Insight Article Archives

Property Auctions: How a solicitor can be your key to success

Posted on January 19, 2024 - 5:43 pm by Penny Dewar

Property auction picture of a house under the gavel.

Auctions have become an increasingly popular and accessible method for buying and selling property. Auctions are being further encouraged by the growth of online property auction sites. It can be exhilarating and may enable a buyer to acquire a property below market value and often from the comfort of their home or office. Sellers admire the quick financial return and the instant commitment to a transaction. However, buying or selling a property at auction presents unique legal and practical issues.

You may often hear the phrase “buyer beware”, and when buying a property at auction, this phrase should be at the forefront of your mind. Purchasers should instruct a solicitor who can put them in the best possible position before the gavel strikes.

Similarly, sellers must proactively present and market their property to achieve the best possible sale price at auction. An astute seller will instruct a solicitor who can prepare a comprehensive and informative legal pack, making their property appealing to potential buyers.

Why buy or sell at auction?

For buyers and sellers, the speed of a property auction is desirable. Buyers have the additional bonus of picking up a potential bargain. However, property auctions are not for the fainthearted, and you should be aware of the potential pitfalls.

Solicitors as the gatekeeper

Property auctions occupy a unique space in the market. However, there are inherent risks associated with them. Solicitors can provide a layer of protection and mitigate the legal risks associated with property auctions. One of the most apparent risks is the limited time for due diligence as the auction process operates at a lightning pace.

A solicitor’s expertise is essential in navigating the due diligence process. Solicitors can thoroughly examine title documents and relevant planning consents, identify and potentially solve legal issues before they arise, and ensure that buyers and sellers are well-informed before entering the auction.

The documents

The documentation provided before the auction is known as the “legal pack” and is prepared by the seller’s solicitor. The legal pack is not standardised and can contain different degrees of disclosure. Most should include the necessary land registry documents, local searches and any special conditions relevant to the lot in question. However, not all do, and in certain circumstances, the pack may contain minimal information or be uploaded very late in the day. Therefore, sellers must instruct solicitors to assemble a complete yet accessible legal pack. Buyers must instruct solicitors to scrutinise the legal pack as soon as possible, particularly given the deadlines and expedited timeframes.

RIAA Barker Gillette (UK) acts for both buyers and sellers of auctioned property. Our auction legal packs are always comprehensive, giving sellers the best opportunity to achieve a sale. Buyers benefit from tailored legal advice and careful examination of the legal pack, empowering them to make informed strategic decisions.

Physical inspection

Unlike traditional property transactions, where buyers have more time to inspect and assess the property, buyers may not have sufficient time to conduct thorough physical inspections. Therefore, gathering as many supporting documents as possible is imperative to decide whether to proceed with the transaction.

Financial commitment

There is always an element of financial uncertainty when entering a property auction – particularly the purchase price. Property auctions will require bidders to commit financially by putting down a deposit on the day of the auction.

A solicitor will assist in navigating the fast-paced and high-pressure environment, avoiding potential post-purchase legal battles or financial losses.

Once committed, successful buyers will often be required to complete very quickly. The buyer must, therefore, establish a relationship with their solicitor in advance so that all legal compliance steps are completed in good time, preventing potential delays when the transaction is due to be completed.

Best practice

Buying or selling at auction can be thrilling and provides an expedited transaction, which is often appealing. However, buyers and sellers should take into account the potential risks involved. We recommend instructing a solicitor to position yourself for success as early as possible. An experienced property solicitor will put your aims and protection first – giving detailed consideration to all possible due diligence and legal complexities to ensure your sale or purchase at auction can proceed smoothly and securely.

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

Are your business’s legal documents up to date?

Posted on January 19, 2024 - 9:53 am by Penny Dewar

People taking corporate legal documents from shelves

Whether you’re a seasoned business owner or just starting your entrepreneurial journey, here’s a comprehensive guide to help you start the year in the right way by reviewing and updating your essential legal documents.

Contracts: A solid foundation

Contracts are the backbone of any business. Begin your legal document review by examining existing contracts. Your review should include client contracts, vendor agreements, employment contracts, and any other legally binding documents. Ensure that all terms and conditions are relevant and update them to reflect any changes in your business operations or legal requirements.

Employment policies: Keeping pace with regulations

Employment laws and regulations can undergo changes, necessitating updates to your employment policies and handbooks. Review your existing documents to ensure they align with the current legal landscape.

The New Year is an excellent time to incorporate any new policies or procedures necessary for your business’s smooth functioning.

Privacy policies and data protection: Adhering to standards

With the increasing emphasis on data protection and privacy, reviewing and updating your privacy policies is crucial. Ensure your practices comply with the latest data protection laws, such as the Data Protection Act 2018. Clearly outline how you collect, use, and store customer data and update your policies accordingly.

Intellectual property portfolio: Safeguarding your assets

Your intellectual property (IP) is a valuable asset. Review your IP portfolio, including trademarks, patents, and copyrights. Confirm that all registrations are up to date and that you have adequate protection for any new products or services your business may have introduced. Update your IP strategy as needed to align with your current business goals.

