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Author: Wellers

Home Improvement Contracts and Building works – ‘Good foundations’

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During the last year many of us have spent more time at home than ever before due to Covid-19 restrictions. Some of us have used this time as an opportunity to carry out home improvements and minor building works. Between the aftermath of Brexit and the pandemic, we have seen the inflation rise significantly and specifically an increase in the price of building materials and delays to their supply.. These unpredictable events can cause real problems for both the trader and the home-owner/customer and can lead to expensive disputes and disgruntled parties. In response to an increase in these types of enquiries, we have provided some useful tips for consumers. Traders stand to benefit from these tips too. Knowing what is important to your customer and reflecting this in your dealings could instill more consumer confidence in your business and secure more  contracts.

Top Tips to avoid disputes

It seems obvious, but many of us do not spend enough time preparing for the intended home improvement project and as a result, we run into difficulty later. Before engaging a contractor or tradesperson to undertake work, we recommend you consider the following steps:

Do your Research

  • Check the identity of your tradespersons/contractors to confirm whom you are actually contracting with. Are they individual sole traders, partners or a limited company?
  • Check the trading address for the contractors to see if it is a post box or an actual address. You may be able to do this online or using an app.
  • Check the company’s financial status at Companies House to see whether there is likely to be any risk of the company being struck-off or going into liquidation in the future.
  • Search for online reviews from trustworthy sources.
  • Check the trader’s website, paperwork and vehicle to see if it is licensed and/or holds a current registration/ membership of a relevant Trade Association or Affiliation. Check it holds the relevant qualifications for the work. Members will usually have to comply with the organisation’s code of conduct and a breach of that code by the member could result in the member being penalised or even removed. The organisation will have its own redress scheme that may assist you in resolving any dispute. It is not unusual to find opportunists falsely using emblems associated with trade organisations, so it is important to check the membership to satisfy yourself that all is legitimate.
  • Ask to view examples of work. Many reputable traders arrange for customers to display their signage for marketing purposes and provide a cost incentive to the customer so potential customers can view the work carried out.
  • Check if the contractor has insurance backed cover to protect you in the event any accidents and/or damage arise during the works.

Quotations or Estimate

  • If you want the certainty of knowing what price you will have to pay, then you must ask for a ‘quotation’. This will be a fixed price for the work requested. Be sure to get this in writing and check if it has an expiry date.
  • An estimate is a rough indication of the likely costs to be charged and may vary.
  • Try to get at least three different quotes or estimates for comparison.

How are you intending to Fund the works?

  • If you are taking out a finance agreement to buy new windows or a new kitchen and/or to pay for the installation works, you may find that you have a contract with the finance company and not the trader. This will depend on the type of finance agreement you take out. Ask questions and read any financial information provided to you thoroughly to ensure that you understand what you are agreeing to, before signing on the dotted line.
  • Check whether you have a time-limit and/or a right to cancel the agreement.
  • If the main contract for services is conditional on you obtaining finance, then you need to make provision to withdraw from any main contract if it transpires that you cannot get the funding. Check whether any cancellation rights exist.
  • If you make a payment by credit or debit card, depending on the contract value, you might have added protection.

Payments

  • Check if you need to pay a deposit and if this is refundable.
  • Consider making staged payment so you only pay out an amount reflective of the actual stage of the works.
  • Consider having a retention clause in the contract to allow you to hold back a percentage (usually 5%) until the works are completed.

Contractor’s Standard Terms of Business

  • Read the full terms and conditions in the contractor’s standard Terms of Business. If the terms do not meet your needs, then consider making agreed amendments to the relevant terms and document these.
  • A Trader is obliged by UK law to comply with consumer protection law. Check that the clause dealing with the applicable law and jurisdiction provides that the Law of England and Wales applies.
  • Notice of your cancellation rights should be referred to in the Terms of Business. Your right to withdraw from a contract will differ depending on when and where you entered the contract.

Prepare a written contract and outline the key terms

  • It is so important to be clear what the expectations are from each party and it is even more important to document these in a written agreement so that the parties can refer back to the document to decipher what they have agreed to do at various points in the contract. Having a well-drafted contract will avoid confusion and provide certainty for all concerned. It could save money and avoid you having to pay thousands of pounds in litigation.
  • Key terms should make provision for most eventualities. At the very least, the contract should address and identify the following :
  • full names and contact details of the contracting parties;
  • a relevant point of contact;
  • a description of the works and where necessary, attach a Schedule of Works and Materials: confirm the start/finish dates and working hours;
  • identify who is responsible for sourcing and delivering the materials and if any planning or other services such as architectural designs or structural surveys are required, specify who is responsible for obtaining and paying for that;
  • outline the price of the works and when and how payment is to be made;
  • when and how variations are to dealt with;
  • identify the VAT position and outline the complaints procedure.

Our solicitors at Wellers Law Group can assist in drafting bespoke contracts to suit the particular needs of the contracting parties. They can also provide specialist advice on consumer related contracts including home improvement contracts and residential building disputes. They advise both traders and consumers on issues that arise in this specialist area of the law. Realistically, employing a solicitor may not appear to make financial sense unless it is a major project but more often than not, seeking legal advice at the earliest opportunity could be money well spent for your own peace of mind.

