atticus periodical issue 4
DESCRIPTION
ÂTRANSCRIPT
Issue 4The terms and conditions ofmodern marriageSetting social media boundariesThe changing future of share buy-backsBuilding risk management into constructionPutting a stop to fraud
a lupton fawcett denison till periodical
Putting a stopto fraud
Make sure your business is notleft with costly liabilities
Contents3. Evolving to keep our clients one step ahead
Managing Director, Richard Marshall, explains how our business is expanding and evolving to meet the changing needs of our clients.
4. Collaborating on pricingOur flexible new pricing structure that is enabling us to provide better value to our clients.
6. The terms and conditions of modern marriageOnce the preserve of the rich and famous, marital agreements are on the rise and look set to change the face of marriage in the UK.
8. When trade secrets aren’t secretWhy keeping business information confidential can be harder than you think.
9. Setting social media boundaries How a better social media policy means better protection for employers.
10. A well-engineered relationshipJohn Samuel, Group Finance Director of Renew Holdings plc, discusses just what makes his relationship with Lupton Fawcett Denison Till run so smoothly.
11. The changing future of share buy-backsWhen it comes to share buy-backs there’s a new regime for private companies.
12. To innovate you have to collaborateTaking a look at a unique collaboration between businesses and universities that helps to advance innovation.
13. Building risk management into constructionGareth Hevey discusses the opportunities for anyone thinking of improving, extending or refurbishing their premises.
14. Putting a stop to fraudSimon Lockley, Director at Lupton Fawcett Denison Till, outlines the steps any business can take to protect itself against fraud.
Welcome to the fourth edition of atticus. We have packed this issue with the latest industry insight and clear, impartial advice as we take a look at some of the biggest issues and opportunities facing business today.
The main aim of atticus is to inform and entertain,
but we also hope to give you an insight into Lupton
Fawcett Denison Till, and some of our clients and
contacts, along the way. We don’t intend this to be
a technical publication, but we will keep you
up-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.
Email your thoughts to
[email protected] EmsleyChairman
Lupton Fawcett Desinson Till 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.© 2014.
Lupton Fawcett Denison Till
Yorkshire House, East Parade, Leeds, LS1 5BD
Leeds: T: 0113 280 2000 F: 0113 245 6782
Lupton Fawcett Denison Till
The Synergy Building, Belgrave House, 47 Bank Street, Sheffield, S1 2DR
Sheffield: T: 0114 276 6607 F: 0114 276 6608
Lupton Fawcett Denison Till
Stamford House, Piccadilly, York, YO1 9PP
York: T: 01904 611411 F: 01904 646972
Lupton Fawcett Denison Till 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 and
regulated by the Financial Conduct Authority in relation to Consumer Credit Licence matters under
Interim Permission No 665319.
Please note that this publication contains general information and does not constitute advice on any
specific matter. Whilst Lupton Fawcett Denison Till 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-dt.com
a lupton fawcett denison till periodical
As you may be aware, our strategy is
firmly focused on becoming Yorkshire’s
mid-market law firm of choice, and providing
niche services to clients of all sizes, across the
region. Naturally, we’re also happy to export
Yorkshire quality, attitude and value to
clients outside the county!
In keeping with our long-term strategy, I am
delighted to say that we have taken a further step
towards our goal through our merger with York firm
Denison Till. From our point of view, our move into
York was driven by a firmly-held belief that York and
North Yorkshire present tremendous opportunities.
For Denison Till, the merger reflects a desire to be better
placed to serve their clients’ needs, and a wish to meet
the challenges of a continually-changing market.
Joining forces with Denison Till allows us to
move three steps closer to our objectives. Firstly, it gives
us a first class platform from which to serve York and
North Yorkshire; secondly, it adds three new services
to our offering, namely Landed Estates & Agricultural
expertise, Construction Law, and Ecclesiastical Law;
and thirdly, it allows us to work alongside a like-minded
group of lawyers and support staff.
In addition to this merger, we have also recently
made a number of senior appointments, which will
strengthen our team and allow us to provide additional
expertise. This includes welcoming Paul Sykes as a
Director in the Dispute Management Department,
together with Jonathan Moore as a Director in
Commercial Property, both in our York office.
We have also made three other significant
appointments in Sheffield: Simon Lockley, who now
heads up Dispute Management; Julian Rowden,
our new head of Commercial Property; and Joan
Pettingill who joins our employment team.
Our Sheffield appointments reflect our
continued commitment to growth in Sheffield and
South Yorkshire, a commitment which was underlined
further by our recent move into new offices in the
Synergy building on Bank Street. In previous editions
of atticus, I have discussed our belief in maintaining a
well-controlled fixed cost base, to guarantee our clients
the best possible value for money. Our new Sheffield
office reflects this principle. Although spacious,
comfortable and fit-for-purpose, our new office is in
direct contrast to the opulent marble-floored atriums
so beloved of many other professional firms.
While it is great to be able to announce new
mergers and lateral hires, our strategy is not simply
about growth. Above all, we aim to create a strong
commercial offering that meets all of our clients’ wealth
creation needs, and provide a suite of personal wealth
preservation services. We aim to support these with the
real value and first-class quality that our clients have
come to expect.
Our continuing growth and expansion is merely
an effective way to achieve these goals and provide the
scale and stability our clients require.
Naturally, evolution
is just as important as
expansion. Alongside growing
our services and offering, we
continue to review and refine
the way we work. With this
in mind, we are currently in
the process of improving our
overall quality and value.