Corporate governance documents: Staying compliant

Corporate governance documents such as articles of association and shareholders’ agreements are fundamental for businesses structured as companies. You should review these documents to ensure they accurately reflect your company’s structure and operating procedures. If there have been changes in ownership or management, update these documents accordingly.

Regulatory compliance: A thorough examination

Industries evolve, and so do regulations. Regularly review your legal documents to ensure compliance with industry-specific regulations. Documents may include permits, licences, or certifications. Stay informed of changes in your industry’s regulatory landscape and update your documents accordingly to avoid legal complications.

Insurance policies: Mitigating risks

Insurance is a critical aspect of risk management. Review your existing insurance policies to ensure they provide adequate coverage for potential risks your business may face. Consider consulting with an insurance professional to assess whether your current coverage aligns with your business needs and any changes in your operations.

Conclusion

Starting the new year right involves more than just setting goals; it’s about ensuring the legal foundation of your business is strong and resilient.

By regularly reviewing and updating your legal documents, you stay compliant with the law, mitigate risks, and position your business for success in the year ahead.

For more information, please speak to our head of corporate and commercial, Victoria Holland, today to ensure that your legal documents are up to date and aligned with your business’s objectives.

Flexible payment terms for corporate reviews

Victoria and her team offer flexible payment terms for corporate reviews. Call Victoria today to find out how she can help you, or click here for more information.

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

Six Common Inheritance Tax Myths

Posted on December 20, 2023 - 4:26 pm by Penny Dewar

Inheritance tax planning is crucial to financial management, yet it is often shrouded in misconceptions and myths. As the New Year begins, it’s an opportune time to debunk these common misunderstandings and shed light on the realities of effective inheritance tax planning. In this article, we’ll address and dispel some of the prevalent myths surrounding inheritance tax, providing clarity for individuals and families seeking to secure their financial legacies.

Inheritance Tax Myth 1: Inheritance Tax Only Affects the Wealthy

One of the most pervasive myths is that inheritance tax only concerns the wealthy. In reality, the inheritance tax threshold applies to a broader range of estates. Understanding the current thresholds and exemptions is essential for effective tax planning, regardless of the size of your estate.

Inheritance Tax Myth 2: Giving Away Assets Automatically Reduces Inheritance Tax

While gifting assets can be a legitimate strategy for reducing inheritance tax, it’s not a one-size-fits-all solution. The timing and nature of gifts and the relationship between the giver and receiver can impact their tax implications. It’s crucial to seek professional advice to navigate the complexities of gifting and ensure compliance with tax regulations.

Inheritance Tax Myth 3: A Will Alone Is Sufficient for Inheritance Tax Planning

A well-crafted will is undoubtedly a cornerstone of inheritance tax planning, but it’s not the sole solution. Various strategies, such as trusts and lifetime gifts, can complement your will and enhance your overall tax planning. A comprehensive approach considering all available options is essential for maximising tax efficiency.

Inheritance Tax Myth 4: You Can Avoid Inheritance Entirely

While there are legal ways to minimise the impact of inheritance tax, avoiding it altogether is a misconception. Inheritance tax is a legitimate tax levied on the transfer of assets, and attempting to evade it through questionable means can lead to serious legal consequences. Focusing on lawful strategies to manage rather than eliminate the tax burden is essential.

Inheritance Tax Myth 5: Inheritance Tax Planning Is a One-Time Activity

it is best practice to view Inheritance tax planning as an ongoing process rather than a one-time event. Changes in personal circumstances, tax laws, and financial landscapes may necessitate adjustments to your inheritance tax strategy. Regular reviews and updates are critical to ensuring your plan remains effective and compliant with the latest regulations.

Inheritance Tax Myth 6: Inheritance Tax Planning Is Only About Property

While property is a significant consideration in inheritance tax planning, it’s not the sole focus. Other assets, such as investments, savings, and personal belongings, are also subject to inheritance tax. A holistic approach that considers all aspects of your estate is crucial for developing a comprehensive tax strategy.

Conclusion

As you embark on inheritance tax planning in the New Year, it’s essential to separate fact from fiction. Dispelling common inheritance tax myths allows for a more informed and practical approach to securing your financial legacy. Consult with legal and financial professionals to develop a personalised and legally sound inheritance tax plan that aligns with your unique circumstances and goals.

Bust those myths today with private client partner James McMullan and his team.

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

Charities, gifts and inheritance tax

Posted on December 14, 2023 - 6:19 pm by Penny Dewar

Inheritance tax may apply to your estate if your assets exceed the available thresholds. The maximum available threshold per person is currently £500,000. The individual threshold is broken down into two components, the general threshold (known as the nil rate band) being £325,000 together with an additional threshold (known as the residential nil rate band) of up to £175,000 for anyone leaving their home (or proceeds from the sale of their home on or after 8 July 2015) to their direct lineal descendants without restriction. These thresholds have been frozen until at least April 2028. There are also some restrictions or criteria which must be met in order to qualify for the residential nil rate band.

For married couples, on the death of the second spouse, the executors of the last spouse to die may be able to claim some or all of the first spouse’s unused thresholds, making potentially up to £1,000,000 free from inheritance tax passing to your children/grandchildren before tax is applied at 40 per cent to the balance of your estate.

