BLP - Differentiate between employed and self-employed

Why employment status is important?

Many employment rights such as the right not to be unfairly dismissed, and the right to redundancy pay, rely on you being an employee.

Many employers take on self-employed workers in order to avoid employee rights and having to pay tax and national insurance for their employees.

It doesn’t matter how your employer refers to you as (employed or self-employed). What matters is what happens in practice, how you work? How much work you do? Do you use your own tools or the employer provides them?

The main differences:

Employee	Has a contract of service (expressly or implied). Existence of a maximum hours threshold and minimum wage.	including unfair dismissal, redundancy and maternity rights - includes all those rights enjoyed by workers
Self-Employed	A person in business on their own account. Have fewer rights except those they negotiated for themselves.	Certain rights in respect of trade unions and under the Human Rights Act only.

The courts have created a test to assess whether a worker is employed or self-employed:

• Control – the greater the control exercised by an employers over the manner in which its workers carry out their duties the more likely they are to be employees.
• Mutuality of obligation to provide and to do work – employers are obliged to offer their employees work and employees are obliged to do it, so the greater the obligation the more likely that they are employees.
• Substitution – employees are usually obligated to carry out their duties personally so If the worker can send along a “stand-in” then they are more likely to be self-employed.

BLP - Choosing a business name

A client needs to consider:

• Any regulatory regime (if any) that applies to the name chosen &
• Whether the name chosen be legally protected.

Regulatory regime

Different regimes for incorporated businesses (e.g. companies & LLP) and unincorporated business (partnerships and sole traders).

Incorporated businesses (Companies & LLP)

Neither limited companies nor LLP can be registered (i.e. cannot form) unless the name chosen by their founders is approved by Registrar of Companies. To get that approval the name must not be:

• An existing name on the index, maintained by the Registrar of Companies.
• A name whose use would be a criminal offence.
• A name which is offensive.
• A name which is misleading.
• A name which would suggest a link with HM Government.
• Nor contain any prescribed words without the consent of the relevant regulatory body (Company & business Names Regulations 1981 –SI 1981/1865).

See also CA 85 (ss25-29 & 348-351) & Limited Liability Partnership Act 2000.

Unincorporated businesses (Partnerships & Sole Traders)

As long as a sole trader or Partnership choose to trade under their own name(s) then no regulations apply. Because everyone transacting with such a business knows the identity of those who run the business (s1 Business Names Act 1985).

If however they wish to use a “business or trading name” would mean that ss2-11 of the Business Names Act 1985 would need to be complied with, i.e. so that the actual surnames of those running the business are disclosed on all correspondences (invoices) so that creditors and all third parties know who they are dealing with.

The use of any prescribed names in the business name requires permission of the relevant specified body (see Company and Business Names Regulations 1981 for a full list of words and the appropriate body).

A corporate body wishing to trade under a business name would be required to comply with Business Names Act s1(1)(c). Which would mean the corporate body’s registered name would have to be disclosed on all stationary etc. Again so that the creditor knows who they are dealing with.

HOWEVER AFTER 1^ST OCTOBER 2008 CORPORATE NAMES WILL BE DEALT WITH UNDER PART 5 OF CA 06 WHILST BUSINESS NAMES WILL BE DEALT WITH UNDER PART 41.

BLP- Removal of Director

Table A article 81 deals with this and provides that the office of director will be vacated in a number of circumstances:

1. He ceases to be a director by virtue of … the act or prohibited by law from being a director.
2. He becomes bankrupt.
3. He resigns his office by notice to the company.
4. He shall for more than six consecutive months have been absent without permission of the directors from meetings of directors held during that period and the directors resolve that his office be vacated (taking article 11+12 into account).

It is therefore quite common for companies to supplement these provisions by giving the directors/members powers to remove in a wider range for circumstances.

Removal of director by members

Companies shall also be bound by s168 CA 06.; giving members power to remove a director by ordinary resolution at a meeting subject to a directors right to protest under s169 CA 06 (not that it’ll make a difference). Special notice to the company will be required (s312 CA 06) of at least 28 days. Therefore you can’t use short notice.

As a director is also a member, he may also have the benefit of what is known as a “Bushell v Faith” clause in the company’s articles (article 10). This gives the members enhanced voting rights on a motion to remove a director where he/she has less than 50% of the shares in the company.

Removal from Executive office

If the director is an executive then under Table A article 84 removal from the board would also terminate this role and the directors employment with immediate effect. However this can have employment law consequences as termination of an employment contract without notice may result in having to pay compensation. Unless the director has been guilty of very serious misconduct.