Over the last few
months, we have been
working closely with
consultants to embed lean
management and process mapping into our
firm. This will not only allow us to deliver the
consistent quality that your business needs,
but also ultimately reduce our costs and
improve the way we manage risk. I have no
doubt that the outcome will be good news for
all our clients. Naturally, this project will not
happen overnight, but we are committed to
what I know will be a long but valuable journey.
All in all, the last few months have been a
period of considerable change and development.
I hope that this brief review demonstrates how
determined we are to help your business overcome
its commercial challenges, and how in future our
drive to become the region’s “go to” law firm can
make a real difference to your success.
Evolving to keep our clients one step ahead
Lupton Fawcett Denison Till’s Managing Director, Richard Marshall, explains how our business is expanding and evolving to meet the changing needs of our clients, and how new appointments are enabling us to provide greater expertise.
A Lupton Fawcett Denison Till Periodical. Issue 4 02/03
We aim to create a strong commercial offering that meets all our clients’ wealth creation needs
RichardMarshall
We are conscious that pricing needs to be a
more collaborative process. Having listened
closely to our clients, it is clear to us that they
prefer flexibility and choice. So, in line with
this feedback, we have developed a new pricing
process that ensures your business always
receives good value on your terms. This process
is structured around the following principles:
– A move away from a cost plus mentality
and a real effort to reduce production costs;
– Greater cost consciousness - “spending” our clients’
money with care, as if it were our own;
– A wider choice of pricing and payment options;
– More client involvement and engagement in pricing;
– Complete transparency;
– Fixed pricing as an option and fewer hidden costs to
enable better budget planning;
– A closer correlation between price and the value of
the results achieved;
– A willingness to share price risk with our clients.
Key to our new process is a clearer understanding
of what is important to your business and which services
interest you. This in turn ensures that you only ever pay
for the services you want and need.
We would also like to explore the extent to which
you share the risk in pricing and the extent to which you
might prefer certainty. We can then develop bespoke
pricing and payment choices to match. The diagram
on the facing page gives further insights into how our
process works.
As I am sure you will appreciate, rolling out a new
pricing model can be a time-consuming and complex
process. However, we’re already making good progress
and some clients are already benefiting from the change.
Rest assured, our roll-out will continue throughout the
next twelve months: and within the next year, we hope to
bring all of our clients the same flexible pricing options.
Collaborating on pricing
Lupton Fawcett Denison Till’s Managing Director, Richard Marshall, explains how a more flexible pricing structure is enabling us to provide better value to our clients.
“Pricing needs to be a more collaborative process.”
DevelopingPricing OptionsDevePricing - Hourly rates (with a price range)- Fixed fees- Flat/portfolio fee- Conditional/contingent fees & Damages-Based Agreements- Fee cap & collar- Abort/success fees- Service level guarantee- Retainers- Bundling & unbundling- Volume pricing- Versioning- Urgency option- Combining pricing options
ClientPriorities- Pricing choice - Price certainty - Price linked to result- Price risk sharing- Payment choice
Document theArrangement
t thement
Focused on the client’s requirements:- What are we doing for you?- What aren’t we doing for you?- Who is doing it?- When will it be done?- How much will it cost?
The key components:(a) Scope(b) Assumptions(c) Exclusions(d) Clarity & brevity
DevelopingPayment Options- Monthly- Staged- All at the end- Hold backs- Deposit- Trigger event- Combining payment options
45678954345678954303-02-87
1234 5678 9000 00001234 5678 9000 0000
YOURBUSINESS
YOURYOURBUSINESS
A Lupton Fawcett Denison Till Periodical. Issue 4 04/05
In 2010, judges ruled that German heiress Katrin
Radmacher should retain her £100million fortune
following her divorce from her banker husband.
This was in line with the terms of the pre-nuptial
agreement the couple had previously signed.
In doing so, the judges overturned the longstanding
practice of dividing up a couple’s assets based on
the principle of fairness.
At a time when relationship breakdown is on the rise,
more and more couples are choosing to resolve the financial
consequences of divorce or dissolution through some form of
agreement. Agreements can not only simplify the legal process,
but also help to minimise the associated distress and expense.
However, while pre-nuptial, post-nuptial and separation
agreements are commonly accepted by courts in Europe and
the US, they are not currently enforceable under English law.
That is, however, set to change following the publication of
the eagerly-awaited report from the Law Commission into the
treatment of these agreements.
Defining a grey areaCourts are increasingly referring to the Radmacher ruling
for guidance. Prior to making its decision, the Supreme court
closely analysed the nature of nuptial agreements, and while
the court was broadly in favour of such agreements taking
effect, it also recognised that care should be applied.
The Law Commission’s report recommends that
legislation be enacted to introduce “qualifying nuptial
agreements”. These would be enforceable contracts, not
subject to the scrutiny of the courts, which would enable
couples to make binding arrangements about the financial
consequences of divorce or dissolution. In order for an
agreement to be a “qualifying” nuptial agreement, certain
procedural safeguards would have to be met. Qualifying
agreements could not, however, be used by the parties to
contract out of meeting the “financial needs” of each other
and of any children.
A series of factors, which would diminish (although
not necessarily destroy) the weight to be given to any such
agreement, has been developed. These include the
following areas:
The terms and conditions of modern marriage
Once the preserve of the rich and famous, marital agreements are on the rise and look set to change the face of marriage in the UK.With the Law Commission’s long-awaited report released at the end of February 2014, Chris Burns examines why agreements remain a grey area, and the factors courts often consider in assessing validity.
