atticus periodical issue 3

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Issue 3 The cost of divorce The devil in the detail Building bridges Crowd Funding: the more the merrier Protecting the health of your wealth Business rates – a two-way street? The secrets of smart IP a lupton fawcett lee & priestley periodical Untangling the myths around TUPE Make sure your business is not left with costly liabilities

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Atticus Periodical Issue 3

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Page 1: Atticus Periodical Issue 3

Issue 3The cost of divorceThe devil in the detailBuilding bridgesCrowd Funding: the more the merrierProtecting the health of your wealthBusiness rates – a two-way street?The secrets of smart IP

a lupton fawcett lee & priestley periodical

Untanglingthe myths

around TUPEMake sure your business is not

left with costly liabilities

Page 2: Atticus Periodical Issue 3

Contents3. Strengthening our business and our offering Managing Director, Richard Marshall, explains our acquisition of long-established Leeds-based law firm, Lee & Priestley.

4. TUPE – untangling the myths We tackle the controversial TUPE regulations and dispel some of the myths.

6. News in brief The Patent Box tax explained and a look at the thorny subject of tax planning.

7. The cost of divorce How specialist legal advice can help protect your finances during a separation.

8. Business rates – a two-way street? Why the issue of business rates should be of interest to more than just Property Managers.

9. The devil in the detail Questioning your current agreement could see you enjoy a little tax relief.

10. Building bridges Protect your interests and avoid expensive, lengthy conflicts before they happen.

12. Crowd Funding: the more the merrier Could the Crowd Funding phenomenon work for you?

13. Protecting the health of your wealth Introducing our new bespoke wealth management company, Leodis Wealth.

14. The argument in favour of NEDs Appointing a non-executive director (NED) could be the best decision your business ever makes.

15. The secrets of smart IP Our top 10 tips for good IP practice as well as the pitfalls to avoid.

15. The smart choice of legal partner Colin Horsley, Property Consultant at the Austin Reed Group, shares his experiences of working with Lupton Fawcett Lee & Priestley.

Welcome to the third edition of atticus. Once more we have packed this issue with the latest industry insight and clear, impartial advice as we take a closer look at some of the biggest issues and opportunities facing your business today.

The main aim of atticus is to inform and entertain, but we also hope to give you an insight into Lupton Fawcett Lee & Priestley, and some of our clients and contacts, along the way. We don’t intend this to bea technical publication, but we will keep youup-to-date with any changes and trends in the law that we think are interesting or relevant. Finally, we fully expect to evolve and develop this journal over time to better reflect the kinds of articles that you would like to read, so please don’t hesitate to let us know what you think and to make any suggestions for future editions.

E-mail your thoughts to [email protected]

Kevin EmsleyChairman

Lupton Fawcett Lee & Priestley atticus is printed on paper that uses only recycled fibre and wood from sustainably-farmed sources as well as being carbon balanced.

Scan this code and it will direct you to the atticus web page, where you can download a PDF of the latest and previous editions or read them online.

Standard text rates and data charges may apply.© 2013.

Lupton Fawcett Lee & Priestley

Yorkshire House, East Parade, Leeds, LS1 5BD

Leeds: T: 0113 280 2000 F: 0113 245 6782

Lupton Fawcett Lee & Priestley

Velocity House, 3 Solly Street, Sheffield, S1 4DE

Sheffield: T: 0114 276 6607 F: 0114 276 6608

Lupton Fawcett Lee & Priestley is the trading name of Lupton Fawcett LLP, a limited liability

partnership, registered in England and Wales, with partnership number OC316270. The registered office

is at Yorkshire House, East Parade, Leeds, LS1 5BD. A list of Members’ names is available on our website

and open to inspection at our offices. Authorised and regulated by the Solicitors Regulation Authority.

Please note that this publication contains general information and does not constitute advice on any

specific matter. Whilst Lupton Fawcett Lee & Priestley endeavours to ensure that the content in this

publication is accurate and up-to-date, nothing within this publication should be construed or regarded

as legal advice.

www.lf-lp.com

a lupton fawcett lee & priestley periodical

Page 3: Atticus Periodical Issue 3

In previous editions of atticus I have

outlined our strategy to become the region’s

mid-market law firm of choice, and our

plans to do this by developing an offering

equal to the sum of the parts found across

the mid-market, all underpinned by quality

and real value.

We have been extremely busy since the last

edition of atticus, culminating in our acquisition of

the practice of Lee & Priestley, a long-established

Leeds-based law firm with first class lawyers and

clients. Lee & Priestley has a proud history of serving

the Yorkshire corporate community and meeting the

needs of its wealth-creating commercial clients with

private wealth preservation services.

The partners at Lee & Priestley recognised

the almost insurmountable challenges facing smaller

mid-market firms in the current financial and

regulatory environment, and the need for a stronger

platform from which to meet these.

After lengthy discussions, the Lee & Priestley

team recognised that their strategic objectives were

very similar to our own and that joining forces would

strengthen and accelerate their ability to deliver what

the market requires. In turn, the Directors of Lupton

Fawcett saw that joining forces with Lee & Priestley

would bring greater strength and depth in a number

of areas, in particular Corporate Finance, services

to the Health Care sector, Family and Child Care,

Employment, Commercial Property and personal

legal services, such as Trusts, Wills and Estates. It will

also create opportunities to deliver areas of our own

offering, such as Intellectual Property and Regulatory

Law, to Lee & Priestley’s clients.

The position is further enhanced by Lupton

Fawcett being able to absorb Lee & Priestley’s

partners and staff into our existing, well-controlled

fixed-cost base, allowing us to continue delivering

value for money to our mutual clients in a market

where solicitors are increasingly struggling to do so.

The two firms joined forces on 1 October 2012

through the acquisition of Lee & Priestley’s staff and

partners by Lupton Fawcett LLP. Lupton Fawcett LLP

now trades as Lupton Fawcett Lee & Priestley with

the intention of consolidating the brand under the

Lupton Fawcett banner once all of the stakeholders,

including clients, staff, our respective contacts and

the wider marketplace have become familiar and

comfortable with the move.

The importance of absorbing all that our

new colleagues have to offer, including how we

can improve what and how we do what we do, is

reflected in the appointment of James Richardson,

Lee & Priestley’s former Managing Partner, to our

Management Board and Strategy Board. James will

ensure there are clear channels of communication

throughout the organisation for us all to learn

from each other and provide better services for

better value.

Whilst joining forces with Lee & Priestley

enhances the offering across the firm, and both of our

offices, there is no denying that we still have much to

do in some areas of the region. Having taken a major

step forward in Leeds and West Yorkshire, it is now

our intention to focus our efforts on demonstrably

developing our offering to Sheffield and South

Yorkshire.

We are currently targeting a number of

senior and high profile lateral hires which I

hope to be able to announce in the next edition

of atticus!

Strengthening our business and our offering

Lupton Fawcett Lee & Priestley Managing Director, Richard Marshall, explains our acquisition of long-established Leeds-based law firm, Lee & Priestley, and how by joining forces we’re better positioned than ever before to help our clients meet the challenges they face.

A Lupton Fawcett Lee & Priestley Periodical. Issue 3 02/03

Page 4: Atticus Periodical Issue 3

If you have ever been involved with the sale or

purchase of a business, or are a service provider

tendering for contracts, it is likely that you will

have experience of the Transfer of Undertakings

(Protection of Employment) Regulations 2006

(TUPE). It is safe to say that TUPE has out-

performed most other UK legislation in generating

confusion and contentious disputes.