If you are in any doubt as to your legal rights or obligations, we strongly advise you to seek legal advice at the earliest opportunity. If you would like to speak to our Consumer Specialist Patricia Wollington in our London office please call on 020 7481 2422 or email patricia.wollington@wellerslawgroup.com.

Power of Attorney and managed investments – why it pays to get professional help

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Since being introduced in 2007 it has become apparent that the Lasting Power of Attorney (Successor to the Enduring Power of Attorney) is an important document to assist in the management of an individual’s financial affairs and medical needs.

However, a part of the Lasting Power of Attorney (LPA) that is often overlooked is Section 7: Preferences and Instructions.  Using this section, the Donor of the power can communicate to their Attorneys details of things they would like them to do, i.e. preferences, or things they must do, i.e. instructions.  By way of an example, a preference may be that the Donor wishes to remain at home and receive domiciliary care; this is something that they would like to happen, but which may not be achievable if their care needs are very severe.  An instruction may be that the Attorney must prepare a set of accounts annually; this is something that an Attorney can do, and will be in breach of their duties if they fail to do so.

Some care must be taken when wording Preferences and Instructions.  If the Office of the Public Guardian feels that the directions given are too restrictive or incompatible with the powers granted by the LPA, they may refuse to register the document until the problematic clause has been removed.

Managing investments

One particularly common instruction, and one that is essential for any Property and Affairs LPA, is the clause that allows Attorneys to invest the Donor’s assets with a discretionary fund manager, or to continue where such an arrangement is already in place, as opposed to investments that would be managed by the Attorney personally.

It is usual for funds to be invested such a scheme, allowing an Independent Financial Adviser to act quickly on behalf of an investor to buy or sell shares subject to the whims of the market.  However, as this would essentially represent an Attorney delegating their powers, the LPA does not authorise investment in this type of arrangement without additional wording.  Where this wording does not appear, it may be that the fund manager will not accept the LPA, and an Attorney does not have the full range of powers available to ensure that they are able to act in the Donor’s best interests and secure the best return on their investments. This could be critical if there is a downturn in the stock markets or investment trends, which potentially offer greater returns start to evolve and you find yourself powerless to act. In particular, it is quite likely that the risk level selected for a person’s investment portfolios might need to change or at least be reviewed once they reach the point of not having capacity.

A Donor should be mindful of this and review their LPAs to ensure that they are fit for purpose; if amendments need to be made it will be far easier to achieve this while the Donor has mental capacity, and before the LPA is needed.

These hidden aspects of preparing a Lasting Power of Attorney can easily catch out those who are not aware and is one of the reasons why it pays to have LPAs prepared by a qualified lawyer.

Please call us on 020 8464 4242 for our Bromley office or 020 7481 2422 for our London office to talk to a qualified professional who can help you with your Powers of Attorney.

Buying property together and the importance of clearly identifying beneficial ownership

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Whether you are partners buying your first home together or investing with family and friends in the purchase of a property, it is incredibly important that you identify how you intend to own the property from the outset. Normally, you will be asked to complete a form known as ‘TR1’. This is the transfer deed and within it, is contained a declaration of trust which identifies how the purchasers intend to own the property. Purchasers can elect to own the property jointly or as tenants in common in equal or unequal shares.

Caught up in the excitement of the transaction, purchasers can simply tick a box without understanding or giving due consideration to what they are actually ticking and agreeing.

The transfer deed will be the starting point for identifying the purchasers’ intended beneficial ownership. If either party seeks to argue otherwise, he or she will have to produce strong evidence to convince the court that what they had stated in that deed was not their true intention.

In the recent Court of Appeal case of ‘Ralph v Ralph’, Mr David Ralph (father) failed to obtain an order for rectification of a transfer deed based on common mistake.

The facts

In October 2000, David was unable to get a mortgage to buy a property and he asked his son, Dean Ralph, to assist him. Dean obtained a mortgage against the property and David paid the balance of the purchase price. The property was transferred into their joint names and box 11 of the TR1 form which deals with declarations of trust, had been ticked to indicate that the purchasers intended to own the property as tenants in common in equal shares. The TR1 form was only signed by the transferors.

The Court of Appeal considered the findings of the lower courts and found that they had been incorrect to allow the TR1 to be rectified but they accepted that the trial judge had found on the facts that there had not been a continuing common interest as to the split in the beneficial ownership of the property.

The Court of Appeal acknowledged that, since the parties had not discussed their intentions at all,  rectification was not possible. For rectification to be available, the parties’ needed to have discussed their intentions at the very least.  In the absence of any discussion as to intention, the Court could not order rectification for common mistake.

Points to note

A party seeking rectification of a document based on common mistake needs to prove that a common intention existed between the parties for a mistake to have occurred. If the party is unable to demonstrate common intention, then the court cannot rectify the document.

This case illustrates why joint purchasers need to discuss and identify how they intend to share their beneficial interest in the property before completing the TR1 form. It is also good practice for conveyancing solicitors to check that the purchasers have understood the significance of the TR1 form and have signed it.