ChrisBurns
Marital agreements and marriage will go hand inhand in all walks of life
A Lupton Fawcett Denison Till Periodical. Issue 4 06/07
Determining the parties’ needsOne of the key factors that any court must take into
account when making a decision is the parties’ financial needs.
However, the meaning of “needs” in this context has generated
uncertainty and there is confusion about the extent to which
one spouse should be required to meet the other’s needs after
their formal relationship has come to an end.
Children take priority over small printThe first consideration in any ruling must be given to the
children of the family, regardless of the terms of any nuptial
agreement. In this respect, no agreement can ever be allowed
to prejudice the reasonable requirements of a child.
The importance of free willIf the agreement is to carry any weight, the parties must enter
into it of their own free will, without any undue influence or
pressure. The court will consider whether there was any material
lack of disclosure. That is to say, each party must have all the
information that is material to his or her decision to sign a
pre-nuptial agreement. There does not have to be ‘full and
frank’ disclosure, merely a sufficient level
of transparency to enable a free decision to be made.
Any duress, fraud or misrepresentation will
undermine the effect that such an agreement would
otherwise have. Unreasonable conduct, such as undue
pressure (falling short of duress), may also dilute the weight
given to the agreement. The court may additionally take into
consideration the parties’ emotional state, what pressures
he/she was under to sign, and the timing of the agreement,
relative to the date of the marriage/partnership. Issues such
as the age and maturity of the parties, and whether they had
been in a married or long-term relationships previously, may
well also be pertinent factors. Last but not least, the court
may seek to determine whether the marriage would have
gone ahead without the agreement.
An adherence to fairnessProblems can arise where the terms of the agreement make
provisions which go against the principles the court would
apply if considering matters in a traditional divorce setting.
In the Radmacher case, the Supreme court decided
that it would not be fair to lay down rules that would limit the
court’s flexibility. The court subsequently confirmed that no
agreement can ignore basic needs. If the agreement had the
effect of leaving one partner in a predicament of real need,
while the other enjoyed a lavish lifestyle, then the result would
likely be unfair. However, the Supreme court also pointed
out that a predicament of real need (at least on the facts of
the Radmacher case) was merely one that did not leave her
husband in a state of destitution!
The rise of autonomyThe desire for autonomy is undoubtedly the driving force
behind more and more couples choosing to regulate their
own financial affairs.
In circumstances where parties have drawn up an
agreement, which they have both freely signed, the court
is likely to respect its terms. The question of autonomy is
particularly relevant where the agreement seeks to protect
premarital property. In the Radmacher case, the court noted
that it would be ‘paternalistic and patronising to override their
agreement simply on the basis that the court knows best’.
However, by contrast, if the agreement sought to allocate
money yet to be earned in a way which was disproportionately
in favour of the earner rather than the home-keeper, then, as
the Supreme court pointed out, it may well be easier to find
that agreement unfair.
Future circumstancesThe longer a marriage has lasted, the more likely that
unknown and unforeseen contingencies will affect the parties’
rights. This is more likely to make it unfair to hold the parties
to their agreement. Such circumstances are, however, likely to
be fact-specific.
Another factor considered by the courts may include
how the courts treat property that one party has brought into
the relationship or acquired by gift or inheritance during it.
The principles in practiceSince Radmacher, the courts have continued to take these
factors into consideration and sent out a clear message that
more judicial notice is being taken of marital agreements.
In December 2013, Mr Justice Mostyn enforced a
pre-nuptial agreement in an application by the wife for interim
maintenance in a marriage which was only 15 months old.
Following the parties’ engagement, a draft pre-nuptial
agreement was produced by the husband. Over a significant
period of time, the agreement went back and forth between the
husband and wife and their respective legal teams. In the run
up to the final agreement being signed in May 2012, this was
intensely negotiated.
Having considered in detail the provisions of the
agreement and the mechanics of its negotiation and how it
came to be agreed between the parties, Mostyn J concluded:
‘It must be obvious that the principal object of the
exercise in this case (as indeed in every case where a nuptial
agreement is signed) is to avoid subsequent expensive and
stressful litigation; and it is for this reason, as will be seen, that
the law adopts a strict policy of requiring the demonstration
of something unfair before it will open the Pandora’s box of
litigation where there has been an agreement of this nature.’
After considering the law on pre-nuptial agreements
and how it applied to the arrangement in that particular case,
Mostyn J went on to conclude that:
‘…when adjudicating the question of interim
maintenance, where there has been a pre-nuptial agreement,
the court should seek to apply the terms of the pre-nuptial
agreement as closely and practically as it can, unless
the evidence of the wife in support of the application
demonstrates, to a convincing standard, that she has a
prospect of satisfying a court that the agreement should
not be upheld.’
It is therefore anticipated that marital agreements
and marriage will go hand in hand in all walks of life.
To find out more about the changing face of Family
Law, simply contact Chis Burns on 0113 280 2115 or email
In recent years there have been many cases where
ex-employees have been asked to join a rival company
and have been accused of taking confidential
information. In cases where there has been blatant
stealing of information, the person in question can
expect robust treatment from the courts. However,
where individuals have not obviously taken
information but are steeped in confidential knowledge
of the business, things get trickier.
