Loading...

Starting any business from scratch is a daunting task. It’s no different when it comes to starting a recruitment business. But it’s a darn sight easier if you’ve got a ready-made database of clients and candidates.

It’s an all-too familiar scenario in the recruitment sector: a member of staff leaving to set up on his own or to join a competitor, and pinching the database before he goes. With modern means of communication, it’s surprisingly common to find that the outgoing employee leaves a trail of unlawful behaviour behind him, usually in the form of emails sent to his personal email address attaching his employer’s database and other confidential information.

More often than not, he’s deleted the email from his sent items and then further deleted it from the “Deleted Items” folder in what he thought was a clever act of subterfuge. But of course most businesses operate server-based systems that incorporate protective backup measures such that this incriminating material can easily and quickly be retrieved.

What can the former employer do to protect its position? Well, if – as is commonly the case – the employee has made use of the confidential information to assist with getting his new venture off the ground, or otherwise disclosed it to his new employer so as to enable the new employer to be better-positioned to compete against the former employer, the primary remedy is what is called a “springboard injunction”.

Many will be familiar with an injunction in the context of restrictive covenants, where a former employee is, for example, contacting key clients in breach of a clause in the contract that prevents him from doing so for a period of time after having left his former employer. Those injunctions are only generally available where there are enforceable restrictive covenants in place, whereas a springboard injunction is available even in the absence of restrictive covenants.

“…the essence of this branch of the law, whatever the origin of it may be, is that a person who has obtained information in confidence is not allowed to use it as a springboard for activities detrimental to the person who made the confidential communication…”

In order to get a springboard injunction, you need to be able to show the following:

  • Unlawful activity by the outgoing employee and anyone else involved in his conduct (ie: his new company or employer). That unlawful activity does not always have to be taking and using confidential material; it can also be an ordinary breach of contract, such as trying to solicit clients away, or operating a competing business during the currency of the employee’s main employment.
  • That the employee has gained an unfair competitive advantage over his former employer – for example by having in his possession the employer’s valuable database, which it would otherwise take him a long time to build up – and that that competitive advantage is not merely very short-term.
  • The advantage is continuing at the date you seek the injunction, and will continue unless the injunction is obtained.

The court will grant a springboard injunction to cancel out and nullify the head start the employee and his new employer have gained through illegitimate means. The injunction therefore places them under a special disability, often requiring them to cease trading altogether, and can remain in place for many months. The length of time the injunction is imposed for is usually consistent with the length of time that it would have taken the former employee and his new employer to achieve lawfully what they achieved unlawfully. So if it would have taken at least 12 months to compile a stolen database, it’s likely that is how long an injunction would be put in place for to remove the unfair advantage gained by reason of having taken it from the former employer and used it.

Springboard injunctions are an invaluable weapon for a recruitment business to deploy in the right circumstances. An outgoing employee armed with details of your clients and candidates, and highly sensitive data such as pricing information and commission margins, will have a huge competitive advantage that he would not otherwise have without that data. Worse still, if he has disclosed that material to his new employer, the risk is even greater. Thankfully the law recognises the injustice of this and affords the victim a powerful remedy.

For more information please contact the recruitment team.

The post Springboard into recruitment appeared first on Sherrards Solicitors.

Read Full Article
Visit website
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

Funeral planning is a subject most of us veer away from.  However some spend a great deal of time planning.

News this week has hi-lighted the Co-op’s plans to offer a cut price funeral.   I arranged such a funeral for a client – a cremation without any form of service or celebrant. It was almost pitiful – the lady concerned had had a full and vibrant life and, albeit, her wish was to have no service, the end result left those attending with a sense of an unremarked upon passing.

Be careful to ensure those you leave behind are not left with a sense of emptiness – the service is for those closest to you to say their goodbyes, and more importantly celebrate your life.

There are a multitude of funeral options.  Not only can you pay for your funeral in advance but you can, if you choose, plan it in meticulous detail!   Your Will is a very useful place to summarize your wishes.   Whilst, not legally binding, we are yet to come across a case where the executors have not carried out the deceased’s wishes.

