Category: Articles

A “must have” for all (Specialist) Lenders

When a borrower defaults on a loan, lenders often discover that a personal guarantee is one of the most valuable documents in their arsenal – if they sought one at the inception of the loan.  

A properly drafted and executed personal guarantee provides an additional route to recovery, allowing the lender to pursue the guarantor personally for sums owed by the borrower.

A personal guarantee is a legally binding contract (unless executed as a deed – see next paragraph)), and normal contract rules apply (i.e. there must be an offer, acceptance, consideration, and the intention to create a legal relationship). While a guarantor may not provide direct consideration, it is normally established by way of advancing credit to the borrower.

However, most lenders require guarantees to accompany all loans, and for that guarantee to be executed as a deed (to avoid arguments over consideration altogether), as it has advantages.

A deed has an extended limitation for enforcement of 12 years (s.5 of the Limitation Act 1980), whereas a guarantee in contract form has a limitation of 6 years (s.8 of the Limitation Act 1980).

Put simply, by executing a personal guarantee as a deed, the lender has more time to bring a claim against the guarantor (ergo, executing as a deed provides the lender with greater protection).

A common misconception amongst guarantors is that a lender must first exhaust its remedies against the borrower before pursuing them personally (pursuant to the deed). Such a contention will depend on the wording of the guarantee, but lenders should look to ensure the wording of the guarantee does not prevent immediate action against the guarantor as soon as the borrower defaults:

“…the Lender shall not be obliged, before taking steps to enforce any of its rights and remedies under this guarantee, to:

1. take any action or obtain judgment in any court against the Borrower or any other person;
2. make or file any claim in a bankruptcy, liquidation, administration or insolvency of the Borrower or any other person; or
3. make demand or enforce or seek to enforce any claim, right or remedy against the Borrower or any other person.”

By way of an example, a property development company borrows £1,000,000.00 to fund a residential development/conversion project. The lender seeks a personal guarantee from the director of that company (or another).

Unfortunately, things do not go to plan: the market drops, a war breaks out, an unanticipated virus takes hold, global inflation takes effect, and the refinancing never materialises, and the loan falls into default.

Suddenly, a document that was signed in less time than it takes to order a coffee becomes the most important document in the transaction.

Many guarantee claims are relatively straightforward. If the guarantee is properly executed and there is no genuine dispute as to liability, a lender may be able to obtain summary judgment, avoiding the need for a full trial (if bankruptcy is not suitable). This can significantly reduce the time and cost involved in recovering the debt.

Most lender-friendly documents also contain an indemnity. The distinction matters. A guarantee is generally tied to the borrower’s liability, whereas an indemnity creates a separate and independent obligation owed by the guarantor directly to the lender. If there is a problem with the underlying debt or the guarantee itself, the indemnity may provide the lender with an additional route to recovery. Put simply, a guarantee says: “if the borrower does not pay, I will“. An indemnity says: “if the lender suffers a loss because the borrower does not pay, I will make good that loss“. Sensible lenders will usually want both.

That is not to say that guarantors never defend these claims. Common arguments include allegations that the guarantee was not properly executed, that the lender failed to comply with the terms of the facility agreement, that legal advice was not taken, that the amount claimed is incorrect, or that the guarantee should not be enforced due to representations made at the time it was signed. The success of such arguments will depend on the particular facts and the wording of the relevant documents.

The key to successful recovery is often early action. Delays can increase the risk of assets being dissipated, financial positions deteriorating and enforcement options becoming more limited. Identifying the guarantor’s asset position at an early stage can help lenders determine the most effective recovery strategy and avoid pursuing remedies that are unlikely to produce a commercial return.

At Wellers, we advise lenders, finance providers and other creditors on all aspects of guarantee enforcement, from pre-action recovery strategies through to judgment and enforcement. Whether the debt is disputed or undisputed, obtaining early advice can often place lenders in the strongest possible position to maximise recovery and minimise risk. Contact us to discuss your personal guarantees and recovery options.