Certain exemptions and reliefs are available to limit inheritance tax liability on your estate, and in this article, we will be focusing on gifts to charities.

Gifts made to qualifying charities during a person’s lifetime or on their death via their will are exempt from inheritance tax. A qualifying charity is one that is established for charitable purposes only, which satisfies jurisdiction, registration and management conditions, and is established in the European Union or other specified countries.

Since 6 April 2012, if someone leaves at least 10 per cent of their net estate to charity, their estate may qualify to pay inheritance tax at a reduced rate of 36 per cent. Gifts can be a cash sum, specific items, property, or the residue of someone’s estate. The gifts to the charities named in your will can pass tax-free, while the remainder of your estate passing to family and friends (non-exempt beneficiaries) will attract tax at this reduced rate. The net effect is that more of your estate can pass to charity, and less will go to HM Revenue & Customs.

In the Spring Budget, the Government restricted charitable tax reliefs so that from April 2024, charities in the European Union (EU) and the European Economic Area (EEA) will no longer qualify for charity tax relief, and the relief only applies to UK Charities and Community Amateur Sports Clubs. Clearly, the government policy behind this is that “charity begins at home”, as the saying goes.

If you have left legacies to charities in the EU or EEA in your Will, you should consider whether it will be necessary for you to update your Will to reflect the changes. This is especially important if you want to pay inheritance tax at a reduced rate.

There are many great charities in the UK doing some fantastic work in supporting worthy causes, and you can usually find a charity working in an area close to your heart, whether that is one that supports children, animals, cancer, homelessness or something not so mainstream. You can carry out a search for a registered charity here.

For the more wealthy, setting up their own charitable foundation has become more popular in recent years. Those interested in philanthropy and directing their wealth at a specific cause or concern will need legal assistance to help them set this up and get a structure in place. We can help with this…

Speak to private client solicitor James McMullan today.

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

Work-Life Balance: How you can support your employees

Posted on December 8, 2023 - 2:24 pm by Penny Dewar

green smiley face being held in a pair of hands showing work-life balance

Work-life balance is a concept that holds different meanings for different individuals. While some associate it with working fewer hours, others believe flexibility is key. However, the common thread is the desire for a balance that allows individuals to excel professionally and personally. Employers must understand the significance of work-life balance and their role in supporting employees to achieve it. This article will explore employees’ legal rights, the duty of care employers have, and strategies to promote work-life balance.

Understanding Employees’ Statutory Rights

Employees have certain statutory rights that employers must uphold to ensure a healthy work-life balance. These rights, outlined in the Working Time Regulations 1998, include rest periods, paid holiday entitlement, and limitations on working hours.

Rest Periods

To promote employee wellbeing, employers must allow their workers the following rest periods:

11 hours of uninterrupted rest per day.
24 hours of uninterrupted rest per week (or 48 hours per fortnight).
A rest break of 20 minutes when working more than six hours per day.

It is important to note that there are limited exemptions to these rights, and workers cannot contract out of them.

Paid Holiday Entitlement

Most employees who fall within the legal definition of a worker are entitled to 5.6 weeks (28 days) of paid holiday each year, pro-rated for part-time workers. This entitlement ensures employees can take time off and rejuvenate, contributing to a better work-life balance.

Limitations on Working Hours

To protect the health and safety of workers, employers must ensure that each employee’s average working time, including overtime and work with other employers, does not exceed 48 hours per week. While many employees opt out of this provision, conscientious employers should consider the legislation’s original intent – safeguarding workers’ wellbeing.

By adhering to these statutory rights, employers create an environment that promotes work-life balance and protects the health and safety of their employees.

The Employer’s Duty of Care

Employers have a duty of care towards their employees, extending to their health, safety, and overall wellbeing. This duty includes ensuring that employees are not working excessive hours, as research has linked long working hours and excessive workload to mental health issues such as stress, anxiety, and depression. Employers must recognise and address these concerns, as mental health conditions can be classified as disabilities.

When mental health conditions qualify as disabilities, employers may be required to make reasonable adjustments to support employees, such as reducing their hours or workload. Failure to make these adjustments can result in claims of disability discrimination and constructive dismissal. Employers also face the risk of accidents or further mental health issues arising from excessive working hours.

Ensuring healthy working practices helps fulfil legal obligations, enhances job satisfaction, increases employee productivity, and fosters a positive work environment.

By prioritising work-life balance, employers can build loyalty, improve employee retention, and contribute to the overall success of their organisation.

Strategies to Support Work-Life Balance

Employers can implement various strategies and practices to support employees in achieving a healthy work-life balance. Here are some examples:

Regular Communication and Workload Management

Regular communication with employees is essential to ensure that their workload is achievable and that they complete their tasks within a reasonable amount of time. Managers should engage in conversations to understand any additional support employees may require, which may contribute to a better work-life balance.

Monitoring working hours and team email flow can also help identify potential issues. Managers should be mindful of the times emails are being sent and have open discussions with their teams about working hours.