Burial in a churchyard or cemetery is not the only option. Natural burial in fields or woodland areas, burial at sea, and even burial on private land (a family farm, or even the deceased’s own garden) are allowed.  Cremations have to take place in a licensed crematorium.  Further to representations by the Sikh and Hindu religious communities, funeral pyres are permitted albeit in an enclosed building

There are insurance policies funeral directors offer to provide a lump sum to pay for the funeral costs.   As well as lump sum advance cash payments, instalments options are sometimes available……and let’s not forget we will be more canny negotiators in respect of the funeral costs for our own funeral, than we would ever be when planning a loved ones!

There are legal requirements for dealing with the “disposal of a body”.  The law governing what has to be done when someone dies is based on the wish to be respectful of the dead and to ensure public health is protected.   So certain parts of the process have detailed and strict rules, for example, there is a minimum depth for graves.   However the law surrounding actual disposal of the body is fairly limited.  You may be surprised that there are no set time limits for disposing of the dead.

There is, also, no legal requirement to use a funeral director, and English law does not insist on embalming unless, for example, a corpse is being repatriated or moved between countries.

Although a body must be “decently covered”, the use of a coffin is not the only option – a shroud, cardboard box or wicker basket will suffice. However some crematoria will have their own requirements and you do need a coffin to be buried at sea, but not to scatter ashes at sea – but a word of caution – know how to manage a boat, if you choose this option and do not imbibe too much spirit before you embark on your voyage!    A client whose dear, drinking buddies carried out his wishes to have his ashes scattered at sea and ended up having to be rescued by the local lifeboat!   They dined out on that particular story for many years after!

Beyond the fairly, minimal legal requirements there is complete freedom to do what you would like both for a service and for the post funeral gathering.

Although burial and cremation are the most common ways of disposing of bodies, two new methods are emerging with the aim to be more environment friendly.  Resomation, which is available in parts of the US and Australia, is a liquefaction process which uses alkaline hydrolysis to dissolve the body’s organic matter inside a steel container. The result is a sterile liquid, and bones which can be crushed and the result is similar to cremated ashes.

Promession is still being developed.  In this process, liquid nitrogen is used to super-cool the body before the brittle remains are shattered, using ultrasonic vibration.  Any water content is evaporated to produce a dry powder which turns to compost when buried in a small bio-degradable container.

And not to forget cryogenics…. but that subject needs a blog all of it’s own!

Whatever method of disposal is for you, try and ensure your funeral service/gathering is your very own unique snapshot of your life, a series of moments whether by words, music or even the clothes your funeral attendees wear, that reflect the best of you – the parts of our lives and personalities we would all like to be remembered for – and do not think this is the zenith of self-obsession – far from it.  As a daughter who has had to plan both of her parents funerals and wrestled with making sure everything was just right, I can assure you had my parents left details of what they wanted to happen, I would have been extremely grateful.

The post Funerals: to plan or not to plan appeared first on Sherrards Solicitors.

Read Full Article
Visit website
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

On 27 March 2018, the European Union accepted the amendments to the European Commission’s revised draft of the withdrawal agreement negotiated with the UK so far.  The agreement is expected to form the basis of a treaty that will govern both the withdrawal of the UK from the EU and the transition period following that withdrawal.

The next key staging post in the Brexit process will be the European Council meeting in June 2018 but the real one will be in autumn 2018. A deal will effectively have to be agreed by this point if it is to be approved by Parliament, the European Parliament and by EU 27-member states.

EU Citizens

The UK and the EU recently accepted that the changes relating to the current EU citizen rights of the draft withdrawal agreement are agreed.

However, there are still some uncertainties about certain citizens.

