Fact Sheet 5; Spotting the signs of Insolvency

There are steps you can take as a business, to “spot” the signs of insolvency. This is important for two reasons;

1. If you continue to supply goods or services to a business that you fear might be facing insolvency, it will allow you the opportunity to re-consider your terms of supply. For example, you might decide only to supply goods or services where you have received full payment on account;

2. If there are outstanding invoices, it might encourage you to be more proactive in your chasing of this debtor, or if you have real concerns that the customer is already insolvent, to undertake further investigations regarding their financial position before issuing Court proceedings.

What should you look out for?

1. You should regularly look at your client’s account and consider whether there are any anomalies on the same. Examples of anomalies that might be an example of a poor financial position might include;

a. The situation where your customer has ordered a greater volume of stock on credit however, is taking longer and longer to pay outstanding invoices?

b. The average number of days for payment of each invoice is becoming greater, without good reason;

c. There is a greater sum outstanding on the account, than is normally owed and this is without good reason;

d. Your customer has made one, or numerous requests for an extension of your credit facilities.

2. Where your sales staff are in regular contact with your customer, they are often the first to realise that “something might be wrong”. For example, staff of your customer might make passing comments regarding their business or finances, or your sales staff might become aware of redundancies and cost saving exercises being adopted by your customer. Whilst this might not be an indication of insolvency per se, this combined with other factors (e.g. an increase in the average number of days for payment of each invoice), might cause you to question their financial status.

3. If a Company has made promises to pay, but failed to adhere to the agreed payment terms, this may well be due to financial difficulties which could well lead to insolvency. In this scenario, and where you are continuing to supply goods or services, it would be wise to withdraw all credit facilities or to vary your current terms of trading – for example, by demanding a director’s personal guarantee in writing before you make a further supply.

4. If your customer has become difficult to contact suddenly, and this is without good reason, this might be a sign of difficulties – particularly where you are contacting your customer regarding unpaid invoices.

What should you do if you believe your customer is facing financial difficulties?

1. If your customer appears to be “juggling debts”, you will need to take a view regarding whether to a) simply wait to see if your debtor ends up paying you or b) take a more pro-active approach in an attempt to get “pushed to the front of the creditors queue”.

2. If you are minded to take a proactive approach, you will need to continue to apply pressure to your debtor by exhausting your internal credit control function in a timely manner and in the event that this does not result in payment, instruct Solicitors to pursue the debt promptly. By issuing proceedings and securing Judgment, you will have the option to enforce Judgment, for example by instructing High Court Enforcement Officers to repossess any assets that the customer has.

To find out more about our low cost debt recovery service, please do not hesitate to contact our Rita Wright on 01992 558411 or rita.wright@breezeandwyles.co.uk.

Service Charge – what is included?

A case involving the owner of a flat, initially sued in the County Court for arrears of service charge, costs and interest, amounting to over £11,000 questioned whether legal fees were recoverable under the lease. The landlord asserted that recovery of the legal costs, amounting to approximately £4,600, was possible as the lease included the following wording: “all such surveyors, builders, architects, engineers, tradesmen, accountants or other professional persons as may be necessary or desirable for the proper maintenance safety and administration of the building”.

Although the Leasehold Valuations Tribunal found in favour of the landlord, the decision was over turned on appeal by the Upper Tribunal, finding that such wording did not include the recovery of legal costs. Therefore to ensure that legal fees are recoverable through the service charge, a lease should set out in clear and concise wording that fees paid to solicitors and barristers are recoverable expenses, “professional fees” is just not going to cut it!

Greening v Castelnau Mansions Limited (Decision Number: LRX 36 2010) http://www.landstribunal.gov.uk/Aspx/view.aspx?id=792

Simple steps that you can take to improve your Interal Debt Recovery


Ensure that an invoice is delivered promptly and accurately and that the invoice states the customer’s full name. Make sure that you are able to clearly and correctly identify your client’s name and status – is your client a Limited Company? Partnership or Sole Trader? Include your customers full and correct name. Correct identification of your customer is imperative if you are to successfully decrease your average debtor days.

Include on the invoice your customer’s reference number so that your customer is able to easily identify the invoice.

Ensure that the invoice states clearly the payment terms and the date by which payment is to be made.