Upon the death or insolvency of a joint owner or following the breakdown in a relationship, many clients find themselves in protracted litigation seeking to prove their beneficial interest in a property. The solicitor instructed to advise on the purported claim to beneficial ownership, will always consider the prospects of any claim by referring back to the conveyancing file and the declaration of trust specified in the TR1. What they find will often mean the difference between a strong or weak claim.

If you need assistance

Whether or not you intend to sell your property soon or in the future, it is worth checking how and if your interests in a property have been recorded. It is better to fix any problems now by having a new declaration of trust drawn up rather than wait for a dispute to arise. If you find yourself in dispute about your interests in a property  and  you require legal advice or guidance in either bringing or defending a claim, please contact Patricia Wollington in our London litigation team on 020 7481 2422 or email patricia.wollington@wellerslawgroup.com or call 020 8464 4242 for our Bromley team.

Payment under a construction contract and the right to adjudicate

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We continue to receive a number of enquiries from contractors and sub-contractors unaware of their right to adjudicate under a construction contract for non-payment, despite the fact statutory adjudication was introduced 25 years ago.

Many clients have come to us after being advised by previous solicitors to commence County Court proceedings, which can be a lengthy and costly process, by which time the paying party may be insolvent.

Alternatively, clients have commenced insolvency proceedings and fall at the first hurdle if there is a genuine dispute. A client will be subject to a costs order if the debtor has been successful in setting aside a statutory demand, which is a precursor to liquidation of a company or the bankruptcy of an individual.

Adjudication

Adjudication is a way of resolving disputes in construction contracts. The right to adjudicate is governed by S.108 of the Housing Grants, Construction and Regeneration Act 1996 (“the Act”). The Act sets out certain procedural requirements which enable either party to a dispute, to refer the matter to an adjudicator, who is then required to reach a decision within 28 days of being served with the Referral Notice.

If a construction contract does not comply with these requirements, a statutory default scheme known as the Scheme for Construction Contracts will apply. If the construction contract contains adjudication provisions, but does not comply with the requirements of S.108, the Scheme will again apply.

The Referring Party of a dispute who appoints an adjudicator, has the added advantage that, its solicitors have spent weeks/months preparing for the adjudication, putting the other party (the Responding Party) on the back foot, with little time to prepare a Response.  This may result in payment being made before an adjudicator has reached his/her decision.

In the event that the losing party does not comply with the adjudicator’s decision, enforcement proceedings can be commenced in the Technology & Construction Court (“the TCC”) and you would normally apply for Summary Judgment. The TCC will enforce adjudication decisions without enquiring as to the correctness, subject to two exceptions.

The purpose of adjudication is to expedite cash flow during the construction contract and it is not uncommon to have multiple adjudications, throughout the duration of a project, but not adjudicated at the same time.

The payment terms of a construction contract are also regulated by Part II of the Act. So, before you decide to commence an adjudication, do you have a construction contract?

A construction contract

 A construction contract is defined by  the Act and are agreements for any of the following:

  • carrying out of construction operations.
  • providing one’s own labour, or the labour of others, for the carrying out of construction operations.
  • arranging for the carrying out of construction operations by others e.g. under a sub-contract.
  • It extends to architectural, design, advice on building, interior or exterior decoration, engineering, demolitions, surveying work and on the laying-out of landscape.
  • Installation of mechanical, electrical and heating works. to include maintenance of the works.
  • A collateral warranty as to the carrying out of construction work. Parkwood Leisure Ltd v Laing O’ Rourke Wales and West Ltd [2013] EWHC 2665 (TCC).Whether you can adjudicate will depend upon the timing and the wording of the warranty. Timing is paramount: Toppan Holdings Ltd & Anor v Simply Construct (UK) LLP [2021] EWHC 2110 (TCC).
  • Government contracts are construction contracts under the Act.

Exclusions

The following are excluded from being a construction contract:

  • Agreements which primarily relate to the financing of works
  • Development agreements containing provision for the disposal of an interest in land
  • Contracts between employers and employees.
  • Supply only contracts: manufacture and delivery of building/engineering, unless the contract also provides for their installation on site
  • Oil and gas exploration, mining and industries plants
  • Contracts with residential occupiers that occupy or intend to occupy the property

All construction contracts, except those with a duration of less than 45 days, must contain a right to instalments, stage payments or other periodic payments.

The Act prohibits withholding or reduction of payments, except after proper notice and prohibits pay-when-paid clauses, except in circumstances of insolvency.  The Act provides a right to suspend performance for non-payment.

Payment under the Act

The Act has the following provisions regarding payment:

  1. It requires a construction contract to provide for interim payments.
  2. It requires the contract to provide a mechanism for determining what sums became due and when is the due date.
  3. It requires the contract to provide a final date for payment which would be later than the due date
  4. The contract must require the employer to serve a payment notice within five days of the due date
  5. If an Employer wishes to resist paying a contractor’s final account, it is obliged to serve a pay less notice

Payment notices and pay less notices

A valid payment notice confirms the sum to be paid by way of an interim or final payment or any other payment provided for in the contract, unless a valid pay less notice is served. S&T (UK) Ltd v Grove Developments Ltd [2018] EWCA Civ 2448 at [37]–[42].