  1. The withdrawal agreement deals with the transition arrangements. These arrangements will form part of UK legislation if the full text of the agreement is agreed and if it is ratified in accordance with the treaties and the UK’s constitutional arrangements before the UK leaves the EU on 29 March 2019 (although the UK and the European Council, acting by unanimity, could agree to extend this date). At the time of writing this is set to occur between October 2018 and March 2019. Therefore, it will be some time before we have full legal certainty as to the transition arrangements.  Assuming that the transitional agreement does come into force, UK rights derived from EU law will continue.  These include TUPE, GDPR, rights attached to the working time directive, maternity and parental rights, equal pay rights, anti-discrimination rights, human rights, right to information and consultation on business reorganisations, redundancies and outsourcing exercises, Health and Safety, right to claim before the ECJ, the right to be given a written statement of pay and work conditions within 28 days of starting work.. etc.
  2. During the transition period (from 29 March 2019 to 31 December 2020), it is practically a given that the UK will accept most of the new EU laws. There may be exceptions such as certain aspects of Schengen. There are also question marks regarding the UK’s willingness to accept new tax rules from the EU.
  3. Third country agreements. There are still some uncertainties regarding the fact that the UK would, according to the EU, still be bound by the EU’s obligations under its external/third party agreements but would not participate in any institutional arrangements under them.  The EU has agreed that the UK could start negotiating its own deals but not sign or implement them.
  4. The competency of the ECJ Court. The competency of the ECJ Court or the setting up of a Joint Committee of the parties to supervise and enforce the withdrawal agreement is still under discussion
  5. Long Term residence rights and the financial settlement. The draft texts do not specifically address the long term residence rights of EU27 citizens moving to the UK during the transition period (or those of UK citizens moving to the EU in that period). The EU negotiating directives envisage that they would acquire the same rights as citizens who had enjoyed freedom of movement prior to 29 March 2019. The UK is also considering a registration scheme for EU citizens moving to the UK during the transition period. The draft texts also do not specifically address financial settlement. This will be dealt with in other parts of the withdrawal agreement
  6. What happens at the end of the transitional period? Like the EU text, the UK text is silent about what happens at the end of the transition period. It does not propose any mechanism to agree an extension of the period (which might otherwise be difficult as it is unclear that the EU could agree an extension using Article 50 of the Treaty on European Union – thus an extension, or amendment, might require a full treaty process). The agreement in its current form, would move the ‘cliff edge’ of a ‘hard Brexit’ until 31 December 2020. Neither party has made proposals addressing issues such as contract continuity or how to transition EU27 or UK market participants or financial market infrastructure from their status within the single market to their new status when the transition period ends and the UK becomes a third-party country.
  7. Long-term agreements. There are currently no written proposals to deal with the implementation steps relating to any eventual long-term agreement concluded during the period except in so far as the text envisages that the UK would drop out of the transition provisions relating to Freedom, Justice and Security measures if and when an EU-UK agreement on those subjects enters into force. The European Union’s area of Freedom, Security and Justice was created to ensure the free movement of persons and to offer a high level of protection to citizens. It covers policy areas that range from the management of the European Union’s external borders to judicial cooperation in civil and criminal matters and police cooperation. It also includes asylum and immigration policies and the fight against crime (terrorism, organised crime, cybercrime, sexual exploitation of children, trafficking in human beings, illegal drugs, etc…).

What if there is no deal – can a company now rely on there being a transition period?

Both the EU and the UK maintain that “nothing is agreed until everything is agreed”. As such, the transition elements in the draft withdrawal agreement represent a political agreement which depends on signature and ratification by both parties. There are a number of open political issues that might still prevent its conclusion, such as the Irish and Gibraltar issues, the financial services and the fishery and agricultural policies which are yet to be addressed. This could have implications on the timing of companies operating cross border to implement contingency plans as it will depend on their own circumstances and risk appetite and that of the UK and EU regulators generally.

Cliff-edge and Britain’s own legal framework to effect a transitional period

If the discussions on the withdrawal agreement fail to deliver a transition period, then the UK is putting in place the legal framework to introduce this unilaterally, although some aspects of this are dependent on cooperation by EU27 firms’ home state regulators.

By contrast, there are no public plans to put in place any legislative machinery at EU27 or EU27 member state level. The EU may be able to take some actions at reasonably short notice following a no-deal exit to mitigate some of the adverse effects on the EU, for example by activating some of the existing third country regimes in EU legislation, but their scope is limited.  Therefore, more practically, it is likely that the transitional period will be extended.

The post The Withdrawal Agreement-Review of its content so far appeared first on Sherrards Solicitors.

Read Full Article
Visit website
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

Stamp Duty Land Tax (SDLT) has now become a highly complex area and requires careful consideration to ensure the rates and exclusions applied are correct. At first glance, it may appear that relief is available but on closer inspection of the scenario this may not be the case.   For example, where a property is over £500,000 and the property is not a first purchase for the buyers collectively, they will not be eligible for first time buyer relief.