BLP - Appointment of a Director

S154 CA 06 requires every private company to have at least one director, the first being appointed through the signing and submission of Form 10. There after appointment is governed by a company’s Articles (table A Articles 78-79).

78 …a company may by ordinary resolution appoint a person who is willing to act as a director either to fill a vacancy or as an additional director…

79 The directors may appoint a person willing to act as a director, provided that the appointment does not exceed the maximum number of directors in accordance with the articles…

Once a new director has been appointed then the Registrar of Companies must also be informed using the appropriate Form (288(a)). However a director may also wish to be appointed to an executive role within the company (Table A article 84).

Executive directors should be issued with an employment contract (sometimes referred to as a “service agreement” and defined as a “Service contract” in s277 CA 06) with the company. If they do then it’s important to ensure that s188-189 and 228 CA 06 are complied with:

• S188 CA 06 provides where the term of a directors employment is or longer than two years then the company may not agree to such a provision unless it has been approved by a resolution of members of the company.
• S189 CA 06 states where s188 is contravened then the provision in the contract as to duration will be void and the contract will instead be terminable on “reasonable notice”.
• S228 states that a copy of all current directors service contracts (or a memoranda of their main terms) must be kept at the company’s registered office (or another authorised place) and must be retained for at least one year after termination.

Civil Lit - Commencing a Claim

All attempts to negotiate have so far failed and all pre-action requirements have been met. The C solicitor will fill out a claim form (N1) and file it at the court.

The Date the claim was commenced?

This is neither the date the form was completed and signed or the date it is sent. But the date of issue or commencement is the date stamped on the form. Make sure the issue date is within the Limitation period.

Which court to use?

In order to fill the claim form you need to decide which court you are using. Decide between the High Court and the County Court paying attention to geographical issues.
In deciding between the two consider: the cause of the action, its value and the nature of the case (PD 7).

• Cause of Action: specialist cases (J.review & Human Rights) tend to go to the High Court. Breach of contract and negligence claims can be begun in either the High Court or the county Court so following the general presumption, the county court should generally be used unless there is another reason to use the High Court.
• The value of the claim: Or the amount the claimant reasonably expects to get. The county court usually has unlimited financial jurisdiction subject to other factors. Therefore a claim for any amount can be begun here. The High Court however is limited to:

1. PI claims (as defined in CPR 2.3 (1)) with a value of £50,000 or more.
2. Other claims with a value of more than £15,000.

• The nature of the case will include:

1. The financial value of the case
2. The complexity of the facts
3. The importance of the outcome to the general public.

Civil Lit - Early Action and Investigation

Pre-Action Protocol

Pre-Action Protocol requires a free flow of information between parties.

Obtain Witness Evidence – With the help of your client and using a police accident report identify all people who were witnesses in the case. Able to give evidence on any aspect, covering liability or quantum (amount of damage). But you need not use all witnesses. If you do interview one of the other sides witnesses, as a professional curtsey you should inform them in advance (CPR Rule 11, guidance point 16). Explaining witnesses maybe required to come to court to give evidence and roughly when that could be.

Obtaining Records (documents)

Police Accidence reporter Certificate of conviction Accident report book

Photographs Contract Quantum/liability

PI protocol applies to all clams:

1. C sends two copies of a letter of claim containing specified information.
2. D should reply within 21 calendar days.
3. D has three months from the date of acknowledgement to investigate and respond in detail to the claim.
4. If liability is denied the defendant discloses specified documents to the C.
5. C sends a schedule of special damages to the D.
6. An expert is agreed where appropriate.
7. Parties consider some form of alternative dispute resolution.

The Letter of Claim acts as a warning letter, sent by the C. The letter sets out the nature of the claim and the facts upon which it is based.

Contents of the letter:

• As soon as there is enough information/evidence to commence a claim a letter of claim should be issued.
• Contain a summery of the facts and nature of injuries/financial loss.
• Whether the case is funded by a conditional fee on success/ or an insurance premium.
• A copy of the letter sent to the defendant’s insurer. If unknown either request this information from the D or send a copy of the letter to the D to forward to his insurer.
• Sufficient information given for D solicitor to investigate the claim
• The letter should ask for an acknowledgement within 21 days of the date of posting, failing which a claim maybe commenced.
• After letter of claim a schedule of special damages with supporting documents should be sent.

Civil Lit - Potential Claimant

Solicitor Consult

First Interview

1. Who is the Claimant and Defendant?

2. What does the claimant want? Damages, injunction?

Special Damages – are all p[ast quantifiable losses to date (Medical, Damage to property, Travel expenses)

General Damages – all other losses (pain, suffering and loss of amenity).