Flexible Working Arrangements

Implementing flexible working arrangements can significantly contribute to work-life balance. Employers can consider provisions such as:

Flexitime: Allowing employees to choose their start and finish times within defined core hours.
Remote Work: Enabling employees to work from home or other locations to accommodate personal needs.
Reduced Hours: Offering part-time options or job-sharing arrangements.
Compressed Work Week: Allowing employees to work longer hours over fewer days.

Employers empower employees to manage their work and personal responsibilities by providing flexibility.

Conclusion

Work-life balance is pivotal for wellbeing and productivity. Employers, bound by legal and ethical responsibility, must support employees. Upholding statutory rights, fulfilling the duty of care, and implementing balance-promoting strategies create a positive work environment. Prioritising work-life balance benefits individuals and contributes to organisational success.

Contact employment solicitor Karen Cole today.

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

Director responsibilities on resignation – do you know yours?

Posted on December 1, 2023 - 2:30 am by Penny Dewar

It was a defiant, headline-grabbing move that may inspire other discontents looking to speak out against their bosses. But the path for a dissatisfied cabinet minister may not translate into the corporate world so easily.

While resignation may mean general duties no longer bind a company director, their corporate responsibility can continue long after stepping down from the board.

Under the Insolvency Act 1986, if a director has allowed a company to continue trading when there is no reasonable prospect of avoiding insolvency, they could be personally liable, even after resigning.

Similarly, a director who has acted negligently, fraudulently, or in breach of their duties during their time may be held personally liable for any losses later incurred by the company.

Neither will resignation be any protection if a conflict of interest arises through the use of any property, information or opportunity gained during a time as director. And if a director has made personal guarantees to secure company loans or debts. In that case, these remain binding, regardless of whether they have resigned.

Importantly, directors looking to resign must ensure that the company’s finances and other corporate responsibilities are well managed to minimise any risk of personal liability later on. Compliance with the Companies Act 2006 requires directors to exercise reasonable care.

Partner and head of our company and commercial team, Victoria Holland, said:

“Even where a director leaves the business in a position of financial stability, if the company were later to become insolvent, then any director who served during the three years running up to the insolvency could be subject to investigation.

“The impact of this could be far-reaching. For example, where a director has played a role in the company’s difficulties in those three years, they could be disqualified from being a director for up to fifteen years, which could prevent them from continuing in any subsequent role as a director.”

Partner and head of our employment team, Karen Cole, added:

“For an MP, the resignation or dismissal may be very high profile, but it’s effectively a clean break. For a director, it’s important to be sure that any resignation takes account of the whole picture and they ensure that financial management and other corporate responsibilities are all in good order before they sign the exit paperwork, if they want to minimise any future risk of personal liability.”

For employment advice and corporate queries, contact Karen Cole or Victoria Holland today.

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

Can you obtain an Emergency Power of Attorney?

Posted on November 16, 2023 - 2:10 pm by Penny Dewar

the words estate planning spelled out in letters for our court of protection article

Accidents and illness can strike at any time, not just later in life, and at times, this can result in an individual losing mental capacity and the ability to make their own decisions. In such cases, the UK’s Court of Protection steps in to protect the interests of these vulnerable individuals and make important legal decisions on their behalf.

In this comprehensive guide, we will explore the role of the Court of Protection, the appointment of deputies, the concept of mental capacity, and the process of making legal decisions.

Understanding the Court of Protection

What is the Court of Protection?

When circumstances lead to individuals losing the mental capacity to make their own decisions, the Court of Protection comes into play. The Court of Protection is a specialist court in England and Wales which safeguards the interests of vulnerable individuals who cannot make decisions about their finances, compensation, health, and welfare. It was established under the Mental Capacity Act 2005 and has the authority to make crucial decisions for these protected individuals.

The Powers of the Court of Protection

The scope of the Court of Protection’s powers is extensive. They cover various aspects of decision-making and the protection of vulnerable individuals. Some of the critical roles of the Court of Protection include:

Assessing an individual’s mental capacity to make decisions
Appointing Deputies to act on behalf of protected persons
Granting permission for one-off decisions on behalf of protected persons
Making decisions regarding statutory wills or gifts
Determining cases involving deprivation of liberty under the Mental Capacity Act 2005

Mental Capacity and Its Implications

Defining Mental Capacity

Mental capacity refers to an individual’s ability to make sound decisions about not just their everyday life but also about life-changing matters while understanding the implications of those decisions at the time. According to the Mental Capacity Act 2005, a person lacks mental capacity if they cannot make decisions “because of an impairment of, or a disturbance in the functioning of, the mind or brain.” Therefore, under the Act, if a person cannot understand information, use it to reach a decision, or communicate their decision, they are considered to lack mental capacity.

Reasons for Lack of Mental Capacity

There are various reasons why someone may lack mental capacity, including old age and dementia, extensive learning difficulties, serious illness, and personal injuries. Serious injuries, especially those affecting the head or brain, can lead to a loss of mental capacity. In such cases, the Court of Protection may appoint a Deputy to decide on behalf of the individual during legal proceedings or following a compensation payout. The lack of mental capacity can be temporary or permanent.

The Appointment of Deputies

What is a Deputy?