According to the courts, a former employee can
use his or her general skill and knowledge within their
new role, but not what the court regards as trade secrets or
essential confidential information. The problem is that there
is no definition of a trade secret or essential confidential
information. Consequently, predicting the outcome of some
cases can be extremely difficult. Interestingly, the European
Commission - love it or hate it - has very recently proposed a
Directive to harmonise the legal protection for trade secrets
and know-how across the EU. The proposed Directive has a
definition of a legally protectable trade secret as follows:
“(1) ‘trade secret’ means information which meets all of the
following requirements:
(a) is secret in the sense that it is not, as a body or in the
precise configuration and assembly of its components,
generally known among or readily accessible to
persons within the circles that normally deal with the
kind of information in question;
(b) has commercial value because it is secret;
(c) has been subject to reasonable steps under the
circumstances, by the person lawfully in control of the
information, to keep it secret.”
The Directive - if it ever comes into force - will require UK law
about trade secrets and confidential know-how to change. For
example, currently in UK law the know-how or trade secret
must be confidential to have legal protection as ‘confidential
information’: but how will that be squared with the proposed
Directive only requiring that the information ‘has been subject
to reasonable steps … to keep it secret’?
In another recent development, in a case in the
Supreme court called Vestergaard Frandsen HAF and others v
Best Net Europe Limited [2013] UKSC 31, the court was faced
with a case in which two individuals left their employment and
worked together with a former consultant of the same former
employer to develop a rival business. The case against the
consultant and one of the ex-employees was straightforward.
However, the other ex-employee had no knowledge of the
misuse of the confidential information and trade secrets.
Eventually the Supreme court decided she could not be held
legally responsible for their misuse. It was not enough that
she had been employed by the former employer whose trade
secrets were being misused, or that she was working with
two others who were in fact misusing the trade secrets of the
former employer.
Inevitably employers believe that their ex-employees
have gained an advantage whilst working for them, and that,
when they leave, that information should not be used for the
benefit of a rival. The courts don’t see it this way. They see the
general skill and knowledge of an employee as portable and
usable by rivals or the former employee to compete.
Competition is thought to be good for the economy
as a whole. So as a general rule, the courts will only intervene
if detailed and specific confidential information has been
misappropriated or misused; such as a chemical formula,
a software algorithm, or a detailed business proposal. The
deliberate copying of lists of prices and customers is likely
to be regarded as a breach of confidence and infringement of
copyright and/or database rights.
It goes without saying that employers can protect
themselves by all their employees having a good contract
of employment with appropriate terms about confidential
information. This is essential to improve not just the prospects of
success but the predictability of the outcome of any court action.
JohnSykes
When trade secrets aren’t secretWhy keeping business information confidential can be harder than you think, by John Sykes, Head of Intellectual Property and Commercial Law.
The problem is that there is no definition of a trade secret or essential confidential information
Developments in social media have made it easier for
individuals to communicate with each other and with the
wider world. Instant communication platforms like Facebook
and Twitter can be invaluable for businesses, particularly
when promoting their brands. But employee misuse of these
platforms can cause employers major headaches.
Here are a few of the key issues that face employers when dealing
with social media, and guidance on ways they can protect themselves.
“I didn’t say that”
Within an employment context, social media sites can cause real problems
because they provide a new (and increasingly dangerous) platform for
employees to complain about their employers, colleagues, suppliers and
even customers.
Before taking action against employees who make inappropriate
comments about their working environment on social media websites,
employers should consider (a) whether there is a genuine risk to their
reputation, and (b) whether employees have been informed of the
consequences of making such comments.
Cases in point
In Preece v J D Wetherspoon, the employer
operated an internet policy which included
the term:
“You should not write ... or contribute to
a blog where the content lowers the reputation
of the organisation, staff or customers and/or
contravenes J D W equal opportunities policy.
This includes pages on web sites such as
MySpace and/or Facebook.”
Following an altercation with some customers, Miss Preece posted a
derogatory comment about them on Facebook. Miss Preece was summarily
dismissed from Wetherspoons on the basis that she had breached her
employer’s policies. Miss Preece subsequently brought an unfair dismissal
claim.
The Employment Tribunal found that Miss Preece had been fairly
dismissed. Key to this decision was the fact that Miss Preece was aware
of, and had signed a copy of, her former employer’s policy in relation to
internet and social media use.
By contrast, in Whitham v Club 24 Ltd t/a Ventura, Ms Whitham
worked for Club 24, which provided customer services to Skoda, which is
part of the Volkswagen Group. She worked in an office with both Club 24
and Volkswagen employees.
One day after work, Ms Whitham posted negative comments about
her colleagues on her Facebook account, though her privacy settings meant
that only her friends could see her messages.
Ms Whitham was summarily dismissed for potentially harming
her employer’s relationship with Volkswagen, and as a consequence
brought an unfair dismissal claim against her employer. The Employment
Tribunal found her dismissal to be unfair. It held that Ms Whitham was
not complaining about Volkswagen, but about her working conditions and
the people with whom she worked. It also found that her comments were
“mild” and would not, in reality, have resulted in Volkswagen terminating its
contract with Club 24.
Examples like these go to show how comments made on
social media can be interpreted within an employment law context.
Companies would do well to safeguard themselves by putting proper
policies and procedures in place.
Staying on top of LinkedIn
Websites such as LinkedIn are often maintained both in and
out of work time, and can be of great benefit to employers in
generating business.
However, there remain a lot of unanswered questions
relating to the use of LinkedIn by employees. Employers should
ensure that they have effective restrictions within their contracts
of employment which prevent the use and disclosure of confidential
information (by any means) by unscrupulous employees who seek
to compete with their former businesses.
Bullying, Harassment & Discrimination
Social media websites have become another medium in which
bullying and harassment can take place. Employers should be
aware that they can be vicariously liable for the actions of their
employees if the actions take place “in the course of employment”.
This has a very wide meaning, and can include actions that take place
outside the workplace.
