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Stories included
- Landlords must reveal how service charge money is spent
- Corporate Manslaughter Bill gets Royal Assent
- Husband and wife team win tax case ruling
- Brown orders review of 24-hour drinking
- Council ‘victimised’ women over equal pay claim
- Dyslexic police officer wins disability ruling
- UPS entered into contract despite its own terms and conditio
- Creditors agree safety net proposals for home equity release
- Cost of preparing for old age set to rise
- Mother loses daughter over refusal to allow father contact
- Civil court judges to ditch their wigs
Landlords must reveal how service charge money is spent
New proposals contained in a Government consultation paper will oblige landlords to provide tenants with yearly statements giving details of how service charges are spent.
Tenants will be given the right to withhold service charges if the landlord fails to comply.
Many service charge payers already receive some information about how their money is spent but until now there have been no statutory minimum standards.
The new rules will affect more than a million people living in leasehold accommodation in England and Wales. They will receive a detailed breakdown of how much service charge money has been spent on such things as repairs, maintenance, improvements, professional fees and staff costs.
Any item accounting for 10% of the total will have to be shown separately. This could include items such as lift maintenance, utility bills and refuse collection costs.
Landlords will also need to reveal the balance of service charge money held at the beginning and end of each year.
Junior Housing Minister Iain Wright said: "Leaseholders are expected to contribute towards the upkeep and maintenance of their property through service charges, so it's only reasonable for them to expect that the money is properly accounted for.
"People should be able to see what they are paying for and a yearly statement of account will create transparency and ensure that tenants receive information about service charges.
"Tenants will be better able to check that they are receiving value for money and see whether sums paid towards the upkeep of their property are being used for the right purpose."
The Department for Communities and Local Government insists the proposals have been drawn up to make sure they do not impose disproportionate costs on landlords. Officials say landlords will be able to hold service charges for several groups of service charge payers on the same account. They will also be able to present the information to leaseholders in a format that is compatible with their accounting system.
The consultation period ends on 4th October.
Corporate Manslaughter Bill gets Royal Assent
The Corporate Manslaughter Bill, which sparked much debate in the country and in Parliament, has now received the Royal Assent.
It means that from next April, it will be easier to convict companies of manslaughter if their gross negligence leads to someone being killed. They face unlimited fines if it’s found that they caused death due to gross corporate health and safety failures. Firms can also be ordered to take remedial action to rectify the failures that led to the death. The court may also order them to publicise details of the case and how much they are fined.
The legislation also extends to corporate bodies in the public and private sector, Government departments, police forces and certain unincorporated bodies, such as partnerships if they are employers.
The Justice Minister, Maria Eagle, said: "The Corporate Manslaughter Bill is a ground-breaking piece of legislation. This is about ensuring justice for victims of corporate failures. For too long it has been virtually impossible to prosecute large companies for management failures leading to deaths.
"For the first time companies and organisations can be found guilty of corporate manslaughter on the basis of gross corporate failures in health and safety. The Corporate Manslaughter and Corporate Homicide Act will make it easier to prosecute companies who fail to protect people.
"We are sending out a very powerful deterrent message to those organisations which do not take their health and safety responsibilities seriously."
The Act does not increase liability for individual directors or managers. However, they can still be held to account through health and safety laws and the common law of manslaughter.
Employers concerned about the impact of the Act can be reassured that an organisation is only at risk of prosecution for manslaughter if it has been guilty of gross negligence. Firms that have good safety policies in place are unlikely to be affected even if someone is killed in an accident.
The Act will come into effect on 6th April next year. The Ministry of Justice says it is now preparing guidance on the main points of the Act which will be published later this year.
Husband and wife team win tax case ruling
Thousands of husband and wife businesses look set to benefit after a couple won a tax case in the House of Lords.
The ruling finally settles the long running dispute between the firm Arctic Systems and HM Revenue and Customs (HMRC).
Geoff Jones and his wife Diana each own a half share in their IT business, Arctic Systems. Tax officials argued that Mr Jones had deliberately paid himself a lower salary so he could pass a share of company profits to his wife in the form of dividends.
To counter this, HMRC argued that a wife’s dividend income from shares she held in a firm jointly owned with her husband should be taxed against him at the same rate as if it were his income. This view was upheld by a specialist tax tribunal and the High Court but then rejected by the Court of Appeal which ruled that there is nothing wrong with a wife taking income through dividends at a lower tax rate.