The Court of Protection can formally appoint an individual as a Deputy to make decisions on behalf of a protected person. A Deputy acts as the legal representative for the protected person and carries out their responsibilities under the Court’s Deputyship Order and the Mental Capacity Act 2005.

Deputies can be close relatives, such as spouses or parents, or professionals, such as solicitors (like RIAA Barker Gillette or a court-appointed panel deputy).

The role of a Deputy is crucial in managing the financial and welfare affairs of the protected person.

Types of Deputy Applications

There are two main types of Deputy applications: property and financial Deputies and health and welfare Deputies. Property and financial Deputies handle matters related to financial decisions, such as selling or buying property, claiming benefits, and meeting all other aspects of the protected person’s financial needs. Health and welfare Deputies decide where the person lives, their daily care, medical treatment, and care arrangements. The Court of Protection specifies the scope of a Deputy’s authority in the Deputyship Order.

The majority of Court of Protection applications relate to property and financial affairs. Generally, the Court considers healthcare professionals best placed to make decisions on behalf of a protected person. Therefore, a health and welfare Deputy is usually only appointed to decide about a specific issue or a series of linked welfare decisions.

Roles and Responsibilities of a Deputy

Once appointed, a Deputy has a range of responsibilities and duties to fulfil. Some of the critical roles and responsibilities of a Deputy include:

making financial decisions and managing the protected person’s property and financial affairs;
ensuring the protected person’s financial needs are met, including paying bills and providing for dependents;
making decisions regarding the protected person’s health and welfare, including care arrangements and consent to medical treatment;
regularly assessing the protected person’s mental capacity to make decisions; and
seeking the Court’s approval for decisions outside the scope of the Deputyship Order.

Decision-Making Process in the Court of Protection

Court of Protection Mental Capacity Assessment

One of the primary functions of the Court of Protection is to determine whether an individual has the mental capacity to make specific decisions. This assessment is crucial in establishing whether a person can make decisions independently or requires the assistance of a Deputy. The Court follows the Mental Capacity Act 2005’s guidelines to assess individuals’ capacity and make decisions in their best interests.

As part of any application to the Court of Protection, you must have and submit a medical practitioner’s or social care professional’s report to support your Deputyship application.

Court of Protection Statutory Wills

In cases where an individual lacks the mental capacity to make a Will or to amend their existing Will, the Court of Protection can make a Will on the protected person’s behalf, known as making a Statutory Will.

You can apply to the Court of Protection with a draft Will and ask for the Court’s authorisation for a third party to sign the protected person’s Will on their behalf. Where possible, the Court of Protection will consider evidence of the protected person’s past and present wishes and feelings and whether making the Will would be appropriate and in the protected person’s best interest. The Court considers each application on a case-by-case basis. The application is not straightforward, and you will need to serve notice of the application to all parties that may be affected.

Making gifts

A Deputy cannot make gifts on the protected person’s behalf without specific permission from the Court of Protection.

It is possible to ask the Court of Protection for permission to allow the Deputy to make gifts on behalf of the protected person if the Deputy can show that the gifting is in the protected person’s best interest and that it is something they would have considered doing if they did not lack the necessary capacity.

Deprivation of Liberty under the Mental Capacity Act 2005

An individual’s liberty can be taken away in certain circumstances, usually as a last resort. The Court of Protection has the authority to decide on the deprivation of liberty. For example, the Court may limit an individual’s freedom by preventing them from moving freely without supervision, either in their own home or a care home. You must apply to the Court of Protection if it is necessary to deprive an individual of their liberty for their safety or the safety of others. The Court will carefully assess the circumstances and determine whether the deprivation of liberty is in the individual’s best interests.

The Importance of a Lasting Power of Attorney

Planning for the Future with a Lasting Power of Attorney

To avoid the Court of Protection intervening in the event of a loss of mental capacity, individuals can set up a Lasting Power of Attorney (LPA). An LPA allows individuals to choose someone that they trust to make decisions on their behalf if they cannot in the future. By appointing an attorney through an LPA, individuals can protect their best interests and ultimately control who decides matters for them. While you retain mental capacity, you can discuss and relay your wishes to your attorneys.

The Benefits and Limitations of Lasting Powers of Attorney

Having an LPA provides peace of mind and security in knowing that you chose the person to make decisions on your behalf. Creating and registering an LPA is less costly and time-consuming than involving the Court of Protection, and it streamlines the decision-making process. However, it is essential to note that LPAs have their limitations, such as the need for mental capacity at the time of creation and the potential for abuse if the appointed attorney does not act in the individual’s best interests.

A well-drafted LPA can include bespoke safeguarding provisions which allow you to limit or extend the powers you confer on your attorneys.

The Court of Protection and Compensation Claims

Involvement of the Court of Protection in Personal Injury Claims

In cases where an accident results in a person losing mental capacity and they wish to pursue a personal injury claim, the Court of Protection becomes involved. The Court may appoint a Deputy to act on behalf of the injured person during the legal proceedings or after awarding the compensation. The Deputy becomes the point of contact for the personal injury solicitor and ensures that the compensation is managed appropriately in the protected person’s best interests.

