News Archive for May, 2012

Are all your eggs in one basket?

Don’t put all your eggs in one basket, the saying goes, and the same could be said for inherited assets and how the court treats those assets upon divorce.

The treatment of inherited assets by the courts is far from predictable; there are no rules in relation to what happens to inherited assets in divorce as it is for the Judge to decide how important it is in a particular case.

Thus, the court can take two approaches to non-matrimonial property;

1) The exclusionary approach which means that the non-matrimonial property is excluded from the principal that the matrimonial assets should be shared fairly.

2) The inclusionary approach which means the non-matrimonial property is included in the calculations with the matrimonial property and the principal of sharing is applied to all of the property. However certain characteristics of the non-matrimonial property will justify a departure from the sharing principal such as its value, nature, when it was acquired, and to what extent it has been mingled with matrimonial property.

Both approaches allow the Judge a degree of discretion and they can result in very different outcomes.

The case of KVL (2011) applied the exclusionary approach and awarded the husband £5 million out of a total of £57 million of matrimonial assets all of which were non-marital assets. The court stated that this amount met the husband’s needs and there was no justification for him sharing the non-matrimonial property in excess of his needs.

The different approaches of the court do create some uncertainty. The best way for any individual bringing inherited assets into the marriage, where practicable, may be to keep such assets separate, so that if the day comes, it can be argued that they have never been part of the matrimonial assets. Alternatively, the parties could enter into a pre-nuptial or post-nuptial agreement, such agreements detailing what will happen to the inherited assets should the parties’ divorce are increasingly carrying more weight with the court in deciding how to divide the finances.

For further information on how best to deal with inherited assets in the context of your marriage, please contact Susan Hughes of our family team via email [email protected] or telephone 01554 749144

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

Posted by Peter Nicholas on Tuesday, May 15, 2012 at 02:12 PM

Warning of new flood risk changes to insurance premiums

The Association of British Insurers warned that up to 200,000 homes could struggle to find adequate insurance cover for flooding next year.

Recent bad weather and flash floods have highlighted that it is not just coastal properties or those lying next to rivers that need to be adequately protected, unexpected weather conditions can cause problems to any property where the nearby ground cannot cope with sudden heavy rainfall.

The Government’s plans to cut funding for flood defences has provoked Insurance Companies to react by refusing to renew their current “Statement of Principles” agreement - a special agreement which allowed flood-hit homeowners of properties built before 1 January 2009 to renew insurance automatically against repeat flooding. With the Insurance Industry also planning changes to the current structure of insurance premiums, the knock on effect to homeowners will mean a substantial increase in premiums and in some extreme cases the inability to obtain insurance for flood risk for householders.

Caesar Adere, solicitor for DPA Law says: It is prudent for all home buyers to be prepared for premium rises and to obtain property insurance quotations as early as possible. Here at DPA Law our experts always advise those considering buying a property to always check first that the insurance premium is affordable before getting to the stage of exchanging Contracts.

For more information contact Caesar Adere via email [email protected] or by telephone on 01554 749144

Posted by Peter Nicholas on Tuesday, May 15, 2012 at 12:22 PM

The £5,000 Workbench!

A recent Tax Tribunal case has highlighted the importance of differentiating between fixtures and fittings when buying or selling property and left one buyer with an additional £5,000 tax bill plus fines and interest as a result of getting it wrong.

In law, fixtures are items which are fixed to property with a degree of permanence. They are treated as part of land and, unless specifically excluded from the sale, will automatically transfer on a sale of the land. Conversely, fittings are moveable items which are not fixed to land with any permanence and are not included with a sale of land unless specifically mentioned in the sale contract. The importance of the distinction for tax purposes is that Stamp Duty Land Tax (SDLT) is payable on land (including fixtures) but not moveable items (such as fittings).

