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Category Archives: Insight Article

What are the automatically unfair reasons for dismissal?

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Some of these reasons are known as the ‘automatically unfair’ reasons for dismissal and are commonly borne out of UK statute. ACAS breaks these down into the following categories:

The .gov.uk website expands this further by adding:

  • acting as an occupational pension scheme trustee; and
  • whistleblowing.

With this ambiguity existing between the two most popular ‘go to’ websites, we thought we’d fill in some of the missing details and expand upon what’s included under some of these umbrella headings.

Under ‘pay and working hours’

As well as rights under the Working Time Regulations, annual leave and the National Minimum Wage, we would expand this category to include (or even detail) rights relating to flexible working arrangements, jury service, Sunday working hours, study leave, training requests and working tax credits.

Under ‘representation’

We would expand this point to include an employee’s right to be accompanied to a disciplinary or grievance hearing or to a meeting under the statutory retirement procedure to make it clear that this heading includes both the employee AND a representative.

As the counterpart to representation, we would add ‘consultation’ to the mix, as an employer has a duty to inform and consult with its employees in certain prescribed circumstances (such as collective redundancies, business transfers and health and safety matters) under the Information and Consultation of Employees Regulations 2004 and the Transnational Information and Consultation of Employees Regulations 2004.

Under ‘trade unions’

One of a trade union’s main aims is to protect and advance the interests of its members in the workplace, and most trade unions are independent of any employer. Therefore, an employer cannot impede any employee’s membership or non-membership of a trade union or participation in trade union activities, such as protected industrial action and collective bargaining arrangements.

Employers are also prohibited from compiling, using, selling or supplying blacklists of trade union members or activists.

Under ‘other’

Yes, unfortunately, we would have to add that infamous heading ‘other’ to both ACAS and .gov.uk’s lists, as both fail to mention agency workers, zero-hour contracts, pension auto-enrolment or where an employee asserts a statutory right (such as the right to receive a written statement of particulars of employment or not to have an unlawful deduction from wages). A dismissal will also be automatically unfair if an employer selects the employee for redundancy based on any of the grounds we have listed above.

So, what are the ‘fair’ reasons for dismissal?

Under the Employment Rights Act 1996, dismissal is usually deemed fair if an employer can demonstrate that it dismissed the employee for one of the five potentially fair reasons for dismissal and that it acted fairly and reasonably in treating that reason as sufficient to justify the dismissal.

The five potentially fair reasons for dismissal are:

  1. conduct
  2. capability
  3. illegality
  4. redundancy; or
  5. some other substantial reason

What else do I need to know?

Note: in an automatically unfair dismissal claim, the requirement for reasonableness (required for usual unfair dismissal claims) is not required.

Where dismissal relates to an employee’s political opinion or affiliation or to an employee’s membership of the reserve forces, the employee doesn’t need two years of service. However, these are not classed as ‘automatically unfair’ dismissals and still require the employee, in either case, to show that the employer did not act reasonably.

If an employee is dismissed in circumstances where they would qualify for suspension on medical grounds, the qualifying length of service to bring an unfair dismissal claim changes to one month.

If you have been dismissed or want to dismiss someone, call Karen Cole today to discuss your rights.

What can debt enforcement companies really do?

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The image of burly men banging on the door and taking away all your worldly goods hasn’t been helped over the years by the media’s portrayal of debt collectors on TV. However, there are limits to what debt collectors and court enforcement officers can do. Knowing your rights is important, so if you’re concerned about that ‘knock at the door’, here’s a brief guide to dealing with the bailiffs.

The difference between High Court Enforcement Officers, County Court Bailiffs and Debt Collection Agencies

The first thing is to understand that there’s a big difference between debt collection agencies, “DCA(s)”, who are usually private firms and enforcement officers (known as either High Court Enforcement Officers or County Court Bailiffs). Regardless of who comes knocking, there must be a set chain of events before the ‘bailiffs are called in’.

Initially, there should be plenty of contact between the creditor and the debtor, and the easiest way to avoid any type of debt collection situation is to keep the creditor fully appraised of your situation. If you are a creditor, you should first try to recover the debt ‘in-house’ or at least negotiate with the debtor to arrange manageable payment plans to pay off the debt. If that fails, then you can take things to the next level by bringing in a DCA.

