Clarke and Son News

Acas has published its annual report and accounts for the year ending 31 March 2010, giving a picture of the state of individual and collective dispute resolution in Britain.  The number of individual employment claims referred to Acas for conciliation rose by 13% to 87,421 (up from 77,478 in 2008/09).  This increase in workload has inevitably affected the overall state of resolution, which dropped slightly to 70.8% (from 72.5% in 2008/09). As always, unfair dismissal was the most common type of claim and featured in 64,878 cases referred to Acas, nearly 10,000 more than last year.

The new pre-claim conciliation (PCC) service introduced in April 2009 has proved very popular and successful in avoiding the need for proceedings to be issued. Acas received nearly 10,000 PCC referrals, of which the overwhelming majority concerned unfair dismissal, deduction of wages and/or breach of contract. It hopes to see this number doubled in its second year. A third of PCC referrals resulted in resolution, with the most common reason for failure being the employer’s unwillingness to engage in the process.

Although large-scale collective disputes have continued to hit the news headlines this year, the number of collective disputes referred to Acas has in fact dropped by 6% to 905. These mostly concerned pay and conditions, recognition, or redundancy. 94% of cases were resolved or moved towards resolution by Acas.

To see the full report, visit: Acas Annual Report and Accounts 2009/10

 For further information on Employment issues, please contact Thomas Hunt on Tel: 01256 320 555.

The Law Society reports that lawyers have seen a significant increase in cohabitation  cases.

The recession has caused an ‘explosion’ in the number of cohabiting couples seeking advice on relationship breakdown, according to family lawyers who have called for ‘complex’ laws appled to them to be updated.

It is thought that part of the reason for the rise is because fewer people are marrying, but the recent surge is principally related to the impact of the recession.

 The law in relation to cohabitees is complex and there is a view that it should be brought in line with the law applied to married people and same sex couples in civil partnerships.

If you require expert help or advice in relation to any cohabitation matter, whether it is dealing with a potential dispute or taking pre-emptive action to avoid a dispute (such as preparing the terms of a cohabitation agreement) Clarke & Son can assist.  Please contact Bhupendra Sankhla on Tel: 01256 320 555.

In this week’s Panorama programme, presenter Vivian White highlighted the risks in using a will writing service.  Many people are under the false impression a ‘Will writer’ is a solicitor, but unlike a solicitor they do not have to undergo any training, have insurance, and are not regulated by any organisation which ensures that they conduct their activities in the interests of the consumer and provide some form of redress, if things go wrong.  If they go out of business, there is little that can be done - sometimes the Will cannot be found, even where charges have been made for storing it.

Andrew Poole’s wife, Suzanne used a Will writer, but the Will failed to include any provision for him, leaving the entire estate in trust for his stepdaughters.  Caroline Bielanska, Chief Executive of Solicitors for the Elderly, appeared on the programme, and expressed concern that a spouse had not been provided for.  The Will writers appeared to have failed to advise on his right to bring a claim against the estate for inadequate provision.  She said,

 ”a specialist solicitor would have asked why a spouse was left out, kept a detailed record of those reasons and advised of the high risk that the Will would be challenged.  Solicitors are in the business of giving legal advice, taking into account the client’s domestic and financial circumstances - it does not appear that Suzanne Poole received any such advice.”

The lack of regulation has enabled many Will writers to adopt high pressure selling techniques which was illustrated in the programme, often offering Wills for a low or discounted fee, and then recommending themselves to be appointed as executors, selling other services without full advice, such as transferring the home into trust in an attempt to avoid care fees.  Terms and conditions can be poorly worded and difficult to understand.  In secret filming undertaken by the BBC for the programme, an elderly couple was not told the details of charges which were confusingly set out in writing but then taken away by the Will writer.

The fear of solicitors costs, prompts some people to use Will writers. Nia Wharry, Partner and Head of Wills & Probate commented,

“Solicitors are required to set out in writing the basis of their charges, and in many cases Wills are undertaken for a fixed fee with free storage of Wills and other documents.”