If an employer (owner/developer) fails to serve a valid pay less notice and fails to pay the amount claimed, the contractor will be able to recover the amount claimed by bringing an adjudication, without the adjudicator having to decide the substantive merits of the payment application.

These are known as ‘smash and grab’ adjudications. If you fail to serve a valid pay less notice and wish to obtain a reduction in the amount due or pursue a counterclaim or cross-claim, you will have to pay the full amount first and then pursue the reduction or other claim, by bringing proceedings or by set-off against a subsequent payment. This is known as a true value adjudication.

The notice requirements apply to all payments provided for by the contract: liquidated damages or repayment of overpaid instalments. It also applies to payments due following completion of the works or termination of a contract.

When deciding if a payment notice (or a pay less notice) is valid and complies with the relevant statutory and contractual requirements, it has to be construed objectively –  how a reasonable recipient would have understood the notice.

A payment notice (and a pay less notice) has to make plain that it is a payment notice (or a pay less notice). Each has to set out clearly the sum which is said to be due and/or to be deducted and the basis on which that sum is calculated. This can be zero. Beyond that, the question of whether or not it is a valid notice in accordance with the contract is a matter of fact.

Grove Developments Ltd v S&T (UK) Ltd [2018] EWHC 123 (TCC) at [20]–[31] per Coulson J upheld by the Court of Appeal: see S&T (UK) Ltd v Grove Developments Ltd [2018] EWCA Civ 2448 at [46]–[59].

What happens if the payer does not serve a payment notice?

Section 110B deals with situations where there is a default in service of the payer’s payment notice.  There are two situations:

  1. Where the contract requires the payer to give the payment notice, and a valid notice is not given, the payee may serve a payment notice instead.
  2. Where a contract provides for the payee to make a payment application before the time for the payer’s payment notice, default in service of the payer’s payment notice, makes the application count as the payment notice. The application must be one which states the amount which the payee considers will become due and the basis on which it is calculated, and it must be given in accordance with the contract..

If you have been provided with a construction contract for execution by an employer, it is likely to be a JCT or NEC contract. They have a suite of standard form contracts for use in the construction industry in the UK to help deliver projects.

It sets out the responsibilities of all the parties within the process and their obligations to each other. The intention of these contracts was to give a balanced allocation of risk between the parties. These contracts are prepared by an employer’s construction solicitor, who will have appended to it, the employer’s schedule of contract amendments, with the objective of increasing the liability of the contractor under a contract and reducing the employer’s risk. It will often have amendments to the payment clauses contained in these contracts. For this reason, it is imperative that you obtain legal advice, so you are aware of all pitfalls, and if it is commercially viable for you to enter into the contact. Upon obtaining legal advice, you may be able to re-negotiate certain terms of the contract.

Whether you are an employer, main contractor or sub-contractor. and you require advice in relation to payment notices and pay less notices, under a construction contract, or wish to obtain our Guide to Adjudication, please contact Teresa Johnston on 0207 481 2422, 07584 229 373 or via email at Teresa.Johnston@wellerslawgroup.com

 

 

New Immigration Routes for Global Talent and Innovators

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The Government’s latest Innovation Strategy was published in July 2021. The proposals focus on the UK’s recovery from the COVID-19 pandemic and the creation of a “robust and agile economy” that will work for everyone and be viable for future generations.

One of the four “key pillars” identified as being crucial to the strategy is “people” and the need to attract global innovators and highly-skilled individuals.

The introduction of two new visa routes for individuals, the High Potential Individual and Scale-up routes, will add to existing routes and could make the UK one of the most accessible countries in the world for global talent.

New immigration routes

The strategy contains details of the following new visa routes for 2022.

The High Potential Individual visa route

Adding to the Global Talent Route, the new High Potential Individual route will see graduates of top global universities able to apply to enter the UK without a job offer. As an unsponsored route, the employer of a “high potential individual” won’t require a sponsorship licence.

The route will offer the visa-holder flexibility to switch jobs and employers, and to extend their visa so they can settle in the UK, thus contributing to the UK economy.

The strategy proposals include scope for the visa route to expand eligibility to additional characteristics of high potential other than university graduation.

The Scale-Up visa route

Skilled migrant workers who have a job offer with the required salary from a qualifying “scale up” business, will be able to enter the UK on the Scale-Up visa route.

The ‘scale up’ business will be able to apply for fast track verifications if they can demonstrate an annual average revenue or employment growth rate over a three-year period greater than 20%, and a minimum of 10 employees at the start of the three-year period.

This new visa route will allow eligible individuals to work, switch jobs or employers, and, if they meet certain requirements, extend their visa in order to settle in the UK.

Global Business Mobility visa

Overseas businesses and companies specialising in innovation will have greater flexibility to come to the UK to grow their businesses and transfer workers to the UK. The Global Business Mobility visa route will streamline a number of existing routes and incorporate various existing provisions.

Updates to existing visa routes

The strategy document also provides details of how existing visa routes for innovators and global talent will be “revitalised”.

The Innovator visa route

This current route allows entrepreneurs and talented innovators to enter the UK from overseas to start a venture-backed business or a business that harnesses innovative technologies based in the UK. The visa holder must operate the business in the UK and create jobs for UK workers.