In order to successfully defend claims which are brought
as a result of their employees’ actions, employers should have clear
dignity-at-work and anti-bullying and harassment policies.
In Teggart v TeleTech UK Limited, Mr Teggart posted
offensive comments on his Facebook page about a female colleague.
Mr Teggart was subsequently dismissed for gross
misconduct for the harassment of a fellow employee, and
for bringing his employer into disrepute by using its name
in connection with the comments. The Employment
Tribunal found that the employer’s finding of harassment was
reasonable and his dismissal was fair.
What should employers do to protect themselves?
Employers should implement clear policies which deal with IT, internet and
social media use. They should also consider the extent to which their IT and
communications systems can be utilised by employees to access social media.
Employers should consider whether to prevent employees from
referring to the business in comments which are posted on the internet.
The consequences of failing to comply with these policies (e.g. potential
dismissal) should also be made clear to employees.
Clear policies relating to bullying, harassment and discrimination
(also within the social media remits) should be brought to the attention of
employees. These should be accompanied by appropriate training. This will
enable employers to better defend claims for vicarious liability.
There is little doubt that employers who wish to dismiss employees
for making inappropriate comments on social media sites will have greater
difficulty in doing so if they don’t have proper policies in place.
If you do not have a social media policy or you feel that your policy
is unsuitable or out of date, please contact Alexandria Quigley on
0113 280 2085 or email [email protected].
Setting social media boundariesA better social media policy means better protection for employers.Alexandria Quigley, Senior Employment Solicitor, shows how businesses can prepare themselves against problems that may arise.
A Lupton Fawcett Denison Till Periodical. Issue 4 08/09
AlexandriaQuigley
Comments made on social media can be interpreted within an employmentlaw context
How long have you worked with
Lupton Fawcett Denison Till?
I first came across Lupton Fawcett Denison Till in 1986,
but it was only when I was appointed to the board of Renew
Holdings plc in 2006 that we began working together. We had
a few small items that needed attention, the first piece of work
being to review a notice of AGM. Since then, they have become
a trusted advisor and we have worked together on several other
projects both large and small.
You recently instructed Lupton Fawcett Denison
Till on a sizeable deal. Why did you trust them
to do the last big acquisition?
Lupton Fawcett Denison Till has recently advised
Renew Holdings plc on the acquisition of Lewis Civil
Engineering: an £8m transaction to buy a Welsh-based
family business.
It was important to Renew Holdings plc that the deal
was carried out efficiently, but also that the lawyers were able
to empathise with a family-run business and its advisors.
Lupton Fawcett Denison Till was a natural choice as they
have a lot of experience with companies like Lewis. We found
their personal approach very reassuring, and it made for a
constructive rapport throughout.
What kind of problems and challenges do they
advise you on?
A business of our size will always need occasional
services of a law firm, and Lupton Fawcett Denison Till has
risen to every challenge.
Since the outset of our relationship they have helped
us with many and varied projects. The fact they have a fully
integrated practice means they have been able to handle
everything from small reorganisations within the group to
acquisitions, changing documents and other
smaller tasks.
What, if anything, makes Lupton
Fawcett Denison Till different?
Their combination of approachability
and professionalism. We are able to work with
Lupton Fawcett Denison Till at a senior level. They are a
pleasure to deal with and we inevitably find their advice very
astute. On a recent project, they went above and beyond to
understand the issues we had which has always made us feel
like we were in good hands. Their wide-ranging expertise allows
them to give us good advice on several specific areas of law.
In your opinion, how do they approach their work
and how does it help you?
Lupton Fawcett Denison Till has demonstrated that
they can get under the skin of the business. They challenge
briefs when necessary, and look at the events and contracts
in great detail. They only use experienced and professional
people to carry out the work. The approach is, however,
a personal one and I know that Renew Holdings plc is an
important and valued client, not just another client.
It’s important to both businesses to understand each
other, so we’ve arranged for the senior teams of both companies
to meet. This demonstrates exactly how well we are working
together.
Why do you continue to use Lupton Fawcett
Denison Till ?
This is a growing relationship and we are working
together to broaden the understanding between the two
firms. We work well together, and they always make us feel
like they have our interests at heart.
Recently, when working on a particular project,
we worked late in the Leeds offices. When we discovered a
potential issue in the early hours of the morning, Lupton
Fawcett Denison Till worked quickly to isolate and resolve it
in the right way.
Working with them has been very beneficial for us.
Their professionalism and commercial acumen means we
can always rest easy.
A well-engineered relationshipJohn Samuel, Group Finance Director of Renew Holdings plc, discusses just what makes his relationship with Lupton Fawcett Denison Till run so smoothly.
“Lupton Fawcett Denison Till has demonstrated that they can get under the skin of the business.”
What is a share buy-back?
A share buy-back is when a company buys shares back from
one or more of its shareholders, as opposed to shares being
transferred between shareholders.
Why do buy-backs happen?
The most common reason for a share buy-back is to provide
an exit route for a shareholder who is retiring or leaving the
company for other reasons.
There can be other reasons for a company to buy back
shares. It could be any of the following:
– return surplus cash to shareholders;
– increase earnings per share;
– increase net assets per share;
– enhance share liquidity; and
– increase gearing.
Share buy-backs have for many years been restricted
by legislation. This legislation is designed to (a) maintain the
capital base and (b) prevent buy-backs being used as a way to
disguise regular remuneration in order to avoid tax.
Recent Changes
The Government is currently promoting greater employee
ownership of businesses.
In 2012, the Nuttall Report on Employee Ownership
simplifed the process for private companies wanting to buy back
shares from departing employees by creating new regulations.
