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ADVICE ON MARITAL AGREEMENTS

We were recently lucky enough to have Lucy Greenwood, a partner with the International Family Law Group, in the studio to share her knowledge and expertise of marital agreements (http://www.iflg.uk.com/portfolio/lucy-greenwood).  Lucy is also a member of our Legal Expert Panel for the Family channel, and we are delighted to have her on board, feeding in ideas for future Family channel topics for continuing professional development (http://www.lawcolmedia.com/%5Cfamily.aspx).  Lucy actually suggested we make this programme!

Here is a sneak peak of the on-camera interview we conducted with Lucy, ahead of the programme’s release on 25th January:

Interviewer: How best can a marital agreement address the issues of needs and fairness?

Lucy Greenwood: Well, this is the very difficult question that we face with every pre-marriage agreement.  For example, it’s commonplace to treat the marital home a little bit differently from any other assets, even if there has been some pre-acquired money going into that property. You’ve basically got to consider – at each stage of the marriage – is the person that’s leaving the marriage without as much money going to be able to meet their needs?  So obviously they’re going to have to have somewhere to live.  What is deemed reasonable for their needs – and when we hear the phrase ‘real needs’ which is another phrase about a discretionary test for needs – it’s very hard to assess.  So you look at the standard of living to some extent and you consider what a court would do if it were looking at the scenario without a pre-marriage agreement, and because it’s a compromise you would look to see what the lower end of that bracket that the court award would comprise.  And it’s those sorts of weighing up kind of decisions that you have to make, and there is no right or wrong answer. But if you don’t meet needs it’s pretty clear from the case law that there’s a great risk that the court will still intervene either partially or totally in the agreement.  But it mustn’t be forgotten that even if it does intervene, because you’ve got this agreement, it’s likely to calibrate the award that is made.  And so they are still very useful tools even today.

Interviewer: What common misconceptions do you find clients have in relation to foreign marital agreements or the enforceability and other jurisdictions of agreements entered into here?

Lucy Greenwood: Well, this is a very common myth.  For a start, many people think that they could only divorce in the country they married, which is obviously not true.  And similarly, they forget that it’s not actually where you enter into the marital agreement that counts, it’s where you are if and when the marriage breaks down.  And so what we tend to do is we will address which country somebody is most likely to live in and get advice from those countries as to what their rights would be. We have very many situations where clients will come into the office and say ‘it’s alright, we’ve got a community of property or we’ve got a separation of assets, property categorisation, property regime in a European country, so they can’t touch my assets on…’.  And we say unfortunately it doesn’t work like that in England, it’s nothing but a factor.  It’s just one of the many section 25 factors that we have to look at. And, of course, depending on the weight and the understanding and the disclosure and all of the fairness aspects around the creation of that agreement the court may or may not abide by that agreement, but many have a real shock when they come in and find that it didn’t really mean as much as they thought it did.  There’s also the issue of Brussels II legislation, and first in time to issue, which can’t be usurped by a marital agreement.  So this can have a very significant effect.  So even if you’ve got a marital agreement in a particular country if you don’t get first in time when it comes to issuing a divorce procedure there’s still a risk that another country, like England, might be looking at your French marriage agreement.  And, of course, there’s the maintenance regulation, and if you’ve got maintenance aspects in the pre-marital agreement, spousal maintenance I’m talking about, not child maintenance, but if you’ve got a spousal maintenance agreement there that’s a prior agreement and therefore you could find that different parts of the case are being dealt with in different parts of the world.

Interviewer: So what specific clauses should practitioners ensure that they draft into marital agreements where there’s a possibility that the couple may move abroad?

Lucy Greenwood: There are certainly no hard and fast rules in relation to this particular question.  You really have to look at the scenario that you’re faced with.  You need to consider whether you’re going to put in a sort of catch-all phrase to say that this agreement should be recognised around the world.  That’s not going to be enough, but it gives an indication.  You look at choice of law clauses and in relation to EU countries you can actually sometimes, if you’ve got a strong enough connection, actually choose the country’s laws which will apply to the pre-marriage agreement but, again, Brussels II can usurp that.  So there is nothing easy about looking at jurisdictional aspects in marital agreements.  And many people think that you can do one and it’s definitely going to be binding all round the world, it is not.  You really have to tailor it to the countries that are most likely to be the countries in which the parties are living and consider the factors and the pros and the cons of choosing a jurisdiction, if that’s what you’re trying to do, over being silent on that issue.

Interviewer: And what particularly public policy or religious issues might need to be taken into account?