TUPE derives from European laws, which require the

UK to implement its own domestic laws to protect employees’

employment when their employer changes. Examples include

when their current employer decides to sell his business

and move on (a business transfer) or when the contract on

which the employees are working is taken away from their

current employer and passed on to a new contractor (a service

provision change). However, since TUPE was introduced, it has

been widely criticised as being overly bureaucratic and too

generous in its provisions, which go way beyond its European

ancestor. The UK’s “gold-plated” version of the European law

has been said to be a significant burden on UK businesses,

especially those that frequently tender for service contracts.

However, all may be about to change! In late 2011, the

Government placed TUPE under review to see how it could

be improved. In doing so it announced a Call for Evidence,

through which businesses, unions and academics (to name

a few) put forward their opinions on the effectiveness and

defects of TUPE. Then on 17 January 2013, after digesting the

nation’s views, the Government finally announced its proposed

changes to the regulations.

In this article we examine some of the more

common issues faced by businesses, and address

some TUPE-related myths. We also consider how

these issues might be resolved, if at all, should the

Government’s proposals materialise.

Service Provision Changes (‘SPC’)As mentioned, in addition to the sale of a business,

TUPE also applies where there is an SPC. A common example

is cleaning services. Some businesses employ their own

cleaners but then decide to outsource the cleaning duties to a

separate company. On the other hand, some businesses that

already engage the services of an outside cleaning company

may decide to use a different service provider or, to try and

cut costs even further, do it themselves. All of these situations

currently amount to an SPC under TUPE.

This however is a step beyond what is required under

the European laws, and so this has arguably been the most

extreme case of “gold-plating” within TUPE. Now, in a radical

change of heart, the Government has decided to remove

entirely the parts that relate to SPCs. Incidentally, this will not

result in SPCs being removed from the TUPE regime; however,

it will become more difficult to identify whether or not TUPE

does apply to an SPC under the proposed new legislation.

Unfortunately, this level of ambiguity is likely to result in a

greater number of disputes between service providers engaged

in tender processes.

Under the current TUPE regime, incumbent contractors

will feel somewhat confident that if they lose a contract they

will at least be able to offload a number of employees with it,

thereby avoiding the alternative of redundancy costs. This

may not be the case following the proposed changes, which

could put existing contractors in a position where they are

stripped of their contract and left with the liability for their

employees. Any employers that are currently in a tender

process, or envisage being in a tender process, will need to bear

these new laws in mind when evaluating their bidding.

The Government is proposing a lead-in period for this

particular change which means it could be between one and

five years before this comes into effect. However, contractors

who are involved in tendering for new contracts now would be

well advised to ensure that bids and contracts deal specifically

with the issue of TUPE, and provide protection for the

contractor in the event that the law changes before the end

of the contract term.

Harmonising terms and conditions following a TUPE transfer

One of the most commonly asked TUPE questions

is whether or not the transferee (the buyer of the business

or the incoming contractor) can amend the transferring

employees’ terms and conditions after the transfer to match

those of their existing workforce, so that everyone is on the

same terms and conditions. After all, this would make perfect

business sense and make life a whole lot easier in terms of the

administration required.

Under the current TUPE this process of harmonisation

is by no means easy. Whether or not an employer is permitted

to make changes to employees’ working conditions under the

current regulations will depend on the type of change being

made. TUPE envisages three types of changes, namely;

1. changes which are unconnected to the TUPE transfer - these

are allowed (subject to them being reasonable);

2. changes which are connected to the transfer - these will

usually be void, and therefore unenforceable, except where

there is an ETO reason for the change (see below); and

3. changes where there is an insolvency situation - these are

allowed, subject to certain conditions being fulfilled.

Changes which are connected to the transfer may

be permitted if they are for an “economic, technical or

organisational reason entailing changes in the workforce”

(otherwise known as an ETO reason). However, ETO reasons are

interpreted narrowly, which in practice means that employers

can only rely on them in very limited circumstances.

It is also irrelevant whether or not an employee agrees

to any proposed changes. TUPE still says the change will be

void unless one of the exceptions applies!

However, within the Government’s proposed changes is

the introduction of a new clause that will allow the employer

and employee to agree any changes that could have been

agreed if the transfer had not taken place. This does not

entirely resolve the problem, because changes proposed

where the transfer is the reason for the change will still be

prohibited – this is still the case under European legislation

and the Government is not allowed to introduce UK legislation

that contradicts the European directive. This means that

harmonisation of contracts will still not be allowed, as the

reason for the harmonisation is the transfer itself.

Who is liable, the transferor orthe transferee?

Under TUPE, the basic rule is that all “rights, powers,

duties and liabilities” relating to the employees transfer

from the transferor (the seller or outgoing contractor) to the

transferee (the buyer or incoming contractor) at the time

of the transfer. Whilst the transferee benefits from a rapid

injection of manpower, it also takes on the liabilities that

come with them. This means that if the transferor breaches

an employee’s contract before the transfer, the transferee

becomes liable for that breach after the transfer. This is

assuming that the employee does not object to transferring to

the buyer before the transfer takes place. Where an employee

does object to his employment transferring, his employment

is treated as terminated with both the seller and buyer. In that

event, neither employer is liable for the termination.

However, where it starts to get a little tricky is when

the employee’s objection is in response to proposed changes

by the transferee to the employee’s working conditions that

are to his material detriment. Under these circumstances the

employee is entitled to object to the transfer and treat himself

Paul Sands

Untangling the mythsaround TUPEEmployment Law specialist, Paul Sands, considers the controversial TUPE regulations, tackles some of the common issues faced by businesses, and looks at the Government’s proposed reforms to the law.

Page 5: Atticus Periodical Issue 3

as having been dismissed. Further, in these circumstances

the employee will be automatically treated as having been

unfairly dismissed by the transferor.

For example, consider the circumstances where an

employee has a mobility clause in his contract allowing his

employer to relocate him to different sites. The transferee

informs the employee that following the transfer he proposes

to change his place of work 50 miles from his current site.

As there is a mobility clause in the contract, this change

would not be a breach of his contract. Even so, the transferee’s

proposal would still amount to a change to his working

conditions, which would allow the employee to resign and treat

himself as unfairly dismissed.

This potential risk is made worse in circumstances

of an SPC, where the transferor cannot prevent the transfer

from going ahead and is therefore stuck with the effect of the

transferee’s proposed changes.

Under the Government’s new legislation this issue will

be partially improved. Unless the proposed change by the

transferee also amounts to a fundamental breach of contract,

any objections and subsequent resignations by employees are

unlikely to give rise to unfair dismissal claims. Using the same

example above, under the new statutory regime the employee

would not be entitled to claim unfair dismissal, and his

compensation would likely be limited only to his notice pay.

However, where the proposed substantial and

detrimental change would also amount to a serious breach

of the employee’s contract the transferor would still be liable

for any unfair dismissal claims. Whilst this is not ideal, the

Government’s hands are somewhat tied as these are the

minimum rights that the European law requires the UK

to implement.

Dispelling the myth of TUPEand assignment

We often hear businesses say that “the employee

spends more than 50% of his time on the business which is

transferring, therefore he must transfer under TUPE”. This is

a common misunderstanding. Whilst there are no proposed

changes on this point, it is still worth mentioning given the

level of confusion that has been created around this issue.