The revitalised route will simplify the existing requirements by streamlining the business eligibility criteria. Fast-track applications may be available when the business ideas are particularly advanced. Any applicant accepted for the Global Entrepreneur Programme (GEP) will be eligible automatically for this visa route.

The latest proposals would see the requirement for £50,000 in investment funds removed, providing the applicant is able to show they have sufficient funds for business growth. Further flexibility will be encouraged by removing restrictions on work carried out other than for the primary business.

Encouraging globally-mobile talent into the UK

Current visa routes and programmes already create opportunities for global talent to enter the UK, and to work and study here. Tweaks and changes to the various qualifying criteria, extent of the provisions, and the options available to applicants and visa holders are being evaluated and added in response to Government strategy.

The ‘Global Entrepreneur Programme’ is available to high-skilled migrant tech founders who have IP-rich businesses they wish to establish in the UK. The ‘Global Talent Visa’ is open to leaders in the fields of research, arts, culture, academia and digital technology. In May 2021 a fast-track option was introduced for winners of globally recognised prizes.

More flexible Graduate Visa routes will allow international students time to live and work in the UK once their studies have been completed successfully. This gives graduates two years following a degree and three years following a PHD to live and work, doing any job, in the UK. This should mean that they have time to find the best, most suitable use of their talents and to potentially fulfil the UK’s innovation needs.

Specialist immigration solicitors for visa applications and more

The ever changing rules and requirements for UK immigration can make it seem hard to enter the UK or to fulfil your business’s needs for talent.

By instructing Wellers Immigration Service you can eliminate much of the confusion and hassle that is often associated with immigration applications. Take advantage of our vast experience, thorough knowledge and team of expert support staff.

Please call Rosalind Nunoo on 020 8290 7982 or email rosalind.nunoo@wellerslawgroup.com

Neighbours Encroaching on Your Right of Way? Consult a Lawyer Today

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Many homes or businesses are only accessible via neighbours’ land and that can prove fertile ground for dispute. However, as a High Court case showed, expert lawyers are adept at ensuring their clients’ unhindered use of rights of way.

A couple’s home and holiday accommodation business was accessed via a track that ran across land that formed part of the grounds of a country house hotel. They took action against the hotel’s owners, asserting that they had for a number of years engaged in a persistent and systematic course of conduct that substantially interfered with the exercise of their right of way over the track. The owners denied the allegation and characterised the couple’s complaints as an attempt to gain greater access rights than those to which they were legally entitled.

Ruling on the matter, the Court found that a succession of works carried out by or on behalf of the hotel’s owners over the years – including the installation of a gate, the placing of boulders on the track’s verges and changes to its entrance splay – amounted to unlawful interference with the couple’s right of way.

Aerial photographs and other evidence indicated that the works had resulted in the track being significantly narrowed in places, making it harder for cars to pass each other and for heavier vehicles to access the couple’s property. The Court was satisfied that the installation of the gate had nothing to do with security but was rather a deliberate attempt to inconvenience the couple.

The Court granted the couple an injunction that required the hotel’s owners to, amongst other things, remove the gate and boulders and to broaden the entrance splay. The couple were awarded £1,000 in damages to reflect the inconvenience they had suffered and, importantly for them, the Court recognised their right to repair and maintain the track, which had at times fallen into a very poor condition.

Do you need a freezing injunction to protect marital assets?

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If you feel there is a danger that your spouse might be hiding assets and money in divorce, or is already disposing of assets before divorce, and this action is intended to deprive you of your rights to matrimonial wealth during a divorce financial settlement claim, a freezing injunction might be a suitable course of action.

A freezing injunction (also known as a freezing order) is an interim court order which can be granted under Section 37 of the Matrimonial Causes Act 1975 to prevent the dissipation of assets.

Speak to Wellers Law Group, so that our experienced divorce solicitors can listen to your concerns and explain the options available to you.

Disposal of marital wealth and financial misconduct

Before the court grants a freezing injunction, you will need to prove that your matrimonial wealth is at immediate risk and that any movement and/or disposal of assets is substantial enough to affect the size of the matrimonial pot to be divided in a financial settlement on divorce.

If proven, the court may consider any reckless, frivolous or unusual disposal of wealth by your spouse to be financial misconduct.

Some of the signs of asset disposal include:

  • Abnormal spending and expensive spontaneous purchases
  • Unplanned and extensive gifting to family and/or friends
  • Unplanned, quick sales of property and investments
  • Large cash withdrawals from savings accounts
  • Unplanned and unexplained trips away and/or expensive holidays
  • Unusual transactions on credit card statements
  • You suspect funds are being transferred into hidden bank accounts
  • Gambling

How do I put a freezing order in place?

You will need to apply to the court for a freezing injunction. In most cases, this will be ‘without notice’, in other words, your spouse or civil partner will not be informed of your application. This will prevent them from having time to dispose of assets before the court grants the freezing order.

You may be expected to attend at least one court hearing in person before the order is granted and there will be fees involved, however, the potential loss of significant assets is likely to far outweigh the cost of seeking a freezing injunction.

You will need to provide strong evidence that your spouse or civil; partner intends to hide or dispose of assets and that, without the order, you would suffer unfairly when the financial settlement on divorce comes before the court.