These new regulations came
into force on 30 April 2013.
Here is a summary of the main
changes to the existing law:
– a buy-back of shares can
now be approved by an
ordinary resolution of
shareholders (therefore by
a simple majority);
– companies can now buy
back shares using cash. Under the previous rules, a buy-back
was only possible if a company also had sufficient distributable
reserves. The amount of cash that can be used must not exceed
£15,000 or 5% of the share capital of the company, whichever
is the lower. A special resolution will be required if there is no
provision for share buy-back in the company’s articles;
– payment can now be made in instalments if connected
with an employee share scheme, which was not previously
possible;
– multiple share buy-backs can be dealt with by one
ordinary resolution if connected with an employee share
scheme and provided the drafting of the resolution is
appropriate; and
– private companies can now hold shares in treasury
following a buy-back, so they are, for example, available for
other employees, rather than being cancelled on buy-back
as was previously the case.
Where there was no ready market for an unlisted company’s
shares, one common practice was to create an employee benefit trust
(EBT). However, the changes
introduced by the regulations can
remove the need for an EBT and
reduce the administration time
and expense involved.
If your unlisted
company has been
discouraged from introducing
and/or expanding employee
share plans, or share
ownership - either because of liquidity issues or a reluctance to
use an EBT – then it could be time for you to reconsider your
position.
These reforms will be of particular relevance
for companies which view employee ownership as a long-term
strategy. Nevertheless, for private companies without this
structure, the reforms should remove much of the onerous
administration connected with the buy-back of shares.
The Government intends to review these reforms over
the next three years. Among other things they will be checking to
make sure there are no adverse consequences as a result of the
simplification of the process.
For further information on the new share
buy-back regime or the employee
shareholder regime, please contact
Jonathan Oxley on 0113 280 2091 or
email [email protected].
The changing future of share buy-backsWhen it comes to share buy-backs there’s a new regime for private companies. By Jonathan Oxley, Director in Corporate Finance at Lupton Fawcett Denison Till.
A Lupton Fawcett Denison Till Periodical. Issue 4 10/11
The Government is currently promoting greater employee ownership of businesses
Jonathan Oxley
Innovation has a huge impact on the way we
live our lives. But bringing those innovations to
life and marketing them can be tough in today’s
competitive environment. Lack of resources and
technological expertise can be problematic for
even the largest of companies.
One answer for business owners has come from an
unlikely place: university.
The University of Huddersfield is already helping
businesses through its £12m 3M Buckley Innovation
Centre, which acts as a gateway to the University’s key
research centres and high-tech facilities. So far this
partnership has already overseen many successful
collaborations between businesses and academia.
Growing business, faster
The beauty of 3M BIC is its
egalitarian approach that
actively promotes business
growth. It’s a place where
high-growth, high-tech
companies can work alongside
the University to transfer
knowledge. A place where
businesses are given the tools
they need to grow and move
into new markets.
The flexible work spaces, laboratories and grow-on
space are designed to accommodate all types of companies at
all levels of growth, and so far the results have been positive.
Many of the businesses involved report that the environment
fosters a spirit of innovation, and encourages collaboration.
Moreover the scheme has already had a positive effect on
regional growth and regeneration.
Collaboration is the key
3M BIC has proved that collaboration works. The University
appointed serial entrepreneur Professor Graham Leslie as its
first resident professor in enterprise and entrepreneurship,
using his wealth of industry experience to attract businesses
from all over the region and beyond. Companies are bringing
the academic expertise of the University to bear on growing
their business, while the University is able to showcase their
research in a commercial environment. It’s an approach which
seems to benefit both parties equally well.
Where technology means business
At the heart of 3M BIC is Innovation Avenue. Here businesses
can find the latest technology for the manufacturing and
engineering sectors – from atomic force microscopes to a 3D
printer that enables users to turn digital models into solid
prototypes for product manufacture.
This set-up is especially valuable to SMEs or
business start-ups, as it gives them access to technology
that otherwise would have been out of their reach.
One such SME is Formative Design, which provides
engineering design consultancy. Their owner, Gary Fenton,
says: “A lot of my clients are from the medical device
sector, so having access to technology and the market
is ideal. It allows me to create prototypes for my clients,
at no extra cost to my business.”
Any interested business can benefit from access
to the facilities and take advantage of the specialist
consultancy, research and development projects through
the centre’s network membership, designed for those
wanting to be a part of 3M BIC’s high growth approach..
For any business looking to grow and break into
new markets, this centre might just be the innovation of
the century.
3M BIC is part-funded by the European Regional
Development Fund, the University of Huddersfield and
Kirklees Council.
For more information about the 3M Buckley
Innovation Centre call 01484 473191,
email [email protected] or visit www.3mbic.com.
LizTown-Andrews
A unique collaboration between businesses and universities helps to advance innovation. Professor Liz Town-Andrews, CEO of the 3M Buckley Innovation Centre, explains why combining academic knowledge with commercial capability can drive forward innovation in the UK.
To innovate you have to collaborate
This centre might just be the innovation of the century
A Lupton Fawcett Denison Till Periodical. Issue 4 12/13
Building risk management into construction The current climate presents genuine opportunities for anyone thinking of improving, extending or refurbishing their premises. However, as Gareth Hevey explains, it pays to identify and minimise the legal risks of dealing with contractors and consultants, before the first brick is laid.
The economic downturn has been good news for
businesses seeking to expand their premises. Eager
to secure new business, building contractors are
increasingly offering new clients competitive deals.