Lucy Greenwood: Well, this is quite interesting.  Generally with pre-marriage agreements the consensus is that child maintenance should not be dealt with in a pre-marriage agreement or if it is it’s definitely something a court could review because it would be against public policy to bar the courts from doing that.  But there are other more perhaps less obvious ones when you’re dealing with certain countries.  So in countries, for example, like Singapore and Dubai where same sex marriages or even homosexual relations are not actually recognised or accepted or legal then you’re not going to be wanting to do an agreement or seek to uphold it in that country if it’s for a same sex couple.  But there are others that are not so obvious.  And, for example, adultery clauses are becoming something that’s been debated recently and some people are advocating where clients want to make a point that somebody should not benefit as much if they commit adultery, that should go into the agreement.  But, again, be cautious with places like Dubai where adultery, again, is illegal and the implications for your potential client of even having that word or the court learning that they’re getting less because of it could have very major implications for that client.  So it’s those sorts of factors, cultural factors, religious factors.  You might want to cover, for example, dealing with the Get in the Jewish pre-marriage agreement so that it’s clear as to how that process is going to be undertaken. Just those sorts of things.

Until next time…

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NON-DELEGABLE DUTY OF CARE UPDATE

In June of this year we released programme 5909 in the Local Government channel: Non-delegable Duty of Care. Here’s a short clip from that programme: https://www.youtube.com/watch?v=0syB_RUaHXQ

The programme looked at non-delegable duty of care in the tragic case of Annie Woodland, a ten year old Basildon schoolgirl who suffered hypoxic brain damage after diving into the deep end of a swimming pool during a school swimming lesson.  The school did not have its own pool, and so had arranged for the swimming lessons to be carried out by a third party company.  As a result of her accident Annie brought a claim against the school, the preliminary issue to be decided being whether or not a non-delegable duty of care was owed by the school to her. Mr Justice Langstaff rejected the claim on the basis that there was no non-delegable duty owed. She appealed to the Court of Appeal and her appeal was rejected, the majority holding that the most important factor was that the school did not have control over the swimming lesson and over the place where the accident had taken place.  However the Supreme Court took a fresh look at the law and decided that a school does owe a non-delegable duty in respect of the care of its pupils. The swimming lessons were an integral part of the teaching function of the school and, in those circumstances, even though the school had delegated the performance of that duty to an independent company, which itself may have further delegated responsibility, either to employees or other sub-contractors, the duty remained that of the school and, therefore, if there was negligence on behalf of anybody who was involved in the delivery of that duty the school would retain responsibility.

Having established a non-delegable duty towards her, Annie went on to succeed in her civil claim based on the swimming teacher and lifeguard failing to properly supervise her, which caused a delay in her being spotted hanging in the water.  The judge said that the swimming teacher and the lifeguard should have noticed that Annie was drowning sooner than they did, and their actions “…fell far below the standard of care reasonable to be expected of a teacher…“.  Essex County Council would therefore be held liable for their negligence, however interesting an issue then arose as to whether it was just and equitable for the lifeguard (who was insured, whereas the swimming teacher was not) to indemnify the Council.

It was held that the swimming teacher was 2/3rds liable (she was in charge of the class) and the lifeguard was 1/3rd liable (she was on the opposite side of the pool to where the swimming lesson was being carried out).  The Court therefore stated that the lifeguard’s insurers should contribute 1/3rd of the Council’s liability to the claimant.  This amount is to be assessed at a later date (http://www.bailii.org/ew/cases/EWHC/QB/2015/273.html)

Our programme also considered the case of NA v Nottinghamshire County Council (2015) (http://www.bailii.org/ew/cases/EWCA/Civ/2015/1139.html), which concerned a claim brought by Natasha Armes who was born in 1977 and spent various amounts of time in foster care and residential care during her teenage years.  In connection with two particular periods of foster care, one for around one year, and one for around three/four months with Mr and Mrs B, Ms Armes alleged that she had suffered physical abuse at the hands of the foster carers and, in the case of Mr B, sexual abuse.  In order to succeed in establishing liability for what had happened in these foster placements, which was the most serious part of the case in terms of harm, she alleged that the local authority was vicariously liable for foster carers, and her claim on that ground failed, but she also alleged that the local authority owed her a non-delegable duty of care so that when she was placed with independent contractor foster carers and those foster carers assaulted her, the local authority was automatically liable for that negligence.  She also failed on this second issue.

The claimant then appealed against this decision, but the Court of Appeal have dismissed that appeal, and unanimously rejected the notion that local authorities could owe a non-delegable duty of care for foster parents.  The Court said this would be contrary to public policy, as such a wide duty would effectively impose strict liability.