You will also need to prove that there are sufficient assets to meet your claim and you will almost certainly need to make an undertaking (solemn promise) to compensate your spouse or civil-partner in the event of any loss they incur should the freezing injunction be later set aside.

This ‘cross undertaking’ might include legal costs for the main proceedings, as well as the injunction application. If a third party suffers losses as a result of the freezing injunction, you also undertake to compensate them.

What can a freezing injunction protect?

Any asset to which a judgment may be attached can be frozen under a freezing injunction. For example:

  • Bank accounts
  • Property – real estate and land
  • Shares and investments
  • Valuable items such as cars, jewellery and artworks

It may be possible to seek a freezing injunction on assets held in trust for a beneficiary, however, this is more difficult and uncommon.

A domestic freezing injunction applies to assets held in England and Wales, while a worldwide freezing injunction applies to assets held overseas, although this type of order can be limited depending on the jurisdiction in which the assets are situated.

The importance of full financial disclosure in a freezing injunction application without notice

As the applicant, you must provide full and frank disclosure of all relevant information, including any material that may be unfavourable or potentially damaging to your own position.

If full disclosure does not occur and is not ongoing, the court can set aside the freezing injunction. You may also be ordered to pay for losses suffered by the other party whether or not the court decides to leave the freezing injunction in place.

The consequences of knowingly attempting to mislead a court are very serious and carry the risk of serious penalties, including criminal charges of perjury and contempt of court.

Contact the divorce solicitors at Wellers Law Group for expert legal advice

It is crucial to have expert legal advice when applying for a freezing injunction. Contact our Family Law team for more information.

We offer an initial fixed fee interview so that we can discuss your situation. Call 020 8464 4242 for our Bromley team, 01732 457575 for Sevenoaks, 020 7481 6393 for central London or 01372 750100 for our Surrey team. Alternatively, you can email an enquiry to enquiries@wellerslawgroup.com.

Divorce and the Family Business

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If you run a family business with your spouse or civil-partner and you are undergoing a divorce, one of your foremost thoughts is likely to be, “What will happen to the business?”

The ending of a business relationship is always a complex consideration and here we answer some of the most frequently asked questions about divorce and the family business.

What will happen to the business on divorce?

Like many of the arrangements that will need to be negotiated on divorce, there is no one size fits all approach to dividing a business, so, it is crucial that you seek guidance from an experienced divorce solicitor as soon as possible in order to evaluate the business asset and build a plan as to how it could be divided fairly.

Depending on its structure and ownership, at least part of the family business is likely to be treated as a matrimonial asset that will need to be divided on divorce. Wherever possible, the court will work towards seeing that the business stays with the original owner, however, if the business was set up by both spouses as a partnership during the lifetime of the marriage or civil-partnership, this makes the division more complex.

Why is my business considered a marital asset?

A family business is an asset in the same way as the family home, property and savings and although it’s unlikely to be a liquid asset, it will need to be divided. Many spouses do not actually ‘work’ for the business, but if they have supported the owner as a homemaker and/or taken care of children while the owner built up and worked for the business, the company will be considered matrimonial property and both parties will have an interest in it as an asset.

Unless the divorcing parties are amicable and determined to keep working together in the business, the court is likely to seek a remedy that will keep the business stable and maintain a workable platform for the future, while ensuring fair division of the value and share of assets that creates a clean break.

How can my spouse claim part of a business that has been in my family for generations

Firstly, if the marriage or civil-partnership was very short-lived and there are no children, the court may not consider the business as part of the assets to be divided. However, a family business does, in many cases, become a matrimonial asset on marriage, even if the other party is not actively involved in running it.

Unless a pre-nuptial agreement was signed stipulating that your spouse would not seek part of the company on divorce, the financial settlement on divorce will need to attribute each party’s appropriate share of this asset.

Even with a prenup in place, the court will always seek to achieve fairness during a financial settlement and if the other spouse’s needs cannot be met from other assets in the matrimonial pot, any argument that ‘ring-fenced’ the family business is likely to fail.

Will a divorce end the business?

The court will, wherever possible, consider the future stability of the business when dividing it as a marital asset and if splitting the business would damage it, or other shareholders’ stakes, then the court may order an offsetting method, such as a larger share of other marital assets or maintenance payments to ensure financial fairness.

When there are other shareholders or business owners outside of the marriage, their stake will not be included in the financial settlement on divorce; only the financial interest of the two divorcing parties will be part of the divorce settlement.

What are the relevant factors the court will consider?

The court will need to know:

  • Who owns the business?
  • Who runs the business on a day-to-day basis?
  • What income does the business produce for the spouses, such as salaries and dividend income?
  • What the business consists of, i.e. property, capital, other assets, etc
  • Does the company have a pension scheme?
  • Whether it’s possible to extract capital sums from the business?
  • Whether it’s possible to borrow against the business or its assets?

Who should value the business for a divorce financial settlement?

If the business is a small business with little or no assets, for example a sole trader with a single work premises providing an income for the family, it is unlikely that an independent valuation will be required.