However, instability in the construction market also
means a high level of risk.
Whether you are looking to refurbish, extend or design
and build premises from scratch, it is important to identify,
assess, manage and insure against legal risk. This process
enables you to create a well-defined legal document that
ensures your project is completed on time, to the required
standard and within budget. While every contract is different,
the following section outlines the factors every company
should take into consideration:
1. The lowest price is not always the best value
Awarding a contract on price alone may not always be the best
solution. At the tender stage it is important to consider designs
which make long-term building running costs more economical,
e.g. through better heating and insulation. This has the added
benefit of reducing your company’s “carbon footprint”.
2. Contractor balance sheets can be deceptive
A contractor’s balance sheets may look good, but can be misleading.
The cash sums owed to contractors on completed jobs could be
illusory or subject to lengthy and risky claims. So it is imperative that
all contractors are subject to a thorough credit check.
3. Careful planning is essential
Even the most meticulously-planned projects can be derailed
by unexpected delays and problems. Careful planning and risk
management allows you to anticipate pitfalls and delivers added
peace of mind.
Bonds, guarantees and third party warranties are a practical
way to protect your investment. To avoid being left out of pocket, it is
worth agreeing a performance bond for a percentage of works value
payable on insolvency of the contractor. This provides a “fighting
fund” to deal with any costs. Similarly, a parent company guarantee
ensures that your chosen contractor fulfils all of the obligations of
their contract.
Naturally, some delays such as bad weather are
unavoidable. These ‘relevant events’ should be defined and agreed
before the contract is created. This not only incentivises contractors
to complete on time, but assures you liquidated damages, if a
contractor cannot demonstrate that they have been delayed by a
relevant event.
Last but not least, a good ground survey is a must, as
unanticipated ground problems can delay construction from
the outset and disrupt and prolong the entire construction
programme throughout.
4. The devil is in the detail
Clarity is key when agreeing contracts. Accurate drawings,
specifications, designs and data should outline the scope of the
proposed works in advance. The contract should also clearly
define the proposed building use and the design, materials and
workmanship required to meet that use.
Taking time to dot the ‘I’s and cross the ‘T’s eliminates
confusion and reduces delays, and a similar approach can be
applied to contract costs. Clearly-annotated breakdowns
of the total “Contract Sum” and price fixing strategies – such as
a Guaranteed Maximum Price Mechanism – can help to rein in
costs and avoid unplanned expenditure.
5. The less control on design - the higher the cost
Design may be the most creative and ongoing stage of the process,
and it still requires a methodical and co-ordinated approach.
From concept to completion, it is critical to spell out who is
designing what, so contractors, sub–contractors and consultants
all understand their remit. This avoids duplication,
spiralling costs and delay.
6. Good management is worth the cost
Keeping project costs to a minimum and maintaining
high standards requires continual management, and
the appointment of an architect, a quantity surveyor
and a project manager more than repays the initial
investment. Reputable consultants can also help to
manage and document on-site Health & Safety to
ensure your project complies with current regulations.
7. Anticipate teething problems
On completion, there may still be teething problems
or outstanding issues. Wherever possible, you should
make clear provision for the rectification of these
defects at the contractor’s cost. Careful thought should
also be given to dispute resolution and the associated cost and
time implications. It’s worth remembering that contractors are
entitled to make a claim against you regarding any issue, and
that these claims may have to be settled within 28 days under the
statutory adjudication process.
While it is true that many of these factors are covered by
regular industry forms, such as JCT and NEC, these do not always
adequately cover the total risk. So careful management of all risks
is essential by amending the industry forms with a set of special
conditions tailored to your specific project requirements.
However, a one-size fits all approach to every contractor
and every project is not recommended. Many contractors are
reliable and reputable and will resent unreasonable amendments
to standard contracts – resulting in unnecessary conflict, delays,
claims and inflated costs.
Striking a perfect balance between risk and reassurance
can be a complicated process, but if your company is considering
approaching a contractor in the current climate, and for the
first time, the creation of a well-defined contract is still the most
effective place to start.
GarethHevey
The creation of a well-defined contract is still the most effective placeto start
Fraud is growing fast. In Yorkshire alone, The
National Fraud Authority estimates that the
cost of fraud to local businesses has more than
trebled from £17m to £53m in the last 12 months.
Estimated losses to the UK economy could be as
high as £52 billion.
From higher insurance premiums to legal expenses,
fraud costs SMEs £9.2 billion per annum. However, despite the
scale of the problem, many companies have yet to consider
preventative measures and lack contingency plans should
they become victims of fraud.
Many senior managers believe that fraud is either
something that happens to other companies, or that little can
be done to prevent it.
The truth lies somewhere in between. While fraud
indirectly affects all businesses, there are simple and
inexpensive measures your company can take to avoid
becoming a victim
Preventing internal fraud
According to Action Fraud, nearly 1 in 5 small businesses have
been defrauded by one of their own employees. While these
events are often due to a single person acting in isolation,
the damage to your business can be huge. A stark example
was provided in the case of bank trader Nick Leeson, whose
unauthorised losses caused Barings Bank to go bust.
Whilst solving internal fraud may seem an impossible
task, there are a number of steps you can take to prevent or
quickly detect fraudulent actions of rogue employees.
These include asking for independent references when
From higher insurance premiums to legal expenses, fraud costs SMEs £9.2 billion per annum
employees join the company, and monitoring staff for ‘tell tale’
signs, such as a sudden change of lifestyle, erratic behaviour,
reluctance to take holidays, or a cavalier approach towards
systems and controls.
