an outdated performance regime and statutory timescales ’ It does not agree with the proposals
Simplified process for planning written representation appeals
The proposal is to introduce a simplified process for written representation appeals covering ten different areas including those relating to refused planning permission; listed building consent; lawful development certificates; and anti-social high hedges The intention is that this proposed simplified process should mirror the existing Householder Appeals Service (HAS) and the Commercial Appeals Service (CAS), both of which deal with small, less complex cases The CLA believes that a simplified appeals process would be beneficial way of addressing the current backlog and agrees with the proposed types of appeal to be included RIBA has not addressed this question in its response and the LGA focuses on the lack of resources at most LPAs and the difficulty of recruiting enough planners.
Overlapping planning permissions
The consultation document describes the current system of being able to vary planning permission as a flexible response to changing conditions and avoids developments being delayed or abandoned The Town and Country Planning Act 1990 s 73, which allowed applicants to apply for a minor material amendment, was amended by the Levelling-up Act which introduced section 73B, a new route for enabling material variations to planning permissions (which has yet to be implemented). The consultation invited respondents’ views on whether 73B is the right route to introduce variations and the proposed scope of the accompanying guidance
Legal nitty gritty
As the LGA pointed out, this part of the consultation gets into legal nitty gritty which may well need a court ruling to help clarify matters However, overall, it is in favour of guidance that sets out what ‘substantially different’ actually means, ‘created in partnership with local authorities drafted to set out clearer descriptors of development through section 73B permissions’, a position with which the CLA agrees The latter also noted that any scope of variation under 73B should be no less than that already available under s 73 and should not introduce any more complexity RIBA opted not to answer this question
In summary
The prevailing concern expressed by this small selection of interested parties is that nothing will make much difference to the progress of planning applications unless LPAs are properly funded and staffed, a view which we share The proposals outlined in the consultation will not work with current resourcing levels, and there is a real risk that applications falling outside the scope of the APS are delayed further In addition, the removal of extension of time agreements may only result in more refusals and more appeals
The LGA sums up the dilemma facing the government: ‘The Government must ask what it values more - the speed of application decisions, or the quality of the outcome/development for communities.’ And it is not only the resourcing issues experienced by LPAs but also the increase in the number and complexity of applications RIBA is equally exercised by the lack of resources and the knock-on effect on the quality of the built environment, which it fears may be further eroded if an accelerated planning service leads to a two-tier approach, a concern also expressed by the CLA Of course, until we know the priorities of the next government, this may just turn out to be a paper exercise Nonetheless, the answers to the questions posed are sufficient to indicate that something does need to be done to speed up and streamline the planning application process. Like so many other policy areas, it remains one to watch.
This article was written by Rebecca
Mushing, Senior Associate in our Planning team
NEWS ROUNDUP
Podcast shout out!
We currently have two podcast channels available for you to listen to for free.
The WHorld of Law offers episodes from different teams across the business discussing pertinent topics
The WHorld of Employment Law focuses specifically on Employment Law and HR matters.
All our current episodes of both podcasts are available to listen to in the Knowledge Base on our website
Employment Mock Tribunal
Earlier this year we welcomed HR professionals, in-house lawyers and key decision makers to our offices for our Mock Employment Tribunal which we ran in conjunction with St Philips Chambers The event allowed delegates to experience, first-hand, the hearing of evidence, cross-examination, submissions and the final decision from the 'Judge' based on a challenging scenario many businesses face.
A full recording is now available on YouTube: Part One and Part Two
Young People First
We are proud to continue to support our Charity of the Year, Young People First, through various fundraising activities
The charity supports vulnerable young people living in Leamington through youth work, mentoring, youth clubs, group work, detached work, peer mentoring, out-of-school-support, in-school support, holiday schemes and family support to help them be the best version of themselves.
Did you see: Housebuilders and High Street Reports
In March our Commercial Real Estate and Development teams released their Housebuilders and High Street Reports
Our Housebuilders Report explores the problems and concerns of the sector in conversation with five regional developers It highlights some industry champions and discusses the innovative approaches they are taking to alleviate some of the sector’s biggest headaches
In our High Street Report, we give insight into how we can save the UK’s high streets and inspire others to aid their survival
Although their solutions differ, the industry voices we have brought together in this report identify many of the same problems.
PROTECTING YOUR BUSINESS FROM EX-EMPLOYEES
People are a key business asset, but once the relationship with an employee or contractor ends they may become a liability, threatening the business’s continued success. The right to work does not outweigh the right to protect legitimate business interests, but employers need to use the available safeguards properly to ensure their enforceability.