The limitation period will start to run when the cause for action comes into existence i.e. when the contract is breached:

Basic Contract Case	6 years from breach
Tort Cases	6 years from cause
Personal Injury	3 Years from the date
Defamation	1 year from the publication

Under s33 of the Limitation Act the court has a discretion to extend the limitation period in personal injury cases.

3. Professional conduct issues

4. General Legal Advice? Is it viable?

5. Funding/cost

Private payment Conditonal fee agreement Community legal Services funding

Before the event insurance Sponsership Pro Bono

6. What the client must be told (Code 2).

• All costs must be given in writing and basis of firmcharges.
• Alternative funding.
• What happens if they loose.

Investigation of Title

Investigation of title will allow the solicitor to discover and anticipate and deal with any likely problems that might be revealed and thus allowing the transaction to go smoothly.

Buyers Investigation

Once the seller has supplied the buyer with evidence of his title, the buyer must do 2 things:

1. Ensure seller has right to sell property.
2. Identify any defects in, or problems raised, by the title.

Anything that’s unclear or unsatisfactory on the face of the documents supplied maybe raised as queries (requisitions) with the seller. Modern practice requires any investigation to be done before exchange of contract and all issues to be resolved before that point. Therefore entering into contract with full knowledge of what title contains.

As after exchange the contract may contain provisions preventing the buyer raising requisition after exchange (SC 4.2.1 & SCPC 6.2.1).

What to look out for on official copies and title plan?

When examining official copies and title plan, look out for the following:

The Property Register

1. Description of land agree with the contract description?
2. Title number matches the one given in the contract?
3. Is it freehold/leasehold? And does this accord with the contract?
4. Any easements enjoyed by the property? Do they match the needs of the client?

The Proprietorship Register

1. Is the class of title correct?
2. Is the seller the registered proprietor? If not, who is?
3. Are there any other entries, and what is their effect?

The Charges register

1. Are there any incumbrances?
2. How do these effect the buyer?
3. Which need to be removed upon completion?
4. Have you agreed In the contract to buys subject to these incumbrances?

The Title plan

1. Is the land being bought included in title?
2. Any colouring indicating rights of way? Possible covenants or land which has been removed from title?

Anything adverse found in the official copies will need to be reported to the buyer and resolved before exchange.

Overriding interests can be discovered through:

• Disclosure by the seller in the contract.
• Pre-contract enquiries where the seller will be asked to reveal details of adverse interest and occupiers rights.
• A local land charges search.
• Inspection of the property before exchange which may reveal evidence of such matters as non-owning occupiers, easements and adverse possession.

The Case of investigating UNREGISTERED land

Firstly a valid root of title must be provided. Once the solicitors have established a good root of title they are prevented from requesting the production of any other document dated prior to the root. The seller must then trace a link in the chain of title from the root document to the document or event by which the the ownership became vested in the seller.

It is then the sellers solicitors duty to provide the buyer with an epitome/abstract of title. Which is essentially a list of deeds and documents with photocopies attached. The abstract must contain all documents and events affecting the ownership of the land from root to present. This includes all mortgages ongoing and discharged e.g. conveyances, mortgages, leases, grants of representation, death certificates, assents, search certificates.

An examination of the documents supplied in the abstract or epitome for:

• The root document is as provided for by the contract. If the wrong one sent, the buyer can insist on the correct document being supplied in its place.
• There’s must be an unbroken chain of ownership, starting with the seller in the root doc and ending with the present seller.
• No defects in title which may adversely affect the buyer’s interest.

You will also have to verify the original deeds as well as checking for evidence of occupiers (done by inspection) as well as completing any pre-completion searches.

While investigating you should also bear in mind whether any transaction in the titles history should have triggered first registration. Compulsory registration occurs when:

• Theres a transfer of freehold
• A grant of a lease for more than 7 years or the right to possession is discontinuous, provided that the periods added together total more than seven years.
• An assignment of a lease which at the time of assignment has more than 7 years unexpired.
• A first legal mortgage of the freehold or of a lease which at the time of the mortgage has more than seven years unexpired.

Stamp Duty: Documents dated prior to 1 December 2003 require a stamp. Unstamped or incorrectly stamped documents are neither good roots of title. Consequently they cant be brought as evidence in civil proceedings nor will the Land Registry accept them on an application for registration.

Conveyance by Trustees to themselves: on the face of it, such a conveyance is in breach of trust and therefore voidable by the beneficiaries. But can be justified if:

• There is proof of a pre-existing contract in favour of the trustee or personal representative.
• The personal rep was a beneficiary under the will or intestacy of the deceased.
• The consent of all the legally competent beneficiaries was obtained to the transaction.
• The conveyance was made under an order by the court.

