The recent case of Thompson v Raggett has highlighted the risks of cutting a cohabitee out of your will. In this case Ms Thompson had lived with her partner, Mr Hodge, for over 40 years.
Over the years Mr Hodge had made several wills in which Ms Thompson was a beneficiary however in his last will , written only two months before he died, he decided to cut her out completely. Part of his reasoning was a dislike of her children and a wish that they would not inherit anything from him. He had also assumed that due to Ms Thompson’s health problems she would not be able to live independently after his death and did not need his money. Indeed she had been temporarily in a residential home at the time of his death however an occupational therapist had assessed her as being able to return home with adaptations and a care package.
The court held that under the Inheritance (provision for family and dependants) Act 1975 Ms Thompson could claim reasonable financial provision for her maintenance. She had been living as Mr Hodge’s wife at the time of his death and was financially dependent on him. The judge decided that Ms Thompson had a right to expect provision to be made for her and that this provision should not be hindered because of Mr Hodge’s dislike for her children.
Mr Hodge’s estate was valued at about £1,500000, consisting mainly of properties and land. The main beneficiaries of his will were tenants in one of his properties. Ms Thompson was awarded a property to live in, valued at £225000, £28,844 for adaptations to be made to the property for her, and £160,000 for her ongoing needs.
This case highlights the impact of the 1975 Act in limiting testamentary freedom to leave your estate to whoever you want and the protection available to those who were dependant on you.
Wills and Probate Team
Sir James Munby, the President of the Family Division has recently delivered a speech at the University of Edinburgh Law School castigating the speed of progress of reform in family law. Particular focus was given by Sir James regarding cohabitant’s rights, no-fault divorce, financial relief after divorce, access to and reporting of family cases and the cross-examination in person by alleged perpetrators of domestic violence of their alleged victims.
Certain of these issues were earmarked to be implemented as long ago as 1996, so the debate is just about older than most of our LPC graduates. The lack of financial protection for cohabitants and the continuing requirement for finding of fault in divorce petitions seem particularly archaic but parliament continue to be apparently resistant to change.
Regarding no-fault divorce in particular, Resolution which is a national body of family lawyers and other professionals committed to the constructive resolution of family disputes, has succeeded in an application to intervene in the case of Owens v Owens, the appeal for which is soon to be heard by the Supreme Court.
Owens v Owens is a case in which thus far the wife has been unable to obtain a divorce from her husband, on account of the initial trial judge being of the opinion that the husband’s behaviour was not ‘unreasonable’ and hence there being no fault attributed to the husband sufficient to establish that the marriage has broken down irretrievably.
Family lawyers and Resolution members in particular await the Supreme Court appeal with bated breath. Whilst the decision will not allow the statute books to be rewritten on divorce, experts believe that a successful appeal will lend even further weight to the argument in favour of no-fault divorce.
Family Law Team
After a lengthy battle with the Federation of German Consumer Organisations (“FGCO”) regarding Facebook’s data protection policies, the Berlin Regional Court (“BRC”) has found that Facebook’s use of its users’ data was illegal.
Facebook had failed to obtain consent to use personal data for their advertising purposes, according to the BRC. The social media giant’s failure to obtain consent was a result of its default privacy settings applied to each user account, including the default activation of the location services for those using the Facebook app, particularly given the lack of information provided to its users.
Heiko Dünkel, the litigation policy officer for the Federation of German Consumer Organisations, said “Facebook hides default settings that are not privacy-friendly in its privacy centre and does not provide sufficient information about this when users register. This does not meet the requirement for informed consent”.
All five of Facebook’s default privacy settings were deemed to be illegal, one of which allows search engines to link to a user’s timeline, as well a further eight of the clauses contained in their Terms and Conditions, including a provision which allows Facebook to transmit data to the US.
This verdict comes ahead of the implementation of the General Data Protection Regulations (Regulation (EU) 2016/679), or ‘GDPR’. The European Parliament intends to strengthen and unify data protection for all EU citizens and GDPR will see stricter controls to govern the processing and storage of data. GDPR will come into force on 28 May 2018 and will affect all companies storing personal information about citizens in Europe, including companies on other continents.