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Until next time…

NEW SENTENCING GUIDELINES COME INTO EFFECT 1ST FEBRUARY 2016

Here at LNTV HQ we are busy starting to write our new Crime channel programme on the Sentencing Guidelines for theft offences, when along comes another Sentencing Guideline – two in a month – we are being spoilt!

On 3rd November 2015 the Sentencing Council (https://www.sentencingcouncil.org.uk/) finally published their Definitive Guideline for the Sentencing of Health and Safety, Corporate Manslaughter and Food Safety and Hygiene offences (https://www.sentencingcouncil.org.uk/wp-content/uploads/HS-offences-definitive-guideline-FINAL-web.pdf).  They will apply to all sentences on or after 1st February 2016, no matter the date of the breach.

Fines are to be linked to a defendant’s turnover, continuing the recent trend of large increases in the level of fines being imposed by the courts in cases such as those involving Hugo Boss (fined £1,200,000) and Lindsey Oil Refinery (fined £1,400,000).

Under the new Sentencing Guideline, organisations are categorised as follows:

Micro = turnover of less than £2,000,000

Small = turnover between £2,000,000 and £10,000,000

Medium = turnover between £10,000,000 and £50,000,000

Large =  turnover of £50,000,000 or more

To give just an example, for large organisations, fines are suggested from a starting point of £10,000 up to £4,000,000 for health and safety offences, extending up to £10,000,000 for those with high culpability and which have caused a high level of harm.  In addition, fines of up to £20,000,000 are suggested for those convicted of corporate manslaughter.

The guideline confirms that the fine must be “sufficiently substantial to have a real economic impact which will bring home to both management and shareholders the need to comply with health and safety legislation.”

Look out for our future programme on these new sentencing guidelines.

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AN EXTRA HOUR…AND THE MODERN SLAVERY ACT 2015

Here at LNTV HQ many of us looked forward to the extra hour in bed on Saturday night, together with lighter mornings as we wait at train stations to start our commute, but the pay off is that evenings will now be getting darker earlier, and that is something we are not such great fans of.  Someone from the team who shall remain unnamed for fear of deserved reprisals, has even declared that they have bought their first Christmas present.  Don’t worry, appropriate action will be taken.

Meanwhile in the studio we were fortunate enough to have Richard Kenyon, Head of Employment and Pensions from Fieldfisher LLP, to talk to us about the new Modern Slavery Act 2015, and its implications for companies and organisations.  Here is a brief extract from that upcoming programme:

Interviewer: What requirement does s.54 of the Modern Slavery Act 2015 impose on organisations?

Richard Kenyon: Section 54 requires commercial organisations to produce an annual slavery and human trafficking statement for each financial year, and that needs to set out what the organisation has done, the steps its taken during that year to ensure that slavery is not taking place either anywhere in the organisation or anywhere in its supply chain.  And once the statement’s been prepared it needs to be approved in the case of a company – by the directors, the board of directors of the company, signed off by one of those directors and then published on the company’s website with a link – a prominent link from the webpage.

Interviewer: And what information should be in a slavery and human trafficking statement?

Richard Kenyon: Well, the type of information that should be included is really left up to the organisation.  The Act does give a high level framework of the type of information that might be included, and that includes a number of things.  First of all, a description of the organisation itself and its supply chain, then the policies that the organisation has in relation to modern slavery, the type of due diligence exercises it carries out within its organisation and its supply chain, how it identifies risk and what sort of Key Performance Indicators it puts in place to ensure that its supply chain are not engaging in modern slavery and, finally, the type of training of the employees in the organisation that the organisation undertakes.

Interviewer: Given that an organisation can discharge its duty simply by stating that its taken no steps, why does the government think that any organisation is going to go to some considerable trouble to supply this information?

Richard Kenyon: That’s right that an organisation can comply with the legislation by putting out a statement that says we’ve taken absolutely no steps to ensure that modern slavery isn’t taking place.  But the government is introducing this legislation in a kind of compliance and social shaming way, so that the statement itself will open up the organisation to public view, and the idea is that through pressure from NGOs and the public, and through peer group pressure, that organisations will want to show that they take this issue seriously. And therefore, peer group pressure will result in more and more information coming into the public domain as organisations take more and more steps is the idea.

Interviewer: So which organisations does this requirement apply to?