In Gill Orsman v The Commissioners for Her Majesty's Revenue & Customs, the purchaser agreed a price of £250,000 for the property and £8,000 for various fittings at the property. The contract for the sale included an inventory of the fittings to be included. On that list were units and a worktop in the garage at the property. The units were freestanding, but supported the worktop which was also secured at the rear by a baton screwed to the wall. HMRC argued, and the tribunal agreed, that this fixing made the worktop and the units into fixtures and so £800 of the £8,000 ought to be attributable to them and added to the £250,000 purchase price. The net result of this was to tip the property into a higher banding of SDLT, increasing the tax bill due from £2,500 to £7,525 plus interest and penalties.

The case highlights the need for care when preparing contracts and inventories. It also highlights HMRC’s determination to investigate marginal cases and maximise any potential tax revenue.

At DPA Law our property experts are able to advise on all aspects of property transactions.  For more information, please contact Caesar Adere via email [email protected] or by telephone on 01554 749144

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

Posted by Peter Nicholas on Monday, May 14, 2012 at 12:32 PM

Will Writing Services

The Legal Services Board has announced proposals to deliver greater protection to consumers of the legal services of will-writing and estate administration, by bringing these services within the scope of legal services regulation, regardless of who provides them.

The decision on whether or not to regulate will-writing and estate administration services has long been debated, according to Trina Wilkins, a solicitor in DPA Law, dealing with litigation arising from contested wills probate and estates. "The LSB has reviewed all of the available evidence about the problems suffered by some consumers in these areas, and conducted original research, to identify what the risks to consumers are and why they emerge”, comments Trina.

The LSB’s investigations found systematic problems with the services delivered by many different types of provider, with consistent patterns of sloppiness, simple errors and poor communication. This often resulted in an unacceptable service. Too often consumers were subjected to unfair sales practices. There have also been well-documented examples of fraud and deception.

Trina adds: “Ultimately, people must be able to write a will with confidence, not fear. For that to be possible, everyone offering such services must deliver to a baseline of consumer protection. This is not about extending regulation for the sake of it. It is about maintaining public confidence in an important legal process; enhancing the environment for reputable providers, and protecting consumers at particularly vulnerable times in their lives.”  The proposals will now be further refined, with a view to final proposals being submitted early next year.

If you feel you may need advice, DPA Law can advise you. Call Trina Wilkins on 01554 749144 for further information, or contact her by e-mail at [email protected]

Posted by Peter Nicholas on Tuesday, May 08, 2012 at 02:16 PM

Lump Sum Option for Small Pension Plans

Under recently announced changes to pensions rules those aged 60 or over now have the option of taking a lump sum from personal pensions with a value of £2,000 or less. The changes mean that, as of 6 April 2012, those aged 60 or over may take personal pension funds worth £2,000 or less as a lump sum, regardless of the value of their other pension savings.

Anthony Davies is a partner in DPA Law, a trustee of the Swansea Bay branch of Age Cymru and a member of Solicitors for the Elderly. He says, “A maximum of two pension plans may be paid out as lump sums in this way. 25 per cent of each lump sum will be tax-free, with the remainder taxed at the taxpayer’s marginal rate of tax.”

Although pension plans are designed to provide an income during retirement, it is generally possible to take up to 25 per cent of the value of a pension fund as a tax-free lump sum, with the rest of the fund being used to provide a regular income. Since 2006, however, under an option known as the ‘trivial commutation’ rule, those with £18,000 or less in pension savings could withdraw all those savings as a lump sum. The limit will remain at £18,000 in future, regardless of changes in the Lifetime Allowance.

Anthony comments: “This move is intended to help those who have pension plans containing small amounts but who cannot make use of the trivial commutation rules, either because their total pension funds amount to more than £18,000 or because they have already made use of the rules in respect of another pension.” 

If you feel you may need advice, call Anthony Davies on 01554 749144 for further information, or contact him by e-mail at [email protected]

Posted by Peter Nicholas on Tuesday, May 08, 2012 at 02:12 PM

Employment law changes this April

It’s time of year when UK employers gear up for a swathe of employment law changes, and 2012 is going to be no different. This year, important amendments include those relating to tribunal procedures, unfair dismissal and statutory maternity and sick pay.