Ensure that a copy of the invoice is retained.

Ensure that the invoice goes directly to the person in the organisation who will be responsible for paying the bill. It is sensible to call and obtain this information from your customer, before sending the bill. This limits the risk of your invoice sitting on anothers desk for a few days or weeks, before finally making its way to the correct person.

Ensure that your invoice clearly shows the manner in which payment can be made. Ensure that you offer the opportunity to pay by credit card / debit card or BACs and identify how these methods can be utilised by your payee. Payment by these methods is often the quickest and easiest method for your payee – the easier it is for your payee to pay your invoice, the quicker you will get paid.


Ensure that you have a proactive and efficient process for chasing unpaid debts, as soon as the payment term expires. The key here is to ensure that you receive reminders, through either your accounting package or outlook, as soon as an invoice becomes overdue. You can not chase your debts proactively if you do not know when an invoice has become overdue.

Where the chasing of invoices is being done internally, automation is ideal because it will limit internal resources whilst ensuring that debts are still being chased. Use standard precedent letters and diarise weekly chasers to be made both by letter and telephone.

To receive further fact sheets or for further information about our commercial debt recovery service, please contact Rita Wright of Breeze and Wyles Solicitors on 01992 558411 or rita.wright@breezeandwyles.co.uk.

Telephone calls are time consuming but often offer a higher rate of return. Make sure you stick to the timescales (If you tell a customer you want payment in 7 days and they don’t pay, chase again by letter or phone promptly on day 8).

Decide how many letters and telephone calls you will undertake during your internal credit control process and what the course of action will be should payment not be made. We would suggest that instruction to us to send a letter before action to your debtor, at a cost of £2.00 plus VAT, should be the automatic next step following exhaustion of your internal credit control function. Our instruction is quick and easy and instructing us promptly will ensure that ongoing pressure is applied to your debtor. This will increase the likelihood of recovery.

Make sure that staff with the appropriate skill set and personality are responsible for your credit control. There is little point having someone who is overtly shy and embarrassed, in charge of asking a customer for a commitment to pay by a certain date.

Make sure that your credit controller is efficient and proactive and keeps records of each call made. When a debtor says that they will make payment, make sure that your credit controller asks them to commit to a date by which payment will be made. If your customer defaults, ensure that the customer is called again and ask for a revised payment date. If the customer defaults again, it is highly likely that further action is going to be required. Continued failure to meet agreed payment proposals may be a sign that your debtor is experiencing financial difficulty.

To illustrate the importance of making a record of a telephone call with a debtor, you can take the example where in a telephone call a debtor admits liability, or tries to agree a payment plan. A telephone note recording admission may well help to question the credibility of a debtor who subsequently tries to deny liability for the debt.

If you do agree an installment plan with a debtor, it is worth confirming the agreement in writing and making sure that when negotiating the agreement with the debtor, you reserve the right to claim the entirety of the invoice should the debtor default on the installment plan.

Act quickly and don’t delay. Delay will breed further delay by your debtor. If you threaten Court action or referral to a Solicitor, follow through with the threat. Otherwise, the debtor may not take you seriously and prioritise paying other creditors that are pushing for payment.

Categorise your debtors in to those who “Won’t pay” and those who “Can’t pay”. Where resources are limited, focus your internal resources on chasing those who “won’t pay”.

Divorce: Minimise the impact on your business.

Planning for a divorce whilst happily married may seem pointless - but ignoring the possibility of a breakup can wreak havoc on your business

Unpleasant and emotionally charged as it may be divorce planning should be an integral part of overall business and personal financial planning. It's not only the breakup of your own marriage you need to worry about. If the survival of your company is a priority, as it is for most business owners, you need to safeguard it against any number of divorces, including those of partners, investors and your adult children.
Following the landmark divorce case of White v White [2001] 1 A.C. 596 the overarching principle in divorce cases is: family’s assets should be shared on a basis which reflects the respective contributions of the parties. However, in assessing contributions the role of the ‘homemaker’ (typically the wife) will be seen by the Court as no less valuable than that of the ‘breadwinner’ (often, but not always, the husband).

