lupton atticus journal issue 5 aw lr
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Lupton Fawcett Atticus issue 5TRANSCRIPT
Issue 5Let’s look at briberyA heads up on the world of modern lawEnergising Yorkshire entrepreneursMaking the case for Insolvency PractitionersSocial enterprise never tasted so good
Energising Yorkshire
entrepreneurs
a lupton fawcett denison till periodical
The story of an amazing Yorkshire-based social enterprise
Lupton Atticus Journal issue 5_AW.indd 1 05/01/2016 17:11
Contents3. The changing face of Lupton
Fawcett Denison TillHow new appointments and new servicesare helping us grow.
4. Personal Profile: Andrew Lindsay A heads up on the world of modern law.
5. Bribery and global risk Our second look at bribery and corruptionand their implications for UK business.
6. Making the case forInsolvency Practitioners A look at how Insolvency Practitionerscan be an invaluable trusted partner,not just a last resort.
8. Business Advantage Scheme News of our exciting ‘entrepreneurship’collaboration with Leeds Beckett University.
10. HR support: too good to be true A warning about the misleading claims ofsome HR and Employment Law ‘specialists’.
12. Consumer rights: getting them right Staying within the law when it comes to providingyour customers with their consumer rights.
13. A social enterprise success story The story of an amazing Yorkshire-basedsocial enterprise and the involvement ofone of our directors.
14. Insolvency and company directors The roles, risks and responsibilities ofcompany directors when times are hard.
Welcome to the fifth edition of atticus. We’ve filled this issue with the latest news, advice, profiles and insights: essential reading for keeping your finger on the pulse and learning about exciting opportunities to improve the way you do business.
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.
E-mail your thoughts to [email protected]
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Lupton Fawcett Denison Till
Yorkshire House, East Parade, Leeds, LS1 5BD
Leeds: T: 0113 280 2000 F: 0113 245 6782
Lupton Fawcett Denison Till
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
www.lf-dt.com
Kevin EmsleyChairman
Lupton Atticus Journal issue 5_AW.indd 2 05/01/2016 17:11
At Lupton Fawcett Denison Till we continue
to develop our position as Yorkshire’s law firm
of choice for the region’s businesses and their
owners. In my introduction to the last edition, I reported
on our merger with York firm Denison Till and our view that
there’s a huge opportunity to better serve the need for legal
services for businesses and their owners in York and North
Yorkshire. Today, I’m delighted to say that our assessment
was correct, an achievement demonstrated by 35.5% growth
in our York office in the first twelve months since our
merger, and also by our expectation of exceeding
100% growth by the end of the current financial year.
The last edition also announced the first lateral hires
into our York office, since strengthened by a number
of appointments into our Private Client Department,
Commercial Property Department, Ecclesiastical and
Charity Law Department and our Construction team.
These include the appointment of Caroline Mockford
as a Director in the Ecclesiastical Department and Niamh
Batterton as a senior solicitor in Construction. We’ve also
grown our Sheffield office with the appointment of Rob
Cooke to head up Property Litigation and Joan Pettingill
in Employment Law.
In Leeds, things have been equally busy, and I’m delighted
to announce that we have been joined by Nick Bell. Nick
is a senior and highly-regarded banking lawyer, and he’ll
further strengthen each of our sector specialisms by offering
banking expertise and advice alongside our Corporate,
Property and Agricultural teams. Based in Leeds, Nick
and his team will operate across our three offices, bringing
additional depth and capacity to each offering.
Our Leeds office has also been joined by Jeremy Scott,
whose role is to build and reinforce our Regulatory team;
another important component within each of our sector
offerings, and here intended to meet the growing challenges
of our increasingly regulated commercial environment.
As always, we remain extremely keen to recruit more
first-class lawyers able to improve and broaden services
in each of our three offices. At the same time, we fully
understand that rather than seeing these offices colonised
from outside their area, those clients with particularly
strong links to York, Sheffield or Leeds are likely to prefer
their relationships to be led by lawyers from that particular
region: lawyers with a real understanding of the intricacies
and nuances of their marketplace. At the risk of turning
each of our clients and contacts into unpaid recruitment
consultants, I would urge you to encourage any first-class
lawyers that you hold in high regard – and who you believe
are held back in their current environment – to contact
either myself or your own preferred contact within the firm.
We would relish the opportunity to explore whether or not
we might improve each other’s futures.
I very much hope that you enjoy this edition and would ask
that you don’t hesitate to let us know of any improvements
you’d like to see, or any particular issues you’d like to be
addressed in future editions.
It’s been an exciting period of growth for our firm, and that has brought benefits for our clients as well as good news for us.
We’re growing, and so is our expertise and service…
Richard Marshall
A Lupton Fawcett Denison Till Periodical. Issue 5 02/03
Lupton Atticus Journal issue 5_AW.indd 3 05/01/2016 17:11
Why did you join LFDT?