Whether or not an employee transfers under TUPE

with a contract part of a business has little to do with the

amount of time he spends on that contract. The correct

question is whether that employee is part of an organised

grouping of employees which has been put together with the

specific purpose of servicing a particular contract or business.

This was put squarely into context in the recent case

of Seawell Ltd v Ceva (Freight) UK Ltd, where an employee

who spent 100% of his time working on a contract was found

not to be assigned to that contract. The employee in this case

just happened to spend all of his time working on a particular

contract at the time of the transfer. However, his employer had

never consciously assigned him to that contract, and as such

was not necessarily bound to it. In contrast, it is quite possible

that an employee who is specifically employed to service two

parts of the business, with a 70/30 split of his time, would

transfer under TUPE if the part of the business which takes up

70% of his time is sold.

Employee Liability informationOne of the more helpful provisions of the current TUPE, is

that which relates to the duty of the transferor to provide

the transferee with certain prescribed information about the

employees before the transfer. This helps to create more

transparency between the transferee and transferor. It is a

little surprising therefore that the Government now proposes to

remove that provision. But what will that mean for employers?

Presently under TUPE, the transferor is required to provide

to the transferee, at least 14 days before the transfer, the

following information;

1. the identity and age of the employees;

2. their employment particulars;

3. details of any grievance or disciplinary procedures

taken within the last two years;

4. details of any court or tribunal cases, claims or actions

brought by employees within the last two years

(or that may be brought by the employees); and

5. details of any collective agreements.

Parts 3 and 4 in particular can be very helpful to a

transferee as they enable it to assess any potential liabilities

that it will adopt under TUPE. If the transferor fails to provide

this information, the transferee is entitled to bring a claim in

the Employment Tribunal. The level of compensation in these

types of claims is a minimum of £500 per employee, and can

be considerably more.

However, under the Government’s proposed changes

the above rules are to be repealed. Instead, the Government

will largely leave it to the parties’ discretion as to what

information is to be provided prior to the transfer, and when

that information is to be provided. Further, only information

which is necessary to enable the transferor and transferee to

properly consult with employees must be disclosed. Failure

to comply with this will result in the transferor and transferee

sharing the liability for any failure to consult with employees.

Whilst it is expected that this will allow greater

flexibility for the transferor and transferee, it will also leave the

transferee somewhat blindfolded to potential risks.

For example, the transferor will no longer be duty-bound

to provide details of potential claims that will become the

transferee’s responsibility, as that information is not necessary

to enable the transferee to consult with employees.

This will pose greater risks for businesses tendering

for service contracts, where the transferee is unlikely to have

any contractual rights against the transferor. The Government

will be issuing guidance as to the types of information that

should be provided by the

transferor, and so it is hoped

that this may prevent any

arguments between transferee

and transferor.

Watch this spaceOf course the

Government’s proposals are

indeed just that, “proposals”.

As such they have not yet

been approved into our laws.

Businesses will need to keep a keen eye on these proposed

changes, especially those relating to service provision changes

which, if removed, could leave employers with a hefty, and

unexpected, redundancy bill. The issues which are highlighted

above are just some of those which we, and our clients, have

encountered over the years, and there are a number of other

changes being proposed which have not been covered under

this article.

If any businesses are concerned about falling into

an expensive TUPE trap, we are here to help you avoid

those pitfalls. If you have experienced problems, or need

help with any aspect of TUPE, please contact us on

0113 280 2000 (Leeds) or 0114 276 6607 (Sheffield).

A member of our Employment Team will be happy to talk

through your situation and ensure that you remain TUPE

compliant and reduce or avoid liabilities.

A Lupton Fawcett Lee & Priestley Periodical. Issue 3 04/05

Whether or not an employer is permitted to make changes to employees’ working conditions will depend on its reasons for making those changes.

Page 6: Atticus Periodical Issue 3

Tax planning ranges from the simple and innocuous (paying into an ISA or pension scheme) to the convoluted and artificial ‘tax avoidance’ (the K2 type scheme). It is important to distinguish these from tax evasion, which involves dishonesty by not declaring taxable income and is a criminal offence. News articles have frequently referred to certain tax planning arrangements as “legal” in order to make it clear that they are not tax evasion.

Successive Governments have tried to prevent the K2 type planning whilst still allowing people flexibility in how they structure their tax affairs. The difficulty comes in defining what constitutes ‘acceptable’ tax planning and what is ‘tax avoidance’. Changes to tax laws have helped prevent specific types of planning, but fall short of creating a blanket of legislation against tax avoidance.

We’ve also seen the courts become increasingly inclined to find against tax avoidance schemes, with judges adopting a looser interpretation of the rules. Tax avoidance schemes now rarely succeed before the tax courts.

The tough economic climate has put the undesirability of tax avoidance in the spotlight, with Jimmy Carr and Take That just two of the celebrity examples highlighted. In the case of Starbucks, many individuals actually urged a boycott. Reputational risk is therefore now a huge issue that must not be overlooked.

A major development on the horizon is in the shape of a general anti-abuse rule, which is due to come

into force on 1 April 2013. The rule will apply to tax structuring which cannot be regarded as a reasonable course of action in relation to the relevant tax rules.

In deciding whether it can be regarded as such, HMRC, the courts and a specially-established advisory panel will look at factors such as the artificiality of the arrangements and whether the tax treatment significantly differs from the economic substance of the arrangements. This is likely to catch contrived arrangements such as the K2 scheme, but unlikely to catch some of the international tax planning which has been under the spotlight recently. The latter is better addressed through a tougher application of existing tax legislation, such as the transfer pricing rules.

Those who have implemented tax planning which is challenged should check the accuracy of any advice or representations made by their advisors or scheme promoters. If there were inaccuracies there may be legal recourse against the advisor or scheme promoter. In a recent court decision (Horner v Allison), an individual who implemented an unsuccessful tax planning scheme was able to claim damages against an individual for fraudulent misrepresentation as to elements of the scheme and her degree of experience.

For expert advice on tax planning and the right approach for you and your business, contact Melanie List on 0113 280 2065 or [email protected].

Following the recent furore surrounding tax avoidance, focusing on celebrities and multinationals such as Starbucks and Vodafone, we take a closer look at how some people are taking tax advice to the limit.

You may have heard about the 10% tax on profits from patents – the so called ‘Patent Box’. This is a significant development and it is important to understand what it means for your business:

1. Although still a proposal, it is being given serious consideration for 2013.

2. The 10% tax rate looks likely to happen so it is worth talking with your tax advisor to understand the implications for your business.

3. The reduced tax applies to profits from patents, so it would be prudent to review your strategy for obtaining patents.

The Government has stated that: “The Patent Box will allow companies to elect to apply a 10 per cent rate of corporation tax from 1 April 2013 to all profits attributable to qualifying intellectual property (IP).

“Qualifying IP includes patents granted by the UK Intellectual Property Office (‘IPO’) and the European Patent Office (‘EPO’), as well as supplementary protection certificates, regulatory data protection and plant variety rights.”

The tax will apply to existing and new IP, as well as bought IP, as long as the owner has further developed it or the product it relates to. The legislation also outlines a structured approach to calculating the profits from qualifying IP.

This tax break offers a real reason to invest in patents and our experts can help you understand the process and obtain patents on your behalf.

You can read more about the Patent Box at: www.hmrc.gov.uk/budget2012/tiin-0726.pdf or contact John Sykes on 0113 280 2113 or [email protected] to discuss this further.