Most owners of privately held companies would be hard pressed to come up with cash equal to a quarter or a half of their business's value without wreaking havoc on their company's operations. That's why having an agreement in place that will both be fair to your spouse, should your marriage break up, and ensure your company's survival is of paramount importance.
The more elaborate and detailed the agreement, the higher your solicitor’s fees but this is far more cost effective than dealing with matters at the time of the divorce. As your financial situation is likely to change as the years go by, you will need to include a requirement that you and your spouse renegotiate and update your agreement at specified intervals. The particular strategies you should think about implementing depend on your own special circumstances.

Unmarried: I'm the sole owner of my business and still unmarried, but I'm close to setting my wedding date. I've read that to protect my company I should have a prenuptial agreement. Frankly, that's the last thing I can imagine bringing up at this stage of our relationship.

Despite the fact that they are not yet enforceable in the UK jurisdiction, case law has suggested that Judges are attaching more weight to prenuptial agreements in circumstances where: there are no children, independent advice was sought by both parties prior to signing the agreement, there has been an exchange of financial disclosure and on the whole the agreement seems fair. Radmacher v Granatino, [2010] UKSC 42 ruled that prenuptial agreements can be a decisive factor in determining the financial division on divorce.

The Law Commission’s consultation in relation to Marital Property Agreements (pre-nuptial and post-nuptial agreements) closed in April 2011. The results of the consultation are due to be published in 2012 so watch this space!!
You don’t need to be Donald Trump in order for divorce planning to make sense. The key point is to include a plan in which the spouse who is not active in the business will receive a financial settlement rather than a share in the company in the event of a divorce. Whatever the size of your business, and whether or not you're profitable yet, it would be beneficial to have an agreement.

Even better would be an agreement that covers the other key elements that could be sticking points. It should include an agreed-upon method to determine your company's value in the event of a divorce. (To ensure getting unbiased results, some people specify that two or three independent appraisers be engaged, with the couple agreeing to rely on their average estimate). When companies are valuable--and it does make sense to assume yours will be someday--you should also be sure to include an extended payout, perhaps lasting as long as 5 or 10 years, in order to shelter cash flow from the shock of a one-shot divorce payment.


If the business is the source of your family’s income then everything must be done to keep it going successfully (or else the family’s financial position will suffer) A sensible and commercial view must be taken when valuing the business (with everything possible being done early on to obtain agreement between the two parties so costs don’t escalate needlessly).

These principles are important since the Courts increasingly look to achieve a ‘clean break’ settlement between the husband and wife, with payments for their children being provided for by way of child support. In most cases, the parties will want to have the business valued so that a “clean break” can be achieved by one party buying out the other. You must consider whether this is actually the best approach for you and your business.

Your business may be profitable and successful but, at the same time, not be worth the sort of sum, post costs and Capital Gains Tax (even at only 10 per cent) to enable the family’s lifestyle to continue at the pre-divorce level.
Further, even if a value can be agreed it may be impossible for the party purchasing to find the funds and perhaps most importantly, where both husband and wife are instrumental in the business, the continued involvement of both parties in their respective roles may be fundamental to its future success.

For these reasons there may be an argument for spousal maintenance until, in the fullness of time, the business can sold to a third party. Then the interests of both parties can be capitalised.

Married: I'm happily married and the owner of a thriving company. My spouse doesn't work in the business.

Do everything you can to segregate all company related assets (such as ownership) and liabilities (such as bank loans to support the company) in the name of the spouse who is actively involved in running the business. Ideally, the family's joint financial assets, such as the ownership of a home, a car, or any investments, will be separate from those relating in any way to the business.

The business undoubtedly constitutes the bulk of your family's assets. Speak with your accountant and solicitor (both personal and business) about how to best go about separating the assets.

Married: Both spouses involved in the business.

You should take the same precautions when your spouse is a business partner that you would with any other business partnership. Any agreement does need to cover some essential issues, e.g. both spouses should agree to several restrictions concerning the ownership of their company's shares, such as it must be held only by people who are actively involved in the business. If either spouse leaves the business, their shares must be sold back to the partner who remains active. Neither spouse can sell shares to anyone else without the other’s permission. And finally, in the event of a divorce, one spouse must leave the business and agree to sell his or her shares back to the active owner. To cover all eventualities you could include a clause should you and your spouse separate but do not actually divorce.

