Insolvent Employers and the TUPE Regulations

A recent Employment Appeals Tribunal case has clarified the situation for staff who would normally transfer under TUPE, where a business is sold by administrators through a pre-packaged deal. In effect, the transfer does not occur automatically. The employee was a director and a 50% shareholder in the company which, in 2006, went into administration. Later that year, the sale of assets to a new employer took place and the employee transferred under the Transfer of Undertakings (Protection of Employment) Regulations 2006.

In November 2007, the employee was dismissed and brought a Tribunal claim for unfair dismissal. The (new) employer argued that the employee had not completed the necessary year's continuous service in order to bring such a claim. The Tribunal agreed, basing its decision on Regulation 8(7) of TUPE so that, regardless of the employee's status with his first employer, he did not have sufficient service to bring an unfair dismissal claim. The employee's appeal to the EAT was dismissed.

The Tribunal's construction of the TUPE Regulations accorded with the policy behind Regulation 8(7); namely, the "rescue culture", whereby a purchaser was not put off by the effects of the transfer of undertaking protection. The outcome was that some jobs were preserved and the creditors benefited from the best available option. (Oakland v Wellswood)

Jane Dismore
Director and Head of Employment Law Services

Insolvency: A new species of debt relief for debtors

On 6 April 2009 a new species of debt relief for debtors was created. Affecting debtors with low debts (less then £15,000), surplus income (disposable income of less than £50 per month) and assets (under £300). This is a cheaper option to bankruptcy and does not require the sanction of the courts.

With some similarity to the rules on bankruptcy this may be an avenue to Official Receivers and other appointees where there is limited funding available from the estate to cover the professional and other costs of recovery. Similar rules apply such as Debt Restriction Orders and Undertakings restricting the actions of the debtor during the period of the disability. In the same way with bankruptcy debtors period of disability can be extended if necessary where the debtor has in some way contributed to his/her financial situation.

If you would like to discuss about Insolvency & Corporate Recovery please contact Brendan O'Brien on 01279 715333.

Brief Guide to Enforcement of Foreign Judgments and Orders

1. Enforcement of United Kingdom Judgments in England & Wales

  1. This section relates to enforcement of judgments and orders from other parts of the United Kingdom, i.e. Scotland and Northern Ireland, in England and Wales.
  2. Usually the judgments in question are for money especially as it is desired to enforce by execution, but similar provisions can apply to a non-money judgment.
  3. The normal procedure is for the Court in Scotland or Northern Ireland to issue a certificate under Section 18 of, and Schedule 6 to, the Civil Jurisdiction and Judgments Act 1982.
  4. For Scottish cases this is normally known as a Form 1 (which is a different Form 1 from their form of summons to start proceedings which appears also to be called Form 1).
  5. This certificate certifies the date of judgment and the amount due under the judgment and whether interest runs and if so the amount and the date from which it runs.  In Scottish cases this is commonly different from the date of judgment, sometimes earlier, and sometimes there are different dates and rates of interest applicable to different sums due under the judgment, for example if interest is due at a higher rate on some of the money under the Late Payment of Commercial Debts legislation.
  6. The certificate (Form 1) has to be registered in the Central Office of Queens Bench Division of the High Court in London before a writ of execution can be issued.  Sometimes this is done by the Claimant’s solicitors and sometimes by Breeze & Wyles Solicitors LLP as part of the process for issue of the writ of execution.  There is no fee for registration of the Scottish or Northern Ireland Judgment in the Queen’s Bench Division of the High Court of Justice in London but the Court allows £39.00 additional costs for the registration process.
  7. It is important to note that the Certificate of the Court in Scotland or Northern Ireland must be registered in the Queen’s Bench Division within six months of the date of its issue otherwise an updated Certificate will be required.
  8. Once the foreign judgment has been registered in the High Court in London either by the Claimant’s solicitors or Breeze & Wyles Solicitors LLP a writ of execution can be issued and delivered to Marston Group Limited for the normal Court fee of (presently) £50.00 with the writ attracting the normal costs of execution of £101.75 recoverable against the Defendant (inclusive of the £50.00 Court fee).
  9. This process is dealt with by Breeze & Wyles Solicitors LLP at the same charge as a normal transfer up of £27.50 plus VAT whether the Claimant’s solicitors register the judgment or Breeze & Wyles Solicitors LLP undertake this.  Assuming no complications the process is generally completed within 7-14 days of receipt of papers.
  10. In relation to Scottish matters, some liabilities which are not at first sight matters relating to judgments or Court orders can be enforced under the above procedure if they are registered in the Books of Council and Session in Edinburgh.  Examples might be liabilities under deeds of separation or bonds relating to loans for crofters.