A business under attack!
Imagine this scenario: your company spends years training and developing Jane, a star senior employee Jane designs a best-selling product and grows a team of talent to support her. She has access to your marketing databases, including details of prospective clients, and knowledge of all the secrets that make your business a success
However, Jane left your business 6 weeks ago You thought that she was taking up a challenge in a different sector, but she has just appeared - working for your main competitor Worse still, she is in contact with your key clients and prospective clients and is apparently talking to members of her old team, encouraging them to join her at her new company Suddenly, your business is under attack! What can you do?
Unfortunately, in today’s fluid employment market, this scenario is all too common In this article we look at how the inclusion of some “restrictive covenants” in Jane’s employment contract may come to your rescue. We also consider other legal routes that may assist you, and finally, we suggest some practical steps to avoid this nightmare scenario becoming a reality
What is a restrictive covenant?
Many consultancy and employment contracts contain clauses that restrict an individual’s working activity when the contract ends
These are known as restrictive covenants They are intended to prevent or limit damage to a business by an ex-employee and so are also called “post-termination restrictive covenants”
The most common types of restrictions in employment contacts are:
Non-compete clauses –to prevent an exemployee, such as Jane, from working for a competitor for the length of time specified in the clause Non-solicitation of clients/customers clause –to stop an ex-employee from approaching customers/ clients to entice them away from you. Customers are free to choose to move their business from one company to another, but with this clause, Jane may be prevented from approaching your customers and encouraging them to follow her Non-dealing clause –to prevent an exemployee from any dealings with clients, customers, or suppliers, even if that person approaches the ex-employee first
Non-poaching of staff clause – should stop Jane approaching her former colleagues and enticing them to join her new company. This will help your company to maintain a stable workforce, which is a legitimate business interest
Are restrictive covenants enforceable?
Hold on, you say, that all sounds good, but I have been told that restrictive covenants are against the law and unenforceable. Aren’t they a complete waste of time and money? Well, to a certain extent that is correct: a badly drafted covenant is not likely to be enforceable However, a good clause, appropriate to the employee in question, may well be enforced by a court
Usually a clause in an agreement that restrains trade and prevents an individual earning a living is against public interest and should not be enforced But the law recognises that it is also in the public interest to allow businesses to legitimately protect themselves Restrictive covenants may therefore be enforced if they are shown to be reasonable when considering the interests of all the parties
What is a reasonable restrictive covenant?
To effectively use restrictive covenants to protect your business these should have the following characteristics:
They should be in a written agreement between you and your employee/ contractor that is signed by both of you They should clearly protect a legitimate business interest such as a trade secret or confidential information, a client data base or supplier terms, or the retention of other key members of your workforce The restriction should be as narrow as possible in relation to the length of time of the restriction, the geographic area of restriction and the definition of the restricted activity. The exact extent of these will depend on the specific business interest that you are trying to protect and may vary from case to case They should be reviewed and altered if the employee is promoted
What if an ex-employee ignores a restrictive covenant?
If it becomes clear that your ex-employee –in this example, Jane – has disregarded the terms of her contract with you, you need to act quickly to limit the damage to your legitimate business interests An appropriately worded letter often produces the desired result. If this does not work, a court order, called an injunction, may be applied for urgently An injunction may stop Jane from actions such as working for your competitor, using your data, or calling your clients, or it may compel her to do certain things such as returning your documents and data.
However, an injunction may only be obtained at this early stage if there is real urgency and if financial compensation at a later point will not be adequate to cover the damage that your business will suffer if the action takes place Delaying by even a few weeks could mean the injunction is not granted because a high degree of urgency is not demonstrated.
How effective is an injunction?
If you prove that the restrictive covenants in your agreement with Jane are enforceable, and the court grants you an injunction, Jane should take this seriously If she fails to comply with the injunction she will be in contempt of court and may be imprisoned for up to 6 months
You may also join Jane’s new employer –your competitor – in the court proceedings, as well as any of your staff members who appear to be conspiring with Jane to join your competitor This may effectively prevent further unlawful activity by all those people
What if my business has already been damaged?
Damages to compensate any loss may be claimed from your ex-employee. Strategically, if that ex-employee will not be able to pay this amount, stopping the damage in the first place by an injunction will be the best course of action If Jane’s new employer knew about the restrictions and encouraged her to break them, it may be possible to bring a separate claim against that company – which may have deeper pockets
What if you have no restrictive covenants or they are unenforceable?