Role of Deputies in Compensation Claims

Deputies play a crucial role in compensation claims by ensuring they meet the protected person’s financial and welfare needs. They may assist in securing compensation on behalf of the protected person and make decisions regarding the funds’ use. In cases where a protected person lacks the mental capacity to manage their finances, the Deputy may set up a personal injury trust to protect the compensation from being means-tested and accessed incorrectly.

Setting Up a Personal Injury Trust

When a personal injury compensation award needs to be protected, a Deputy can establish a personal injury trust. A personal injury trust ensures the compensation is ring-fenced and not considered for means-tested benefits or care assessments. It provides a safeguard for the protected person’s financial future. It allows them to benefit from the compensation without affecting their eligibility for support.

Applying for Court of Protection Assistance

How to Apply to the Court of Protection

If an individual requires assistance from the Court of Protection, the proposed Deputies must follow various steps to make an application. They can apply online through the official government website or by contacting the Court of Protection directly. It is essential to provide all relevant information and supporting documentation to support the application and ensure that the Court comprehensively understands the situation.

If you are missing any relevant information or documents, the Court of Protection may make an interim order to allow you permission to request further information from the appropriate third parties.

You should seek advice from solicitors or legal professionals to avoid unnecessary delays with your application.

Short-term and Long-term Help

The Court of Protection can offer short-term and long-term assistance depending on the individual’s circumstances. Short-term help may involve appointing a Deputy for a specific decision or a limited period to make decisions on behalf of the protected person, such as managing their finances while they cannot. Long-term help may involve appointing a Deputy for ongoing decision-making, covering financial and welfare matters, when the protected person lacks the mental capacity to make these decisions themselves.

Frequently Asked Questions

Who can Become a Deputy?

Anyone over the age of 18 can become a Deputy. However, the Court of Protection prefers to appoint family members or close friends who have a personal connection to the protected person. But, there may be reasons why the Court of Protection cannot appoint such relatives or friends. When applying to become a Deputy, you must undertake any duties and responsibilities at the standard the Court expects.

If no suitable family member is available, it is possible for a professional, such as a solicitor or accountant, to be appointed as a Deputy. The critical consideration is that the appointed Deputy acts in the protected person’s best interests and has the necessary skills and knowledge to fulfil the role.

Can Multiple Deputies be Appointed?

Yes, the Court of Protection allows for the appointment of multiple Deputies. They can act jointly, meaning all Deputies must agree on decisions, or jointly and severally, meaning Deputies can make decisions individually or together. However, the Court generally discourages appointing more than three individuals as Deputies to avoid complexities, increased costs, and potential delays. Having multiple deputies allows for the burden to be shared between the Deputies so that they are more manageable.

What are the Limitations of a Deputy’s Powers?

Deputies have certain limitations on their powers. For example, they cannot make decisions regarding life-sustaining treatment, create or amend a will, or make significant gifts using the protected person’s money. Deputies cannot hold money or property in their own name on behalf of the protected person. Any decisions made by the Deputy must be in the protected person’s best interests and aligned with the Mental Capacity Act 2005 principles. You may need to return to the Court of Protection to seek further authority to manage the protected person’s affairs.

Expert Advice and Support

Seeking Legal Guidance and Support

Navigating the Court of Protection process and understanding the legal implications can be complex. It is essential to seek legal guidance and support from experienced professionals specialising in Court of Protection matters. Solicitors and legal advisors can provide personalised advice, assist with applications, and ensure compliance with the relevant laws and regulations. They can also help address any concerns or disputes related to decision-making. Our private client team can support and guide you through the process.

Conclusion

Without a valid Lasting Power of Attorney in place, when accidents result in individuals losing their mental capacity, the Court of Protection plays a vital role in protecting the person’s interests and making decisions on their behalf. With the appointment of Deputies and the involvement of the Court, vulnerable individuals can receive the necessary support and guidance to manage their finances, welfare, and legal matters. Planning for the future with tools like Lasting Power of Attorney can also give individuals a sense of control and peace of mind. Seeking expert advice and support is crucial to effectively navigating the Court of Protection process and ensuring the best outcomes for those in need.

Speak to James McMullan today if you have any questions or want to discuss making Lasting Powers of Attorney or a Deputyship application to the Court of Protection.

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

Directors must understand the implications of AI

Posted on November 9, 2023 - 11:44 am by Penny Dewar

AI Regulation - the UK's approach - picture to go with article. Picture of a man at a computer with overlaid images.

As businesses increasingly turn to AI-driven solutions, the dynamics of decision-making, risk management and strategic planning have undergone a profound evolution. Directors must navigate the demanding interplay between technology and corporate governance to steer their companies towards a successful and ethically sound future in the AI-influenced corporate world.

Understanding AI impact

Strategic decision-making

Directors need to grasp how artificial intelligence affects the company’s strategic decisions. This includes understanding how it can optimise processes, enhance product development and improve customer experiences. Without this knowledge, they might miss out on innovative opportunities it can provide.

Ethical considerations

AI applications often involve complex ethical considerations, including issues related to bias in algorithms, data privacy and the impact of AI on society. Awareness of these ethical concerns is essential to ensure the company’s AI initiatives align with ethical standards and public expectations.