Employers need to “switch on”, according to Mike Davey, a partner in DPA Law: "This year there are important changes to statutory maternity, paternity, adoption and sick pay.” There are also significant changes to the qualifying period for unfair dismissal and in accident-reporting requirements.

For example, in April the qualifying period for making an unfair dismissal claim increased from one to two years in most cases; and the required period of incapacity following an injury caused by an accident at work increased from more than three days to seven. Mike comments: “April is a month that tends to be overloaded with employment and health & safety law changes. Employers can all too easily miss something.” 

If you feel you may need advice, DPA can advise you. Call Mike Davey or Christian Houston on 01554 749144 for further information, or contact them by e-mail: [email protected]

Posted by Peter Nicholas on Tuesday, May 08, 2012 at 02:07 PM

Lasting Power of Attorney

Individuals  can make a lasting power of attorney (LPA) which enables them to choose a person to make decisions regarding their health and welfare, and/or  their finances. This replaces the previous system of enduring powers of attorney (EPA). Since October 2007 it has not been possible to create an EPA. EPAs created before October 2007 remain valid and can be used if the person who nade the EPA loses mental capacity . It  is not possible to convert an existing EPA into an LPA

The donor of the power - the person creating the power who wishes to delegate decision making

The attorney - the person (s) or institutions appointed to act under the power to make decision on behalf of the donor

The Scope of LPAs
You have  the choice to determine whether  your  LPA should apply to personal welfare, financial affairs or both. You can also  make restrictions to the scope of the LPA as it relates to particular financial matters or health and welfare decisions e.g. to withhold permission to deal with a specific piece of property or to make certain medical decisions.

Where the LPA relates only to property and financial affairs, the attorney can be either an individual or a trust corporation i.e. a bank. However, when the LPA relates to welfare, only an individual can be appointed. Different attorneys can be appointed by the donor to act in respect of welfare and property and financial matters.

The overriding principle is that an attorney appointed by  an LPA is obliged to act in the best interests of the donor at  all times.

The Attorney's Powers under the LPA - Financial Matters
These include:

•Operating a bank account
•Making investment decisions
•Signing tax returns
•Buying and selling property
There are also certain restrictions, for example the attorney cannot

•Sign the donor's Will, or
•Act for the donor as a trustee or executor, or
•Make gifts, except in cases where the gift has historically been made by the donor
Powers Relating to Personal Welfare
Attorneys have the power to decide on issues such as:

•Living and accommodation arrangements for the donor
•Care and medical treatment
•Decisions relating to the application or continuation of medical treatments.
An attorney cannot make decisions where:

•The donor has the capacity to make the decision themselves
•The  decision would be contrary to an LPA subject to valid "advance conditions" made by the donor concerning medical treatment at a time when they had full mental capacity
•It relates to the refusal of life-sustaining treatment, unless the LPA expressly says so
The Procedure for Making an LPA
For the LPA to be valid it needs to be registered by the Office of the Public Guardian immediately after it is created.  This contrasts with the EPA which only required registration when the donor was believed to have lost mental capacity.

The LPA must be 'certified' under the LPA scheme. This means that the LPA certificate needs to be countersigned by someone who has either known the donor for at least two years or is a 'prescribed person' such a solicitor or a doctor. The certifier must confirm that, in his opinion, the donor understands the effect of the LPA and the purpose and scope of the documents they are signing and that the decision of the donor was not influenced by fraud or undue influence. 

The donor can appoint one or more attorneys. The LPA should specify whether, if there is more than one attorney, the attorneys must act together or separately. It is possible to provide that certain decisions are made jointly e.g. the sale of a house and others jointly and severally (i.e. individually) e.g. operating a bank account. This contrasts with the EPA where the attorneys acted either jointly for all decisions or jointly and severally for all decisions.