Restrictive covenants are not the only way to protect your business from ex-employees There is an implied duty of good faith in all employment relationships, and a duty not to use or disclose confidential information gained in the course of employment You may also demand the return of any information that Jane has retained which belongs to you
A court will also impose restrictions on Jane misusing or disclosing confidential information such as your trade secrets even though she is no longer in your employment Your business is also protected by other intellectual property laws relating to your trademark and patent Copyright law prevents Jane from copying written works created in the course of her employment, and the design rights for work created during that employment continue to belong to you
However, if you do not currently have restrictive covenants in your employment contracts please consider taking advice and introducing these at an appropriate point, particularly for key and senior roles You may need to give affected employees salary increases or other compensation to show that you have been reasonable when introducing the restrictions, but this may be money well-spent to avoid damaging your business in the future
LEAMINGTON’S GAME
Summary
Many employment contracts include restrictive covenants These may discourage ex-employees from doing certain things that will damage your business, but they are only enforceable if they are reasonable and protect the legitimate interests of your business. There are other laws that protect your business from attacks by ex-employees, but well drafted restrictive covenants offer you the best protection before too much damage is done Taking legal advice early will enable you to navigate a safer path to achieving a fair result from the end of an employment relationship
PLEASE NOTE: a version of this article first appeared in Engineering Designer April-June 2023
This article was written by Rhys Jarman, Partner and Head of Intellectual Property, Technology and Manufacturing Disputes.
Huge congratulations to Susan Hopcraft who has produced her own book 'Leamington's Game' which celebrates 150 years of lawn tennis in Leamington Spa It was recently launched at Leamington Tennis & Squash Club and is now on sale, helping the club's charity of the year Age UK.
Susan's book release has come just at the right time to coincide with the start of Wimbledon We know we'll be enjoying our strawberries and cream whilst learning about the local lawn tennis history!
WHAT ARE THE GROUNDS FOR CONTESTING A WILL?
Losing a loved one is never easy, and if you suspect that their will may not reflect their true wishes, it can make what is already an emotional time even more difficult.
On what grounds can you contest a will?
There are a number of ways that the validity of a will can be challenged But it’s not a decision to be taken lightly. It’s imperative to consider whether a successful claim would actually produce a better result than the existing will and the appropriate research must be done before embarking on a claim
For example, if there is no earlier will, the rules of intestacy will apply However, if there is an earlier, unchallenged will, the terms of that document will take effect
In order for a will to be deemed valid it must meet certain requirements, often referred to as formalities These are set out below together with an overview of the most common grounds on which a will can be contested.
Requirements to be deemed a valid will Section 9 of the Wills Act 1837 states that for a will to be valid, it must be: in writing; signed by the testator (or someone else in the testator’s presence and at his direction); the testator must intend when signing the will for it to be valid; and the testator’s signature must be acknowledged in the presence of at least 2 witnesses
If there is concern that a will is not valid because it fails to meet the requirements, the first step is to contact the witnesses This will help establish whether the will has been properly executed and if necessary,
witness statements of due execution can be obtained and filed at the probate registry, when applying for a grant of probate.
If the will has been properly executed, the presumption is that the will is valid, unless one of the concerns set out below arises
There are a number of grounds on which a will can be contested:
1) The deceased did not have the required testamentary capacity
The person contesting the will must raise a real suspicion that the deceased lacked capacity If this is done, the burden of proof passes back to those seeking to prove the will, to establish that the deceased did have capacity
The test which is applied is set out in Banks v Goodfellow [1870] LR 5 QB 549, which states that the testator must:
understand the nature of making a will and its effect; understand the extent of his/her property; be able to comprehend and appreciate the claims to which he/she ought to give effect; and have no disorder of the mind which ‘shall poison his affections, pervert his sense of right, or his will in disposing of his property'
In a claim of this nature, the medical records of the deceased and the opinion of a suitably qualified medical expert are crucial to assessing the claim and should be obtained at an early stage
2) The deceased did not properly understand and approve the content of the will
If the court’s suspicion is aroused, it is for those seeking to propound the will to prove that the deceased fully understood how it operated and approved its contents
Examples of suspicious circumstances could be where the deceased:
was hard of hearing, or had a speech impediment; was visually impaired; and/or had low levels of literacy, and no adjustments were made by the will drafting solicitor; was frail, unwell or otherwise vulnerable, and the will is particularly complex or unusual; or is purported to have directed that the will be signed by someone else