There have been some highly colourful interpretations of ‘the mixed-use’ category where rates are significantly reduced. For example, an artist’s studio in a garden, an office in a mews house and selling apples for pressing commercially have all been suggested as being commercial use under the SDLT legislation.  The revenue is investigating such designation more frequently to claw back SDLT.

It is also important to consider the floor plan, where more than one property is contained within the demise, in case ‘averaging relief’ can be claimed. However, the revenue does have a clawback provision where the number of dwellings is reduced within 3 years.

An area causing much debate is the additional 3% charge for companies (charged on every purchase where an exemption to 15% rate is applied) and individuals who own residential property worldwide. In this case, the exemption applies where a main residence is being replaced. However, the guidance requires that it is the intention of the buyer at the time of purchase to live primarily in that residence and the replacement of such and not a matter of allowing the purchaser to choose which property is to be the main residence. Married couples are treated as a single person when applying the test so where a property is owned by one spouse this will be relevant for both when replacing the main residence and calculating whether the higher rates are available. The ownership of inherited property is ignored where an interest does not exceed 50%. However, if one spouse who does not own any property purchases in their individual name they are affected where the other spouse owns a property portfolio or even one other property and the purchasing spouse will pay the higher surcharged rate.

The higher rate of 15% is charged when non-natural persons purchase the property i.e. a company or a partnership. However, the rate can be reduced to the surcharged additional 3% where the company is a property developer or rents properties as a business (with no connected person in occupation). In any event this rate only kicks in over £500,000 so although the 15% rate may not be charged, the additional property 3% rate will be.  The revenue’s calculator does not make provision for an SDLT calculation for non-natural persons, so on initial calculation, this can be misleading.

Higher rates of SDLT may be also payable where there is a linked transaction, for example, where either two properties are being purchased or a building contract for works has been entered into separately.

A further area requiring consideration is where clients are divorcing and the couple transfers the property to one of the co-owners. SDLT is usually payable on the equity or mortgage being taken by the purchasing party. However, an exemption applies where there is a court order or deed of separation in place or where the separation is likely to be permanent.

A number of tenancy agreements in central London will exceed the £125,000 threshold meaning that SDLT is due on the signing of a tenancy agreement by the buyer. The amount is cumulative and therefore any renewals will also be caught.

The revenue also plan to reduce the filing period from 30 days to 14 days, although this is still to be confirmed. It is imperative that specialist advice is obtained on the SDLT liability levels, as it has become a complex area.

For more information please contact our property team.

The post SDLT update appeared first on Sherrards Solicitors.

Read Full Article
Visit website
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

25 May 2018 – take note of the date as this becoming affectionally known as “GDPR” day.  It is the day when the old Data Protection Act 1998 is superseded by the GDPR.  The aim; to effectively standardise rules across the EU and create greater transparency, responsibilities and liability in relation to how data (held on individuals) is collected, used, shared, stored, transferred or deleted.  While not officially confirmed, it is expected that the UK will continue to commit to observing GDPR post Brexit to maintain the harmonisation with the EU rules and general data market.

But what does this mean?  GDPR, very briefly, places the burden of ensuring compliance on your entire organisation, especially functions like recruiting which rely heavily on collecting candidates’ personal data – their name, email addresses, possible medical requirements, telephone numbers or addresses. All information that would allow you to easily identify the individual.

The following are a few of the key areas of impact and how GDPR should be considered:

  1. Consent

GDPR requires additional transparency in informing individuals about when (and why) their data is collected, processed and transferred. Traditionally, recruitment sector businesses have relied on an individual’s consent to justify the processing of their data. However, under the GDPR, there are stricter requirements for consent – it must be clearly distinguishable from other matters, in an informed way and easily accessible form and must be capable of being easily withdrawn.  Separate consent must be sought for separate processing activities (such as, for example, when a candidate has put his or her details forward for one vacancy and these are then used for unrelated vacancies or other purposes). We expect that most businesses will need to revisit and revise their current data collection and handling processes in order to comply with the new obligations.  For example, some recruiters may need to ask existing candidates to re-register and remove any candidate who has not consented and to give candidates additional clarity about how they collect and use their personal data.