Lifting the lid on The Patent Box tax

News in brief

The thorny subject of tax planning

Page 7: Atticus Periodical Issue 3

For anyone in the process of, or considering a

divorce, the issue of how to divide your finances

can be both sensitive and contentious. When trying

to reach a financial settlement you may choose

to negotiate directly with the other party, attend

family mediation, engage in the collaborative law

process, take part in traditional solicitor-based

negotiations, or even begin court proceedings.

However you decide to seek a resolution, the

following factors, as set out in section 25 of the Matrimonial

Causes Act 1973, should be taken into account:

• Income, earning capacity, property and other

financial resources which either party has or is likely

to have in the foreseeable future.

• The financial needs or responsibilities that

either party might have or is likely to have in

the foreseeable future.

• The standard of living enjoyed by the parties prior

to the marital breakdown.

• The age of each party and the duration of the marriage.

• Any physical or mental disability of either party.

• Contributions which each party has made or is likely

to make in the foreseeable future to the welfare

of the family.

• The conduct of the parties if, in the court’s opinion,

it would be wrong to disregard it.

• Any loss of benefit under pensions.

• Any other relevant circumstances.

In cases where children are involved, their welfare will

always be at the forefront of considerations, but some

or all of the above factors may be relevant.

When parties seek a binding and enforceable

agreement by asking the court to make an order to reflect

the terms of any agreement reached, it is worth noting that

the court can and does refuse orders which it thinks are

not fair to one or both parties. Courts do not simply

rubber-stamp applications for consent orders.

What is fair?The definition of ‘fair’ largely depends on the parties’

individual circumstances and is influenced by recent case

law in addition to the statutory criteria previously stated.

The starting point set out in the famous case of

White v White in 2001 is an equal division, but there are

many reasons to move away from this precedent. For

example, one party may earn more than the other; there

may be minor dependent children whose primary home

is with one party; or there may be issues such as inherited

assets and premarital acquired wealth and contributions

to take into account.

It is also important to understand the powers that

the court has in divorce cases. It can, for instance, order

properties to be sold or transferred to the other party, or one

party to have a deferred charge type arrangement over the

property. It can also make orders in relation to income, such

as spousal and child maintenance and pension provision.

Judges in such cases have a great deal of discretion

as the law is based not just on the statutory components of

the Matrimonial Causes Act 1973, but a whole host of case

law which is constantly evolving and filtering down from

the High Court, the Court of Appeal and the Supreme Court.

Parties sometimes don’t realise that there should

be an unequal division of capital based on their own

financial circumstances. For instance, one or both parties

may have business or family trust interests, or other

investments, to be valued and considered.

There is also the common misconception that all

pensions are the same and it is as simple as adding the

values together and dividing by two. This thinking fails

to take into account the fact that one person may have

a final salary scheme and the other may have a money

purchase scheme, which further highlights the importance

of seeking specialist advice.

The Law Commission is currently looking into two discrete

issues of financial relief:

• The extent to which one party should be

required to meet the other’s needs after the

relationship has ended.

• How non-matrimonial property (i.e. property

acquired by a party prior to the marriage or civil

partnership or received by gift or inheritance)

should be treated on divorce or dissolution.

The report is expected shortly and it is not yet known

whether it will lead to legislation changes.

How Lupton Fawcett Lee & Priestley can helpIf you are faced with financial issues following marital

breakdown, it is worth seeking independent legal advice

before getting involved in meaningful settlement discussions

or reaching formal agreement with the other party. These are

considerations which can

have an enormous effect

and impact on the rest of

your life.

Lupton Fawcett

Lee & Priestley’s Family

and Divorce specialists

offer a wide range of

family law services.

We are vastly experienced

in dealing with financial

matters associated with relationship breakdown,

particularly those involving high net worth assets,

and we will ensure you get a fair deal.

Find out more by calling Andrea Dyer at

our Leeds office on 0113 280 2090.

A Lupton Fawcett Lee & Priestley Periodical. Issue 3 06/07

The cost st of

The definition of ‘fair’ largely depends on the parties’ individual circumstances.

Andrea Dyer, Head of Family and DivorceServices at Lupton Fawcett Lee & Priestley,

explains the importance of seeking specialist legal advice to protect your finances during a separation.

Andrea Dyer

Page 8: Atticus Periodical Issue 3

Local property taxation in the form of business

rates represent a significant cost to businesses,

and contributes around £24 billion annually to

the Exchequer.

In a recent PwC survey of the Total Tax

Contribution of the top 100 UK companies, business

rates accounted for 15% of their annual tax contribution,

and were the third largest tax after Corporation Tax

and employers’ NIC. For smaller companies, rates are

typically the second largest tax after Corporation Tax.

This is why it surprises me that when my

advice is sought about business rates it is usually the

Property Manager rather than the Finance Director or

Tax Manager asking the questions. Rates are a tax and

I would urge finance and tax specialists to take a far

greater interest.

A tax on occupation The origin of rates can be found in the Poor

Relief Act of 1601 and began as a tax on

the value of occupation

of land. Rates are also a

fairly arbitrary tax, and the

general impression is that

there is no way to reduce

the charge other than by

the usual rateable value

appeal – but there are other

avenues to explore.

Rates are unusual

in that they rely on two

taxing bodies. HMRC use

the Valuation Office Agency

(VOA) to set the basis for the

tax by allocating a ‘Rateable

Value’ to a property. The

Local Authority then

demand and collect the

rates, as well as determine

reliefs and exemptions.

When targeting business

rates cost reduction, the

level of this Rateable Value

is often the first port of call

through discussions with the

VOA. But the system also

allows for discussion with

the other party to levying

the tax – the Local Authority.

Within the Local

Government Finance Act

a number of mechanisms

exist that allow the Local

Authority to reduce, remit

or remove rates in certain

circumstances. Charitable,

non-profit-making

organisations, sports clubs

or ratepayers suffering

hardship have long been

able to secure reductions in

rates liability. Additionally,

from 1 April this year, the

Government has granted

Local Authorities the power

to create their own local discounts. It remains to

be seen how or if these new powers will be used.

One of the least-publicised reliefs is for

where a property is in partial use for a short

time. When combined with a special rule that

enables inactive machinery or office equipment

to be ignored, this relief can be very valuable in

a wide range of circumstances.

Understanding backdated billsThe ‘two taxing bodies’ system has disadvantages

for ratepayers who are pushed from one to the other

whilst trying to avoid the traps lying in wait for them.

With most taxes, once HMRC has assessed the tax

due and this is paid, that is generally the end of the

matter. Rating is unique because the VOA can change

the rateable value retrospectively or value unassessed

properties at any point within the current 5-year

rating cycle which began on 1 April 2010. The rules are

complex and a valuation “limitation” rule can be invoked

by the ratepayer in the right circumstances.

Where a Local Authority levies a backdated

demand, study this carefully before paying. There is

actually a wealth of case law, culminating in the North

Somerset case, that dictates a backdated rates bill may

not be legally due or payable.

The rules behind empty ratesIn 2007, the previous Government decided to reform the

rating system by extending the scope of rate charges on

empty properties. Since 1966 there has been a steady

move towards empty rates, but the changes that took

effect on 1 April 2008 introduced a 100% empty rate

charge on empty industrial properties after a 6-month

initial rate-free period, and after 3 months on offices

and shops.