You also need to plan for an orderly and fair transfer of the company, should that become necessary. It is imperative therefore to set out how the company will be valued.

Is divorce planning really necessary?

If you can come up with the cash to handle paying off your spouse then maybe not!

If it seems absolutely impossible for you and your spouse to agree on how business and marital assets should be split, maybe it pays to leave that one issue up to the judge, should you ever end up in Court. But you can still help protect the long-term survival of your company if you can at least agree on such matters as how the business will be valued and how long the payout will be extended.

Matters to consider:

• Can the business continue with just one of you?

• If only one party is involved, can the other be sure that the business will be run in an open and honest manner?

• Can a “clean break” be funded either immediately or on a safe and secure deferred basis?

• How will the staff react to the divorce?

• Has an independent and commercially realistic view of how to resolve the business issues been obtained?

For further information please contact Brendan O’Brien (Director – Company and Commercial) brendan.obrien@breezeandwyles.co.uk or Olive McCarthy (Director – Matrimonial Department) olive.mccarthy@breezeandwyles.co.uk

The effective credit control tools!

Rachel Harper, a paralegal at Breeze & Wyles Solicitors LLP in the Debt Recovery Team talks about effective credit control to Brendan O'Brien Director and Head of Business Services .

It’s a familiar story, you have done the work, delivered the products/service but the invoice remains unpaid! Regrettably, it’s likely you will have at least one bad debt during the life of your business.

Cash flow is of major importance to everyone, including your debtor and therefore if they have even the smallest reason to delay or refuse payment they will do so.

When setting up your business credit control and invoicing terms are of paramount consideration – get this right and chasing outstanding payments is much more straightforward.

Know your customers - are they a sole trader, limited company, etc? Is the delivery address the same as their head office/accounts address? It is free to carry out a company’s search on the Companies House website – for a limited company this will reveal whether the debtor is still trading and provide details of their registered office.

If the work undertaken is going to amount to a substantial sum, consider carrying out a credit check. Once the credit check is carried out you can make an informed decision on setting a credit limit. DO NOT let credit limits be exceeded.

Obtain a deposit where practical to do so. Be mindful of any special materials required to complete the tasks in hand and obtain payment for “extras” up front.

Ensure that you have signed terms and conditions – amongst other details to consider, give thought to the following: when and where will you send your invoice? What are the payment terms? What happens if the type of product/service to be provided needs alterations? What are your interest rates for late payment?

Issue invoices periodically, waiting until the job has been finished can be detrimental to your cash flow, as each step is finalised invoice for the work undertaken to date.

Would you allow 70 day payment terms? If you are not utilising an efficient credit control system this may be exactly what happens! If you wait until the end of the month to carry out your accounts consider the following:

• Invoice sent to debtor in October
• Invoice received by debtor in November
• Invoice authorised for payment in next cheque run (at end of month)
• Payment sent to you at the beginning of December

Perhaps this may seem somewhat extreme but if you are not chasing payment your debtor will see this as payment on time!!

Do not give the debtor an excuse to question the figures - ensure that the invoice is correct as errors will only delay payment further. If you are required to reissue the invoice it is likely the debtor will restart the clock on the payment time. Payment terms should be clearly displayed on each invoice. Make sure the payment terms are clear and precise – if payment terms state “30 days” – 30 days from when? Is this 30 days from delivery, 30 days from date of invoice? 30 days from the end of the month in which the invoice is received?

Once the payment is due but not received make a gentle reminder – a telephone call reminding them of the “oversight” can work wonders. Keep a note of any and all contact in relation to chasing the invoice. If the invoice remains outstanding chase via letter setting out how overdue the payment is and when you expect them to return payment. Do not make idle threats – if threaten further action, such as adding interest or issuing proceedings, be prepared to follow it through.

Incentive for early payment – a blessing or a curse? Ensure that any early payment incentive will be enough to cover your costs and that you achieve your goal – to speed up payment. Most debtors will take advantage of a discount for early payment but what happens if they make late payment but at the reduced rate? Do you really want to spend more of your time and money chasing the difference between the reduced rate and the total invoice? Your terms of business need to be crystal clear on early payment discounts and their expiry.