  1. Data “processing”

Under the existing regime, the “data controller” is the party who controls and decides the manner in which the data is used; a “data processer” is someone who collects or processes the data (and this can be as simple as receiving and holding the data) from or on behalf of another.  Currently, there is little direct obligation or liability on data processers.  However, under the GDPR all data processers will now have direct responsibility to data subjects in relation to their compliance with the GDPR.  There are also various duties now on data controllers to ensure that they have a clear contract with suitable GDPR compliant terms with data processers as to what they can and cannot do with data that may be shared.  All parties will need to ensure that the relevant recruiter has complied with the above mentioned “consent” requirement.  Well organised recruiters will include the GDPR provisions within their terms of business and pursuant to their privacy policy.  If you haven’t been given either by the recruiter, you should request them and ensure that there are clear provisions stating that they ensure all relevant and informed consent is given by the candidates.  You will also need to be very careful on how you use, store and “process” the candidate data so as not to breach the GDPR.

  1. Data Subject Rights

Under the GDPR, individuals will have far greater rights as to how their data is used and accessed.  These range from the “right to be forgotten” and have data erased, or where it is no longer needed or is factually incorrect (which could include cases where candidates or contract workers contest feedback about attendance or performance).  A new right of “portability” of data is created – the right for individuals to demand that all of their data is transferred, in easily readable formats, to another provider.  Both recruiters and employers will need to review their working policies and practices to ensure that they can comply with all of these individual rights.

  1. Security

Under the GDPR there is a duty to implement measures to ensure a level of security which is “appropriate to the risk“.  Appropriate measures may include: pseudonymisation and encryption of personal data; the ability to restore data in a timely manner in the event of an incident; and a process for regularly testing the effectiveness of security measures. This means that you may need to change your internal processes now in order to comply with the GDPR.

The implications of the GDPR are far reaching and impact on all aspects of your business.  The above is a very brief snap shot into the implications of the GDPR and if you wish to discuss any of the issues raised in this article, or for any advice or assistance, please do not hesitate to contact the recruitment team.

The post GDPR and Recruiters appeared first on Sherrards Solicitors.

Read Full Article
Visit website
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

Any woman working in the field of law will be acutely aware of the challenges that she will face if she is to be successful in her career. Commercial law, in particular, is historically dominated by men and brings with it a culture of long and unsociable hours. Women still retain primary responsibility for childcare, and this fact alone can present a hurdle to career progression and success.

Although great progress has been made to remove some of the barriers faced by women, particularly with the increasing acceptance of flexible working (helped in no small part by technological advances), it is still a fact that, despite the number of women entering the profession outnumbering men, the number of women at equity partner level is significantly lower than men.

Last week (21 March 2018) saw the launch of the International Bar Association’s Report on Women in Commercial Legal Practice, which considered the reasons why women continue to experience barriers to the most senior positions in commercial law firms. The Report is both startling and unsurprising: startling in its confirmation of the difficulties faced by women, and unsurprising in that it says nothing that most women don’t already know.

The Report concluded that:

  • Female representation as equity partners in law firms remains low, often less than 20 per cent.
  • Discrimination against, and sexual harassment of, women continues to be a significant problem.
  • The demands of billable hours, and the expectation that lawyers must commit themselves “unconditionally” to work, are used to call into question women’s commitment to their careers.
  • Diversity policies are generally ineffective, because they are designed to tackle the problem of women, not the workplace.

It is clear to anybody reading the Report – and any women working in the law – that things need to change if law firms wish to create a workforce reflecting broader expertise and diversity. At the launch of the Report, a panel of distinguished leading lawyers working both in house and in private practice recognised that increased diversity was in the interests of the law firms themselves, as well as the lawyers. We heard how clients are becoming increasingly alive to the issue of diversity and are demanding greater transparency – including publication of male to female ratios – from their law firms.

There is still a long way to go. This Report, though, should be required reading for all law firms who want to self-reflect on their own internal barriers, to make sure that the brightest and best lawyers – male or female – are attracted, retained and progressed within their firms.

After all, it makes commercial sense.