Corporate and Commercial Team
0113 207 1099
I first heard about a company called Cambridge Analytica in January 2017. Having an interest in data protection matters due to the nature of my work, I was actually fascinated by a company that claimed it could assist political campaigns to produce highly precise targeted Facebook ads and that their services were employed by both the Trump campaign and the Brexit Leave campaign. I was not shocked at the time but do recall sharing the article via a WhatsApp group with my inner-circle of friends – a motley crew of fellow lawyers, doctors, academics, company directors, architects and IT professionals from across the world. Those in this group, who work in commercial and business sectors discussed the inevitability of this happening and were surprised (myself included) that it had taken so long for it to occur given people have openly shared highly personal information with Facebook since around 2006. Any company with the right data mining tools would indeed discover hidden treasure from all the information that is out there.
Cambridge Analytica are a British company who operate out of London. As such, they are subject to UK data protection law. The furore over the past 24 hours concerns data acquired by a company about Facebook users under the pretext of academic research. This data was then sold onto another company – Cambridge Analytica, whose intention was to use it very differently. Cambridge Analytica it seems, hold Facebook data on people who have not agreed to share it directly with them. For clarity, this is not a data breach contrary to what has been described in a great deal of global media coverage over the past 24 hours.
The Information Commissioners Office (ICO) have said they shall apply for a warrant to search computers and servers used by Cambridge Analytica amid concerns about the company’s activities. The Information Commissioner – Elizabeth Denham, has criticised Cambridge Analytical for being “uncooperative with her”. The fact however that Cambridge Analytica have been alerted to the ICO’s intended application for a court warrant detracts from the impact that a sudden inspection would have had upon the offices and indeed personnel of Cambridge Analytica. Such a warrant shall take time to acquire and it is required under the current law (the Data Protection Act 1998) as the ICO have no such powers to inspect at will.
Under the General Data Protection Regulation (GDPR) which comes into force on 25 May 2018, the ICO shall enjoy much wider investigative and corrective powers under Article 58 of GDPR. These will include the power to undertake on site data protection audits, the power to issue public warnings, reprimands and audits to carry out specific remediation activities. If such a situation as with Cambridge Analytical today was to arise after May 2018, the ICO would be able to order the company or organisation in question to provide virtually any information it would require to perform its tasks.
Applied to your own company, awareness of these investigative powers the ICO shall gain shortly, should be considered when determining data protection policies both internal and external to your company. Transparency and record keeping will both become accepted practices over time.
Corporate and Commercial Team
0113 227 9260
In January the case of Sargeant v Sargeant decided that after 10 years since Probate was granted for her husband, the Claimant (Mrs Mary Sargeant) did not have permission to bring a claim against her husband’s estate.
The Inheritance (Provision for Family and Dependants) Act 1975, commonly referred to as the 1975 Act, allows for disappointed relatives to apply for some provision from the deceased’s estate, especially in circumstances where they were dependent on the deceased. In this case, the wife of the deceased found herself in a situation where she did not have enough money to maintain her lifestyle. Although the Judge recognised that the Claimant may have had a case, the claim was issued late and so she needed permission from the court for the claim to be heard.
According to section 4 of the 1975 Act, a claim must be issued within six months of probate being granted. Therefore, a preliminary hearing was heard, based upon written evidence only, to decide whether the claim itself could be heard.
The Judge decided that Mrs Sargeant had been given enough opportunity to make a claim, and had been told numerous times that she could seek legal advice independent from the solicitor in charge of the administration of the estate. He also recognised that there was not enough reason to delay the issuing of the claim simply because the deceased had said that the claimant would be a ‘wealthy woman’ once he died. Mrs Sargeant knew of her financial issues and still continued to follow the instructions set out by the Will.
This case highlights the urgency of seeking independent legal advice as soon as a difficulty has arisen. Six months is a short period of time for a claim to be issued within and so it is vital to seek advice as to whether there is a claim.
From this case, it appears that it does not matter how strong your claim may be, risking a delay in seeking legal advice means you may risk your chances of receiving anything from the deceased’s estate.
Wills & Probate Team
0113 227 9235
Delayed rail passengers will now be given stronger rights to claim consequential losses, including taxi fares, hotels and missed flights following train cancellations and delays.
Currently the National Rail Conditions of Travel (the “NRCoT”) govern rail travel and this allows operators to refuse claims for consequential losses. From Sunday 11 March 2018, the NRCoT will be updated to state that a passenger’s right to claim for losses will be governed by the Consumer Rights Act 2015, ensuring that passengers will have additional rights to claim compensation.