Risk assessment

AI implementation introduces its own set of risks, such as cybersecurity threats and legal challenges. Directors must be well-versed in these risks to make informed decisions about its adoption, develop risk mitigation strategies, and ensure the company operates within legal boundaries.

Compliance and regulation

The legal landscape surrounding AI is continually evolving. Directors need to understand the regulatory requirements related to AI applications in the jurisdictions where the company operates. Compliance with these regulations is a legal obligation and a crucial aspect of maintaining the company’s reputation and customer trust.

Financial implications

AI implementation involves significant financial investments. Directors must understand the financial implications, including the costs of implementing AI solutions, potential return on investment, and long-term financial sustainability. This understanding is essential for budgeting, financial planning, and resource allocation.

Stakeholder expectations

Shareholders, customers, employees, and other stakeholders may have varying expectations and concerns regarding AI. Directors must be aware of these expectations to address concerns transparently and align initiatives with stakeholder interests.

Overseeing Implementation and Use

In terms of oversight and use, the scrutiny applied to AI should mirror the rigorous approach directors take towards other critical aspects of the business, such as management, compliance, risk, and disclosure:

Transparency and accountability

Directors must ensure transparency in AI-related decision-making processes. Transparency fosters accountability, which is essential for building trust among stakeholders.

Regular assessment

AI initiatives should be regularly assessed and evaluated, just like other aspects of the business. Directors should demand comprehensive reports on performance, risks and compliance to make data-driven decisions and adjust strategies as needed.

Continuous learning

The field of artificial intelligence is rapidly evolving. Directors must continuously learn to stay abreast of the latest advancements, emerging trends and best practices. This knowledge equips them to make informed decisions and guide the company toward sustainable adoption.

By ensuring that their understanding of AI’s impact is comprehensive and their oversight approach is thorough, directors can effectively navigate the challenges and harness the opportunities and plethora of ever-increasing benefits presented by artificial intelligence.

Contact corporate partner Victoria Holland today.

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

Overzealous employee monitoring may overstep data protection boundaries

Posted on November 8, 2023 - 6:32 pm by Penny Dewar

Employee monitoring lady's hands at a keyboard

Can employers monitor employees?

You can monitor employees if you do it in a way which is consistent with data protection law.

Data protection law does not prevent employers from monitoring employees. Instead, it requires employers to do so in compliance with existing data protection laws. Equally important is the Human Rights Act 1998, which concerns a person’s right to respect for private and family life. With the rise of homeworking and increased employer monitoring, this right is becoming increasingly important and relevant. An employee’s expectation of privacy is likely to be significantly higher when working at home. Yet, the risk of recording private information increases the more employees work from home. Employers must balance employee’s rights and freedoms against their business interests.

Impact of remote/hybrid working

Electronic monitoring of employees has risen in tandem with the rise in home working triggered by the Covid-19 pandemic. While the number working from home has dropped from its peak of 49% during the 2020 lockdowns, most recent figures from the Office of National Statistics show that around 40% of working adults still work from home at least some of the time.

Before the pandemic, the figure was around 12.5%, and the dramatic shift has driven businesses and organisations into uncharted territory to manage their workforce. Many have addressed the challenge by increasing electronic monitoring to tackle any loosening of control.

New research from the Information Commissioner’s Office (ICO), which oversees and regulates data protection and freedom of information in the UK, found that 19% of those surveyed believe an employer has monitored them.

Asked how they felt about being monitored, 70% of those surveyed by the ICO said it was intrusive. Only 19% were comfortable taking a new job where an employer would monitor their activity.

This discomfort echoes findings by the Trades Union Congress (TUC) in 2022, which found significant and growing support amongst workers for stronger regulation of AI and tech-driven workplace surveillance, with more than 70% saying they believed technology-informed decision-making could increase unfair treatment. The TUC research found some sectors reporting very high levels of surveillance, for instance, more than 70% across the financial industry and the wholesale and retail sectors.

Employment solicitor Karen Cole explains:

“Developments in software have made a range of options available to employers, making it all too easy to implement a form of monitoring, whether to check if people start work on time or to monitor activity – such as through the number of keystrokes made. However, employers should not take that ease of monitoring for granted. Any monitoring has to comply with data protection law.

There’s also the potential breakdown in trust and reputational damage that may come through implementing what employees may consider to be a surveillance culture.”

Karen added:

“Any surveillance must measure up against at least one of these criteria. However, it may be tricky in some situations because of the imbalance in an employer/employee relationship. In some circumstances, employees may feel they are risking their jobs if they dispute a planned form of monitoring.

The best approach is to ensure that any action is legal and that employees know what is happening and have a sense of trust. It’s too easy for surveillance to feel like an invasion of privacy, whether or not it passes the legal test. Policies must also be regularly reviewed and updated to align with technological advancement.”