The Revenue appealed but the ruling has now been upheld by the House of Lords.
The decision will come as a relief to thousands of other family businesses which have similar arrangements in place. However, many experts believe the Government may now introduce legislation to close what HMRC sees as a tax loophole.
We shall keep clients informed of developments.
Brown orders review of 24-hour drinking
The Prime Minister Gordon Brown has asked the Home Office to carry out a review of the 24-hour licensing laws.
The study will focus on the impact on health and disorder. Mr Brown acknowledged that there were concerns about the social effects of having alcohol available round the clock. He told a press conference: "Clearly there are strong feelings about what has happened. There has been an increase in the number of arrests between 6pm and 6am and you might expect that, but it is not a very significant part of the amount of arrests that take place in our community."
Home Office officials will consult several organisations including the police, local authorities and hospitals during the review and a report will be produced by the end of the year.
The move follows Mr Brown’s decision not to proceed with super casinos and has prompted speculation that he may also favour tightening up the licensing laws.
However, he said the 24-hour laws had been in place for only two years and it was too soon to rush to judgment. He will wait until the report is produced and then examine the evidence.
We shall keep clients informed of developments.
Council ‘victimised’ women over equal pay claim
The House of Lords has ruled that letters sent by a local authority to 39 of its women employees amounted to victimisation.
The women were bringing equal pay claims against St Helens Metropolitan Borough Council. The council sent letters to them urging them to settle and warning of the potential consequences of persisting with their claims. These included the possibility that other staff might have to be made redundant and some children would be deprived of school dinners.
An employment tribunal said that this amounted to victimisation but that was overturned by the Court of Appeal. However, the House of Lords has now upheld the tribunal ruling. The Law Lords said that an employer is entitled to try to protect his interests but must be careful not to do anything that would make a reasonable employee believe that he or she was being pressurised.
They said indirect pressure such as pointing out the potential risk to colleagues could be just as powerful in preventing an employee from pursuing a claim as more direct threats. However, each case would depend on the individual circumstances and it would be up to the tribunal to look at the facts and determine whether undue pressure had been used.
Dyslexic police officer wins disability ruling
A police officer has won his appeal that he should be classified as disabled because he suffers from dyslexia.
David Paterson joined the Metropolitan Police in 1983 and rose to the rank of chief inspector. He was diagnosed as suffering from dyslexia in 2004. He then claimed that the force discriminated against him because it didn’t make reasonable adjustments to the internal processes that would determine whether he could become a superintendent.
Mr Paterson lost his case at an employment tribunal which ruled that he could not be classified as disabled within the terms of the Disability Discrimination Act. It ruled that his condition didn’t have a “substantial adverse effect” on his ability to carry out his everyday duties.
However, the Employment Appeal Tribunal has now ruled that the dyslexia was a substantial impairment because his ability to advance his career depended on passing written exams.
Mr Justice Elias said: “In our view, carrying out an assessment or examination is properly to be described as a normal, day-to-day activity. Moreover, in our view the act of reading and comprehension is itself a normal, day-to-day activity.
The tribunal ruled Mr Paterson’s dyslexia put him at a disadvantage because he needed 25% more time to carry out an assessment.
Having established that dyslexia can be classified as a disability, the case will now be referred to another tribunal hearing to see if Mr Paterson was a victim of discrimination.
Many legal experts believe the case could have far-reaching implications for thousands of dyslexia sufferers and their employers.
We shall keep clients informed of developments.
UPS entered into contract despite its own terms and conditions
The House of Lords has ruled that by agreeing to transport three packages by road to another country, the delivery service UPS had effectively entered into a contract of carriage regardless of what its own terms and conditions might say.
In 2002 the company Datec Electronics Ltd gave UPS three packages of computer processors to be delivered the next morning to a firm in Holland. The processors reached UPS in Amsterdam but went missing and were never delivered to the Dutch company.
UPS argued that its standard terms and conditions stated that it would not carry any individual package worth more than 50,000 US dollars. Each of Datec’s packages exceeded that value and so UPS argued there was no contract.
However, the House of Lords ruled that regardless of such terms, a contract of carriage was created “if UPS accepts the package and the undertaking to transport it is performed to any extent”.
This meant that as the packages were transported overseas, including part of the way by road, the Convention on the Contract for the International Carriage of Goods by Road (CMR) applied and so UPS would be liable for damages.
The Lords also upheld Datec’s view that the probable cause of loss was wilful misconduct by UPS or its agents or servants. This had the effect of displacing the limitation of liability that might otherwise be available to UPS.