Once registered, the attorney has the authority to act in accordance with the terms of the LPA. However for each decision that they need to make they must check with the donor if he/she can still play a part in making that decision otherwise they will not be acting in the donor's  best interests. In other words there is no definite time when the donor loses capacity absolutely. Capacity has to be assessed for each individual decision e.g. a donor may not have the capacity to decide if they want to sell their house but has the capacity to withdraw a weekly amount of cash from his bank account. Third parties, such as banks or doctors, will need to see a copy of the document before they will accept an attorney's instructions and will need to satisfy themselves that the donor is unable for each transaction to play a part in the decision making process. An LPA can be revoked by the donor at any time, provided they have the mental capacity to do so.

What If You Don't Make an LPA?
If you lose your mental capacity and do not have an LPA in place, an application to the court will need to be made on your behalf for someone to be appointed as your receiver. This is a far longer and more complicated process. Whoever is appointed has to comply with extensive reporting obligations to the court on an ongoing basis.  The LPA is an important opportunity for a donor to make the decision themselves as to who should represent them in the event of deterioration in their mental capacity.

How We Can Help
Our experienced Wills and Probate team are ready to help you make provisions for your own future, or that of a loved one. We offer a full Will writing service, and can help you in all matters relating to Probate and Lasting Powers of Attorney.

Posted by Peter Nicholas on Tuesday, May 01, 2012 at 03:40 PM

Internet and E mail Access Policy

In order to protect the firm, its employees, customers and suppliers, all members of staff should be given a copy of the firms policy regarding acceptable use of IT resources – particularly internet, e-mail access, and data protection policies. This should form part of the contract of employment – to the extent that any breaches of the policy could result in disciplinary action, and in some cases dismissal.

Having an acceptable use policy not only helps protect the organisations exposure to rogue software, but can also help in disputes with employees.

E mail
A number of companies have been sued for defamation after employees have electronically questioned the integrity of a competitor using e mail, and published these opinions externally.

In another example of a hearing at an industrial tribunal, an employee of a credit card company had his claim for unfair dismissal rejected. The reason for his dismissal was for using the firms’ e mail system to send personal e mails whilst at work. As the credit card company had an effective e mail and internet policy in place, they were able to defend the claim of unfair dismissal.

Illegal material
Due to the uncensored nature of the material on the internet, there are a large number of web sites which contain offensive, obscene and illegal (in the UK) material. Employees should not access such sites.

Viruses and phishing
Innocent looking web sites and e mails have been used to tempt users to download material which has been found to contain a virus, or to disclose personal data they would not normally relay.

A Model Policy Statement
To minimise these kinds of potential problems, all employers should consider setting out a policy statement for all employees embracing internet and e mail access.

A suggested policy statement is shown below which you may find useful as a starting point.

Policy and scope
The company/ firm (delete as appropriate) sees the internet and the use of e mail as an important business tool.

Staff are encouraged to enhance their productivity by using such tools - but only according to guidelines on their use as set out in this document.

The internet is largely unregulated and uncensored and we have a duty of care to protect the security of the company’s/firms internal information, our customers, our suppliers and our employees from malevolent, obscene and illegal material.

[Monitoring - Optional paragraphs 1

With this in mind, the company (firm) reserves the right to monitor e mails and internet sites visited, on an employee basis. However, this will only be performed where there is a suspicion of behaviour which breaches the company’s ‘e mail and internet access’ policy.

Staff under surveillance will be informed, by management, that they are being monitored.

Covert monitoring will only be performed in exceptional circumstances and only when sanctioned by a senior officer(s) of the company/firm.]

[Monitoring - Optional paragraphs 2

With this in mind, the company/firm reserves the right to monitor e mail and internet traffic. However, individual users will not be identified in the monitoring process.]

It will be assumed that all staff understand and agree to the policies unless a director (partner) is notified otherwise. Any exceptions are to be appended to the employees contract of employment and signed by a director (partner) and the employee.

All the company’s/firm’s resources, including computers, access to the internet and email are provided solely for business purposes.