The post Breaking Ranks – Women in the Law appeared first on Sherrards Solicitors.

Read Full Article
Visit website
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

Geraldine Fabre, a partner in Sherrards’ French team took to the stage at PWC’s London offices last week to announce the winner during the French Chamber of Commerce’s annual cross cultural quiz evening.

Focusing on Sherrards international outlook in the face of increasing protectionist trends around the world, Geraldine praised the Institut Français’ commitment to embracing cultural diversity and congratulated it on its well-deserved win. The Institute Francais is part of a worldwide network promoting French language and culture and encouraging cross-cultural exchange and diversity.

Geraldine commented, “Whilst we didn’t enter ourselves for the Intercultural Trophy, we had a great table at the quiz and put in a fantastic performance.  With a mixture of English and French speaking guests, including Peter Burdin, former Africa Bureau Chief of the BBC and now Chair of the Trustees of Humanity & Inclusion, we were convinced we’d win – but didn’t!  Competition was strong with tables from Chanel, Euronext, PWC and many others.  The evening was a huge success for the French Chamber and PWC and really demonstrates that those of us working with companies in the UK, France and around the world are totally committed to continuing to build great international businesses and relationships.  As a firm, Sherrards has a number of international teams, with bilingual, and often dual qualified, lawyers. Our clients come to us for their commercial, employment, property, IP, litigation and private wealth needs.  With our backgrounds, we provide a great bridge between the different cultures and legal systems.”

Geraldine also thanked all the firms who put their names forward for the Trophy and particularly those who were shortlisted

  • Browne Jacobson
  • EBL Miller Rosenfalck
  • EPIC
  • ESCP Europe Business School
  • Evolution Coaching
  • James Cowper Kreston
  • Street League
  • Waddington Custot

For more information please contact Geraldine Fabre.

The post Sherrards award Intercultural Trophy to Institut Français, UK appeared first on Sherrards Solicitors.

Read Full Article
Visit website
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

The Chancellor’s upbeat spring statement and predictions of the economy growing faster than expected, will hopefully provide some reassurance and optimism for UK businesses and investors.

As a business owner, you are no doubt constantly seeking to grow and invest in your business, whatever the economic conditions and political uncertainties, such as Brexit. One way of achieving this growth is by purchasing another business. Conversely, having grown and nourished your business, you may think that market conditions in your sector are right for capitalising on all your hard work and investment by selling.

Acquisitions can either be conducted whereby the sale and purchase of the underlying assets of an operational business are acquired, or by transfer of its shares. Whilst these methods both achieve the same commercial objective, the legal and tax consequences are different, require careful thought and specialist advice.

In a share acquisition, the buyer acquires the shares of the company and it is the ownership of the company (including all its assets and liabilities) that passes to the buyer.

In an asset acquisition, the buyer can select the assets from the business that it wants, leaving the majority of liabilities with the seller. An asset acquisition is often preferential to a buyer on the face of it, whilst a seller is more inclined to seek to sell its shares.

A buyer will want to ensure it acquires exactly what it wants for the best price; a seller will try to minimise its continuing obligations whilst striving to achieve the best price. The best price of course means the opposite to each of the parties.

Seller 

Shares 

  • Following the disposal of shares, the seller makes a ‘clean break’ from the business.
  • The buyer, however, will seek protections from the seller and make investigations about the company to ensure that it has a right of action against the seller should undisclosed problems arise.
  • A ‘clean break’ will only be achievable if the seller can negotiate releases in this respect.

Assets 

  • In an asset sale, legal liability to third parties for debts and obligations remains with the seller.
  • Though a buyer might contract to assume responsibility for some liabilities, a third party is still able to take action against the seller.
  • The seller will also be liable for any unexpected liabilities which may occur further down the line.

Buyer 

Shares 

  • All the assets of the company are acquired by the buyer. An asset purchase provides the buyer with the flexibility to choose the assets it wants.
  • Following the acquisition of shares, the buyer will benefit from the continuity of the business trading.

Assets 

  • In an acquisition of assets, the liabilities carried over are identifiable in relation to the assets the buyer has decided to purchase.
  • Subject to statutory exceptions (employees and environmental matters) a buyer has the flexibility to decide which liabilities it agrees to take responsibility for, avoiding any unquantifiable or unknown liabilities.