DCAs often work on a “no collection, no fee” basis and should go through a process of written contact and phone calls before moving on to personal visits. Bear in mind, though, that DCAs do not have any enforcement authority, so they can’t enter a property to take control of goods in lieu of payment. They also cannot threaten, intimidate or lie to the debtor about what they can do, and debtors have every right to refuse entry to DCA agents.

Going through the courts

If the use of in-house and DCA methods are still not garnering results for the creditor, then they can go through the courts. The most common route is to apply to the County Court for a County Court Judgement (CCJ). This gives the debtor a certain time to pay the outstanding debt, usually two weeks. If the debtor still either can’t or won’t pay, it can be elevated immediately, and the court can authorise enforcement.

Who carries out an enforcement order?

Usually, a County Court Bailiff or a High Court Enforcement Officer executes the order. The debtor will be told of the decision to elevate the case to the court and that they have seven days to pay before officers arrive at their doorstep. Unlike DCA agents, court officers do have the right of entry and can seize goods to cover the cost of the debt if they are sure the assets belong to the debtor.

Bear in mind that if you are visited by a court officer pursuing a debt, then you will have to pay the debt itself, but there will also be additional charges depending on the size of the debt and the actions that the officers take to recover it. The longer you ‘string things out’, the more you’ll pay.

I’m a creditor. What’s my best option?

The cheapest option is a no-collection-no-fee debt collection agency, but as their authority is limited, it may not produce the results you want.

If the debt is substantial and you have demonstrated that you’ve given the debtor plenty of opportunities to pay, then the best option is to go straight to the County Court and then elevate it to the High Court to enforce payment. You will have to pay a fee, but the chances of getting at least some of your money back are higher.

If you’re worried about debt or are concerned that a debt owed to you hasn’t been paid, speak to Daniel Downes today.

A rocky road to freedom of expression

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A hospital nurse who discussed her Christian views with patients, offering a bible to one and advising another that his survival prospects would be improved if he prayed to God, was fairly dismissed for improper proselytising, a court has ruled. But another, where a quality control manager was asked to keep her sexual orientation under wraps, has seen a compensation award of £8,000 for direct discrimination. So what exactly is freedom of expression in the eyes of the law?

Nurse Sarah Kuteh was responsible for assessing patients about to undergo surgery, part of which involved asking them about their religion. Still, patients complained that she initiated the unwanted religious discussion. When the issue was raised with Mrs Kuteh, she assured management at the Darent Valley Hospital that she would not discuss religion again unless a patient directly asked her.

When further incidents followed, she was dismissed on the grounds that she had breached the Nursing and Midwifery Council’s code of conduct. She later issued an unfair dismissal claim, alleging a breach of a European Convention right to freedom of thought, conscience and religion.

When the case of Kuteh v Dartford and Gravesham NHS Trust reached the Court of Appeal, the court recognised the importance of the right to freedom of religion. Still, it said improper proselytising was not covered under Article 9 of the European Convention on Human Rights, which defends the qualified right to practice religion. As a result, the court ruled it was not unfair for the NHS Trust to have dismissed the nurse for proselytising to patients after being asked not to.

But in Mrs A McMahon v Redwood TTM Ltd and Mr Darren Pilling, the company found itself in hot water for stopping an employee from speaking out.

When Ashleigh McMahon joined the textile firm Redwood TTM, she disclosed that she was gay to her immediate boss during the first week of her new job. Still, he told her to avoid mentioning this to anyone else, saying the company’s owner was ‘old school’ and wouldn’t like it.

After being made redundant some months later, she made a number of tribunal claims against her former employer, including unfair dismissal and making a protected disclosure, as well as direct and indirect discrimination. Although the other claims were rejected, the tribunal agreed that the request by her manager amounted to direct discrimination on the grounds of sexual orientation, as the same request would not have been made to one of the company’s heterosexual employees.

Employment partner Karen Cole said:

“These two cases highlight the need for businesses to keep their recruitment and working practices under constant review, as there is growing pressure to keep pace with both the law and changing attitudes across society. There is no special exclusion clause for those who are thought to be ‘old school’ and everyone must make sure they refresh their mind-set. Employees cannot be treated differently because of their sexual orientation or any other protected characteristic.”

