Why shareholder agreements are vital in family businesses

Posted by David Filmer Mar 22nd, 2011, in Business Protection, Dispute Resolution

In any business, when shareholder disputes arise, it‘s always a difficult time. However, when the owners of a business are also members of the same family, then things can turn especially nasty.

The benefits of relying on family members in business affairs are evident in the hallmarks of greater trust and stronger commitment to the success of the business. However, when problems at home spill over into the office, there is rarely a happy outcome.

The Patak’s family business dispute

This was highlighted in a high-profile case surrounding the family-owned Indian food business Patak’s. This business was developed from a small family enterprise making curry sauces, into a multi-million pound business, but things turned sour when the patriarch of the company died, and the shares in the business were being distributed between the siblings. In the end, a protracted case in the High Court led to two of the siblings being awarded multi-million pound settlements in 2006, but at the expense of family unity. (more…)

Minimising legal costs: Why prevention is better than the cure

Posted by Amanda Webster Mar 15th, 2011, in Dispute Resolution

In my role as a Deputy District Judge in the County Courts, one of my functions is to assess the legal costs claimed by the winning party against the losing party in civil disputes.

Having been a litigation lawyer for over 23 years and involved in a number of high profile cases, I thought I had seen it all when it came to legal fees.

I have to say, however, it always comes as a surprise to see the huge bills of costs run up on some cases where the amounts in dispute are relatively small, or where the issues aren’t of particular importance to the parties to the claim. It is not uncommon to see cases where the costs claimed are wholly disproportionate to the amount in dispute, sometimes two, three or even four times the damages awarded.

In a recent case in Leeds County Court I spent two full days assessing the costs in a claim concerning the boundary between two properties. The damages awarded by the trial Judge were £2,500. The reason the assessment took so long in this extreme example was that the costs claimed were so high, in excess of £50,000.  On anybody’s reckoning that cannot be said to be value for money. (more…)

Inheritance Tax: Transferable Nil Rate Bands explained

Posted by Rachel Conroy Mar 9th, 2011, in Wills, Probate and Trusts

Everyone has an allowance which they can leave free of Inheritance Tax on their deaths. This amount is referred to as the Nil Rate Band and is currently £325,000. Further, no tax is payable when an Estate is left to a spouse or civil partner.

The transferrable Nil Rate Band was introduced in the Finance Act 2008 and is available where someone has died on or after 9 October 2007, even if their spouse or civil partner died before this date.

Where a married couple leave everything to each other in their Wills it is now, not only exempt from Inheritance Tax but it means they have not used their own Nil Rate Band and it can be transferred to their surviving spouse or civil partner. Where there have been gifts to other family members or friends on the first death, which are below the Nil Rate Band, it is possible to transfer the unused part of the Nil Rate Band to surviving spouse or civil partner. (more…)

Harrison Drury shortlisted for Red Rose Awards

Posted by Communications Director Mar 8th, 2011, in HD news

Harrison Drury has been shortlisted for the Law Firm of the Year prize at the Lancashire Business View Red Rose Awards 2011.

The Red Rose Awards celebrate the outstanding achievements of business in our region, rewarding and recognising businesses which have not only survived but thrived in incredibly challenging times.

Awards in 18 different categories will be presented at a ceremony and celebratory dinner at Winter Gardens, Blackpool on March 31 2011.

Earlier this year, Harrison Drury was a finalist for Law Firm of the Year at the Insider Lancashire Dealmaker Awards 2011.

Harrison Drury assists in joint venture between Preston poultry businesses

Posted by Communications Director Mar 2nd, 2011, in HD news, Mergers and Acquisitions

Experts from Harrison Drury have advised a Preston chicken processing company on a partnership with a local meat and poultry business.

The Champ Chicken Company Ltd, based at Longton, near Preston, has entered into a joint venture with Hen House (Wholesale) Ltd, a wholesale supplier of meat and poultry products.

The deal has seen former owners of Champ Chicken, John Singleton and Alan Orritt, pass the business to the next generation of their families, Nicola Singleton and Terence Orritt, who will remain directors of the business following the merger.

Peter Rayton, chairman, and Andrew McLaughlan, financial controller at Hen House, founded in 1990, say the partnership will significantly enhance the capabilities of both companies and will offer exciting new market opportunities. (more…)

Are we to see new rights for cohabiting couples?

Posted by Shena Baron Feb 28th, 2011, in Divorce and Family Law

Two years ago I wrote about plans being discussed to introduce legislation that would give cohabiting couples who break up similar rights to married couples.