A buyer and a seller will have opposing views about how best to proceed; what is an advantage to one of the parties will usually be a disadvantage to the other. The reality is that the acquisition method will ultimately hinge on the parties’ negotiating power.

This is just one element amongst many which need careful considerations prior to undertaking an acquisition or sale of your business. Buying and selling businesses are at the core of the Sherrards corporate/commercial practice and the team advise both public and private companies; understanding that commercial insight extends beyond the law in seeking to provide the best outcome in each and every transaction.

For more information please contact the corporate/ commercial team.

The post Assets or Shares? appeared first on Sherrards Solicitors.

Read Full Article
Visit website
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

For lawyers, words matter. A lot. And for good reason.

In a recent case in the High Court, Sherrards successfully defended a claim in which a former employer in the recruitment sector was trying to punish a former employee for having had dealings with one of its customers after the employee had left and joined a competitor.

Any terms in an employment contract which seek to restrain an employee from any form of post-termination activity (such as, for example, soliciting business from the employer’s clients) are generally void on public policy grounds – the general view being that individuals should be at liberty to earn a living free from restraint. However, some restrictions (known as “restrictive covenants”) will be enforceable, so long as they go no further than reasonably necessary for the protection of a legitimate business interest.

But what is clear beyond a shadow of a doubt is that employees cannot be prevented, after the termination of their employment, from doing something that they did not do before the termination. This was the issue before the High Court on this occasion.

In this case, the focus was on what was meant by the word “business” in a restrictive covenant in the employee’s employment contract. Did it mean “functional entity” or did it mean “activity”? The employer claimed that it meant “entity” as opposed to “activity”. This was fatal to the employer’s claim.

Crucially, whoever drafted the contract of employment failed to define the term “business” and, had he or she properly defined it, the case would likely never have gone anywhere near a courtroom. Had the term been defined, it would – as is customary – have been spelled with a capital “B” (“Business”).

The case was complex and but the basic facts were:

  • The employer (“A”) specialised in recruitment in the financial services sector.
  • A was trying to establish a relationship with a new client, Company C (“C”). C operated in the insurance sector (that is, a sector in which A neither specialised nor operated).
  • Whilst working for A, the employee placed a candidate with C. The role was insurance-specific, and was a one-off placement. A did not otherwise engage in providing recruitment services into the insurance sector.
  • When she left A, the former employee joined a competitor (“B”), who operated in the financial services sector (and so was in that sense a competitor to A), but also the insurance sector. She had dealings with C on behalf of B, providing candidates for insurance-specific roles. The issue was whether this placed her in breach of her restrictive covenants to A. Was she prohibited from having dealings with C even if those dealings did not overlap with anything A did?
  • Because of A’s argument as to the meaning of “business” (they said it meant “entity” and not “activity”), it meant that the covenant would stop the employee from dealing with C, even providing insurance-specific recruitment services, simply because B (as an “entity”) competed to some extent with A.
  • So the fact that B was a competitor to A (because it also operated in the financial services sector) was irrelevant. Nor did it matter whether the services provided to C by the employee were insurance or financial services-specific.
  • What mattered was that the restrictive covenant A was trying to enforce would have stopped the employee from providing insurance-specific recruitment services to C, even though A did not engage in this sector at all and would not have had the slightest commercial interest in such prohibition.

The crucial issue, therefore, was that the restrictive covenant was too wide. It went further than reasonably necessary to protect A’s interests. It sought to prevent the employee from engaging in recruitment services into the insurance sector, even though that is not something A did at the time. A had no legitimate commercial interest in stopping its staff from providing insurance-specific recruitment services to its customers after they’d left A’s employment, regardless of whether they did so whilst working for a company that competed with A in another respect.

The Judge hearing the case concluded that the restrictive covenant in question was “manifestly too wide” and that the arguments advanced by A via its lawyers were simply “wrong”.

The lesson? Words matter, and nowhere more so than in a restrictive covenant in an employment contract. Had the word “business” been properly-defined, the case may well have turned out differently and the employer may well have had the benefit of the protection it wanted.

For more information please contact the recruitment team.