The transaction was sanctioned by the trust instrument.

Disclosure Obligation

What to send to the buyers solicitor:

1. Title Documents to check that the seller owns and is entitled to sell what he has instructed the solicitor to sell and to draft the contract of sale (the location of the title documents will need to be ascertained in the initial interview).
2. Other documents accompanying the title documents: Land and Charge certificates for all titles registered prior to 13 October 2003. Possibly any planning consent etc. When requesting title documents from lenders it is customary to include in the letter that the solicitor will either repay the loan to the lender (thus ending the mortgage and entitling the seller to the return of his deeds) or return the deeds to the lender.
3. An application to the Land Registry for official copies of the register entries: Made by using form OC1 and if there’s other documents that are known to be filed at the Land Registry i.e. a conveyance imposing restrictive covenants, you’ll need to apply using form OC2. Applications can be made by post but usually made by telephone or fax.
4. Home Information Packs: Properties for sale from 14 December 2007 need a Home Information Pack (HIP); containing an Energy Performance Certificate (EPC), also including documents such as sale statements, searches and evidence of title. Along with a Property Information Form and/or a Fixtures and Fittings and Contents Form. If the land is unregistered, a up to date search of the Index Map should be included.
5. The Pre-contract package; this should include a minimum of 2 copies of a draft contract, details of the sellers title, and the following if following protocol:
1. Sellers Property Information Form: originally given to the seller at the initial interview.
2. Fixture Fittings and Contents Form: also given at the initial interview.
3. In unregistered land, an Index Map Search @ Land Registry: to ensure there are no interests registered at the Land Registry adverse to the seller’s title.
4. A Land Charges Search against the seller and all other estate owners revealed by title deeds: this will reveal any incumbrance affecting the property and if any insolvency proceedings are pending.
5. Any property related Planning permission.

The purpose of this is to help the buyer quickly make up his mind if he wishes to continue with the transaction.

What the buyer should do?

1. Start pre-contract searches.
2. Deal with his clients mortgage and survey arrangements if required to do so.
3. The pre-contract package; once received its contents must be studies carefully to ensure that what is being offered for sale matches the instructions given by the buyers.
4. Home information Pack (HIP); Obtain a copy from the estate agent and study its contents In particular its searches and if any additional searches will be required. If the Property Information Form and the Fixture Fittings and Contents Form has been included and nothing in the pre-contract package from the sellers solicitors that may require changing.
5. The buyer client should be advised of any changes as soon as possible.

Powers Of Attorney: is a deed under which the donor appoints someone to carry out certain actions on his behalf. There are four types of power of attorney:

1. A general power, under s10 of the Power of Attorney Act 1971, entitles the attorney to deal with all of the donors assets.
2. A special power, permits the attorney to deal with specific assets.
3. A trustee power, used where property is held on trust.
4. An enduring power, under the Enduring Powers of Attorney Act 1985, endures through the donors mental incapacity.

The buyer is entitled to a certified copy of any power of attorney which affects the title. If the transaction is not made within 12 months of granting the power a statutory declaration should be obtained, to the effect that he had no knowledge of the revocation of the power. Otherwise its unlimited.

A trustee may delegate to another trustee by The Trustee Delegation Act 1999.

An attorney may not act as an attorney and a beneficiary for a sale of land. Over reaching allows buyers to take free of beneficial interest. Buyer’s interest passes from the land to the money.

Matters of Disclosure: Matter which do not relate to defect in title do not need to be disclosed. As it pertains to the use and enjoyment of the property. Unless asked and they mislead. Under s 2(b) addresses if theres been a formal complaint.

All easements should be discoverable and disclosed on inspection (under 2(a)). However to avoid a dispute all incumbrances should be disclosed in the contract.

Planning permission is needed in respect of any activity which constitutes ‘development’ as defined in s55 of the Towns and Country Planning Act 1990. Enforcement in respect of any breach must be started within four years of the alleged breach.

First Interview Sale Checklist

Suggested Sale Checklist

Date of Instructions

Seller’s Full Names

Contact Address

Address of Property Being Sold

(If Different From Contact Address)

Contact Phone Number(s)

Daytime

Evening

Mobile

Estate Agents

Contact

Buyer’s Name & Address

Solicitors Acting

Mortgage Details

1^st Mortgage

2^nd Mortgage

Other Mortgages

Occupiers Over 18

Agreed Sale Price

Fixtures and Fittings Included

Fixtures and Fittings Excluded

Details of Connected Purchase

Target Completion Date

ID Inspected

CGT Relevant? Yes/No

Client Care Information Given

Special Features /

Additional Information