But Is Your Expectation of Privacy Reasonable?

Most people assume they have a right to privacy, and they would be correct.

While we hear of many such disputes occurring with celebrities, (ex)royalty, politicians, and newspapers, the principles arise in everyday life.

For example:

1. Your neighbour installs CCTV which captures parts of your garden rather than simply their own property; likewise, Ring Doorbells and drones.
2. Someone takes photographs or videos of your children (perhaps on Sports Day, given the time of year) and posts them on social media without your consent.
3. An ex-partner shares personal messages or photographs with others.
4. An architect or contractor takes photographs of the work done at your home and uses those images for advertising without permission.

Now, it does not follow that, having taken a picture on holiday (for example), those featured in that picture have any claim against you for breaching their (right to) privacy; so do not worry.

The question that must be asked and sits at the heart of any civil claim for a breach of your privacy/misuse of private information is:

“Would a reasonable person in your position expect that information to remain private?”

The courts apply a two-stage test.

Was There a Reasonable Expectation of Privacy?

The court first asks whether the claimant had a reasonable expectation that the information (photographs, messages, videos, etc.) would remain private.

Context is key. Information concerning health, finances, family life, relationships and activities inside the home will often attract a strong expectation of privacy (they are clearly more personal in nature).

A useful example is the neighbour’s CCTV camera. Having a camera covering the owner’s driveway is unlikely to cause difficulty. However, if the camera regularly records you, your family members, or substantial areas of your garden, or through your window, the argument that you had a reasonable expectation of privacy becomes considerably stronger.

Is Disclosure Nonetheless Justified?

The court must balance the individual’s right to privacy against any competing interests (i.e. freedom of expression or genuine public interest).

So, while reporting criminal wrongdoing may justify disclosure of information that would otherwise be private, reporting information to satisfy public curiosity usually will not (i.e. while something may be of interest to the public, that is not the same as being in the public interest.

Practical Points

When considering a privacy dispute, ask:

1. What information has been obtained or disclosed?
2. Would a reasonable person regard that information as private?
3. How was the information obtained?
4. Was there any consent?
5. What harm has been caused or could be caused?
6. Is there any genuine public interest in disclosure?

These questions frequently arise in neighbour disputes, workplace disagreements, family conflicts, social media arguments and disputes involving surveillance technology.

What Remedies Are Available?

The most powerful remedy is often an injunction. This can prevent information from being published or require its removal from websites, social media platforms or other publications. The court can order documents, recordings, photographs or electronic data to be returned, destroyed or deleted.

For example, if a neighbour were threatening to publish footage obtained from a CCTV camera overlooking your garden, the court may be willing to intervene before publication occurs.

Damages

A claimant may recover damages for:

• distress and anxiety caused by the misuse of private information; and/or

• financial losses arising from the disclosure (although this is not necessary if the above can be substantiated); and

• legal costs.

Data Protection Claims

Where personal data is involved, a claimant may also have a claim under the UK GDPR and Data Protection Act 2018. In practice, privacy and data protection claims are frequently pursued together, increasing the potential exposure for the wrongdoer.

Conclusion

Privacy law is not limited to newspaper headlines and celebrity scandals. It affects ordinary people every day.

Whether it is a neighbour’s camera overlooking your property, private messages being shared without consent, recordings being taken inside the home, or personal information being circulated online, the central question remains the same:

Would a reasonable person in your position expect that information to remain private?

If the answer is yes, the law may provide a remedy, ranging from damages and deletion orders to urgent injunctions preventing publication altogether.

If you think that your right to privacy has been breached, please contact James Day at james.day@wellerslawgroup.com or on 01732 457575 or another member of the Dispute Resolution team for a no-obligation initial discussion

Understanding the Law and the Remedies Available

Increasingly, solicitors are instructed where harassment takes place online, through social media, messaging platforms, anonymous emails, website reviews, and coordinated campaigns intended to intimidate or damage an individual’s reputation. The digital age has dramatically expanded how harassment can occur, with the expansion of Facebook, Instagram, TikTok and X, etc. These can include (but are not limited to):

1. threatening text messages;
2. unwanted social media contact; and/or
3. coordinated online campaigns (i.e. revenge porn).