2. Enforcement in England & Wales of European Community Judgments (including Republic of Ireland)

  1. The procedure depends upon whether there is in force a European Enforcement Order (see section 3 below) or not.
  2. In the absence of a European Enforcement Order enforcement is dealt with under what is known as “the Judgments Regulation” which is the European Council Regulation (EC) number 44/2001 of 22nd December 2000.
  3. Application has to be made to the Central Office of the Queen’s Bench Division of the High Court in London for registration of the EEC judgment.  This application is made without notice to the Defendant and attracts a fee of (presently) £40.00.
  4. The application has to be supported by a witness statement exhibiting:
    1. The foreign EEC judgment or order for enforcement, or an authenticated copy.
    2. Where the judgment is not written in English a translation into English certified by a notary public or other qualified person and accompanied by written evidence confirming that the translation is accurate is also required.
  5. The application (usually in the witness statement) where it relates to enforcement of a money judgment must state:
    1. the name of the Judgment Creditor and his address for service within England & Wales (usually the address will be that of Breeze & Wyles Solicitors LLP).
    2. the name of the Judgment Debtor and his address or place of business if known.
    3. the amount in respect of which the judgment is unsatisfied.
    4. that the European Court has not suspended enforcement of the judgment.
  6. The witness statement is normally drafted by Breeze & Wyles Solicitors LLP on the basis of information received from or obtained from the Claimants lawyer.
  7. The application will be considered by a Master at the Central Office of the High Court and assuming permission is granted to register the judgment the Registration Order, which must be in a special form, must be served on every person against whom the jdgment was given.  This is normally done by a process server whose fee is likely to be about £70.00 plus VAT in a straightforward.
  8. The Registration Order must state the right of the Judgment Debtor to apply within 28 days from service of the Order for the variation or cancellation of the Registration Order.
  9. No steps may be taken to enforce the judgment before the end of the 28 day period or, where an application is made, until it has been determined.
  10. The costs of Breeze & Wyles Solicitors LLP for this service are approximately £350.00 plus VAT (if applicable) plus the Court fee of presently £40.00.  Normally the Court will add these costs to the indebtedness so they are recoverable from the Debtor in the event of a successful recovery.  In the absence of complications a Registration Order would normally be received within about 21 to 28 days of receipt of papers.
  11. After the time of 28 days from service required under the Registration Order has expired a writ of execution can be issued in the normal way paying the Court fee of £50.00.

3. European Enforcement Orders

  1. Commonly a Creditor’s lawyers will obtain a European Enforcement Order which is an Order under European Council Regulation (EC) 805/2004 creating a European Enforcement Order for uncontested claims.  This is often referred to as an EEO.
  2. The foreign lawyers have to obtain the European Enforcement Order Certificate and supply it to Breeze & Wyles Solicitors LLP.
  3. The requirements from the foreign lawyers are:
      1. An authenticated copy of the judgment of the foreign Court.
      2. If the judgment of the foreign Court is not in English an authenticated translation.
      3. An original copy of the European Enforcement Certificate.
      4. If the European Enforcement Order Certificate is not in English and authenticated translation thereof.
      5. A cheque for the Court fee of £50.00 in favour of HMCS.
      6. The procedure, provided the documentation is in order, is somewhat simpler than the method of enforcing a European Judgment under the 1982 Act but more complex than a transfer up.
      7. Breeze & Wyles Solicitors LLP would normally propose to charge approximately £150.00 plus VAT (if applicable) plus the Court fee payable of (presently) £50.00 for this service.
      The authentification of documents generally relates to them being issued or certified by the Court or other suitably empowered authority for that purpose in the country from which the document emanates.

      1. The process would normally take about 14-21 days from receipt of papers in a straightforward case

    4. European Enforcement Orders in respect of Judgments of Courts of England & Wales for enforcement in other jurisdictions

    This is not generally within the realm of the service provided by Breeze & Wyles Solicitors LLP for Marston Group Limited as the enforcement by definition takes place outside of England & Wales and therefore Marston Group Limited have no jurisdiction.  In such circumstances generally the Creditor is advised to contact the Court in question with a view to obtaining a certificate from the English or Welsh Court for registration in another part of the United Kingdom using a form number 111.  The application normally has to be supported by a witness statement giving certain prescribed details.

    5.Enforcement of Judgments from Jurisdictions outside the European Community

    At present enquiries in regard to this are rare and each case would have to be dealt with on its individual circumstances including consideration of what treaties or other arrangements for reciprocal enforcement are in place between England and Wales and the jurisdiction in question.  Such arrangements are not necessarily in place, e.g., some judgments of the lower Courts in the Channel Islands can not be enforced in an easy manner in the UK without taking completely new proceedings.

    The costs of dealing with these enquiries would be dealt with on a time charge basis to be arranged with the lawyers concerned.

    If you have any specific problems on which you require advice, please do not hesitate to contact us.

    Brendan O’Brien
    Director and Head of Arrears Management
    20 April 2009

Change in the Debt Recovery Procedure

With effect from 6 April 2009 the process at the commencement of debt recovery proceedings is to change. Along with some clarity on the content of the letter, where recovery is for a company or business from an individual further required contents are necessary. In particular the letter should advise the individual debtor of the possibility of free advice in respect of the debt.

National Debtline
Tricorn House
51-53 Hagley Road
Edgbaston Birmingham B16 8TP
FREEPHONE 0808 808 4000

Consumer Credit Counselling Service (CCCS)
FREEPHONE 0800 138 1111

Citizens Advice
Check your local Yellow Pages or Thomson local directory for address and telephone numbers

Community Legal
0845 345 4345
Advice (formerly Community Legal Services Direct)

You should allow a reasonable period of time of up to 14 days for the debtor to obtain debt advice. However you need not allow the debtor time to seek debt advice if the claimant knows that

(1) the debtor has already received relevant debt advice and the defendant's circumstances have not significantly changed; or

(2) the debtor has previously asked for time to seek debt advice but has not done so.