What will rail passengers be able to make a claim for?
The Consumer Rights Act 2015 does not specifically refer to consequential losses however it does state that services must be carried out with “reasonable care and skill”. Under the impending changes to the NRCoT, passengers will be permitted to submit claims for consequential losses and rail operators shall be compelled to review these claims. In addition, passengers will be entitled to make a claim for poor service under the Consumer Rights Act 2015. This is in addition to the current position whereby rail passengers can claim for a reimbursement or partial reimbursement of the cost of their rail ticket following a delay to the service by the rail operator.
How will the rail operators respond to claims under the new rules?
The Rail Delivery Group (a leadership body that brings together the companies running the UK’s railway networks), has advised that passengers claiming consequential losses through the Consumer Rights Act 2015 need to pass a “very high legal hurdle” in proving that the train service was not provided with reasonable care and skill. It also states that while it has been happy to work with the Government to make customer rights clearer, “it is important for our customers to understand that it is very unlikely that they will be entitled to compensation for additional losses”.
It remains to be seen how the rail companies will deal with claims following the upcoming changes.
Tips for making a successful claim
- Take a note of the date, time, train company and service you are on including the reason given for the delay or cancellation and how long you were delayed for;
- Record what impact this had on you and your journey and what steps out had to take because of the delay or cancellation – for example you had to get a taxi;
- Keep any receipts and take photographs to support your claim; and
- Apply within the time limit specified by the rail company.
Corporate and Commercial Team
0113 227 9260
An ex-wife awarded a £90 million settlement in 2014 upon divorcing her property tycoon husband is seeking to argue that she should receive another £25 million – despite having signed a pre-nuptial agreement. http://www.dailymail.co.uk/news/article-5363469/Wife-signed-pre-nup-says-90m-payout-unfair.htm
A pre-nuptial agreement is a contract that seeks to regulate the financial arrangements between two parties to an intended marriage/civil partnership in the event that their relationship ends; but these agreements are not currently legally binding in England and Wales. https://lawblacks.wordpress.com/2014/02/27/prenups-to-be-made-binding/
The court will consider various factors when determining how much weight should be given to a pre-nuptial agreement which involves a consideration of the circumstances at the time the agreement was made. For example, was there any undue pressure and were both parties fully informed of its implications? Did both parties receive legal advice? Would enforcement of the terms of the pre-nuptial agreement meet the needs of the parties and in particular any children of the family?
Whilst the court can regard pre-nuptial agreements as persuasive and even decisive in divorce settlements, they can depart from them if the prevailing circumstances mean it would be unjust to hold the parties to their agreement. This is precisely what Camilla Versteegh has sought to argue in appealing the court’s award of £90 million, claiming that this sum is “unfair” and that after 21 years of marriage and an extremely high standard of living she should be entitled to another £25 million from her ex-husband Gerard Versteegh – a property tycoon said to be worth £273 million https://www.thetimes.co.uk/article/90m-divorce-award-isn-t-enough-says-former-wife-camilla-versteegh-5h902rlb2.
Lawyers for Mrs Versteegh have told the court that the pre-nuptial agreement was signed without any legal advice, or even the opportunity for it, as the pre-nuptial agreement was presented to her the day before the wedding when Mr Versteegh turned up at her house. Lawyers for Mr Versteegh have argued that he has already been very generous to his ex-wife given that she signed away all her rights to his money before they wed, but with the Judge awarding Mrs Versteegh less than he otherwise may have done due to the existence of the agreement, her lawyers say it is only fair that she is due more.
The hearing before Lord Justice Lewison, Lord Justice Holroyd and Lady Justice King continues.
Family Law Team
0113 227 9215
The recent case of Kings Court Trust Limited v Lancashire Cleaning Services Limited highlights the difficulties that a company can face upon the death of a sole director and shareholder. If the director/shareholder was to die unexpectedly there would be no executive officer available to run the company.
In the above case, Mr Pilling was the sole director and shareholder of a cleaning company who suddenly died. Before his death, Mr Pilling had prepared a will appointing executors to administer his estate. However the company’s Articles of Association did not allow the executors to appoint a director on the death of Mr Pilling. Without a Grant of Probate, the executors had no legal authority to appoint a director or to make other important decisions regarding the company. In particular, they were unable to change the Register of Members to remove Mr Pilling and to record the transmission of the shares into their names as executors of his estate.