Proof of delivery – where practicable obtain a signature stating that the goods were received in their entirety and in good condition. This will assist in relation to any future claims the debtor may try to bring, such as part of the order was broken or missing.

Retention of title - "all goods remain the property of (name of your business) until payment in full is received" - use of such a clause in your terms and conditions means that you retain ownership of the product until full payment is received, i.e. not only can you sue for the money owed but where practicable you can take back the goods delivered to your customer. You may also be able to claim the costs you have incurred in removing the goods from your customer!! It is also sensible to have the same wording on your invoices – this acts as a gentle reminder that the debtor does not own the goods as yet and will not do so until they settle the invoice.

Beat Stamp Duty Land Tax rise in March 2012

Potential first time buyers are warned to note that there purchase of residential property in England and Wales may attract Stamp Duty if they complete after 25 March 2012. The Stamp Duty relief for first time buyers will come to and end on this date.

From this date the situation will change as set out in the Table below

Fig. 1

Purchase price % Stamp Duty then % Stamp Duty now
Up to £125,000 0 0
Over £125,000 to £250,000 1% 0
Over £250,000 to £500,000 3% 3%
Over £500,000 to £1 million 4% 4%
Over £1 million 5% 5%

If you are considering buying a property in the coming months and you fit the following criteria

Until 25 March 2012 first time buyers of residential property can apply for SDLT relief (as set out in Fig. 1 above) if all of the following apply:

•the effective date is on or after 25 March 2010 and before 25 March 2012

•the consideration given is £250,000 or less

•the buyer intends to live in the property and it will be their only or main home

•they have not previously owned property or land either in the UK or anywhere else in the world - including property bought with anyone else

then contact us on adrian.toulson@breezeandwyles.co.uk or 01279 715333

Is your Business worth more than you think?

Intellectual property – what is it and why is it so important?

Whether you're an inventor, an author, a business tycoon or the owner of a small family business protection of your intellectual property is paramount.
What is Intellectual Property?

Intellectual property (IP) could be referred to as “creations of the mind”, for which exclusive ownership rights are recognised. These rights belong to a variety of intangible assets (assets that you can’t see), including inventions, phrases, symbols, music, works of art, and designs to name but a few. Some of the most common types of IP are copyright, trademarks, industrial design rights and patents. The term “Intellectual Property” is far reaching. However, most business owners only see IP as Patents or invention.

The importance of protecting intellectual property:

IP rights are valuable assets for your business - possibly among the most important it possesses. Businesses rarely value the IP or if when they do they do not understand the relationship between the value of terms such as ‘goodwill’ and IP.
Your IP rights can:

• set apart your business from its competitors
• provide revenue through licensing or sale
• offer customers something innovative and diverse
• form an important part of your promotion or branding
• be used as security for borrowing

What can be protected?

Amongst other things you can protect:

• Your business name
• logo
• designs
• inventions
• works of art
• works of intellectual effort
• trademarks

Only some IP is automatically protected by law; but there are other types of legal protection available. However, you must make the appropriate application to take advantage of the protection afforded by them.

It makes sense to do all you can to protect your business – this includes the IP. You can:

• protect it against encroachment by others and defend in the courts your sole right to use, make, sell or import it
• stop others using, making, selling or importing it without your permission
• earn revenue by licensing it
• exploit it through tactical associations with other businesses
• make money by selling it

What next?

Start by asking yourself: Why should others profit from my hard work?
The answer is obvious: They shouldn’t!
Ask further questions such as:
Who owns my website?
The company logo was designed by a third party – who owns the IP?
How do I protect my IP?

For answers to these questions and any other queries you may have we would be happy to help.

Please do not hesitate to contact Brendan O’Brien or Damian Pitts on 01992 558411 or brendan.obrien@breezeandwyles.co.uk or damian.pitts@breezeandwyles.co.uk

Employment Newsletter January 2012

January 2012

Dear Employer

We hope you have enjoyed your well-earned Christmas Break and wish you a very happy and prosperous New Year!

There are exciting times ahead in the work place: various reforms that the Government is proposing are due to come into force, not least the new pension rules later this year. If it all gets too much, remember we are here to assist.