Empty rate mitigationWith empty rates becoming a real problem to many

owners, there has been a lot of focus on these tax

charges. There are legitimate ways to remove the

empty rate burden, such as by agreeing shorter

term lettings. A new occupier, providing they stay in

occupation for more than 6 weeks, has the double

advantage of a new rate-free period being generated

once they vacate the property.

For older buildings, the VOA has a statutory

presumption that a building is in good repair, and

they are not always persuaded that a property in poor

condition should be removed from rating. As a result,

the Local Authority would seek to continue to levy the

rate charges.

However, there are a number of empty rate

exemptions available, dependent on the physical

state of the property, and these can be explored by

rating advisors.

Get creative to avoid the rates burdenSome owners have turned to creative methods to remove

the rate liability. For example, short-term funded lettings

under licence to a charity have the potential to remove

a large part of the rates burden. Properties owned by

companies in insolvency proceedings are exempt from

rates if proper procedures are put in place, but some

sham schemes have been devised.

However, Local Authorities and the Government

are becoming more aware of these schemes, with Local

Authorities beginning to refuse rate reliefs and a number

of cases due before the High Court, which could spell

an end to some of these avoidance strategies. Recent

announcements from the Charities Commission and

the Insolvency Service have also made it clear that

charity trustees and insolvency practitioners involved in

outright avoidance would be subject to sanctions.

The moral of all of this is that wider

consideration should be given to business rates, and

when navigating the various routes to reductions, there

are numerous two-way streets and the odd dead end. In

all rating matters, professional advisors are there to point

the way. Always look for a member of either RICS or the

IRRV who will operate within their codes of practice to

get the best solution for your business.

Business rates – a two-way street?

Cost reduction and cash recoveries are more relevant than ever before, and property costs are a major burden for many businesses. Phil Vernon, Rating Specialist at PwC, shares his thoughts on why the issues of business rates should be of interest to more than just Property Managers.

PhilVernon

Page 9: Atticus Periodical Issue 3

The devil in the detail

A Lupton Fawcett Lee & Priestley Periodical. Issue 3 08/09

If you feel held to ransom by your business rates, our Director of Commercial Property and Development Work, Russell Davidson, looks at ways to enjoy a little tax relief by questioning your current agreement.

Russell Davidson

ail

Many landlords and business owners simply accept the terms

of their business rates, but with some thought and careful

drafting there are a number of practical steps you can take to

deliver significant benefits.

Clarifying your lease burdenA tenant, not wishing to renew their lease, might move out during or

towards the end of the lease. As the landlord, you might then find the nil

rate period has expired. One way to prevent this happening is to include

within the lease a provision that the tenant should reimburse you for this

loss if they move out prematurely.

The rateable value of commercial premises is assessed by the

Valuation Office Agency (VOA). It often works to historic figures and it is

important to know that the original information submitted when your

premises was first assessed may be old. Both tenants and landlords should

also keep an eye on the rental values of comparable premises in their areas,

and lodge an appeal against the rateable value of any property that appears

over-rented.

When submitting rateable value information to the VOA, make

it clear exactly what services are and are not included in the rent. If a

number of landlord services are included, this implies that the element of

the rent attributable to occupation is less than the headline sum, so make

sure it is the true occupation cost that the VOA take into account.

Calculate the cost of tenant incentivesIn the current letting climate it is common to offer long rent-free periods

and landlord inducements such as fit-outs and other services. Again, the

value of these should be assessed. If the VOA has focused only on the

headline rent, it can be argued that a substantial rent-free period or other

inducement has not been taken into account when assessing the true

rateable value of the premises.

Dealing with difficult to let propertiesEven before Gordon Brown increased the empty rates burden from 50% to

100% of the rateable value, owners of hard to let properties were stripping

roofs off and doing other work to make premises uninhabitable in order

to reduce the rateable value to nil. Both the VOA and Local Authorities

are wise to such actions and are now much more reluctant to remove

premises from the valuation list.

This is where the opinion of a reputable valuer can help; areas

change as does taste in buildings, and some properties may indeed be

incapable of attracting an occupier. Even squatters are more choosy than

they used to be!

Do not be afraid to question the VOA.

The evidence of a prolonged letting

campaign, plus a surveyor’s opinion

that there is no market for that

particular property in that particular

area, forms a powerful case in arguing

against a rates assessment on a building.

Remember that VOA employees are extremely stretched, so

include in your submission details of any marketing campaigns you have

undertaken and photographs showing the state of the property. There is no

duty on a property owner or occupier to keep a building in pristine repair

so the VOA is obliged to assess the property as it is on the date of valuation.

Property and business acquisitionsAlways ensure the acquisition document clearly states who is responsible

for business rates. If you are selling or letting a property and the buyer or

tenant is late in completing, does the contract make it clear that they are

obliged to pick up the rates liability for the period of non-occupation?

If not, then the seller or landlord is liable.

Similarly, if your agreement allows for early occupation

by the buyer or tenant – in advance of completing the disposal or

letting – is it clear who pays the rates? Business rates liability falls

on the party in effective occupation and control of the premises.

So, suppose you sell a property but want to store goods in it

temporarily or share its use for a short period with the new owner

– again, does that count as occupation and control for the purposes

of the rates liability? These are just some of the questions that the expert

team at Lupton Fawcett Lee & Priestley can answer for you.

Steer clear of questionable advisorsLots of firms offer to reduce business rates liabilities and do so on a

“no win no fee” basis. Treat these companies with caution and be sure to

check the small print as some charge for each year of saving, which can

add up to much more than would be the case for a surveyor paid on a

normal time spent basis.

Using a reputable surveyor will save you money in the long run as

most will agree a fixed fee for trying to get a rates reduction, which may

include an uplift if they secure a certain saving.

Agreeing a deal with the VOAIf you lodge an appeal with the VOA you may receive a call offering to do a

deal rather than pursue a valuation tribunal. Preparing a tribunal involves

a lot of work which they would rather avoid where possible. These deals

are usually done over the phone with calls often recorded. Be sure to get

your facts straight in advance as once you have done the deal you will be

held to it.

If you want to take control of the business rates you pay,

and explore ways of managing your properties more intelligently,

call Russell Davidson on 0113 280 2138 or email

[email protected].

Page 10: Atticus Periodical Issue 3

Many factors can impact on cash flow, including

poor management, a downturn in revenue and

an increase in expenses. In the construction

and building industry, disputes between

employers, contractors and sub-contractors

can be a primary cause of cash flow problems.

For that reason, it makes good business sense

to avoid conflicts during construction-related

projects and quickly and efficiently resolve any

disputes that do arise. Whilst no-one enters into

a contract with the intention of getting into a

dispute, it is still important, prior to entering

into a construction contract, to consider ways of

minimising the chances of conflict both during

and at the end of a project.

Get your agreement in writingTo secure a job it can be tempting to ignore the hassle

of paperwork and proceed on a simple handshake or

‘gentleman’s agreement’. This is risky, as if a dispute

does arise there is no written contract to refer back to.

You could then find yourself in a position where a court or

third party resolves your dispute based on whose witness

evidence they prefer, regardless of whether that reflects

the initial agreement.

To avoid such a scenario, all parties should take the

time to agree, document and sign terms at the outset. This

doesn’t have to be complicated or expensive, but it is worth

getting professional advice. A well-drafted contract should:

• Be clear about the identity of the parties

entering into the contract.