The Equality Act 2010 prevents direct and indirect discrimination based on protected characteristics, which include:

  • age
  • religion or belief
  • disability
  • gender
  • personal relationship status
  • race
  • sexual orientation

The protection of the Act extends to:

  • buying or renting property
  • consumers
  • education
  • private clubs or associations
  • public services
  • the workplace

Questions can be asked about health or disability only in certain circumstances, such as whether someone may need help to take part in an interview, whether disability covers both mental or physical impairments, and whether an employer should make ‘reasonable’ adjustments to accommodate disabled applicants and employees.

In addition, the Act makes it unlawful to discriminate against or treat employees unfavourably because of their pregnancy or because they have given birth recently, are breastfeeding or are on maternity leave.

Employees should not be required to share personal information if they are not comfortable doing so. However, they should not be precluded from discussing aspects of their private life if others who do not share their protected characteristics can freely discuss those aspects.

Employers should have up-to-date equal opportunities policies detailing their approach to equal opportunities and setting out what is and what is not acceptable.

Speak to Karen Cole regarding your freedom of expression concerns today.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Lease renewals where there’s disrepair

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You’re a landlord, and having agreed to a lease renewal with your tenant, you’re obviously keen to get that in place ASAP. But before you rush ahead, have you considered dilapidations and the reinstatement of alterations?

It is critical to consider how to carry forward any outstanding dilapidation liability to a renewal lease. The best way is to agree on a dilapidations schedule and attach it to the renewal lease. The schedule should be unpriced, just listing the breaches and remedies required, because costs will change during the renewal lease term, and it avoids having an argument about costs at this stage. However, agreeing on such a schedule may still be contentious and could take some time.

It is likely to make more commercial sense to get the renewal lease and any increased rent in place, with the question of dilapidations being postponed to the expiry of the renewal lease. This can be achieved by including appropriate wording in the renewal lease.

The other key point to consider is that any alterations carried out under the previous lease will, on the grant of the renewal lease, form part of the premises. This means that at the expiry of the renewal lease, the landlord may not then be able to require the tenant to reinstate those alterations. It may also be problematic for tenants because those works could then be rentalised on any rent review under the renewal lease. Again, this is something that can be addressed in the wording of the renewal lease.

Dilapidations and reinstatement can amount to vast amounts of money and should always be properly considered with professional advice.

If you have a lease renewal coming up or any queries regarding dilapidations, call John Gillette today to discuss your options.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

How to sell a limited company

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For the founding members of many privately-owned companies, the end game is focused on selling up before moving on to new ventures or sometimes retirement. But many owners underestimate the time involved in making a business market-ready or do not seek advice on the different options before they start, nor the route-map to follow to secure a successful sale.

Ideally, an advisory team should be put together, involving a lawyer and an accountant specialising in company transactions, to guide the limited company on the preparation for sale before any moves are made to seek out buyers. Calling in advisors after a deal has been struck may mean financial or legal pitfalls that can cause a deal to fail in later stages, and the role of the advisory team in this preparatory stage is as important as any work they will undertake in finalising the deal.

Taking your time to get it right and make the business market-ready means that timescales of 12 to 24 months for preparation are not uncommon.

In putting together a detailed exit plan for a limited company, the first question you are likely to be asked is whether you are looking for a share sale or an asset sale, also known as a business sale. The answer may be influenced by personal, financial or legal reasons, which can be explored with the specialists. Still, the final decision will determine the process to be followed and the resulting tax implications for both buyer and seller.

It is worth mentioning before exploring this further that choosing between these two options will apply only to limited companies, where the company is an entity in its own right.

  1. Share sale. The shareholders sell their shares in the limited company that owns the trade and assets of the business.

    A share sale is effectively the clean-break option for the shareholders. The buyer is purchasing the whole company, its assets, liabilities and the business as a going concern. There is no need for new contractual arrangements with employees, suppliers, customers, landlords or others, as the corporate entity will continue in its present form; it is simply that the shareholding has been transferred.