The purpose of this policy is to ensure that you understand to what extent you may use the computer(s) owned by the company/firm for private use and the way in which access to the internet should be used within the company/firm, to comply with legal and business requirements.

This policy applies to all employees of the company/firm and failure to comply may lead to disciplinary action in line with the Disciplinary Procedure. In addition, if your conduct is unlawful or illegal you may be personally liable.

General principles
A computer and internet access is provided to you to support the company’s/firm’s activities.

Private use of computers and the internet is permitted, subject to the restrictions contained in this policy. Any private use is expected to be in the employee’s own time and is not to interfere with the person’s job responsibilities. Private use must not disrupt our IT systems or harm the company/firm’s reputation.

You should exercise caution in any use of the internet and should never rely on information received or downloaded without appropriate confirmation of the source.

Access to the internet and e mail
All/The following users have access to the internet and e mail from all/the following PCs…

Personal use
The internet may not be accessed for personal use during normal hours of employment. Occasional use for personal reasons is allowed outside working hours, however the restrictions set out in ‘Browsing/Downloading material’ (below) must be adhered to.

Personal e mails may not be sent/received unless in an emergency or with prior authority.

E mails and e mail attachments
E mails must conform to the same rules as issuing correspondence on the company’s/firm’s headed paper.

E mails must be authorised by either a director/ partner (or manager).

E mails must not contain controversial statements/opinions about organisations or individuals. In particular, racial or sexual references, disparaging or potentially libellous/defamatory remarks or anything that might be construed as harassment should be avoided.

E mails must not contain offensive material.

E mails containing a virus must not knowingly be sent.

E mails coming from an unknown source must not be opened but disclosed to management (see Disclosure).

E mails sent externally, must contain the company’s/ firm’s disclaimer (see sample below)

E mails (sent and received) must be stored in the appropriate client files and use the same naming conventions which are used to store letters and other correspondence.

Browsing/Downloading material

Only material from bona fide business, commercial or governmental web sites should be browsed/downloaded.

No other material should be browsed/downloaded. This specifically includes games, screensavers, music/video and illegal, obscene or offensive material.

Laptops/portables and portable media devices

a Travelling with laptops/portables
Laptops are liable to be inspected by authorities particularly if travelling by air/sea/rail, both within and outside the UK. Where an employee has a company’s/firm’s laptop they must ensure that it does not knowingly contain illegal material.

Laptops containing corporate data should be encrypted.

b Using laptops/portables on remote connections
Company’s/firm’s laptops may be used for e mail/internet use without being connected to the corporate server. Appropriate security software to allow such access and to control viruses, should be installed.

c Using portable media devices
Portable media devices include USB memory sticks, USB pens, CD’s, DVD’s etc.

Where these contain confidential corporate or personal data, the data contained on these devices should be encrypted.

Employees have a duty to report the following to management:

•suspect e mails/e mail attachments/web sites
•obscene/illegal material found on a PC
•persistent use of the internet for personal reasons
•persistent downloading of illegal/obscene/offensive material
•loss of corporate data or loss of machines and devices containing corporate data
A breach of any of the policies is a disciplinary matter.

Illegal activities will also be reported to the relevant authorities.

Inappropriate use
Computers are a valuable resource to our business but if used inappropriately may result in severe consequences to both you and the company/firm. The company/firm is particularly at risk when you have access to the internet. The nature of the internet makes it impossible to define all inappropriate use. However you are expected to ensure that your use of computers and the internet meets the general requirements of professionalism.