If you have any particular employment issues, please do not hesitate to contact us: details are at the end of this letter. If you have any comments or suggestions on this newsletter, please email newsletter@breezeandwyles.co.uk

Kind regards

The Employment Law Team

Some Recent Changes and Cases in Employment Law

No Right To See Redundancy Interview Notes

The EAT has overturned a Tribunal's decision that a redundancy was procedurally unfair because the decision to dismiss was taken before the interview notes the Claimant requested were provided. As part of reorganisation the Claimant came sixth out of seven candidates in a scoring exercise. She was given her scores and told she had not secured a position. She did not accept that her scores reflected her abilities and asked to see her interview notes. However, she did not actually challenge her scores or specify which of her scores she was unhappy with. She received the notes between 1st June and a meeting on 5th June, at which she was told that her employment would be terminated by reason of redundancy, on 12th June. She subsequently brought a claim for unfair dismissal, on the basis that some employees had been excluded from the redundancy process and not all those who sought voluntary redundancy were made redundant.

The Tribunal had found the dismissal unfair and the Employer appealed. The EAT allowed the appeal. As the Claimant knew her overall score and did not challenge it or its individual components, the Tribunal had no basis for saying that, by asking to see the notes taken at the interview, she had somehow communicated that she reserved the right to challenge her scores. The Tribunal had erred in drawing that inference, which had formed the basis for their conclusion that her dismissal was unfair. Also, the Tribunal had failed to stand back and ask whether there had been a fair redundancy process overall. There was no basis on which it could be concluded that the decision to dismiss the Claimant was unfair. (Camelot Group Plc v Hogg)

No TUPE Exemption For Company In Administration

The Court of Appeal has held that companies in administration are not exempted from TUPE. The Court of Appeal approved the EAT's approach to Regulation 8(7) of the TUPE Regulations 2006, which disapplies TUPE protection for certain kinds of insolvency proceedings. It preferred to lay down a general rule that administrations do not trigger Regulation 8(7) rather than to hold, as an earlier EAT had done, that the application of Regulation 8(7) depends on whether, as a matter of fact, the administrator intended to liquidate the assets of the company. The significance of Regulation 8(7) is that in certain situations, regulations 4 and 7 of the TUPE Regulations - ones that govern the automatic transfer of employees to a new employer and give employees the protection of the automatic unfair dismissal provisions - can be disapplied entirely. The situation is whether the transferring employer (the transferor) is the subject of "bankruptcy proceedings or any analogous insolvency proceedings which have been instituted with a view to the liquidation of the assets of the transferor".

In this case, the Court of Appeal said that given the range of possibilities open to an administrator upon the making of an Administration Order, it could not be said that the appointment of an Administrator is made "with a view" to liquidation of the company's assets. That may be what happens in practice, and in many cases it might seem to be clear from the outset that that is what is going to happen, but is not always the case. The Court of Appeal agreed with the EAT's preference for an "absolute" approach. (Key2law (Surrey) LLP v De'Antiquis)

Discrimination and Married People

In a recent case the EAT has held that married persons are protected from less favourable treatment for being married to a particular person (under Section 3 of the Sex Discrimination Act). In this case, although the employer did not discriminate against married people generally, the employee could rely on less favourable treatment that was specific to her marriage. In this particular case, the employee was discriminated against because of antipathy between the Chief Executive of the employer and the employee's husband.

Note that protection from discrimination on the basis that a person is married (or a civil partner) is now found in Sections 8 and 13 of the Equality Act 2010. (Dunn v Institute of Cemetery and Crematorium Management)

Fox Hunting and Poppies - Philosophical Beliefs

In a landmark decision an Employment Tribunal decided that a fervent anti-fox hunting campaigner was protected from discrimination because of his beliefs in animal welfare. Mr Hashman was employed by a garden centre and was a keen animal rights campaigner. He had given evidence in support of prosecutions for illegal hunting. When his employers discovered his fervent anti-hunting views he was dismissed. He argued that his dismissal was because of his belief in animal rights and that the dismissal was discriminatory.

The Equality Act 2010 protects against discrimination because of an employee's religion or beliefs. The question of what constitutes a philosophical belief has been addressed in previous cases, e.g. the belief must be about a weighty and substantial aspect of human life and behaviour and must attain a certain level of cogency, seriousness, cohesion and importance. It must also not be incompatible with human dignity and not conflict with the fundamental rights of others. The Tribunal held that Mr Hashman's belief was protected from discrimination.