Sherrards uses reasonable care to ensure that the content (“Content”) appearing on the Website is current and accurate. The Content does not constitute legal advice and is provided for general information purposes only, without giving any warranty of any kind, either express or implied. The User hereby acknowledges that Sherrards have no control over the use to which the User puts the Content and as such Sherrards cannot and shall not be liable for any loss arising out of the Users (or any third party to whom the User forwards Content) use of, or reliance upon the Content (whether such loss is direct, indirect or consequential).

The post business isn’t Business appeared first on Sherrards Solicitors.

Read Full Article
Visit website
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

Whether you are the landlord or the tenant, you need to think carefully at the time of signing a new lease about what happens when the lease comes to an end.  A manufacturing company, for example, who has invested in the installation of specialist plant and machinery at a property, will want that lease to continue, to provide it with the comfort it needs to carry on operating its business without fear of having to relocate at the end of its term. Another tenant, providing business services and taking the lease of an office, for example, may not have the same concerns. They may not see the property as critical to their business in the same way as the manufacturing company does.  The landlord on the other hand needs to think about its long-term plans for its property and be aware that unless it opts out of the Landlord and Tenant Act 1954 (the Act), security of tenure is automatically given to the tenants of most new commercial leases.

It can be crucial, therefore, for landlords to consider whether its tenants should have protection under the Act, especially when they might want to take possession of the property at the end of the lease. The tenancy becomes protected unless the parties contract out of the Act.

The protection given to tenants is twofold: First, the tenancy does not come to an end on the term end date of the lease and continues until it is terminated according to the procedures set out in the Act. Second, tenants are given the right to apply to court for a new lease once the fixed term of their current lease has expired. A landlord may only oppose an application on certain statutory grounds.

Security of tenure does not apply across the board to all tenancies however and there are certain tenancies that are excluded from the protection of the Act. Nevertheless, security of tenure applies to most commercial leases with a term over six months unless contracted out.

For a landlord to regain possession of the property at the end of a term, it must serve a statutory notice to terminate the tenancy. Such a notice must be served not less than six months, nor more than twelve months, before the date of termination specified in the notice itself. The date of termination cannot be before the term end date in the lease. The landlord must be able to demonstrate one or more of the following statutory grounds:

  • The tenant has failed to comply with its repair and maintenance obligations
  • The tenant is persistently late with rent
  • The tenant is in substantial breach of their obligations
  • The landlord has offered and is willing to provide or secure the provision of suitable alternative accommodation for the tenant’s requirements
  • The tenant is a sub tenant of part of the landlord’s building and the landlord could get more rent by leasing the whole of the building rather than part
  • The landlord intends to demolish or reconstruct the whole or any part and could not reasonably do so without obtaining possession of the property and/or
  • The landlord intends to occupy the property.

If a landlord envisages that it will want possession of its property at the end of a lease term, then contracting out of the Act is crucial. In practice, the landlord will serve a warning notice before the lease or agreement for lease is completed and the tenant will reply with a statutory declaration. The warning notice must be in a prescribed form and the lease must contain reference to the exclusion agreement, the notice and the declaration.

The Act is highly technical and legal advice should always be sought in relation to any specific matter. The Sherrards property team are able to advise landlords (as well as tenants) on key considerations in relation to security of tenure.

Sherrards uses reasonable care to ensure that the content (“Content”) appearing on the Website is current and accurate. The Content does not constitute legal advice and is provided for general information purposes only, without giving any warranty of any kind, either express or implied. The User hereby acknowledges that Sherrards have no control over the use to which the User puts the Content and as such Sherrards cannot and shall not be liable for any loss arising out of the Users (or any third party to whom the User forwards Content) use of, or reliance upon the Content (whether such loss is direct, indirect or consequential).

The post Make the right commercial decision when it comes to signing or granting a lease with security of tenure protection. appeared first on Sherrards Solicitors.

Read Full Article
Visit website

Read for later

Articles marked as Favorite are saved for later viewing.
close
  • Show original
  • .
  • Share
  • .
  • Favorite
  • .
  • Email
  • .
  • Add Tags 

Separate tags by commas
To access this feature, please upgrade your account.
Start your free month
Free Preview