For more complex business structures, an independent accountant should be appointed to prevent any valuation bias that could be challenged by the other party. Specialist assets, such as overseas property and complex plant or intellectual property assets, should be valued by specialist independent valuers.

An in-house accountant may assist in the independent valuation process and look over the valuation appraisal before it is submitted as part of the financial settlement on divorce, however they should not, as a rule, undertake the valuation themselves.

How will the court divide the family business on divorce?

There are a number of approaches the court can take to family business assets during a divorce financial settlement and these include:

  • One party retains control of the business – the other party will be compensated, perhaps with a lump-sum payment or maintenance, or a combination of the two.
  • Both parties become shareholders – the business does not need to be sold and both parties share the risk. A shareholders agreement will need to be drawn up to protect the interest of the business and all other shareholders.
  • Transfer of shares – suitable in situations where only one party will continue running the business, but both parties are owners.
  • Selling the business or shares – courts generally only order the sale of a business or shares in exceptional circumstances where no other remedy achieves fairness and one party is unable to “buy out” the other party. If this approach is adopted, the court should allow enough time for the sale so that a fair price can be achieved.

Divorce financial settlements to protect the family business

Our divorce solicitors and family specialists are committed to making the divorce process as clear and straightforward as possible. We aim always to encourage amicable settlements relating to the issues of relationship breakdown, and to help our clients understand the options available to them.

Talk to Wellers Law Group today about your situation and your aims, so we can discuss how we can help you through the divorce process.

Contact our office in Bromley today to arrange an appointment with a family law solicitor on 020 8464 4242. For our Surrey team call on 01372 750100, for Sevenoaks the number is 01732 457575 and for central London please call 020 7481 2422.

EU Settlement Scheme for Construction Employers – What you Need to do Now

Posted on by Wellers

The deadline for EU nationals to apply for residency under the EU Settlement Scheme (EUSS) has come and gone. If you employ EU nationals in your construction business, there are some important factors to consider now.

Hopefully, your employees all applied under the EUSS and their status has either been confirmed or is in the process of being adjudicated. However, if any of your EU employees have not yet applied and/or you intend to employ EU nationals in the future, there are several issues you should be aware of.

Can EU nationals still apply under the EU Settlement Scheme?

While the EUSS application deadline of 30 June 2021 has indeed passed, this particular date was relevant only to those who were able to apply for ‘full settled status’ due to their having five years of continuous residence in the UK prior to 31 December 2020.

EU employees with ‘pre-settled status’ (that’s around 2.3 million EU nationals who had not achieved five years of continuous residence by 31 December 2020) now have up to five years to accumulate the required amount of time in the UK to apply for full settled status. So there is likely to be a steady flow of applications up until mid 2026 for those who wish to live permanently in the UK.

What is the difference between pre-settled status and full settled status?

EU workers who had been living and working in the UK before 31 December 2020, and wanted to continue to do so, had until 30 June 2021 to apply under the EU Settlement Scheme. What type of status they could apply for depended on their employment status and the evidence they were able to supply to the Home Office.

Pre-settled status applies to EU citizens who had lived in the UK for at least one day in the six months until 31 December 2020. It is a temporary status of up to five years and allows limited leave to remain (meaning that if the applicant does not apply for full settled status they will be required to leave at the end of the applicable period).

Full settled status was available to individuals who had lived and worked in the UK for at least five years prior to the deadline and fulfilled the continuous residence criteria. It provides indefinite leave to remain.

Valid reasons for late applications under the EU Settlement Scheme

If your employees have yet to apply for settled status, it will be their responsibility to prove to the Home Office that they had a genuine reason for failing to apply during the application period if they wish to remain living and working in the UK.

If the applicant can prove that an application should reasonably have been made on their behalf, such as by a parent, guardian or local authority, this may be seen as reasonable grounds. Typical scenarios are likely to include the EU parents of a child born in the UK not realising they needed to apply within three months of the birth of the child, and EU parents who applied themselves but did not realise the requirement to apply separately for their children.

The following are also possible valid grounds for late application to the EU Settlement Scheme.

  • The applicant has diminished physical or mental capacity and/or specific care or support needs.
  • The individual has a serious medical condition or was undergoing significant medical treatment including, in certain cases, hospitalisation with COVID-19.
  • The applicant has been a victim of modern slavery.
  • The individual is in a controlling, coercive or abusive relationship.
  • Other compelling compassionate reasons including a lack of permanent accommodation which prevented them from applying, complex needs that meant they were not aware of the support available to help them apply, they were hampered in accessing the support available to help them apply by restrictions associated with the COVID-19 pandemic.

When an EU citizen is attempting to prove they have a valid reason for late application under the EU Settlement Scheme they will benefit from the assistance of an experienced immigration solicitor who can help them build their case. Without sufficient evidence an EU worker who has does not have settled status will no longer be able to live or work in the UK and could be removed by the Home Office.

What do construction employers need to do?

There are many EU workers employed in the construction industry and UK employers now have a duty to ensure that all new non-UK citizens they employ have the right to work in the UK. Employers who do not check the right to work status of all new hires may face fines of up to £20,000 per illegal employee with no limit on the number of employees that could incur fines. In the worst cases, employers may face a custodial sentence.