This is the first time that a fervent objection to fox hunting has been protected as a philosophical belief.

By contrast, in the recent case of Lisk v Shield Guardian Company Limited, Mr Lisk, an ex-serviceman, objected when he was asked by his employer to remove his poppy at work. He submitted claims for direct discrimination and harassment on the protected ground of philosophical belief. He believed that people should pay their respects by wearing a poppy from 2nd November to Remembrance Sunday. However, the Tribunal concluded that the belief underpinning the wearing of a poppy could not be described as a philosophical belief because it lacked the characteristics of cogency, cohesion and importance that were required.

What's in the pipeline

Major Pension Reforms

From 2012 there will be some major pension reforms coming into force. These will include (but not necessarily be limited to) the following:

* With effect from 1st October 2012, the introduction of Auto-Enrolment. This will mean workers being automatically enrolled into their employer's qualifying pension scheme without any active decision on their part. At present many workers fail to take up valuable pension benefits because they do not make an application to join their employer's pension scheme. Auto-Enrolment is intended to overcome this. From 1st October 2012 (subject to the employer's own introduction date) all eligible workers will have to be auto-enrolled into a qualifying pension scheme. Employers can choose the qualifying scheme they use, which could include NEST (National Employment Savings Trust). Total contributions must be at least 8% of all qualifying earnings between £5,035 and £33,500, with a minimum employer contribution of 3%.

* The State Pension is to be increased in line with earnings (rather than prices)
Increase In Statutory Payments

From 9th April 2012 Changes are expected to come into force to the rates of Statutory Sick Pay (SSP) and Statutory Maternity, Paternity and Adoption Pay.

SSP will increase from £81.62 to £85.85 per week.

Statutory Maternity etc. Pay will increase from £128.73 to £135.45 per week.

New Compensation Limits In Force

From 1st February 2012 limits will be increased (as usual) on certain Employment Tribunal awards and other amounts payable under Employment Legislation. The main changes are:

* Maximum compensatory award for unfair dismissal increases from £68,400 to £72,300
* The limit on the amount of a week's pay for the purposes of calculating e.g. Statutory Redundancy Payments and the Basic Award for Unfair Dismissal will increase from £400 to £430.
* Guaranteed Pay will increase from £22.20 a day to £23.50 a day.
* The minimum basic award in cases where dismissal was unfair by virtue of health and safety, being an employee representative and the other statutory situations will increase from £5,000 to £5,300.
The new rates will apply where the event giving rise to compensation or payment occurs on or after 1st February 2012. Where the dismissal or relevant event falls before that date, the old limits will still apply, irrespective of the date on which compensation is awarded.

New Equality Advisory Service

The Government has made the decision to cease funding for the Equality and Human Rights Commission's (EHRC) helpline and Legal Grants Program in 2012. To replace this, the Government Equalities Office has announced the creation of a new Equality Advisory and Support Service to provide support to vulnerable and disadvantaged individuals facing discrimination. The service will provide telephone advice and support, encouraging problems to be resolved early and informally where possible.

Employer Traps and Other Tips

Making Notes

In any formal meeting with an employee you should also ensure that notes are taken, which are sent to the employee afterwards for their agreement. Making notes should also apply if (for example) you are going through a redundancy process and are applying selection criteria. It is always a good idea to have a record of why you reached a particular conclusion, so that there is no doubt later.

Equal Opportunities Policy

You should ensure that you have an Equal Opportunities Policy and that it is up to date. Should you find yourself in the unfortunate position of having a discrimination claim brought against your company, one of the first things that an Employment Tribunal will want to see is your Equal Opportunities Policy.

Other news from Breeze and Wyles

Debt Recovery Service Launch

We offer a low cost, fixed fee debt recovery service aimed at assisting businesses to chase unpaid invoices. An initial letter to a debtor costs just £2.00 plus VAT. This means that businesses can cost effectively chase their aged debtors. Many businesses now use this service to chase debts that otherwise would have been written off, because it offers such a cost effective and efficient solution. For further information please contact Rita Wright at rita.wright@breezeandwyles.co.uk or telephone 01992 558411.

