Courts and Dispute Resolution Archives - Palmers Solicitors
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Courts and Dispute Resolution

Trouble in the boardroom as shareholder rebellions rise

Trouble in the boardroom as shareholder rebellions rise

The number of shareholder rebellions has risen by more than a quarter in 2018, new research reveals.

The Investment Association (IA), which published the figures, said a growing number of shareholders are using their votes to hold executives to account.

The report reveals that 120 FTSE All-Share companies were added to the Public Register up to the end of July 2018, compared to 110 added during the same period last year.

Likewise, a total of 237 individual resolutions were added to the Public Register in 2018, an upturn of 25 per cent compared to the same period last year.

The IA notes that 29 “repeat offenders” appeared on the Public Register for the exact same resolution.

The figures also show that “opposition to individual director re-election” was a key driver of shareholder angst this year, with resolutions more than doubling from 38 in 2017 to 80 in 2018.

Although executive remuneration remains a key theme, resolutions in this area declined from 68 in 2017 to 61 in 2018.

Earlier this year, the IA said shareholder concerns over director accountability are at an all-time high since the introduction of the Public Register – an ‘aggregated list of publicly available information regarding meetings of companies in the FTSE All-Share who have received significant shareholder opposition’.

Luke Morgan, a Partner with Palmers who specialises in shareholder disputes, said: “Shareholder deadlock – particularly if accompanied by director deadlock – can paralyse a business.

“How shareholder disputes and deadlocks are dealt with can often be resolved and negotiated by careful review and consideration of the Company’s Articles of Association or a written Shareholder’s Agreement.

“However this assumes two important points – firstly that the Articles have properly been considered and drafted at the start of the relationship and, secondly, that a Shareholder’s Agreement exists in the first place.

“We often find that the contentious scenarios arise where the Articles are silent as to certain rights or where there is no Shareholder’s Agreement.

“In these situations and more the Companies Act 2006 is vital in determining your rights and unravelling the deadlock where possible.

“If your company is involved in a shareholder dispute or you suspect boardroom unrest it it important to seek prompt legal advice.

“We can walk you through the terms that apply to your shareholder relationship with a view to resolving matters amicably if possible and to get you back to running your business.”

For help and advice regarding shareholder and director disputes, please contact us.

Court rules homeowners blighted by Japanese Knotweed should receive damages

Court rules homeowners blighted by Japanese Knotweed should receive damages

A landmark Appeal Court ruling means that homeowners who are blighted by Japanese Knotweed growing on neighbouring land, will now have legal redress.

Network Rail was taken to court by two Welsh homeowners, Stephen Williams and Robin Waistell,

Both homeowners sued the rail company after claiming that it had not taken sufficient steps to deal with the fast-growing plant which had become so overgrown that it had extended underneath their properties and also affected the view from their windows.

Mr Waistell, claimed that the Japanese Knotweed towered above his bungalow and had led to a massive reduction in the value of the property – essentially making it unsaleable.

Initially, a County Court awarded both homeowners damages in February last year but Network Rail appealed the decision.

Now the Appeal Court has also sided with the homeowners, agreeing that the Japanese Knotweed was an ‘actionable nuisance’ and this decision could now pave the way for similar cases to be brought.

Andrew Skinner, a Partner with Palmers who specialises in boundary disputes, said: “Many mortgages and insurance providers may impose restrictions if Japanese Knotweed is found to be growing near a property and is not being treated.

“In addition to being unsightly and difficult to control, there are concerns amongst some experts that the roots and rhizomes of the plant – which can grow up to 20 cm a day – can cause structural damage.

“Because treatment for Japanese Knotweed is potentially expensive and may need to be repeated for a period of up to 5 years, some landowners have been shirking their responsibility to the detriment of their neighbours.

“The ruling by the Appeal Court should mean that homeowners can now take legal action if a neighbour is not taking the appropriate steps to stop Japanese Knotweed encroaching onto their land.”

For help and advice on matters relating to Japanese Knotweed or any other concerns relating to boundary disputes, please contact us.

Probate fee increase put on hold as MoJ runs out of time

Probate fee increase put on hold as MoJ runs out of time

The Ministry of Justice (MoJ) has stated that it has run out of time to push through legislation which would have seen a massive increase in probate fees introduced in May.

Fees had been due to increase, significantly in many cases, with a fixed fee of £155 (for those applying through a solicitor)  being replaced by a sliding scale. This would have meant estates worth more than £2million would have been hit with a 9,000 per cent increase and would have attracted a fee of £20,000.

However, the controversial fee increase, which had been dubbed a ‘tax on death’ and which attracted opposition from solicitors, charities, a parliamentary committee and even Conservative MPs, has now been placed on hold, with the official explanation being that this is due to the snap General Election announcement which has halted parliamentary business.

There is no confirmation from the MoJ whether this is a temporary delay or will lead to a complete scrapping of the probate fee increase and a senior Conservative declined to say if the scheme would be brought back if the Prime Minister is re-elected.

Lee McClellan, a Partner with Palmers, who specialises in Wills, Probate and Older Client Services, said: “Shortly before the increase was due to be implemented, this hugely unpopular increase in probate fees, which many viewed as a stealth tax, appears to have fallen at the final hurdle.

“Whilst this is to be welcomed, the true reasons for the postponement are open to question and whether the fee increase will be resurrected in the next Parliament or will be permanently be kicked into the long grass is at present far from clear.

“Regardless of what happens in the future, careful estate planning remains important in ensuring that your estate passes to your chosen beneficiaries in the most appropriate and cost/tax effective way possible, so you should consider your options carefully and always seek expert legal advice before taking any action you may later regret.”

For further information about our wills and probate service, please contact us.