• Be specific about the scope of the work,

and reference where possible the plans

and specifications.

• Set out in full the responsibilities of each party.

• Be clear about the payment terms and dates.

• Set out on what basis an extension of time for

completing the works will be granted, and the

procedure for doing this.

• Set out what, if any, damages can be claimed in the

event that the works are not completed on time and

no extension has been granted.

• Set out the procedure to follow in the event that the

contract has to be amended e.g. to allow for a change

in the scope of the works.

• Contain an entire agreement clause, which prevents

the parties from relying on any statements or

representations other than those expressly set out

within the contract.

• State what procedures can be used in the event

that a dispute cannot be avoided.

When disputes ariseThere are a number of ways in which construction and

building disputes can be resolved, and it is not always

necessary to resort to the courts. The most appropriate

method will vary from contract to contract, and all parties

should consult with their legal advisors about the various

options before entering into the contract.

If a resolution cannot be reached by way of

discussions or negotiations between the parties, then the

two main alternatives to commencing court proceedings

are adjudication and arbitration.

Keeping cash flowingAdjudication was introduced as a way of quickly resolving

construction and building disputes and protecting cash

flow whilst the project is ongoing. Usually concluded

within 28 days of being referred, the adjudicator’s decision

is binding unless and until the dispute is closed through

litigation, arbitration or agreement. This ensures that the

project can continue with minimum impact on cash flow.

Until recently, only disputes arising out of written

contracts could be referred to adjudication,

but it now also encompasses oral contracts.

Nevertheless, it remains good practice for the

terms of contract to be documented in writing.

Seeking an expert opinionArbitration is more formal than adjudication and

more flexible than litigating a dispute through

the courts. It is often preferred to litigation as all

parties are bound by confidentiality, which does

not apply in court proceedings.

The arbitrator is often someone with a

construction background, which can be reassuring

if the dispute is of a technical nature. The parties

can refer, within the construction and building

contract, to a specific arbitrator; or an organisation

such as the Chartered Institute of Arbitrators will

appoint one if asked.

As the arbitrator’s decision is final and

binding it can be considered as more certain than

adjudication. The main disadvantage of arbitration

over adjudication is that it is far more time;

consuming and expensive.

Letting the courts decideThe very last resort is to go down a litigation route, which

means letting the courts rule on your dispute. This can be

costly and time-consuming. In most cases it is therefore

clearly beneficial to pursue alternative dispute resolution

processes rather than litigating through the courts.

Other methods of dispute resolutionOther options for resolving construction and building

disputes without recourse to the courts include:

Expert Determination – where an expert who is familiar

with the technical issues disputed is jointly appointed by

all sides to determine the dispute between them, often on

the basis of written submissions only. The decision is then

legally binding.

Early Neutral Evaluation – a non-binding process in

which an independent third party, appointed by all sides,

gives a non-binding assessment of the merits of any claim.

Mediation – where an independent third party will assist

all sides with negotiating their own binding settlement.

If the parties work together prior to entering into a

contract, to ensure that it is as comprehensive as possible,

then the chances of ending up in a dispute with one

another should be minimised.

In the event, however, that a dispute cannot be

avoided, both parties should seek legal advice about the

dispute and the options for resolving it at the earliest

opportunity. This should ensure that there is as little

disruption to the cash flow cycle as possible – something

which is more important than ever before.

ClaireMoss

Building bridges

Claire Moss from our Building and Construction team takes a look at the impact disputes can have on your business, and outlines how Lupton Fawcett Lee & Priestley can work to protect your interests and avoid expensive, lengthy conflicts before they happen.

Page 11: Atticus Periodical Issue 3

A Lupton Fawcett Lee & Priestley Periodical. Issue 3 10/11

Page 12: Atticus Periodical Issue 3

Crowd Funding: the more the merrier

With lending from banks hard to come by, individuals are pooling resources to fund everything from businesses to creative projects. Andrew Lindsay, Head of Corporate Finance at Lupton Fawcett Lee & Priestley, and a Director of the Leeds, York & North Yorkshire Chamber of Commerce, looks at the Crowd Funding phenomenon and asks, could it work for you?

Andrew Lindsay

Crowd Funding is all about collective

lending and investing, and where the

banks have stepped out, individuals are

stepping in. The concept originated in

the USA as a way for people to group

together and pool their money to fund

what were initially creative projects, such as

films and theatre productions.

The idea originally focused on the giving of non-

financial rewards, such as tickets to a project’s premier

in return for finance, which was a way to get around

the investor protection regulations. It has now evolved

significantly.

In the UK, a share offering by a private limited

company is governed by the Financial Services and Markets

Act 2000 which, on the grounds of consumer protection,

greatly restricts the type of individual a company can

promote or offer shares to. Crowd Funding, however, has

bowled the regulator something of a ‘googly’ in both the USA

and the UK.

Businesses are now using novel fundraising

methods to navigate their way through financial services

regulations, which were designed to prevent this sort of

unregulated activity from occurring. Increasingly, crowd

funders are devising schemes and utilising loopholes that

allow a company to offer its shares

to the world at large, and this is

greatly increasing the chances of a

new venture achieving its funding

objectives.

Individuals are coming

together online to fund a company

in return for the possibility of some

reward. Investors ‘bid’ on normal

commercial terms, in return for

either a shareholding or a loan. The

company then typically considers

the various offers and accepts those

which it finds most favourable.

The Crowd Funding optionsThere are several models of

Crowd Funding. The first utilises

donations, the second debt finance,

and the third equity finance.

Donations model – This model

sidesteps financial regulations by

offering gifts instead of equity/debt in return for funding.

Funders provide money to a company or to fund a project,

either for no return or in return for some form of non-

financial reward. The gift could be a bespoke recognition

in the product, or a meeting with the creators, etc. This

model is largely used in the creative sector and laid the

foundations for the other variations that followed.

Lending model – This method has proved increasingly

popular and provides businesses with an alternative to

traditional bank lending. It allows funders to provide

money by way of a loan with a requirement that it is

repaid with interest. The funders can propose at what

interest rate the loan is repaid, and the company seeking

finance can then choose to accept the loans that it deems

most suitable. To fit in with the current regime, the loans

must not involve the provision of consumer credit.

Securities model – As a general rule, under the Financial

Services and Markets Act 2000: ‘a person must not, in the

course of business, communicate an invitation or

inducement to engage in “investment activity”’. This

creates a position whereby a private limited company

cannot approach the public at large to seek investment in

return for an equity stake. Companies can now, in the

main, approach ‘high net worth individuals’ and

‘sophisticated investors’, where investor protection

regulation is less onerous; but, by only approaching these

types of individuals, the market for raising finance is

potentially reduced.

There have been two main approaches used to get

around the restrictions of the current regulatory regime:

1. Where FSA authorisation is requiredIt is possible to get FSA authorisation to arrange deals in

units through a collective investment scheme. This model

makes use of an exemption under the current regime by

only promoting to individual investors who are deemed

adequately knowledgeable about the risks. Due to the

nature of the selection process involved with this model,

the number of potential investors may be limited when

compared with the model below.

2. Where FSA authorisation is not requiredThis model relies on certain exemptions and loopholes

contained within the UK regulatory regime that allow a

company to approach the public at large for investment

in return for an equity stake. The company using this

model does not require FSA authorisation, but the Crowd

Funding platform must be approved by a person

authorised by the FSA.