Alternatively and commonly, such a claim can also arise in circumstances where a relative (usually an adult child) of the deceased has given all the instructions to the will drafter and the will drafter has never met the deceased and as such, calling into question the deceased’s understanding of the will they executed
3) Undue influence
In the context of making a will, there is no presumption of undue influence If a will is to be found to be invalid, it must be established that actual undue influence occurred It is for those challenging the will to produce sufficient evidence to satisfy the court
A claim of this nature should be pursued cautiously It must be proved that the testator acted against their own volition, and that they were coerced into making a will that that they did not wish to make
As the nature of this allegation is tantamount to fraud, the evidential burden is high, and if a claim fails, there are likely to be serious cost consequences
Bear in mind also that if coercion was exercised, the chief witness (i e the deceased) will not be able to give evidence, and it will usually have taken place behind closed doors and in the absence of any other person It can therefore be extremely difficult to obtain sufficient evidence to convince a court that undue influence has been exercised
4)
Forgery and fraud
If it can be proved that a will has been forged, it will be invalid. At the outset, it is advisable to obtain the opinion of a handwriting expert as to whether the testator’s signature/handwriting is genuine The expert will need to see a considerable number of original samples of the deceased’s writing and signatures from the relevant point in time i e around the time the will was signed If the expert produces an inconclusive report, it is unlikely that a claim would succeed but may encourage both parties to try and agree settlement terms
More generally, it is possible, though rare, for a will to be challenged on the basis of fraud, i.e. an intentional deception made for personal gain, or to damage another individual An example of such a claim that has succeeded and of which Wright Hassall has experience, is where a person impersonated the testator
These claims will be few and far between, as there are usually alternative and less risky grounds for challenge which can be pursed
5) Rectification
A will may not reflect the wishes of the deceased due to a clerical error, or a failure to understand the testator’s intentions. The scope is however, very limited.
A clerical error is where a mistake is made in recording the testator’s wishes If either scenario occurs, the court will rectify the will to give effect to the true intentions of the deceased A claim of this nature must be issued within 6 months of a grant of probate being issued
If it appears there has been a mistake in the drafting of a will, the initial steps should be to obtain and review the solicitor’s file, together with securing a statement of the solicitor’s understanding of the deceased’s wishes.
If it becomes apparent that the will writer understood the instructions, but incorrectly applied the law, then the will is still valid, but there may be a claim for professional negligence either by the executors if the estate has suffered loss, or the intended beneficiaries if they have suffered loss
How to contest a will
If someone has passed away, and there is concern that their will does not reflect their wishes, specialist advice should be sought
At the outset, a careful analysis of the facts and likely outcomes will need to be undertaken.
When to bring a claim
Most claims challenging wills where there is property involved, should be brought no later than 12 years from the date of death
However, this is not always the case, and there are a number of notable exceptions where the timeframe is much shorter (e.g. a claim for rectification as above or a claim under the Inheritance (Provision for Family and Dependants Act) 1975) At the other end of the spectrum are matters of fraud, where a limitation period does not apply
Initial investigations should be made early, and ideally before a Grant of Probate has been issued and the estate has been administered In some circumstances, it will be appropriate to enter a caveat to stop a Grant of Probate being issued In terms of investigations, it can take quite some time for third parties to respond to queries and as time passes, the recollections of those able to assist may fade Indeed, obtaining medical records can also be a lengthy process
From a practical standpoint, if an estate has been substantially administered, this is likely to impact on the viability of contesting a will due to the limited assets which might be recoverable, if the claim were to succeed
There are a number of grounds on which a will may be challenged, however, each case is unique and advisors should obtain a good grasp of the character of the deceased, the nature of family relations, any testamentary intentions of the deceased (as expressed to friends, family or third parties) and consider this against the contemporaneous evidence before advising a client An informed decision can then be made whether to contest a will and if so, on what basis Alternatively, a client may have a claim for reasonable financial provision from the estate pursuant to the Inheritance (Provision for Family and Dependants Act) 1975
PLEASE NOTE: this article was originally written for and published in the Gazette
This article was written by Katie Alsop, Partner in our Contentious Probate team
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The information provided in these articles are provided for general information purposes only, and does not provide definitive advice It does not amount to legal or other professional advice and so you should not rely on any information contained here as if it were such advice
Wright Hassall does not accept any responsibility for any loss which may arise from reliance on any information published here Definitive advice can only be given with full knowledge of all relevant facts If you need such advice please contact a member of our professional staff The information published is correct at the time of going to press