Court rules driver must pay massive “fine”

Court rules driver must pay massive “fine”

A young woman was recently ordered to pay £24,500 to a private parking firm after ignoring hundreds of parking tickets.

Carly Mackie had been handed the almost-daily penalties after leaving her car at Dundee’s Waterfront without the necessary permit.

The 28-year-old had ignored the deluge of tickets, believing that they could not be enforced by law.

She was subsequently taken to court by the parking company Vehicle Control Services (VCS).

Earlier this month, a court ruled the charges were from a valid contract and Ms Mackie was liable to pay the outstanding sum.

Sheriff George Way said that she had parked outside a garage belonging to her stepfather and would not accept the offer of a parking permit – available for the cost of £40 a month.

In his judgment, Sheriff Way said “She admits she parked without a permit, on the property that the pursuers were contracted to protect.

“She had no better right or title to do so than any other interloper or stranger no matter what her belief might be.

“The defender refused to pay the parking charges not because she was unaware of the parking scheme or the terms of the notices or the financial consequences of parking at any time, but because she did not believe that the charges were valid in law.”

Jeremy Sirrell, a Palmers Partner with a wealth of experience of road traffic matters, said: “This case demonstrates the dangers of ignoring tickets. If the situation is allowed to escalate you may find that you eventually face a massive bill.

“If you are receiving parking tickets from a private firm and aren’t sure where you stand legally it is always worth seeking expert advice to clarify the situation.”

For advice on the law relating to parking tickets, please contact us.

GM ‘motors on’ as Manchester Ship Canal Company court battle sinks

GM ‘motors on’ as Manchester Ship Canal Company court battle sinks

A court has ruled in favour of General Motors (GM) over a case involving drainage rights, which, if it had been successful, would have netted the land owners a windfall payment worth several million pounds.

Back in 1962, the Manchester Ship Canal Company (MSCC) granted GM a ‘licence’ to drain through its land into the canal beyond for a fee of just £4 a month.

Problems arose, however, when GM ceased paying the fees in 2013. Despite the fact that MSCC chased up the overdue payments on a number of occasions, the vehicle manufacturer failed to pay what it owed and so, in 2014, MSCC terminated the 1962 licence citing a breach of contract. GM disputed this and the case ended up in the High Court.

Andrew Skinner, a Partner who specialises in litigation and dispute resolution, said: “Recently judgment was handed down, with the court finding in favour of GM which, for those who have been following the case, came as something of a surprise as the court took an unusual legal route.

“GM was granted ‘forfeiture from relief’ which is usually used on a discretionary basis and has previously only applied to leases, or contracts granting ‘proprietary interests’ or ‘possessory rights’ over land.

“On this occasion, the judge appears to have extended this legal concept and, in effect, has equated a ‘right to drain through land’ with a ‘right to occupy land’.

“Whilst this may appear to make sense because water flowing over or through land ‘occupies’ it, at least on a temporary basis, these rights do not permit the creation of a pond, lake or standing water. The judgment does not appear to have made this distinction and has instead treated the drainage water in a similar way to easements which deal with rights of way to land.

“Although there is no official word yet from MSCC, they may decide to appeal, particularly as revised charges for such drainage rights would no longer be set at the 1962 rate of £4 a month and is probably worth nearer half a million pounds per annum.”

Andrew added: “The lesson from this case, is if you have a rights agreement in place, don’t allow it to lapse. Even though GM won in court, it now faces not only its own legal fees but MSCC’s full legal costs too, which could all have been avoided if they had paid their £4 a month bills on time.”

For more information on all aspects of commercial law including litigation and matters relating to easements and land rights, please contact us.

Disputes cost small businesses billions each year

Disputes cost small businesses billions each year

The Federation of Small Businesses (FSB) has estimated that legal disputes are costing small businesses more than £11.5 billion annually.

Research conducted by the FSB reveals that around 70 per cent of small businesses in England and Wales have recently faced at least one dispute, with the average amount contested being £18,000.

The report, ‘Tied Up: Unravelling the dispute resolution process for small firms’, reveals for the first time the scale of disputes and the costs spent chasing debts.

The findings include the fact that nearly three quarters (72 per cent) of small business legal struggles are as a result of late or non-payment of goods or services.

According to the Federation, the “consequences of disputes can be devastating for small businesses, ranging from short-term cash flow difficulties right through to insolvency” and it has now called for a “a new approach to help small businesses prevent disputes from occurring in the first place and facilitate faster, fairer and cheaper resolution”.

The study found that small businesses are most likely to deal with a dispute informally. Less than 20 per cent of respondents said they had taken their most recent dispute to court, while only 8 per cent used alternative dispute resolution, such as mediation or an arbitrator to try to resolve the dispute.

FSB Chairman, Mike Cherry, said: “We want to see a beefed up system to bring about fewer disputes and faster resolutions for small firms. The Small Business Commissioner should become a hub for prevention and early intervention, dispute advice, and for helping small businesses identify and use alternative dispute resolution.”

Luke Morgan, a Partner with Palmers, who specialises in alternative dispute resolution, said: “Late payment disputes cause misery for any business but for small businesses who are often operating on a very tight cash flow, late or missed payments can often mean the difference between survival and ceasing trading.

“In some circumstances a late payment can also represent a breach of the original terms of contract so if business owners are concerned about late payment issues they should seek prompt legal advice.

“Palmers offers a Commercial Debt Recovery Scheme to help businesses manage the recovery of their debts and to keep legal costs proportionate. Often a strongly worded solicitor’s letter is all that is needed to recover the outstanding payment but where this fails mediation and other alternative dispute resolution (ADR) procedures can be effective in recovering outstanding business debts. As a last resort, formal recovery action can also be taken.”

For support with business disputes and alternative dispute resolution as well as legal advice on debt recovery, please contact us.