Recent research by the consumer group, Which? found that the average fee for a Will drafted by a solicitor was £130, compared to that of a Will writer of £107.

Nia Wharry said,

“This programme highlights the potential for getting it wrong without full legal advice and the need for proper regulation of Will writers. It can be very costly to undo after you have gone and can leave your family in disarray when they have to pick up the pieces as problems generally only come to light when you have died.”

For more information on Making a Will, contact Nia Wharry on Tel: 01256 30 555.

The importance of making a Will was highlighted recently following the death of famous boyband singer Stephen Gately who died intestate. Sephen’s estate was worth £3.5million and after settlement of all liabilities left approximately £1.5million being divided according to the rules of intestacy.  The intestacy rules meant that his husband would receive two thirds of his estate and his parents the remaining one third and it is unclear as to whether or not these would have been his wishes had he made a Will.

So what happens if there are insufficient funds in the estate to pay all the legacies in the Will?

If there is not enough money in an estate, then debts and expenses have to be paid in a particular order:

1. Those who have incurred funeral and testamentary expenses

2. Anyone owed a debt that has been secured upon the deceased’s property

3. HM Revenue & Customs

4. Department for Work and Pensions

5. Anyone who is owed unpaid wages

6. Beneficiaries named in the Will: a. Pecuniary Legacies b. Residuary Estate

If there is insufficient to pay the legacies in full, unless the deceased had provided clear directions, the legacies must be decreased in equal proportions.

If there is a situation where the legacies add up to a far larger sum that the testator’s estate had for many years, this could possibly raise queries relating to the mental capacity of the testator at the time the Will was made.

If you would like to find out more about Making a Will or What to do when someone dies without making a Will, contact Nia Wharry Tel: 01256 320 555.

Update from the Chief Economist at RBS (5 July 2010)

Mortgage approvals for house purchase in May dipped marginally compared with April while house prices were flat m/m in June according to Nationwide. This despite the cost of borrowing on new mortgages falling to an all time low, at least for those with some equity. The average market rate for a two-year fixed-rate mortgage with a 25% deposit fell to just 3.78% in May. Monetary policy may now be ‘pushing on a string’, at least in the housing market.  In other words, the impact of lower interest rates may have been exhausted.  Figures from the bank of England also pointed to a slowdown in the supply of credit for buying houses due to concerns about lower availability of wholesale funding, on which bank lending depends.

If you would like information on Buying or selling your home or Re-mortgaging, please contact Jenny Axe on Tel: 01256 320 555.

The following are predicitions of how the Emergency Budget on 22nd June 2010 could affect you and your business:

Rise in tax-free allowance - the Government has indicated that they intend to raise the personal tax-free allowance which currently stands at £6,475 to £10,000 over the lifetime of this Parliament. It is likely that in the first instance the allowance will rise between £700 - £1,000.

National Insurance Rise - A 1% rise in National Insurance Contributions is likely to kick in next April.

VAT Rise - There is speculation of an increase in VAT.

Corporation Tax - it has been announced that the headline rate of corporation tax will be reduced however there has, at present, been no indication as to the rate it may be reduced to.

Pensions - The Coalition Government has agreed to restore the link between the basic state pension and earnings. There is a likelihood that further pension reliefs will be taken away from high income earners, perhaps lowering the proposed threshold for tapering of higher rate relief which is set at £150,000 of income. The Government could go further and implement other reforms such as increasing the state retirement age for men and women.

Inheritance Tax (IHT) - there is unlikely to be any change to the current IHT threshold of £325,000.  However, there may be changes to some restrictions to IHT including the rules for non-domiciled individuals.

