New article on the confidentiality of medical records

Check out my latest article, published on People Management News today, regarding the confidentiality of medical records:


http://www.cipd.co.uk/pm/peoplemanagement/b/weblog/archive/2015/10/06/employers-may-need-to-access-recruits-medical-records-after-glasgow-bin-lorry-case.aspx

Yet another Court fee hike proposed by Goverment

Following on from my blog post earlier this year on Court fee rises in March 2015, I attended the Civil Litigation Section Conference at the Law Society. The Civil Litigation Section is a Law Society led information provider, sounding-board and lobby group for civil litigators.


At the Conference there was much disquiet amongst practitioners that the new Court fees would effectively bar some claimants from having access to justice due to the extortionate rises, in some cases from around £1000 to nearly £8000. This would especially hit claims with a value of £200,000 to £300,000 - this range being a sweet spot in SME breach of commercial contract claims. It effectively means that savvy contractors can deliberately breach a contract of around that value knowing that an SME will not be able to afford the Court fee to commence proceedings. Sometimes the only way to make a breaching party sit up and take notice is to file proceedings - this old tactical trick is now effectively blown out of the water if the injured claimant cannot afford the fee.


At the Conference the Civil Litigation Section appealed to its members to provide examples of clients who were unable to commence proceedings as they could not afford the new Court fees. They were then going to present this information to the Government who has given them until December to do so.


It is with some surprise therefore to discover that the Government has just announced a consultation, of which responses need to be returned by 15 September (!), which proposes more Court fee rises. The proposal is to double the Court fee from £10,000 to £20,000 for all money claims over £400,000. The Government's justification is that such claims are normally initiated by large corporates or High Net Worth individuals and it is thus 'fair' to ask them to contribute more.


As a litigator who deals with SMEs and High Net Worth individuals, claims in the range from £400,000 to £700,000 are also very common. Having to pay £20,000 to commence a breach of contract claim worth £400,000 will certainly dissuade such clients from commencing litigation. Sadly, some of these breaches of contract are so harmful to SMEs that the losses inflicted can lead to their ultimate downfall. If they cannot afford the £20,000 Court fee then this constitutes a clear injustice.


It follows that the problem with mediation is that the breaching party is not forced to come to the table, unlike with proceedings. As practitioners we will now have to advise SME clients to incorporate arbitration clauses into their commercial contracts as sadly a High Court solution may be beyond their financial reach. A sad day for the High Court indeed and a wholly unnecessary blotch on its stellar worldwide reputation for consistently delivering impartial and affordable justice.

Spring Law Announces Acquisition of Leading Employment Practice Ferguson Solicitors LLP

Spring Law has today completed its acquisition of City employment boutique, Ferguson Solicitors LLP.

 

The deal will see the entire Ferguson team including 2 partners and 6 additional fee-earners move to Spring Law’s offices in Chandos Place, Covent Garden. The combined business will have 5 directors, 20 fee-earners and 5 support staff and a turnover close to £5 million.  Spring Law also engages a team of consultants.

 

Although experts in all areas of employment law, Ferguson Solicitors are particularly renowned for successfully representing City bankers and other finance professionals in disputes with their employers and are recommended in Chambers, the leading legal directory.  

 

Founded in 2002 by Tim Perry, previously General Counsel of Sportsworld Media Group PLC, Spring Law Limited acts for domestic and international private companies and high net worth individuals.  Alongside Tim, the board comprises James Russell, formerly a partner at Surry Partners, a Sydney law firm, Louise Marshall, formerly General Counsel at Hudson, a Nasdaq listed global talent company, Andrew Day, formerly of Dentons and Nigel Clark, the COO, who, until recently, managed Minter Ellison’s offices in Beijing and London.

 

Tim Perry, managing partner of Spring Law comments: “The acquisition supports the firm’s strategy of growth by excellence and enables us to provide preeminent employment expertise to all our clients. In particular, the Ferguson team will bring an additional and valuable dimension to our commercial litigation practice.”

 

Charles Ferguson, managing partner of Ferguson Solicitors comments: “We are delighted to have joined forces with a law firm that shares our values, aspirations and commitment to clients. This is an exciting time for us all and we look forward to offering our clients an enhanced range of legal services.”

 

For further information, please contact:

Nigel Clark, COO, Spring Law on 020 7395 4870 or nigel.clark@springlaw.co.uk

Antonia Welch, Welch PR on 07813 917980 or antonia@welchpr.co.uk

 

Spring Law is a trusted adviser, dedicated to delivering first class legal services to business and private clients in today’s world.