The executors could not wait for the Grant of Probate to be granted because without a surviving director or company secretary the company’s bank account had been frozen by its bank which left the company unable to pay employees’ wages, creditors and tax due to HMRC. Further, a buyer had been found for the company but it could only be sold at an attractive price if it was sold as a “going concern.”
The executors therefore made an emergency application to the High Court asking the Court to intervene by using its statutory powers to order rectification of the Register of Members to include the names of the executors. This would then allow the executors to pass a written resolution to appoint a new director.
The Court granted the Order sought by the executors although the Judge stressed that he only did so due to the exceptional circumstances of the case. Had it not been the extreme urgency caused by the frozen bank account then it is likely that the executors would have been told by the Court to wait until probate was granted.
Companies with a sole director and shareholder should review their Articles of Association to ensure that they contain provisions which allow the personal representatives of the sole director/shareholder to appoint a new director immediately upon the death of the sole director.
Commercial Dispute Resolution Team
0113 227 9316
News has hit the headlines recently of another high-profile celebrity divorce, that being TV presenter of Ant-n-Dec-fame Ant McPartlin who has separated from his wife Lisa Armstrong.
Ant McPartlin and Lisa Armstrong have been in a relationship for over twenty years, since 1994. They were married in 2006 and so they have had a very long relationship and a medium to long term marriage.
Many celebrity divorces in the past have raised questions of ‘special contribution’ or the issue of pre-owned assets, but the probability in this situation is that all of the wealth will have been built up during the relationship, bearing in mind they met when they were 19.
It would be reasonable therefore to expect an equal division of the assets, whether they are owned in the sole or joint names of either Ant or Lisa. There are no children to either of them and so they will be likely to be assessed as having equal financial needs. Ant will be likely to be earning more than Lisa in terms of ‘salary’ but Lisa is by all accounts a high earner in her own right.
It may well be the case that the court therefore would deem this a case suitable for a ‘clean break’ and an equal division of all of the assets. Reports suggest that Ant and Lisa are trying to reach a settlement on the basis of a clean break and avoid the spotlight of the court process. This would appear sensible, providing that the assets can be suitably divided by agreement with the assistance of their solicitors.
Family Law Team
Developing land is one way of increasing its value. However, not all landowners have the expertise or the finance to do that. Landowners can, however, sell their land to a developer and benefit from the increase in the value of the land under an Overage Agreement. An Overage Agreement requires the developer to make a payment to the landowner if they secure planning permission and subsequently develop the land thereby enabling the landowner to benefit from the increase in the value as a result of the development. Typically, under an Overage Agreement the landowner will receive a percentage of the increase in the value of the land as a result of it having been developed and sold.
The recent High Court case of Sparks v Biden highlights the need for Overage Agreements to be carefully drafted. In that case Mr Sparks owned some land with development potential. Mr Biden agreed to purchase the land and then proceeded to develop it. Under the Overage Agreement Mr Sparks was to be paid a purchase price of £600,000 for the land together with an overage equating to 33.3% of the sale price of each newly constructed house. Mr Biden eventually constructed eight houses on the land but rather than sell them Mr Biden proceeded to occupy one and rented out the rest. The Overage Agreement did not contain any express term obliging Mr Biden to sell the houses and therefore Mr Biden contended that there was no overage payment due to Mr Sparks. Mr Sparks disagreed, arguing that a term should be implied into the sale contract that the properties, once constructed, should be sold thereby triggering the overage payment.
The courts are generally reluctant to imply a missing term into a contract and will only do so where they are satisfied that:
- it is reasonable and equitable;
- it is necessary to give business efficacy to the contract, so that no term will be implied if the contract is effective without it;
- it is so obvious that it “goes without saying”;
- it is capable of clear expression;
- it does not contradict any express term of the contract.
The Judge decided that in order to give the original sale contract business efficacy, a clause should be implied into the Overage Agreement obliging Mr Biden to sell the houses once constructed.
Mr Sparks was lucky in this case that the Court intervened to rescue the overage provision but there is no guarantee that a court would imply a similar term in another case. This case illustrates the need for agreements to be drafted very carefully so that they anticipate all possible eventualities and to cover those eventualities as far as possible in the drafting.
Commercial Dispute Resolution Team
0113 227 9316