Creditors agree safety net proposals for home equity release
Creditors could soon find it easier to access the home equity of debtors who sign up to Individual Voluntary Arrangements (IVAs).
The proposals, drawn up at the industry forum hosted by the Insolvency Service and the British Bankers’ Association, also provide a safety net for those in debt.
Many people with IVAs are expected to re-mortgage their homes in year five to allow creditors to access the growth in the property’s value. However, there is no protocol in place for people who can’t afford to re-mortgage. Changes have now been agreed to suit both parties. If someone can pay 65% of their debts by re-mortgaging then creditors can call upon them to release the equity in their homes at the start of the IVA.
For those who can’t afford to do that and so have to wait until the fifth year, there will be safeguards. Re-mortgaging will only be necessary for equity of more than £5,000 and on the basis that the loan-to-value ratio is set at a maximum of 85%.
The fee structure for Individual Voluntary Arrangements could also be about to change because of a proposal put forward by the British Bankers’ Association.
IVAs have become increasingly popular as they allow a debtor to repay money over a period of up to five years. However, many banks have become increasingly dissatisfied with the system because it involves paying large fees upfront without any guarantee that the arrangement will be honoured.
Many IVAs break down within a few years leaving creditors unable to recover the debt and out of pocket having paid the initial fees.
Now following discussions at the insolvency forum, the banking industry and IVA providers have reached agreement in principle to reform the system. They’re looking at ways in which the creditor writes off part of the debt in return for having the fees spread out over the full five years of the IVA.
This would mean that companies providing IVAs would have a greater stake in their success and make them more likely to do everything possible to make sure they didn’t fail.
The banks are also looking for an overall improvement in standards while the providers want greater clarity about the acceptance criteria for IVAs.
Desmond Flynn, Inspector General of The Insolvency Service welcomed the level of agreement reached and said: "The development of these protocols will produce clear benefits in the issues of transparency, fairness and the overall costs of the process. We hope that, going forward, this will enable IVA proposals to be dealt with on their merits which would be in the best interests of both debtors and creditors".
The discussions are continuing.
Cost of preparing for old age set to rise
The cost of preparing for the frailty of old age by nominating someone to have authority over your affairs looks set to at least treble.
Thousands of people make arrangements known as enduring powers of attorney which are designed to come into force should future ill health mean they are no longer able to make decisions for themselves. In these circumstances, the nominated person who is usually but not always a relative, would have the legal right to make decisions on the sufferer’s behalf about such things as money and property.
At present, a married couple could arrange these powers and make their wills at the same time for a relatively modest cost.
That looks set to change in October when the Mental Capacity Act introduces a new system to be known as Lasting Power of Attorney. They may sound similar but the new system will be more complicated and so more expensive.
The new lasting powers of attorney will also have to be registered at the Court of Protection which will push up the price even further.
However, one advantage of lasting powers of attorney is that people will also be able to nominate someone to make decisions about their future health care – even to the point of whether or not they should be given life-saving treatment.
That may appeal to some people while alarming others but at least they will have the choice.
People who like the idea of granting authority over their health care may prefer to wait until October when the new system is introduced, whereas those who only want to grant power of attorney over their business affairs might be better making arrangements now when the cost is much lower.
Mother loses daughter over refusal to allow father contact
A father has been granted a residence order for his daughter after the mother repeatedly failed to comply with contact orders.
The couple separated in 2001. The father was able to have contact with his daughter for the first year but then the mother refused to co-operate. The father began proceedings but the mother refused to comply with court orders on at least 11 occasions, including some with penal notices attached.
A judge ruled that it would not be appropriate to send the mother to prison as she had a baby with her new partner. Instead, the father was granted a residence order for his daughter with the mother being allowed reasonable contact.
The order was upheld by the Court of Appeal which said the mother’s hostility and refusal to co-operate meant there was no option but to let the girl live with her father.
Civil court judges to ditch their wigs
Judges are to stop wearing wigs in civil courts, bringing to an end a tradition dating back more than 200 years.
Their elaborate robes are also going and will be replaced by a simple black gown. The changes are being introduced from January by the Lord Chief Justice, Lord Phillips, who believes the traditional dress makes the legal system seem dated and out of touch.
It’s estimated the move will save the taxpayer £300,000 a year.
However, judges will continue wearing wigs and robes in criminal courts where it’s felt they add to the dignity and gravitas of the occasion.
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