The FSA did not envisage the emergence of Crowd

Funding and the regulatory regime does not sit

particularly comfortably with it. It is likely that UK

regulation will be introduced at some point in the near

future to ensure a regulated marketplace for this activity,

and to provide adequate investor protection.

One course of action for Parliament would be to

follow the USA and its implementation of the “Jumpstart

Our Business Startups Act” (the “JOBS Act”) to further

deregulate this type of investment activity in the UK.

Could Crowd Funding work for you?Lupton Fawcett Lee & Priestley has recently been

involved in advising on a number of Crowd Funding

projects and the level of interest generated is steadily

increasing. If Crowd Funding is of interest to you or

your business, you can draw on our extensive

knowledge in this area. To discuss this further contact

Andrew Lindsay on 0113 280 2025 or

andrew [email protected].

Page 13: Atticus Periodical Issue 3

Previously the Asset Management department of

Lupton Fawcett Lee & Priestley had been offering wealth

management services to private clients. This was established

in the late 1980s, and although providing financial services was somewhat

unusual for solicitors, we have always felt that our clients – including

those using our corporate services – are in essence ‘private clients’, with

the businesses they own and manage being the vehicles for creating,

maintaining and growing their personal and family wealth.

We see these services as a natural extension to the others

that we offer, in particular those of our Trusts, Wills and

Estates department.

A fresh approach to wealth managementLeodis Wealth is a bespoke wealth management company

that incorporates the activities and personnel of our Asset Management

department. We believe this independent, dedicated business is the best

way to meet the growing need for wealth management services. It also

creates a clear distinction in our operations to meet regulatory demands.

The Leodis Wealth team provides the comprehensive advice we are

known for, and we’ll continually explore ways of enhancing the service we

offer you – be that through new activities or the recruitment of specialists

with new skills and ideas.

Created with the modern financial environment in mind

Many firms in the financial services sector will have had to make

significant changes to their business models to meet the new regulatory

requirements which came into force this year. Commission-based advice has

had to be replaced by fee-based arrangements – we have always been

fee-based, so there has been no change or disruption in how we work.

In addition, we have never focused on selling products, believing

instead that our clients’ interests are best served by providing a bespoke

service that is right for their circumstances and requirements. Their hopes,

plans, attitudes and preferences are at the heart of what we do, and we

strive to ensure that a close, long-term working relationship is established

with the aim of realising their goals.

A service for whatever your circumstances requireCurrently, the services offered by Leodis Wealth include portfolio and cash

management, general financial planning, and a personal taxation service

for clients who need help completing their annual return.

Typically, clients will seek our advice when they have savings, a windfall

or an inheritance to invest, or existing investments which need reviewing

in light of changing market conditions. They may have pension

arrangements which are unclear or perhaps not right for them, or they

may need more general advice on their overall financial affairs and plans

to ensure they are complementary and understandable.

To make sure our clients always have access to the best advice

around we also work closely with Lupton Fawcett Lee & Priestley’s Wills

and Trust team, trusted third parties who provide specialist help, and any

other professional advisors they might want us to liaise with on

their behalf.

Sound financial planning has never been so importantIn the current economic environment it is vital to have a well-thought-

through financial plan in place. Prior to the economic crisis of 2008

investors could choose between the safety of cash savings – which would

produce modest returns – and riskier stock market investments which had

the potential to generate higher returns. The property market was also a

popular choice for investors’ funds, with price rises fuelled by the seemingly

endless supplies of cheap money from the banks.

However, the world is a very different place today. Interest rates on

cash savings have plummeted, and there are real concerns about the safety

and strength of many banks, including those high street institutions which

previously were regarded as …well, as safe as houses.

All of this highlights the need for the kind of expert support that

Leodis Wealth can offer.

The smart money is with Leodis WealthWe would be delighted to help with your investment and general

financial planning, and our industry expertise and unbiased advice

across a range of wealth management services will ensure that you

get the best deal possible. An initial meeting costs nothing more than

your time, and if you would like to talk about what we can do for you,

call Paul Smith of Leodis Wealth on 0113 280 2121 or email

[email protected]. Alternatively you can visit the

Leodis Wealth website: www.leodiswealth.com.

A Lupton Fawcett Lee & Priestley Periodical. Issue 3 12/13

Protecting the health of your wealth

PaulSmith

We have recently launched a new bespoke wealth management company, Leodis Wealth LLP, to offer all our clients the financial planning and management needed in today’s challenging economic climate.

Page 14: Atticus Periodical Issue 3

“Experience, talent, leadership and key skills, particularly at

director level, have never been so crucial to business growth,

and in some cases survival.” That is the view of Kevan Watson

of NED Connections, a unique organisation that connects

non-executive directors with SMEs.

The NED Connections service complements those provided by

other professionals, such as lawyers, accountants, insurers and venture

capitalists. Whilst these professionals offer business advice in their

specific field, their clients may benefit from the next tier of support

that a non-executive director can bring. Keen to see them prosper, some

professional services providers have even helped their clients tap into this

valuable resource.

Objectivity, creativity and invaluable experienceIncreasing pressure on SMEs and owner-managed organisations can lead

to some business needs being neglected, and this is compounded by the

misconception that recruiting at board level is simply too expensive.

That’s where a non-executive director comes in. As defined by the

Institute of Directors, a NED is a person who is not an employee of the

company and usually works part-time. NEDs have the same legal duties,

responsibilities and potential liabilities as executive directors, but they

can bring a different perspective to the role.

NEDs are usually chosen for their breadth of experience, relatively

high calibre and personal qualities. They can make a creative contribution

by providing objective criticism, and focus on board matters without

straying into executive direction. They may also have some specialist

knowledge that will help the board with valuable insights.

Above all else, they bring a degree of objectivity to boardroom

discussions by virtue of their independence.

Not just for big businessesHistorically, NEDs have been associated with large corporates

where the need for objective guidance and corporate governance

is in great demand. However, the SME sector also needs the

support and fresh thinking offered by bringing experienced and

talented non-executive directors to their boards.

One such company, full-service design and marketing

agency Magpie Communications, did just that.

The communications agency, which specialises in youth and student

campaigns, had arrived at a point where it was either invest and expand

or remain a niche provider with a modest, but healthy, turnover.

The business partners had sought advice about mentoring and coaching,

and after meeting NED Connections they realised they could recruit a

NED with sector-specific experience for around the same cost as a junior

designer. They decided to take the bold step of bringing a NED on board.

Non-exec’, Jules Caton, former MD of a marketing agency with

240 employees, was selected as the perfect match. Magpie director, Ged

Savva, said, “We believe we had reached a point where a high-calibre NED

with marketing, design, brand and business experience would help us

achieve our goals.”

Those goals were challenged by the incoming NED, who initially

concentrated on restructuring the financial strategy of the company,

which in turn redefined Magpie’s business plan. A strategy session helped

extend the boundaries set by Magpie through thoughtful questioning

and constructive criticism, and with the company encouraged to look

beyond its current sectors, it is already seeing growth in new areas. Board

meetings are now more structured and the NED is in regular contact

offering business advice – even adding creative input which resulted in a

major new client win.

“It is a brave move for such a young organisation to engage a NED

but it reflects their mature business approach,” Jules Caton said. Other

business owners and leaders appear to agree.

Bringing a fresh perspective to your businessSome, who already act as non-executive directors or have NEDs on their

boards, argue that SMEs have been largely ignored where non-executive

directors are concerned.