  2. Asset sale. The limited company sells some or all of the assets which comprise the business.

    Here the seller is the company itself rather than the individual shareholders. Only those assets and liabilities identified and agreed to be transferred are involved in the sale. This can cover both tangible assets, such as property, stock or machinery, and intangible assets, such as intellectual property and goodwill. An asset sale may occur because a seller wants to retain parts of the business that will continue to operate or be sold elsewhere or because the buyer wants to cherry-pick and avoid certain company liabilities. As the business is being transferred to a different corporate entity, third-party contracts with customers and suppliers must be novated or redrafted; commercial real estate requires negotiation with the landlord to agree on an assignment of the lease, and there would have to be employee consultation. A Transfer of Undertakings (Protection of Employment) Regulations 2006 situation is likely to arise, commonly known as TUPE, where employment rights are protected and transferred to the new owner of the business assets.

The tax position is a key factor in the decision-making between these two routes. This is complex and specific to each situation. Still, individual shareholders will generally be better off in a share sale, with a single tax charge on any capital gains arising (which is likely to be reduced to 10% if entrepreneurs’ relief applies). In an asset sale, there is a potential double tax charge, firstly on the company, with corporation tax on the profit made on the sale of assets, and then on the shareholders when they withdraw the sale proceeds from the company.

Whichever of these two routes is finally decided upon, the management team needs to ensure that contracts and policies are all in order and that any disputes or other issues have been resolved. Once the limited company is ready to go on the market, a non-disclosure agreement (NDA) for potential buyers should be in place. Confidential information must be withheld from any interested parties until the NDA has been signed.

Once a deal has been agreed, buyers should be credit checked and their source of funds validated. If those pass the test, then set out the terms at an early negotiation stage. The sale price is important but not the only thing that matters. Getting a clear document setting out the heads of agreement, also known as heads of terms, can influence the way and speed the transaction progresses and means everyone knows what is expected of them. A solicitor should review any heads of terms before they are signed.

This is likely to include a timescale covering aspects such as when contracts will be sent, how long the buyer has to complete due diligence, and when the exchange of contracts and completion will occur. It should clearly define what is being sold and what may be specifically excluded. And while a non-refundable deposit is usual on the exchange of contracts, it is worth considering a deposit on the signing of the heads of terms, as this can protect against a buyer withdrawing without good reason or failing to meet the timescale.

At each stage, the most important thing is that all members of your advisory team are working with each other in a seamless way throughout the process, as well as directly with you. Where the ground shifts, as it inevitably will, they must remain focused on your vision for the company sale and work with you to achieve the best possible outcome in changing situations.

If you want to make your business market-ready and prepare for a share or a business sale, call Evangelos Kyveris today.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Asking to see your medical records

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The simple answer is yes, you do have the right to see them. Under data access laws, you can ask to see your medical notes anytime. Practices up and down the country have reported a marked increase in the number of requests since the introduction of GDPR in May 2018 by patients who want to know exactly what notes are being kept by their doctors.

Why would you want to look at your notes?

Fundamentally, what happens to your body or your mental health is your affair. You have every right to know what your medical team has recommended, what notes are being kept and how those notes affect how your health is managed by your GP, medical professionals or mental health experts. The UK Information Commissioner’s Office has issued a set of advisory notes to help ordinary people understand their access rights and whether your GP can refuse to let you see your medical records.

The ICO’s advice in brief

A GP cannot query your reason for requesting access to your personal medical records and cannot refuse access to your information. However, they can ask you or your representative to clarify the information you want to access and only show you information relevant to your specific request. So, for example, if you have been diagnosed with cancer, you can ask to see all the notes pertaining to the diagnosis and treatment of your condition.

Most records are kept online, so medical professionals can allow the patient digital access to their records through an online portal if requested. That information must be safeguarded so that it cannot be ‘hacked’ by using digital encryption, for example.

What if the notes are for someone else?

To stop anyone from getting unauthorised access to confidential patient notes, there are certain safeguards in place, and medical professionals will be cautious about giving out any information unless it’s to the patient themselves. However, a patient can ask a close family member or legal representative to act on their behalf. The GP may ask for clear evidence that the patient has given their representative the right to access their records. They will refer back to the patient if they believe that more information than necessary is being requested.

Suppose they are still concerned about the level of access the patient’s representative is requesting. In that case, GPs can choose to provide the patient with the information directly rather than giving it to the representative. The patient can then decide for themselves just how much of that data they pass on to their representative.

Medical professionals have the right to refuse a request if they believe it could cause serious physical or mental harm to the patient or if the information you requested relates to someone else. You do not have their expressed permission to access the data.