Employers who carried out applicable right to work checks prior to the end of the EU Settlement Scheme application period will have fulfilled their legal duties to ensure employees have the right to work. As long as EU employees’ passports and national id cards proved their right to work prior to 30 June 2021, EU construction workers employed prior to the deadline will still be eligible to work in the UK from 1 July onwards. If they have received full settled status they have indefinite leave to remain in the UK and if they have achieved pre-settled status, they will need to apply for full settled status once they achieve the five years of continuous residence in the UK.

Home Office guidance makes it clear that employers are not obligated to check whether existing employees have secured settled status under the EU Settlement Scheme, and that employees have no obligation to prove their settlement status.

How to stay compliant with ‘right to work’ obligations while avoiding discrimination

The application deadline created a fine line for employers between discriminatory behaviour and ensuring the ongoing stability of their workforce. During the application timeline, new hires from the EU could volunteer their status under the EU Settlement Scheme but were not compelled to do so. Thus creating a conundrum for the employer regarding the applicant’s long-term commitment to working in the UK. However, discriminating against employees who had not applied under the EUSS could contravene UK Employment Law.

In order to ensure the future stability of your construction workforce you may wish to carry out retrospective settlement status checks, but this must not lead to discriminatory action against employees who have not applied. Employers may wish to hold informal meetings with EU employees and contractors to make sure they understand the rules around ‘right to work’ following Brexit.

New EU hires, after 1 July 2021, must provide their prospective employer with evidence of their status under the EU Settlement Scheme or prove they have the right to work through another source, such as sponsorship under the new points-based-visa system or via a partner visa.

The introduction of the points-based visa system for EU workers has created a new layer of costs involved in hiring overseas staff, including the need for many more businesses to seek sponsor status.

COVID-19 adjusted measure checks

Despite the global health pandemic, it remains a statutory obligation for employers to carry out ‘right to work’ checks for all new hires. Temporary COVID-19 adjusted check measures were introduced on 30 March 2020 and have been extended until 5 April 2022. These measures include:

  • Using video calls to carry out checks rather than face-to-face meetings.
  • Allowing scanned documents or legible photographs of documents, sent via email or suitable messaging platform, to be provided by job applicants or existing workers instead of sending originals.
  • The provision of the online Employer Checking Service for instances when a prospective or existing employee is not able to provide the accepted documentary evidence.

There are a number of rules that apply in order to ensure the right to work check is valid including:

  • During the right to work check video call, the employer must see the original documents and check them against the digital copies. The date of the check should be added to the copy and marked “adjusted check undertaken on [date of check] due to COVID 19”
  • If the worker has been granted the right to work under the EUSS or via the points-based-visa programme, or if they have a current Biometric Residence Permit or Biometric Residence Card, the employer can use the online Right to Work checking service during the video call so long as they have the applicant’s permission to view their status details.

Wellers Law Group immigration services for business

Post Brexit immigration is a hot topic and despite the guidance about post-Brexit changes to freedom of movement and right to work being available in plenty of time before the deadlines expired, many businesses had not fully comprehended how the changes might affect their workforce.

If your construction firm hires migrant workers, you will need to ensure that you have carried out the relevant right to work checks and have applied for the right level of sponsorship if you are going to employ EU workers on a points-based-visa in the future.

For assistance on all business immigration matters, contact Rosalind Nunoo on 020 8290 7982 Ros provides expert support which can help you understand and uphold your legal obligations as an employer of EU and all overseas workers.

Wellers help to create award-winning social impact investment

Posted on by Wellers

We are extremely proud to announce that Water Unite Impact (a collaboration between Water Unite and Wellers Impact, our impact investment manager) has won the Impact project/investment of the year: Water category in the prestigious Environmental Finance IMPACT Awards 2021.

The Wellers Law Group commercial and charity law teams carried out the structuring for this innovative investment for Water Unite. Water Unite Impact uses micro-contributions, for example from bottled water sales (1 cent/pence per litre sold) in the form of donations from international retailers, as Catalytic Capital to attract commercial capital and expertise that has the power to transform the water, sanitation and plastics recycling sector.

It supports corporations to meet ESG goals through impact investment and helps retailers and investors report transformational impact to their consumers, clients and stakeholders. Micro-contributions make it possible for consumers to directly contribute to scaleable commercial solutions making water and sanitation more inclusive and removing plastics out of the environment.

Neil Sandy, CEO at Wellers Impact, said “It has been a privilege to work on the Water Unite Impact project with partners such as Water Unite, The One Foundation, The Coop and Elior. These are organisations that understand the very pressing issues of plastics pollution and access to water being experienced in many different parts of the globe and are addressing it.

We at the Wellers Law Group and Wellers Impact are delighted to have been able to play a part by using the legal and the impact investment knowledge we have under one roof to help structure this unique and important investment and bring it to market. We see this as a future model for both sustainable investment managers and charities to deliver positive outcomes and financial returns.”

Please see below for more details of the award:

https://www.environmental-finance.com/content/awards/impact-awards-2021/winners/impact-project/investment-of-the-year-water-water-unite-impact.html

If you are looking to structure an innovative social impact investment contact Neil Sandy at Wellers Impact on 020 7481 2422 or email neil.sandy@wellersimpact.com

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