Six situations where employee monitoring is allowed

Consent
Contract
Legal obligation
Vital interests
Public tasks
Legitimate interests

To support organisations in ensuring that any employee monitoring is lawful, transparent and fair, the ICO has issued guidance for employers, which highlights some of the key considerations:

Making employees aware of the nature, extent and reasons for monitoring.
Having a clearly defined purpose and using the least intrusive means to achieve it.
Having a lawful basis for processing employees’ data – such as consent or legal obligation.
Telling employees about any monitoring in a way that is easy to understand.
Only keeping the information which is relevant to its purpose.
Carrying out a Data Protection Impact Assessment (DPIA) for any monitoring likely to result in a high risk to the rights of employees.
Making the personal information collected through monitoring available to employees if they make a Subject Access Request (SAR).

The privacy watchdog has also warned employers, saying they will take action against employers if they threaten people’s privacy.

What is a Data Protection Impact Assessment (DPIA)?

DPIAs are a formal procedure through which an organisation can assess the impact of data processing activities and protect personal data. Under the Data Protection Act 2018, you must carry out a DPIA when processing personal data is “likely to result in a high risk to the rights and freedoms of natural persons.”

Even if not legally required, completing a DPIA helps you identify and minimise the risks of any monitoring activity you plan. The DPIA process includes a step to discuss your plans to introduce monitoring with employees. This step will help to shape your plans and build trust with your employees.

Speak to us today for practical guidance on this complicated area of law. We can help ensure your business complies with data protection obligations and minimise the risk of claims from disgruntled employees.

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

Legal considerations for launching a charity business

Posted on October 31, 2023 - 1:32 pm by Penny Dewar

Understanding charities

Charities are organisations focused on benefiting others rather than personal gain. The UK has over 160,000 registered charities, all defined by the Charity Commission as altruistic entities. Charities often arise to address unmet needs, and often, they emerge from personal experiences or community projects. While major charities get attention, smaller ones can also significantly impact communities.

Charity vs. business

Charities solely serve their charitable purposes, unlike businesses that mix charitable and non-charitable activities. To generate profits through a charity business, consider social enterprises or Community Interest Companies.

Fundraising

Starting a charity requires dedication and sustainable funding. While government grants are common, competition is tough. Relying solely on grants may not be viable. Diversifying funding sources like using the National Lottery grants and creating a solid charity business plan are crucial if you want your charity to have a lasting impact.

A well-crafted business plan guides a charity’s operations and understands beneficiaries’ needs. Thorough research into your business plan will help you secure funding, as most applications require a comprehensive plan.

Rules and regulations

Once your charity generates more than £5,000 in revenue, it becomes mandatory to register with the Charity Commission. Registration is a rigorous process, and registered charities must comply with a set of standards outlined by the commission. Before registering, your charity must establish a robust charity structure, which typically involves adopting a governing document and appointing trustees.

Four common charity structures

Unincorporated associations: Suitable for small charities that do not anticipate exceeding a certain revenue threshold. However, trustees of unincorporated associations bear personal liability for the charity’s activities, and this structure lacks a separate legal status.

Trusts: Appropriate for charities that already possess funds they wish to contribute to a charitable cause. Trusts also lack a separate legal status.

Charitable incorporated organisations: Charitable incorporated organisations are a relatively new legal structure for charities that combine the benefits of limited liability companies with the simplicity of registering with the Charity Commission.

Charitable companies: Operate similarly to private companies limited by guarantee, providing the flexibility to employ staff, own property, and engage in various business activities. This structure protects personal finances and assets, as the charity possesses its own legal identity. Additionally, charitable companies must register with Companies House.

Choosing the right charity structure

Selecting the appropriate charity structure for your organisation is a critical decision that impacts various aspects of its operations. Factors to consider include who will run the charity, how it will be governed, and the range of activities it can undertake. Each structure has its advantages and disadvantages, and it is essential to assess your specific needs and objectives before making a choice.

Unincorporated associations are suitable for small charities with limited resources. At the same time, trusts are ideal for those with existing funds to contribute. Charitable incorporated organisations offer the benefits of limited liability companies without the administrative complexity. In contrast, charitable companies provide flexibility in employing staff, owning property, and conducting business activities. You should carefully evaluate your requirements and, if necessary, consult legal professionals to determine the most suitable structure for your charity.

Converting a limited company to a charity

If you currently operate a registered limited company and wish to transition it into a registered charity limited by guarantee, it is possible to change your Articles of Association rather than initiate the process of starting a new charity. This option allows you to leverage the existing structure and resources of your company while aligning its activities with charitable purposes.

By amending your Articles of Association, you can reflect the new charitable direction of your organisation and ensure compliance with charity regulations. Working with legal professionals or utilising online resources can guide you through converting your limited company into a registered charity, enabling a seamless transition while maintaining continuity.

Conclusion

Establishing a charity represents an opportunity to make a lasting impact on society and contribute to causes that align with your values. While the process can be complex, understanding the legal considerations and following the necessary steps outlined in this guide will help you navigate the path to successfully launching your own charity in the UK. By conducting thorough research, crafting a comprehensive charity business plan, and selecting the appropriate structure, you can set the foundation for a sustainable and impactful charitable organisation. Remember, seeking advice and professional support throughout the process can provide valuable insights and ensure compliance with legal requirements, allowing you to focus on making a meaningful difference in the lives of others.

Contact corporate partner Victoria Holland today.

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

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