If you have asked for medical data and your GP has refused, you can then pursue the matter further, either through the practice manager or by making a complaint to the Information Commissioner.

Often, medical information is requested by a patient who may feel that the treatment they have received has contributed to a deterioration of their condition or by a relative who may have questions as to how a member of their family is being treated.

Suppose you want to see your medical records and are being denied access by your medical care professionals. In that case, you may have to consider talking to a lawyer to help you resolve the situation.

Contact James McMullan today.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Nine smart ways to build staff loyalty

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The positives are well documented. Higher staff engagement and greater retention generally increase productivity, customer loyalty and profitability. On the flip side, if an organisation has problems retaining and motivating staff, it can have several negative impacts on the business, for example, the added cost of recruiting replacement staff and paying agency temps.

Step one: find out why

Perhaps the most simple and effective way to improve staff loyalty and retention is to focus on the reasons for voluntary staff departures. Why are people choosing to leave? Identify common causes of dissatisfaction across the workforce or explore reasons specific to particular sections of the organisation – then form an action plan.

Step two: take action

Once you know why employees might leave your organisation, you can choose how to respond. There are countless retention initiatives you could undertake. For instance:

  1. Improve recruitment and selection practices.

    It may seem obvious that a business would only recruit the right people for the role. Still, if employees leave within the first six months of joining, your organisation is not hiring the most suitable candidates. To find the right people, you’ll need to develop relevant job-related selection criteria, attract a pool of potentially suitable candidates, give recruits a realistic job preview, and use competencies and other selection tools to find the most appropriate match.
  2. Improve induction practices.

    Once you’ve hired the right candidate, you’ll need to give them a quality induction to your organisation. This will greatly affect how well they settle in and how long they stay.
  3. Offer training and development opportunities.

    Research has shown that many employees value training and career development opportunities above financial incentives. Before developing any new training initiatives, you should review existing provisions to identify any gaps, as well as assess any individual training and development needs.
  4. Encourage career development.

    If staff feel that there’s no opportunity for promotion, they may leave for greener pastures elsewhere. So, to support career progression, use the results of development and/or performance reviews and discussions to identify employees with the potential to assume greater responsibility. You could develop career progression plans with an individual. This could include in-house and external courses, workshops and seminars, coaching, mentoring and networking. This way, talented employees can move to key roles when they become available.
  5. Build line management skills.

    An individual’s relationship with their line manager often influences their decision to leave an organisation. As the old saying goes, employees don’t work for companies. They work for people.
  6. Support flexible working.

    If your team wants a better work/life balance, flexible working arrangements can help boost their loyalty and commitment.
  7. Show your recognition.

    Often overlooked by employers, simple things like praising someone’s performance can greatly impact their satisfaction and retention. Expressing your gratitude can be hugely effective – and it’s completely free.
  8. Launch health and well-being initiatives.

    Looking after your employee’s health and well-being is vital. Research shows that poor employee well-being is linked to high levels of staff turnover and sickness absence.
  9. Open up and communicate with staff.

    Communication with employees can take many forms; the most effective strategy will incorporate various methods. Generally, regular team meetings, one-to-one discussions with line managers on an ongoing informal basis and one-off briefings by senior managers on any significant organisational development work best.

In short

Higher staff engagement and retention increase staff loyalty, productivity and profitability.

Find out common reasons why people are leaving and develop an action plan to address them.

You could undertake numerous retention initiatives, from offering flexible working hours to improving career development.

Speak to Karen Cole today to see what your organisation could be doing.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Change in divorce law looks set to stop the blame game

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The news that no-fault divorce is likely to become law has been welcomed. Still, while the legislation waits for its place in the parliamentary calendar, families must continue to deal with one party being ‘blamed’ for the breakup or wait for the change in the law.

And with the parliamentary calendar full of another divorce – the UK’s departure from the EU – no date has been given for debating the proposed changes.

Official statistics show that almost half of divorce petitions between 2016 and 2018 cited behaviour as the reason for ending the marriage rather than the required period of separation. However, while signalling the likely shift to a mutual agreement, the Ministry of Justice announcement sets out plans for a minimum six-month timeframe from making a petition until the final divorce so that couples have time for reflection before securing a divorce.