 

Ferguson Solicitors LLP have acted in numerous high profile claims against investment banks.  These include the case of Steven Clark-v-Nomura International Plc which was the first City bonus claim to come before the UK courts and is still the most quoted authority in bonus disputes.

 

The new employment team will practice under the name of Spring Ferguson, a division of Spring Law Limited.

Funding Reform Reprieve for Insolvency Litigation

Following on from my blog entitled 'A Free Pass For Fraudsters? Funding Reforms to Affect Insolvency Litigation' the government has announced that the funding reforms planned for insolvency litigation to commence on April 2015 will now be delayed.


The extensive lobbying that was undertaken by R3 and other stakeholders in the insolvency industry seems to have had the desired effect. R3 pointed out that the delay would save £160 million of creditors' money per year - such money to have likely fallen into the hands of fraudulent directors or third parties. No doubt HMRC, with their creditors hat on, were also interested in not rushing through reforms that could see them recoup substantially less funds through the insolvency litigation route. This seems to be yet another hiccup in the breath of fresh air that the Jackson Reforms promised to deliver.

Court of Appeal rules that unpaid director was an employee

An interesting decision has emerged from the Court of Appeal this week which sounds a warning to companies that permit unpaid work to be undertaken by shareholders or directors.


In Stack v Ajar-Tec Ltd [2015] EWCA Civ 46 the Court of Appeal held that a director and shareholder who worked part-time for free did in fact have 'worker' and 'employee' status.


The case relates to an audio-visual business that had three directors who were also shareholders. One of the directors had a contract of employment and was remunerated accordingly. In contrast, although contracts of employment were considered and circulated in regard to the other two directors, such discussions and drafts were never formalised. The remaining two directors did input their time into the business but on a part-time, ad-hoc basis. This continued for three years but they were not paid.


When relations broke down, one of the directors who helped out part-time brought an unfair dismissal claim. Importantly, the Court of Appeal held that even though there was no formal agreement or remuneration in place, the director had undertaken a positive, enforceable obligation to work for the company. This was confirmed by his offer to bring his skill-set to the table at the beginning of the venture and then confirmed by his subsequent working input.


The appeal judges felt that such commitment and obligation implied that he should have received remuneration and it would not be just that one director received a salary and dividends whereas the others should only receive dividends, despite their evident input.


Small business should be aware that shareholders or directors who invest time and effort into the business but are not officially paid, may have employee status under the Employment Rights Act 1996. This would allow them to bring proceedings for unfair dismissal if they have provided such services for more than two years.


I know a number of SME businesses that have directors who operate in this manner and my advice would be to discuss such arrangements immediately with the concerned parties so as not to avoid confusion or problems further down the line. Directors who work for the business should ideally be placed on director's service contracts or employment contracts so as to provide protection for both the director and the company.

Law Society says civil court fee hikes spell disaster for access to justice

Following on from my last blog on the imminent increase to Court fees, see below the recent statement from the Law Society:


The Law Society has heavily criticised the government's decision to increase court fees for some civil cases. Law Society president Andrew Caplen said:''Court fee hikes introduced by the government from April spell disaster for access to justice.'


Read full statement

Get in quick to avoid imminent increases in Court fees

Hot on the heels of my last blog which recommended filing any insolvency proceedings before the CFA and ATE insurance changes affecting that industry arrive in April, the Ministry of Justice have announced this week that, as of March 2015, Court fees will increase.


From March 2015, Court filing fees for all money claims with a value of £10,000 or more will increase to 5% of the value of that claim. However, the filing fees will be capped at £10,000. Thus, for a money claim of £10,000, the Court fee would be £500. For a claim to the value of £100,000 - £150,000 (a common money claim value in the SME market), the Court fees would be £5000 - £7500. This represents a substantial increase in Court filing fees. One silver lining is that claims lodged via the Money Claim Online system shall enjoy a 10% reduction in filing fees. This is unlikely to reduce the Court fee substantially in larger claims though.


These changes have caused some controversy, not least amongst the judiciary, who are concerned that this increase in fees will reduce access to justice. Interestingly, Employment Tribunal fees were introduced in the summer of 2013 and were also greeted with much controversy. Last year official figures revealed that Employment Tribunal claims have reduced by around 80% since fees were introduced. Some would argue that this heralds a general move by the Ministry of Justice to increase settlements. Interestingly, the official line is that these measures will unburden the Courts which are increasingly swamped with claims that would be more suitable for settlement or Alternative Dispute Resolution such as mediation.