Specifically, during any use of the computer or internet you must not:

•copy, upload, download or otherwise transmit commercial software or any copyrighted materials belonging to the company/firm or other third parties
•use any software that has not been explicitly approved for use by the company/firm
•copy or download any software or electronic files without using virus protection measures approved by the company/firm
•visit internet sites or download any files that contain indecent, obscene, pornographic, hateful or other objectionable materials
•make or post indecent, obscene, pornographic, hateful or otherwise objectionable remarks, proposals or materials on the internet
•reveal or publicise confidential or proprietary information (including personal data) about the company/firm, our employees, clients and business contacts.
The following activities are expressly forbidden:

•the deliberate introduction of any form of computer virus
•seeking to gain access via the internet to restricted areas of the company’s/firm’s computer system or another organisation’s or person’s computer systems or data without authorisation or other hacking activities.
•Downloading corporate information onto portable media devices (such as USB pen or CD) unless management has expressly approved this activity.
•Uploading personal/private information (for example music, films or photographs) from portable media devices (such as USB pen or CD) onto a local or network drive, unless management has expressly approved this activity.
At any time and without notice, we maintain the right and ability to examine any systems and inspect and review any and all data recorded in those systems. Any information stored on a computer, whether the information is contained on a hard drive, computer disk or in any other manner may be subject to scrutiny by the company/firm. This examination helps ensure compliance with internal policies and the law. It supports the performance of internal investigations and assists the management of information systems.

In order to ensure compliance with this policy, the company/firm may employ monitoring software to check on the use of the internet and block access to specific websites to ensure that there are no serious breaches of the policy. We specifically reserve the right for authorised personnel to access, retrieve, read and delete any information that is created by, received or sent as a result of using the internet, to assure compliance with all our policies. Such monitoring will be used for legitimate purposes only.

Sample Disclaimer
This e mail and all attachments it may contain are confidential and intended solely for the use of the individual to whom it is addressed. Any views or opinions presented are solely those of the author and do not necessarily represent those of [the company/firm]. If you are not the intended recipient, be advised that you have received this e mail in error and that any use, dissemination, printing, forwarding or copying of this e mail is strictly prohibited.

Please contact the sender if you have received this e mail in error.

Companies Act 2006 e mails and web sites
Changes to Company law mean that, every company must now include their company registration number, place of registration and registered office address on corporate forms and documentation (this includes e mails and websites).

In particular, all external e mails must include this information – whether as part of the corporate signature or as part of the corporate header/footer.

How we can help
We will be more than happy to provide you with assistance in formulating an acceptable use policy, or if any additional information is required.


For information of users: This material is published for the information of clients. It provides only an overview of the regulations in force at the date of publication, and no action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a result of the material can be accepted by the authors or the firm. 

Posted by Peter Nicholas on Tuesday, May 01, 2012 at 11:54 AM

When an intern becomes an employee entitled to pay

Q. My son has been working for a firm of landscape gardeners since he left school last summer. He was laid off for quite a while over the winter but started back in the spring. He is getting experience but I think he's being exploited.

He's called an intern and they only pay his expenses. Surely there are rules about how long you can call someone an intern and expect them to work unpaid? He works extremely hard, is learning a lot and now knows how to manage his time and get the job done. He loves the work but is exhausted by the time he gets home at night so it's hard to look for paid work. I don't know how to advise him as I appreciate there are probably lots of others who would step into his shoes if he kicked up a fuss and got fired. Can you give me some advice please?

A. Unless he really is a volunteer, your son is probably entitled to be paid the national minimum wage (NMW). For 16 and 17-year-olds that's £3.68 an hour; at 18 it's £4.98 an hour. If there is a contract of employment or other arrangement which makes him a "worker" he is entitled to be paid. It can be a problem deciding who is a worker and who isn't, but calling someone an "unpaid worker", "intern" or a "volunteer" isn't enough to prevent them from qualifying for the NMW.

The law says an employer can't force or persuade a worker who is entitled to the NMW to agree to work for less. Nor can your son sign away his right to the money. If your son claims he is a worker and is therefore entitled to be paid, the onus is on the person he considers to be his boss to prove that he isn't.

DPA solicitors act for employees and employers in employment matters. If you require legal advice in relation to employment policies and procedures or any aspect of employment law, please do not hesitate to contact us via email [email protected] or by telephone on: 01554 749144

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.

Original article published in The Independent Newspaper on Sunday 22nd April 2012 at, and can be viewed via their website

Posted by Peter Nicholas on Tuesday, May 01, 2012 at 09:58 AM

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