Professionals have welcomed the potential change in the law, saying it will help couples focus on less acrimonious negotiations when it comes to agreeing on arrangements for the children and/or a suitable financial settlement with each other.

Family lawyer Pippa Marshall said:

“The blame game can further inflame relations that are already strained by a breakdown, so this move is certainly one to be welcomed. Hopefully, it can further support the general shift towards a more conciliatory approach to separation, as there will always be a need for negotiation between couples.

We are dealing with increasingly complex financial and family arrangements, as many couples undertake second and subsequent marriages, often with children from previous relationships. It means that even in the most amicable of divorces, it’s to be expected that each side will wish to secure the best outcome in terms of asset sharing. Eliminating the additional upset of having to apportion blame for the marriage breaking down will probably increase the prospects of couples reaching agreements for their future arrangements.”

Under the existing Matrimonial Causes Act 1973, grounds for divorce require an applicant to prove their partner is at fault through adultery, desertion or unreasonable behaviour. Alternatively, and only if both sides agree, they can agree to wait two years before lodging their divorce petition. If no fault is given, and one party does not consent to the divorce, then the period of separation is extended to living apart for five years.

The proposed changes include:

  • the irretrievable breakdown of a marriage to be the sole ground;
  • the option of a joint application for divorce, alongside retaining the option for one party to initiate the process;
  • removing the ability to contest a divorce;
  • continuing to have a two-stage legal process, known currently as the decree nisi and decree absolute;
  • introducing a minimum timeframe of six months from the date of making the petition until final divorce, with 20 weeks from petition to decree nisi and six weeks from decree nisi to decree absolute.

Pippa Marshall has extensive experience practising family law. Call her today.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

Safeguarding’s vital when appointing others to act

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Have you considered who would manage your affairs and make decisions if you have an illness or accident that leaves you incapable of looking after things yourself? A Lasting Power of Attorney (LPA) enables you to appoint someone you trust to look after your financial affairs or your health and welfare with minimum effort, delay and expense.

The application process has become much simpler since an online system was introduced a few years ago, which has encouraged many more people to prepare an LPA, with digital applications soaring from 14,000 in the year to March 2014 to 164,000 to March 2017. Paper applications have also risen, and almost 560,000 registrations were made in the year to March 2017, compared with 200,000 in March 2012. But while easier to make, they are also easy to abuse if safeguards are not implemented.

Unfortunately, that is demonstrated by reports of a significant increase in the number of investigations into the actions of attorneys and deputies who have been appointed under an LPA. These have increased by more than 40% in the past year – 1,729 investigations were carried out in 2017-18 – up from 1,199 the previous year, according to the Office of the Public Guardian, which is responsible for administering LPAs.

While the DIY process makes the process more accessible, professional guidance can make the difference in ensuring adequate control on those acting as attorneys to help avoid mistakes or, in the worst case, abuse.

An LPA is a valuable tool, but the right safeguards must be in place, and everyone needs to understand what is involved and the responsibilities it brings.

Understanding Lasting Powers of Attorney

Why have one?

You may want to allow someone else to manage your affairs for many reasons. While the obvious situation is if you are older or ill, an LPA can be useful if someone is undertaking long-term travel or working overseas for a corporate employer.

Using a Property & Financial Affairs LPA, you can appoint someone to look after your financial affairs on your behalf. You can also make a Health & Welfare LPA, which can be used to appoint someone to deal with issues such as where you live and medical treatment if you become mentally incapable.

Without an LPA, if someone becomes mentally incapable, whatever their age, their financial and personal affairs must be managed by a deputy appointed by the Court of Protection. Generally, this makes for a slow and potentially expensive business for families, who must apply to the Court for permission to undertake transactions.

How do they work?

Once an LPA has been made, it must be registered with the Office of the Public Guardian before attorneys can act, with a fee of £82 per LPA. Once registered, the LPA can be submitted to any institution, such as a bank or utility provider, under a financial LPA or to health or care professionals under a health & welfare LPA, enabling the institution to deal directly with the appointed attorneys.

An attorney under a health and welfare LPA can only decide on your behalf if you cannot decide for yourself.