Breeze and Wyles Solicitors LLP are a leading law firm with offices throughout Hertfordshire and Middlesex, providing quality legal service in all of the mainstream areas of the Law for over 90 years.

We are one of very few law firms that offer services online. Check out our services

· Divorce solutions at www.firstfordivorce.co.uk
· Home Information Pack service at www.breezepack.co.uk
· Solution for volume legal instruction at www.breezeplus.co.uk

We have been awarded Lexcel Accreditation and are regulated by the Solicitors Regulation Authority. If you would like further information on any of the issues referred to in this letter, or any other employment matter, please contact Jane Dismore at

2nd Floor, Stag House, Old London Road, Hertford, SG13 7LA
Tel: 01992 558411 Fax: 01992 503889

Homeowners warned to watch out for Squatters

Homeowners warned to watch out for squatters

The housing market is sluggish, prices static, and more people are staying put and renovating or extending.

But homeowners wanting to protect their property value should also invest time in checking out their boundaries and making sure they don’t have squatters.

According to Andrew Moore, property law expert with Hertford based Law Firm Breeze & Wyles Solicitors LLP : “Mention squatters and most people think of someone who has made themselves at home in an empty property. But squatters’ rights, or adverse possession as it is known in law, can happen in all sorts of property ownership situations, including boundary disputes. They can easily turn into a property owner’s worst nightmare and in a tougher property market, buyers are more likely to dig deeper and come across such problems.”

Adverse possession is the law’s way of barring stale claims to land and recognising lengthy possession as giving a kind of title to land. The Land Registration Act 2002 sets out the requirements and procedure for claiming what is known as possessory title.

To be successful, the person claiming must have been in possession or control of the land in question to the exclusion of the legal or paper owner for at least ten years. If the paper owner interrupts the squatter’s possession, even for a short period, the ten year period begins again.

But a recent case that went all the way to the Court of Appeal has highlighted just how far the paper owner must go to secure that interruption.

In 2002 Mr and Mrs Zarb bought a house next door to Mr and Mrs Parry. Some years earlier a strip of garden had been sold by the Zarbs’ predecessor to the predecessors of the Parrys. The buyers thought that the boundary was marked by a hedge on the land, but this was about 12 feet beyond the true boundary.

When the Zarbs discovered the error in 2007, they decided to take back what was they believed to be their land. They went onto the disputed strip, removed a tree and some fencing erected by the Parrys and started to put in fence post along the actual boundary line shown in the deeds.

But they had been there for only twenty minutes when the Parrys discovered them and made them leave. Subsequent negotiations with expert advice to agree the disputed boundary failed and the neighbours went to Court, finally ending up in the Court of Appeal, where the Zarbs tested what amounted to “interruption” of adverse possession. They also claimed that the ten year period had not been satisfied, arguing that their predecessors had given consent for possession of the strip of land.

The Court of Appeal agreed that the true boundary was where the Zarbs thought it was, but judged that the Parrys had acquired ownership by lengthy squatting, saying that the 20 minute action by the Zarbs did not amount to interruption. The Court ruled that interruption required the paper owner to have exclusive control of the land, even if that control only lasted a short time, which had not been satisfied in this case.

Said Andrew: “If the Zarbs had been more careful in checking the situation when they bought the property, or in taking advice on how they could lay claim to the land, they would have stood a stronger chance of a successful outcome.

“This case highlights once again how important it is to investigate any issues over boundaries or the like. Once matters have been aired and settled, then the outcome should be recorded in the deeds. If things can’t be resolved amicably, then this sort of dispute is best dealt by mediation. Going to court is a very costly and lengthy option.”

He added: “If you are selling your property it is absolutely vital to be open and truthful about any boundary disputes or discrepancies. If you do not volunteer full details you might find yourself being sued for misrepresentation some years later, because if one thing is certain, it is that boundary disputes never fully die.”


Web site content note:

This is not legal advice; it is intended to provide information of general interest about current legal issues.

New Debt Recovery Pricing for 2012

Breeze & Wyles Solicitors LLP has the pleasure to announce that to ensure that we maintain a marketing leading pricing structure we have revised the pricing for all instructions received from today.

Our new pricing structure is available upon request by e mail to rita.wright@breezeandwyles.co.uk