Richard Kenyon: Well, it applies to commercial organisations, which is bodies corporate or partnerships, which produce goods or services and which have a turnover of £36 million or more, some of which is done in the UK, so it’s businesses that are operating in the UK which have a turnover of £36 million or more.

Interviewer: And there was some debate, wasn’t there, about where to set the threshold of turnover?  How did they arrive at £36 million and what are the reasons behind it?

Richard Kenyon: Well, the government consulted over a number of figures, the lowest was £36 million and the highest was a billion. In fact, only 7% of the respondents to the consultation suggested that it should be a billion pound turnover. The government ultimately settled for £36 million largely because, first of all, that was the number that the majority of respondents to the consultation requested; secondly, there is in the Companies Act a definition of medium sized businesses which is businesses which have a turnover of £36 million or less, so £36 million or more is large businesses. And the rationale is that large businesses will have the commercial clout to push this issue down through their supply chains by requiring their suppliers to provide information about what they’re doing in relation to modern slavery.

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GREEN ISSUES FOR LANDLORDS AND TENANTS

Recently we were lucky enough to have wonderful Peter Williams of Falco Legal Training in the studio to discuss the minimum energy efficiency standard and the Heat Network Regulations as part of our upcoming Property channel programme, ‘Green Issues for Landlords and Tenants’.  Here is an exert from that forthcoming interview:

Interviewer: What is the central aim behind the introduction of the Energy Efficiency Regulations 2015?

Peter Williams: The purpose of these Regulations is to cut down the amount of energy used in the UK. UK carbon emissions 25% of those are thought to be domestic houses and another 12% commercial buildings, and the aim is to target tenanted buildings, which is a fair proportion of the building stock as a whole. And the Energy Act 2011 contains provisions that require the Secretary of State to make Regulations to ensure that this happens.

Interviewer: Can you explain the way in which the minimum energy efficiency standard is going to operate?

Peter Williams: Yes. The Regulations that provide for this were made under the Energy Act 2011 and the Secretary of State was required to make these, and the standard has to come in to effect no later than April 2018. So the Regulations operate in two different ways. First of all, they say that landlords are not permitted to grant leases, both of residential and commercial property, of property with an energy rating of less than E, unless they’ve carried out works that are cost effective to improve the energy efficiency of the property, or one of the exemptions applies. So that’s the first. And the second one is that from a later date, which is 2020 for domestic properties and 2023 for commercial properties, landlords won’t be allowed to continue to let properties, which means that they’ll have to carry out works to improve the energy efficiency of property that is already let.

Interviewer: The minimum energy efficiency standard applies to both domestic and non-domestic private rented property. Why in practice is this not going to be workable in relation to domestic property?

Peter Williams: This is to do with Green Deal funding. Landlords have to carry out cost-effective energy efficiency improvements, and the way that’s defined in the Regulations is that it’s works for which the landlord can obtain Green Deal funding. And that means taking advantage of the government’s Green Deal, which is borrowing money for energy efficiency improvements which is then paid back through a levy on the electricity bill. And the Green Deal runs with the property so that it can be passed on between different owners. Now landlords are only required in domestic properties to carry out works for which Green Deal funding is available, but relatively recently, the middle of 2015, the government withdrew all Green Deal funding. It had been available, but the government announced that no further funding was going to be made available. And therefore it’s unclear now how landlords are going to be able to carry out any cost effective improvements when Green Deal funding is no longer available. So we’re waiting for some sort of announcement from the Department of Energy and Climate change, which is the responsible government department for this as to how they think this is going to work in the context of domestic properties.

Interviewer: Focusing on non-domestic private rented properties then, which properties are going to be covered by the standard?

Peter Williams: Right, so we’re looking at commercial properties principally now, and that’s defined in the legislation as any property that isn’t a dwelling, so dwellings are fairly self explanatory. There will be borderline cases, but we can look at them individually as and when they arise. But generally, therefore, we’re looking at commercial properties which are being let. There are exclusions for very long leases, so leases of 99 years or more from the date when they were granted are exempt, and also very short lets are exempt as well, so that’s leases of six months or less, unless the tenant has already been in there for 12 months, which is an anti-avoidance provision, obviously. Now the only properties that are covered are those that have a valid energy performance certificate, or EPC. So obviously all properties now need an EPC for the next letting, but there will be some properties where there may be no EPCs, even though leases have been granted. And also there are some properties for which EPCs are not needed at all, listed buildings is a classic example where we think that no EPCs are needed. So generally, if you don’t need an EPC then you’re not within the minimum energy efficiency standard regulations.