Importantly, the increase in Court fees will not relate to Commercial Court or divorce proceedings. However, the Ministry of Justice has just announced a new consultation to consider raising Court fees in applications in civil proceedings and for the recovery of land.


It may be that this heralds a move to higher Court fees in all proceedings in England and Wales, but for those that are considering money claims, it would be advisable to file such claims before March and avoid the unwelcome fee hike.

A Free Pass for Fraudsters? Funding Reforms to Affect Insolvency Litigation

The last two years has witnessed major changes to the civil litigation regime known collectively as the ‘Jackson Reforms’. These reforms, sculpted by Lord Justice Jackson, have had a major impact on the litigation landscape, especially regarding costs and funding. Most of the reforms came into effect in April 2013. However, insolvency litigation has been exempt from the Jackson Reforms until April 2015. Now that the due date approaches, this piece explores the changes and their probable impact for insolvency proceedings.

The reforms relate to Conditional Fee Arrangements (CFAs) and After the Event Insurance (ATE). CFAs are an agreement between lawyers and those wishing to litigate where payment of a lawyer’s fees are only triggered if the litigation is successful. This is designed as an incentive for those who wish to litigate but do not have the requisite funds. The incentive for the lawyer is that, on top of their fees, they can also receive a ‘success fee’ payment if the litigation is successful.

ATE is a further incentive for those wishing to litigate who are concerned about having to pay the other side’s legal costs if they lose the litigation (a standard rule in civil litigation). ATE provides the prospective litigant with an option to secure insurance to protect against having to pay the other side’s costs if they lose.

A significant proportion of insolvency professionals use CFAs and ATE to fund insolvency litigation, including many of our own clients. Importantly, the Government believes that insolvency litigation is in the public interest as it acts as both a deterrent and a regime to punish fraudulent directors who deliberately wind-up their companies in order to avoid creditors. Such creditors are often HMRC so insolvency proceedings also provide a mechanism for the Government to recover tax. This public benefit is the main reason why insolvency proceedings have remained exempt from the Jackson Reforms, until now.

From April 2015, success fees deriving from CFAs and ATE premiums will no longer be recoverable (by lawyers and insurance companies respectively) for insolvency proceedings. This has caused controversy in the insolvency profession who unsuccessfully lobbied for insolvency proceedings to be exempt from these reforms. They argue that the abolition of the recoverability of success fees and ATE premiums will discourage insolvency litigation which will allow fraudulent directors to profit and the public purse, as well as private creditors, to suffer accordingly.

In April 2014, Professor Peter Walton published ‘The Likely Effect of the Jackson Reforms on Insolvency Litigation – an Empirical Investigation.’ This research was supported by many organisations with an interest in this issue, such as the Insolvency Practitioners Association.

In his report, Professor Walton argues that the Jackson Reforms are not applicable to insolvency litigation as their main aims were to address the disproportionality of legal costs to the value of the claim (such claims often being frivolous) and the ‘cherry picking’ of only the strongest claims by lawyers. In contrast, Walton argues that insolvency litigation, as it is in the public interest, is never frivolous nor the costs disproportionate as it allows the public purse to be reimbursed.

The statistics in the report also suggest that the Jackson Reforms may have a negative impact on the insolvency industry. For example, insolvency proceedings currently backed by CFAs enforce claims of approximately £300 million per annum. Of that figure, up to £70 million is money owed to HMRC.

Spring Law specialise in the SME market and, worryingly, it is the small to mid-market that may be most vulnerable to the actions of fraudulent company directors. The report points out that the majority of insolvency claims realise £50,000 or less. The concern is that due to the reforms, these smaller value cases are less likely to be pursued. This could have the unsavoury side-effect of giving fraudulent directors a carte-blanche to deliberately fold companies which owe creditors £50,000 or less and avoid any recourse through insolvency litigation.

It has yet to be seen how these reforms will impact insolvency litigation but if the problems outlined above do come to bear, then the Government may be forced to introduce amendments to these reforms. Spring Law work with providers of litigation and ATE funding and they have informed us that insolvency practitioners will need to move quickly to file claims before April 2015 in order to retain CFAs with success fees and ATE insurance. If you would like more information on how to bring such a claim or attain litigation insurance, please contact Andrew Day or Rory Lynch in the Dispute Resolution team.