The plans have still not been introduced (they were put on hold by the Labour government for fear of undermining the institution of marriage), but all that could be about to change after Britain’s most senior family judge said cohabiting couples should get new legal rights to share property and money.

Sir Nicholas Wall, president of the Family Division, said women in particular were receiving unfair settlements when a partnership ended.

Describing the current situation as an “injustice” he insisted any legal changes would not undermine the institution of marriage and could still be judged on a case by case basis taking into account the length of the relationship and how much each partner contributed.

Although there are around 2.3 million couples living together in England and Wales, with one in four children born out of wedlock, common law spouses do not have specific legal rights.

It’s thought more than half of these couples wrongly believe they are protected by the law. Instead they must pursue other legal avenues to determine how assets are divided. (more…)

Do your contracts need a review following Court of Appeal case?

Posted by Colin Fenny Feb 10th, 2011, in Dispute Resolution, Property

If you’re a building contractor, you’ll be interested to hear about a recent case in the Court of Appeal which has provided useful guidance on the extent of your liability for defective works.

Even if you’re not in the building trade, the case is equally applicable to manufacturers wanting to protect themselves against future claims for defective products.

In this case (Robinson –v– P E Jones (Contractors) Limited) a homeowner brought a claim against the contractor that had originally built the property, claiming the costs of remedying defective works carried out in 1992, but not discovered until 2004.

The homeowner could not pursue a claim under the original building contract because more than six years had passed since the works were completed. The homeowner therefore sought to pursue a claim under the common law of negligence. (more…)

How to make succession planning work for your business

Posted by David Filmer Feb 8th, 2011, in Mergers and Acquisitions

Succession planning is vital if your business is to maintain its value when you decide to take a back seat or step aside completely.

Entrepreneurs often put their own stamp on a business to such an extent that performance dips without them at the helm. Think about what happened at Apple when CEO Steve Jobs announced he was taking an indefinite period of medical leave – the company’s share price opened six per cent lower on the day the news broke – or when Sir Terry Leahy announced in 2010 he was to retire from Tesco, knocking a reported £750million off Tesco’s value.

This is a problem that is compounded if the new managers are (or perceived by customers to be) unprepared or inexperienced.

Why you need to act now

This means succession planning must be factored in long before the owner takes his or her foot off the pedal. A time-frame of 12 months to three years is recommended.

This enables any issues to be resolved well in advance so that the business will stand up to the close scrutiny of potential purchasers (more…)

When does workplace banter become unacceptable behaviour?

Posted by Roger Spence Jan 27th, 2011, in Employment Law

This issue has been the subject of much debate in recent days following the very public sacking of Andy Gray by Sky television.

Many people view office banter as a bit of fun which is good for morale. However, banter can easily cross the line and become unacceptable harassment. In that case the employer is obliged to deal with the matter as a disciplinary issue. Read my Q&A for more details.

What’s the legal position?

Employees who have been the subject of ‘banter’ from colleagues or superiors may complain about it, before going on to indicate this is because the individual just doesn’t like him/her or, that they have never got on, perhaps due to a clash of personalities.  In those circumstances the individual will have no legal claim.

However, if the employee is able to point to workplace ‘banter’ which is linked to his or her sex, race, age, disability, sexual orientation or religious/belief, the employer will have a problem.

What legislation does this fall under?

The Equality Act 2010 prohibits harassment on the grounds of race, sex, disability, age, sexual orientation and religion/belief. The legal definition of harassment is: “Unwanted conduct that violates a person’s dignity or creates an intimidating hostile, degrading, humiliating or offensive environment”. Essentially, the legislation provides a means for the employee to bring formal tribunal complaints arising out of harassment. (more…)

Will Naomi Campbell case change way civil justice is funded?

Posted by John Chesworth Jan 21st, 2011, in Dispute Resolution, HD comment

It seems court cases involving Naomi Campbell are hitting the headlines a lot these days.

But the legal community has paid closer scrutiny this week to a case in the European Court of Human Rights (ECHR) involving the supermodel which threatens to change radically the way litigation is funded in the UK.

Lawyers representing Mirror Group Newspapers successfully overturned an earlier ruling which had required MGN to pick up the lawyers’ success fee element in Ms Campbell’s £1million ‘no win, no fee’ legal bill.

In the earlier case, The Daily Mirror was ordered to pay £3,500 compensation to Miss Campbell for publishing “offensive and distressing” pictures of her back in 2001. But it also had to pay her costs, which included ‘success fees’ of more than £365,000 agreed by the model with her lawyers.

Success fees became recoverable following the introduction of conditional fee arrangements, commonly known as ‘no win, no fee’ agreements. The rules provide that a successful claimant (more…)