It was great to finally have Peter in the studio after making contact at an SRA event looking at the future of Continuing Professional Development, and we are grateful to him for giving up his time to come and speak to us on this important subject for landlords and tenants of all properties.

Until next time…

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WHAT HAPPENED TO SUMMER…AND NEW GUIDELINES FOR ASSESSMENT OF GENERAL DAMAGES IN P.I. CASES

As we gaze out of the window at LNTV HQ this week we are slightly confused.  We are sure that back in June we were told that summer was officially starting, and we’ve been patiently waiting ever since.  We admit there has been the odd day of blistering heat, only to return to cloud, wind, rain and cold the very next day.  Today there were mutterings of extra layers being needed, and even a tentative suggestion that we might need to consider the possibility of turning the heating on.  This is early September, we have to remind ourselves, while scrutinising the calendar and zipping up our coats.  Perhaps there will be a late summer, a glorious few weeks in which to salvage something from what will otherwise go down in history as one of the wettest summers on record.  We can only hope.

However, our frustration at not seeing enough of the big yellow thing in the sky is happily distracted this week by news that the finishing touches have just been added to the 13th edition of the Judicial College Guidelines for the Assessment of General Damages in Personal Injury cases, and should be published later this month.  We feel a future programme topic in the air!  Thanks to friend of LNTV, Len South (on Twitter @rolypolyspaniel), for drawing our attention to it.

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THIS WEEK IN THE STUDIO…RICHARD WILLIAMS, SENIOR POLICY EXECUTIVE AT THE SRA

This week we were lucky enough to be joined in the studio by Richard Williams, Senior Policy Executive at the Solicitors Regulation Authority, to talk about the future of Continuing Professional Development for our upcoming programme ‘SRA Competence Statement and Toolkit’, in the Practice Management & Compliance channel.

Here’s a sneak peak at part of Richard’s interview, before the programme’s release date:

Interviewer: And the key document in this is the Competence Statement, isn’t it?  And it’s a fairly extensive document.  Does it run the risk of being over-prescriptive?

Richard Williams: The Competence Statement really just articulates what all practicing solicitors need to do in order to do their job to the best of their abilities. But as an approach, our new approach to ensuring continuing competence is less prescriptive than the current requirement to undertake 16 hours. The 16 hours requirement is, in fact, a blanket approach, it applies to all solicitors, irrespective of their career, their experience, and also their role. With our new approach, solicitors can think about what they need to do in order to deliver a proper standard of service and meet their regulatory responsibilities.

Interviewer: So Principle 5 is what underlies all this, how do we interpret that in the light of the new CPD requirements and the Competence Statement?

Richard Williams: All solicitors have a regulatory requirement to deliver a proper standard of service, and this is articulated in Principle 5. The Competence Statement can help solicitors deliver this particular obligation, and there are two ways in which it does that. Firstly, the Competence Statement articulates what a solicitor needs to do to practice effectively. And, secondly, the Competence Statement in the context of our new approach can be used by solicitors to enable them to reflect on their practice and identify any learning and development they need to do in order to continue to practice effectively.

Interviewer: So how does the SRA believe it’s going to be using the Competence Statement in future?

Richard Williams: We use the Competence Statement as a key mechanism in order to allow us to ensure that the consumers of legal services are protected. It’s really important that solicitors do their job effectively and practice effectively, and the Competence Statement and our new approach to ensuring on-going competence enables us to do this in two ways. Firstly, solicitors have a regulatory responsibility to deliver a proper standard of service, and under our new approach to CPD they’ll have to reflect on the quality of practice in relation to the Competence Statement, and identify where they may have any learning and development needs.  As part of our Training for Tomorrow programme we’re also considering the introduction of an assessment framework. We will consult on this later in 2016. The point of the assessment framework will be to enable solicitors to demonstrate to us that they are competent at the point of admission to the profession, so in that way the Competence Statement will critical as part of ensuring that consumers and legal services are protected.

Interviewer: So some people might say that this looks very much like a box ticking exercise which, of course is what CPD was always criticised for. What would you say to them?

Richard Williams: Absolutely not. Our new approach is much harder than a solicitor attending a course towards the end of the CPD year to gain a specific number of hours. Solicitors will need to think really hard about what it is that they need to do in order to deliver a competent service and meet their regulatory obligations. As a regulator we take this really seriously. As a result, under our new approach all solicitors will be required to make an annual declaration that they’ve reflected on the quality of their practice. They’ve identified their learning development needs and addressed them, and we’ll monitor that.

That’s all for this week – a VERY happy bank holiday weekend to all our readers and subscribers!

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