What is harassment?

The principal legislation governing harassment in England and Wales is the Protection from Harassment Act 1997 (“the Act“), enacted to apply to a wide spectrum of oppressive behaviour.

Section 1 of the Act provides that:

“A person must not pursue a course of conduct which amounts to harassment of another… and which he knows or ought to know amounts to harassment of the other.”

Two elements are fundamental:

1. there must be a “course of conduct” (i.e. at least two occasions); and
2. the conduct must be sufficiently serious to amount to harassment (rather than a mere annoyance or irritation).

But what amounts to a “course of conduct“?

While “harassment” is not defined in the Act, it does say that it includes “alarming the person or causing the person distress” and to have occurred on at least two occasions.

Furthermore, guidance was given by the High Court in 2010, where Mr Justice Simon said in that case that a harassment claim will only succeed if an individual can show that the conduct:

1. has occurred at least twice (as per the Act);
2. is calculated in an objective sense to cause alarm and distress; and
3. is objectively judged to be oppressive and unreasonable.

The test for harassment is, therefore, an objective one (ergo, the Claimant’s own genuine belief and perception is just one factor which the court will consider when deciding whether to uphold the claim).

Civil or Criminal Harassment?

The Act creates both criminal and civil liability.

However, the threshold for a civil claim is more easily achieved as the claimant needs only to establish harassment on the balance of probabilities (i.e. 49 to 51).

Whereas a criminal claim would require the victim to prove harassment “beyond reasonable doubt” (a much higher threshold).

Furthermore, by advancing a civil claim, the victim maintains control of the matter, whereas they would be beholden to the authorities if pursued criminally. Taking the civil route also allows the claimant to bolster their position by arguing other privacy-based causes of action alongside their harassment claim (for example, misuse of private information, defamation, malicious falsehood, and breach of privacy).

Civil remedies

Injunctions

Perhaps the most valuable remedy, a successful injunction should prevent further harassment by order of the Court that prohibits:

1. contacting the claimant;
2. publishing material;
3. encouraging third parties to harass; and/or
4. communicating via social media.

Applications may be made urgently and, in appropriate cases, without notice. Furthermore, to breach an injunction may constitute contempt of court, punishable by imprisonment (up to five years), fines or seizure of assets, so it should be treated with the utmost seriousness.

Damages

Section 3 of the Act allows recovery for:

1. anxiety;
2. psychiatric injury;
3. financial loss;
4. any reputational damage (where appropriate); and
5. any consequential losses flowing from the harassment.

Disclosure Orders

Where anonymous online abuse is involved, claimants may seek disclosure orders against internet service providers or platform operators to identify anonymous individuals before substantive proceedings commence (for example, IP address). Such an order is commonly referred to as a “Norwich Pharmacal Order” (although used in other civil matters where the defendant’s identity is unknown). As such, in the event of harassment online and by an anonymous source, there is a legal mechanism whereby disclosure can be ordered.

Practical considerations

For victims, early legal advice is often critical. Evidence should be preserved carefully, including:

1. screenshots;
2. emails;
3. metadata;
4. call logs;
5. witness evidence; and/or
6. evidence demonstrating the effect upon the victim.

Conclusion

Harassment law has developed considerably since the Act first came into force. The courts now recognise that sustained campaigns of intimidation are no less serious because they occur through smartphones or social media rather than face-to-face.

For individuals, prompt legal intervention can often prevent harassment from escalating and protect both reputation and well-being. If you think that you are the victim of harassment, please do not hesitate to contact James Day at james.day@wellerslawgroup.com or another member of the Dispute Resolution team for a no-obligation initial discussion.