In the case of financial affairs, once the LPA is registered, your attorneys will have the power to enter into any transaction unless you have specifically forbidden it, so they can deal with investments and write cheques. If you are mentally capable, the attorney should only do what you authorise them to do – for example, if you had physical issues that made it difficult to attend a meeting or sign documents. You instructed the attorney to act on your behalf. If you become mentally incapable and are no longer capable of authorising or consenting to the attorney’s decisions or actions, the attorney can make decisions and do things on your behalf. However, there is no cut-off point at which you are presumed to be incapable; capacity is decided on a decision-by-decision basis, and the attorney must do everything practicable to help you arrive at your own decision on every occasion.

Three steps to LPA confidence

  1. Choose attorneys carefully

    An attorney has far-reaching powers, and problems are likely to arise if they do not appreciate their role or if there are insufficient checks and balances in the process.

    Being granted authority may draw some attorneys into abuse of their position with intentionally fraudulent activity, but it is just as likely to be a misuse of power by family members, who justify their actions as being acceptable because they are making use of assets that will come to them in the end, or because they feel it is reasonable to have a financial contribution for what they do for their relative. Before appointing an attorney, think about how well they look after their own finances, how well you know them and how sure you are that they will make the right decisions for you. Even where an attorney acts with the best intentions to respond to the trust placed in them, if they are disorganised or indecisive, this can impact their ability to make good decisions, just as much as if they are self-serving.

  2. Make attorneys accountable

    You can appoint two attorneys and require that they are both involved in each decision, although that can complicate transactions. Another option is to appoint, alongside a family member or friend, a professional attorney whose job it would be to undertake regular checks on how matters are being handled. Alternatively, you can include a requirement within the LPA for the attorney to consult with a third party if a decision exceeds a given threshold or for specific assets. This would allow you to restrict the sale of property or investments without the input of a professional, for example. At the very least, a clause within the LPA appointing a third party to check whether attorneys act within the scope of their authority annually is a good idea. Even where there is no specific requirement within the LPA, the Office of the Public Guardian can ask an attorney to account for their dealings with any money they handle, and so attorneys should be advised to keep financial statements and receipts carefully.

  3. Give good guidance

    As well as careful selection and ongoing checks on attorneys, it is important that an attorney has guidance to help them understand their fiduciary and statutory responsibilities and how to satisfy them at the outset.

    They should appreciate how their role should be performed regarding the Mental Capacity Act 2005 Principles and Code of Practice, particularly in how they consult with the donor of the LPA and help the donor to make their own decisions, if possible. They should also be made aware that they must not benefit from their position or use money or property for their own benefit, whatever their relationship to the donor, and even where they imagine it would not pose a problem if the donor were not mentally incapable. Recognising that they may need to get expert advice, whether legal, financial or otherwise, is also important if they are to act within the reasonable standards of care and skill required by an LPA.

For further advice and information, contact James McMullan today.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

What lies beneath…

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Back in 2013, prompted by changes under the Land Registration Act 2002, some estate owners had their legal advisers trawl through their old deeds to identify and register certain interests which needed protecting.

In doing this, they uncovered evidence that title to some mines and minerals had been severed from the ownership of the surface land decades or even centuries earlier. While not all rights to mines and minerals needed protection by registration, estate owners applied to register them voluntarily anyway.

Prior to this, when a surface owner bought (as it thought) the whole of the land, it may not have known about such mines and mineral rights because many had not been registered at that time.

So, what’s the position if you own the surface property, someone else has the rights to the mines and minerals, and you want to carry out works beneath the surface, such as laying foundations?

Some of these interests limit mines and minerals to a certain depth. So, it may not be an issue if you don’t excavate to that depth. However, if you do, the owner could technically claim trespass, but they would need to establish that they had suffered some loss.

What if you’re buying a property and such interests beneath the surface are revealed? What’s the risk? And what can you do?

Mines and minerals don’t have to be anything valuable, and the Land Registry has been known to register titles where they formed the ordinary bedrock of the local area. These interests often cover vast areas of land. So, whilst such interests may exist, the commercial risk of anything happening with them could be low.

What remedies are open to me?

A mining search should be obtained, and generally, it will always be prudent to seek title indemnity insurance to cover the risk. Be wary of approaching the owner of a mineral to find out if it is prepared to sell its title, as this would likely result in unavailable insurance.

John Gillette has over 15 years of experience dealing in commercial real estate.

Note: This article is not legal advice; it provides information of general interest about current legal issues.

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