Capital Gains Tax (CGT) increase - the actual rate is yet to be determined but it is thought that there will be an increase in order to bring CGT in line with income tax, indicating it could go up (from 18%) to approximately 40%, leading to owners of second homes, share portfolios and other investments facing substantially higher CGT bills. It is predicted that this increase will begin at the start of April 2011. The increase is to be on non-business activities only, however there has been some discussion as to what is classed as ‘business’ and ‘non-business’.  The Emergency Budget may also introduce changes to Private Residence Relief which enables people to sell their only or main residence free of CGT.

For more information on any of these issues, please email Nia Wharry or Tel: 01256 320 555.

ACAS (Advisory, Conciliation and Arbitration Service) has issued guidance to help employers get the best from their employees and avoid absence during the World Cup this Summer. (www.acas.org.uk/worldcup)

In anticipation of the World Cup, ACAS urges employers to start talking to employees early to manage their expectations and minimise the impact on workplace productivity.  ACAS enourages employers to be:

• Flexible, where possible, for example, by altering start and finish times and allowing longer lunch breaks so that staff can watch games during the working day;
• Clear about what you expect from your employees in relation to attendance and performance;
• Communicative - start talking early on about managing leave and working hours;
• Honest about how you will manage changes to working practices and where this isn’t possible explain the reasons for this;
• Fair about the way you respond to requests for time off.

Thomas Hunt, Employment Law Specialist adds:

“This does not mean that Employers simply need to bend over backwards to accommodate football fans. It is important to note that not everyone is  interested in football and when contemplating changing working practices in favour of those wishing to take leave during the tournament the impact on other employees must always be considered to avoid any issues of unfair treatment.”

“In addition,  Employers should also be wary of sickness absence and the possibility of false applications for sick leave during the course of the World Cup.”

Should any of the above issues affect your business, please do not hesitate to phone Thomas Hunt on Tel: 01256 320 555 to arrange an appointment.

Homeowners selling their properties will no longer be required to produce a Home Information Pack (HIP), after the government announced they will be scrapped.

HIPs, which were launched in 2007 and have since become mandatory for anyone selling a home, have been dogged by criticism. Estate agents have long complained they add red tape to the selling process, while sellers have grumbled about the £200 - £400 price tag attached to the packs.

Communities secretary, Eric Pickles, laid an order before parliament suspending HIPs, pending primary legislation for a permanent abolition. He said:

“The expensive and unnecessary Home Information Pack has increased the cost and hassle of selling homes and is stifling a fragile housing market. That is why I am taking emrgency action to suspend the HIP, bringing down the cost of selling a home and removing unnecessary regulation from the home buying process.”

“This action will encourage sellers back into the market, and help the market as a whole and the economy recover.”

Sellers will still be required to get an energy performance certificate (EPC), showing how energy efficient a property is, within 28 days of putting their home on the market, as this is a requirement under EU law. The cost of these is typically around £60.

For further information on buying or selling your home or on EPCs, please contact Jenny Axe on Tel: 01256 320 555.

HM Treasury announced on 17th May 2010 that the Chancellor will deliver his emergency Budget on 22nd June 2010.

Also on 17th May 2010, HM Treasury announced the creation of an independent body, the Office for Buget Responsibility (OBR), to assess the state of public finances. HM Treasury confirmed that the OBR’s forecast for the economy and public finances will be published as part of the Emergency Budget.

Help the Aged and Age Concern have joined forces to create a leading and influential organisation - Age UK. This is now a large charity dedicated to providing help and support to the elderly community. The organisation works to improve the lives of the elderly providing life enhancing services and vital support to those in need.

Creating Age UK is an exciting and positive step to present greater opportunities to the elderly. They aim to help people stay independent for longer in their own homes for as long as possible.

Age UK also includes a network of shops within local communities, information and advice services through helplines and the Internet.  Age UK also campaigns on related issues such as age discrimination and pensions working towards making a difference in society and raising awareness in the public.

If you have a query regarding matters for the elderly, contact Nia Wharry on Tel: 01256 320 555.