It is also important to closely observe ‘areas of
opportunity’ such as misuse of company credit cards,
false expense claims and false or fraudulent contracts
and invoices. To establish a zero tolerance culture amongst
their employees, many companies provide guidelines for
preventing, detecting and dealing with fraud.
Companies should also be aware of their most
valuable physical and intellectual assets, and restrict
access to them accordingly.
Tackling external threats
Just as critical is the potential threat posed by customers
and suppliers. Fraudsters often pose as regular customers,
with common frauds including the misuse of electronic
payments, use of stolen or fake debit/credit cards, and cheque
over-payments. Long firm fraud, a favourite of the Krays,
is also prevalent. Long firm frauds initially involve fraudsters
placing orders to establish a decent credit history.
These are followed by a number of larger orders, which once
delivered are never paid for.
Wherever possible, companies should closely monitor
large or unusual orders, undertake regular customer credit
checks and, where appropriate, visit company premises.
Spotting supplier fraud
Invoices are a well-established area for fraud with as many as
675,000 businesses having fallen victim to a fake invoice fraud
at some point in their trading history (source: Action Fraud).
Such frauds can involve fraudsters masquerading as a regular
supplier, or an actual supplier over-charging.
Companies should also be aware of insolvent trading,
where companies either trade immediately before going
bankrupt, or phoenix companies that attempt to establish
a trading relationship.
Key to tackling this issue is the importance of regular and
ongoing checks. Customers and suppliers who appear credible and
stable at the outset can quickly change for the worse.
Protecting intellectual property and data
While it is easy to focus your fraud prevention measures
on protecting physical assets like laptops and hard drives,
it is all too easy to overlook the information that is stored
on them. The theft of valuable data is often harder to detect
and can be extremely damaging to your reputation and
competitive advantage.
Worse still, you could also be prosecuted and heavily
fined by the Information Commissioner for failing to protect
your corporate data. By way of example, NHS Surrey was
recently fined £160,000 after hard drives containing personal
patient data were sold on an online auction site.
Although many of us would agree on the need for
enforcement in this instance, many would be surprised at the
fine of £5000 imposed on the sole proprietor of Jala Transport
Limited. While driving home in the rush hour, a thief smashed
the side window of his car and stole a bag containing an
external hard drive which contained the details of over 250
customers. The proprietor was subsequently fined by the
Information Commissioner, despite ensuring that the drive was
password protected and reporting the incident immediately.
The Commissioner highlighted the failure of not properly
encrypting confidential material.
If it had not been for the fact that the financial
resources of Jala Transport Limited were extremely limited,
the fine would have been closer to £70,000!
Reducing risk with insurance
Where a risk assessment identifies a risk of internal or external
fraud in your company, it may be worth discussing the matter
with your insurance broker. There is currently a wide range
of bespoke policies available which can provide inexpensive
protection from the consequences of fraud.
However, many companies overlook these options. As
insurance broker Gordon Brain from Eastwood and Partners
comments: “The take-up of these policies is often low amongst
SMEs and there is a lack of awareness of the extent of the cover
and the low cost of obtaining this type of cover.”
Mr Brain makes similar comments in relation to cover
in respect of Director’s liabilities.
Acting quickly to minimise impact
Unfortunately, the impact of fraud is not restricted to dealing
with rogue employees or fraudsters who have targeted your
company. Sometimes, even the innocent can fall under
suspicion. As a result, it pays to consider legal representation
within your contingency plans. Lawyers can represent either
the company owners or (should the company wish to support
them) their employees. This expertise can be invaluable in the
event of the police wishing to interview staff under caution at a
police station. Reliable legal representation at an early stage of
an investigation can also be critical in preventing an otherwise
worrying and costly criminal investigation.
How to mitigate damage
If you do become the victim of a fraud, effective planning is
essential to mitigate damage. Pre-existing arrangements with
your legal advisors not only save time, but also allow you to
use freezing orders to prevent fraudsters from transferring or
dissipating any assets. On discovering fraudulent activity it is
important to act quickly and decisively. You should take the
following into consideration:
– When, and if, you should call the police;
– What type of experts, such as forensic accountants,
IT recovery experts and employment lawyers, you need to
mitigate any loss;
– What steps can be taken to recover stolen assets;
– Whether a private prosecution is appropriate.
While the impact of fraud remains an issue for
every company, it is not insurmountable. By having an
awareness of the areas of your business which
may be vulnerable, and acting accordingly, it is easy to
maintain a sensible and practical approach.
Lupton Fawcett Denison Till has a dedicated Civil Fraud
Asset Recovery Unit which helps companies and individuals
who are victims of fraud.
For further help and advice, please contact Simon
Lockley on 0114 228 3297, Robert Tranter on 0114 228 3292 or
email [email protected].
A Lupton Fawcett Denison Till Periodical. Issue 4 14/15
Putting a stop to fraudAt a time when fraud in the UK is approaching epidemic proportions, it is easy to believe that falling victim to fraudulent practices is inevitable. Not so, says Simon Lockley, Director at Lupton Fawcett Denison Till, , who outlines the steps any company can take to protect themselves.
SimonLockley
We do good business at Lupton Fawcett Denison Till, but any law firm can do that. What we pride ourselves on is a unique understanding of our clients: one that’s based on a proactive, straight-talking commercial approach that achieves quick and meaningful results.We call it the Law of Advantage.
www.lf-dt.com
There’s a reason we attract great businesses.We’re one too.
Lupton Fawcett Denison Till are proudly supporting Welcome to Yorkshire and the Yorkshire Grand Départ 2014