Margaret Wood MBE is the owner of ICW (UK) Ltd in Wakefield.

She employed a non-executive director and claims that without a NED her

specialist glass panel manufacturing business might not have survived.

“In any business you can become very insular. As owner and managing

director of a business I needed someone to challenge me, make me think

about what I was doing and plan the way forward”, she said.

Some NEDs are chosen because they have a specific skill

lacking on a board, whilst others have the industry experience and

contacts a business needs. This makes the matching of candidates with

organisations a careful process. Equally, it is not just a case of bringing

in friends or somebody who may have been a senior executive in a big

company, but who has no empathy with the requirements of a growing

SME. In Margaret Wood’s view, “the key thing is finding the right fit of

person for your board.”

For those organisations that do find the right individual the

benefits can be significant, not to mention cost-effective. As Margaret

concludes, “finding the right person as a NED brought me a huge return on

investment.”

To watch Margaret Wood’s account of her NED experience, plus

comments from other business leaders, visit www.nedconnections.com.

For further details on NED Connections contact Gillian Johnson on

0330 1000 961 or [email protected].

The argument in favour of NEDs Professional legal advice, whilst extremely important, may not offer a total solution for business growth and improved performance. Kevan Watson, Head of Marketing and Communications at NED Connections, explains why the addition of a non-executive director (NED) can be the best decision many SMEs ever make.

KevanWatson

Page 15: Atticus Periodical Issue 3

The smart choice of legal partner Colin Horsley, Property Consultant at the Austin Reed Group, shares his experiences of working with Lupton Fawcett Lee & Priestley and highlights how we deliver real value to his business.

You’ve been working with Lupton Fawcett Lee &

Priestley since 2010. What was the original problem

or challenge on which you engaged with them?

Initially we were looking for a legal partner who could

demonstrate an understanding of our business and the

challenges we face. Finding someone who ticked these boxes

was harder than it sounds, and we tried a number of firms in

London and Yorkshire with little joy.

I became aware of Lupton Fawcett Lee & Priestley and

their strong reputation when a Director with whom we had a

long-standing relationship joined the firm. This was the

catalyst for us to begin working together, and we have not

looked back since.

They have proved time and time again their ability to

understand our business and support us in a number of ways

across our entire operation.

What business areas do they support you in today?

We draw on Lupton Fawcett Lee & Priestley’s expertise in

all areas of property law, including acquisitions, disposals,

litigation and commercial matters. I am also aware of their

strong intellectual property offering, but to date we have had no

opportunity to tap into this.

There is one project in particular that springs to mind

and highlights how they used a range of specialisms to deliver

the right solution for us. The lease assignation of our prestigious

Regent Street store to Superdry, and the way that they managed

this complicated process, was very impressive. They not only

handled the assigning of our lease with the landlord and head

landlord involved, and helped us lease back some of the space,

but also took care of a number of other issues.

We were delighted by their efficiency and

professionalism throughout the process.

What differentiates Lupton Fawcett Lee & Priestley

from their competitors?

I would say it is their entire approach that sets them apart.

They have a very good understanding of our business and what

makes us tick, and they take a holistic view of how we operate.

Nothing is too much trouble and they go about their work in a

way that puts you at ease.

Here in the UK, we tend to seek legal advice when

we have business or legal problems, rather than

avoiding problems in the first place. What’s your

opinion of this approach, and have you benefited

from ‘The Law of Advantage’ that Lupton Fawcett Lee

& Priestley claim to put on your side?

As a business it is always best to know where you stand

legally, and it is reassuring to know that Lupton Fawcett Lee &

Priestley is there to provide that advice from the outset. In the

past, other firms have struggled to deliver the same level of clarity

and insight, and I think this is because they lack the commercial

acumen that Lupton Fawcett Lee & Priestley possess.

To me, it is this peace of mind knowing that we have the

right partner by our side that gives us ‘The Law of Advantage’.

Basic checks save money!Start-up businesses can save a lot of time, money and

trouble by carrying out basic checks on their proposed

trading, product or service names before putting them

into use.

A free search of the UK Trade Mark Registry

website www.ipo.gov.uk will tell you if your chosen name

(or similar) has been registered as a trade mark or if an

application to register it has been made. This site also

contains a good overview of intellectual property rights

and regulations.

Knowing your potential market can avoid litigationMake sure you complete your trade mark searches

before printing up stationery and corporate identity, to

avoid infringing an existing trade mark. Reprints and

the potential legal implications can be extremely costly,

especially during the start-up phase of a business.

Make protective domain registrations where possibleRegister your web domain name as soon as you can.

The process is relatively cheap so it is also worthwhile

considering registering similar words or abbreviations. This

prevents rival companies registering domain names that

use variations of your business name, which can mislead

customers and threaten the reputation of your business.

Maximise your legal protectionProtect yourself by registering your trade marks. You

can make money by doing this as you are not only

entitled to costs and damages if someone infringes your

rights, you can also grant licences to third parties for

future use.

Know what legal rights you have and use them effectivelyMake sure you use the ™ and ® notices correctly on all

your brand names. Some rights exist “for free”, such as

copyright and common law rights for trade marks, so you

should use the © and ™ notices wherever your copyright

works and trade marks are reproduced. If you have

registered your trade mark you can also use the ® notice.

Free marketing!Get free publicity by making sure your licence

agreements require licensees to print on all your

products, or their labels, the words “used under licence

from [your company name]”.

Keep records to protect your unregistered rightsWhen it comes to copyright works, always include the

© notice and date on which your work was originally

created, and post yourself a copy of the original, dated,

signed work and keep it somewhere safe.

Don’t forget design right protectionDesign rights can be obtained for designs that are ‘novel’

and have ‘individual character’. Sometimes a design

right registration can be obtained for your trade marks,

which can give you an additional monopoly right for the

outward appearance of the design.

Make more money from your design workAs with trade marks and copyrights, a design right not

only prevents other people from using your design, but

also allows you to sell or license the design to third parties.

Maximise the income from your IP assetsCertain design rights may exist automatically without

the need for registration, but you can still acquire a

licence fee if a third party wishes to use your design.

A word of warning about patents and secretsIf you disclose your idea for an invention without asking

the other party to sign a confidentiality agreement, you

could lose the right to get patent protection. The same is

true if you work on your invention in a publicly-accessible

place – which would include your garden shed.

Let us help protect what is yoursWhen you have invested your time and money into

developing an idea, it is only right you get to enjoy its

success. To do this you need the right expert advice to

protect your intellectual property.

Speak with John Sykes and his team of IP specialists

at Lupton Fawcett Lee & Priestley before you share

your idea with anyone, and they can talk you

through getting the IP protection your idea deserves.

Contact John on 0113 280 2113 or

[email protected].

The secrets of smart IPJohn Sykes, our Head of Intellectual Property and Commercial Law, shares his top 10 tips for good IP practice, and points out some of the common pitfalls to avoid.

A Lupton Fawcett Lee & Priestley Periodical. Issue 3 14/15

JohnSykes

Page 16: Atticus Periodical Issue 3

Business is never as usual at Lupton Fawcett Lee & Priestley –it is the result of our unique approach to client relationships.We are prepared to think in an untraditional way, and advise you as though we were advising our own business. It is a culture that has helped us form solid partnerships with Chairmen and MDs all over the country. We call it the Law of Advantage.

www.lf-lp.com

To some it’s aboutthe companythey attractTo us it’s about thecompany we keep