It was the opportunity to create a corporate law
department that could be distinctive from its peers.
I joined from Denison Till in York about three years ago,
where I previously headed the Corporate Department for
a number of years, and which was extremely successful.
Upon joining LFDT, I became head of Corporate, and
quickly saw that in addition to our offices in Leeds and
Sheffield, we had the opportunity to merge with my
former colleagues in York, and create a unique offering
across the Yorkshire region. As a result of that merger,
we are the only commercial law firm with offices in Leeds,
Sheffield and York. So we really do cover the length and
breadth of Yorkshire.
How do you seek to differentiate LFDT from its
competitors?
In a service industry, we are here to service the client –
it is not the other way round. They are certainly not here
for our convenience! It’s a competitive world, so we need
to deliver value at every stage of every interaction with
clients. I always believe that the cost of our service should
be less than the benefit to our clients, and we should also
strive to exceed clients’ expectations every step of the
way. I want us to differentiate ourselves, by being pro-
active, to do a lot of our clients’ thinking for them and to
bring them ideas and suggestions before they have even
thought of them. I also believe that our mind-set should be
focussed around building a relationship and making our
clients’ businesses better, rather than merely earning a
fee. If we do the first of these two things right, the last one
will follow.
What is your proudest achievement for LFDT?
I like to see young people who work with me do well.
When they say, “I have learned such a lot on this
transaction”, it gives me a warm glow. I give people a
lot of responsibility early on, and I hope, if we have
recruited them correctly, they will swim rather than sink,
and add value to our business as well as to the businesses
of our clients.
I notice that a lot of lawyers are quite defensive
and hang on to their
relationships with clients
very carefully. I prefer to
let other people make good
relationships with clients
I introduce to the firm. I
don’t think “possessiveness”
is a good thing for either
clients or the individual
lawyers who work for them.
So, if I can help create
a collegiate atmosphere, so much the better.
It is also pleasing to see my department making
inroads into new sectors and specialisms. We have a
great opportunity at LFDT to become the leading
independent corporate and commercial law firm in
Yorkshire. If we continue to run that extra mile for clients
and deliver value as well as service, then I see no reason
why we cannot achieve it.
What single piece of advice would you give
to your clients in 2015?
I would say, “don’t give yourselves an excuse that you are
the victim of a fragile market”. There is always business
out there. If your competitors are doing better than you,
there is a reason for it. Keep asking yourselves difficult
questions all the time, such as: “How can we do this
better? What can we learn from our experiences? What is
happening in the marketplace? and How can we improve
the overall service to
our clients?”
I think it is also important
to be curious about
everything, to be restless,
to be prepared to be
disruptive and to take risks.
If you keep doing the same
thing, you will keep getting
the same results; you will
also be overtaken by your competitors before you have
even realised it.
I would like this firm to be known as an innovative
and creative one. We have a very long way to go, but
everything is possible.
Andrew Lindsay
We asked the Head of our Corporate Department, Andrew Lindsay, about joining the firm, his biggest achievements and some of his personal insights into the world of law firms and their clients. A key member of our team, Andrew is a highly respected legal advisor working with a wide range of businesses and organisations right across Yorkshire and the North of England.
A heads up on the world of modern law
If your competitors are doing better than you, there is a reason for it. Keep asking yourselves difficult questions all the time, such as: “How can we do this better?”
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Psst… let’s look atbribery and global risk
Director of our Regulatory and Corporate Defence team, Jonathan Cripwell, considers global risk and its implications for UK business.
Almost four years after the Bribery Act 2010 came into force,
this is our second review of bribery and corruption within
UK business. Although awareness of economic crime and the
damage it causes is higher than ever, corruption still poses a
significant legal and commercial risk for corporations doing
business around the world.
The Bribery Act 2010 constituted a complete overhaul of previous
UK anti-bribery law, much of which dated back to the early 1900s.
Meanwhile, the US has led the way with unprecedented levels of anti-
corruption activity over recent years, enforced through the 1977 Foreign
Corrupt Practices Act (FCPA), which underpins US legislation in this area.
Operational risks
For many corporations, the risks relating to bribery and corrupt
commercial payments represent one of the most serious operational
threats. This isn’t just in terms
of the impact of regulatory
investigation, prosecution and
financial penalties, but also
because of the substantial risk of
damage to brand and reputation.
On top of that – and perhaps
more significantly for individual
employees – there is also a risk
of criminal prosecution for UK
nationals, not only here in the UK
but also in foreign jurisdictions where they have operated.
Organisations in specific markets engaged in procuring
government contracts are particularly at risk. These include defence,
construction, infrastructure and healthcare, where those organisations
might be competing for business. The dangers are even greater in
certain high-risk countries where bribery might historically have been
an integral part of how business is done. While the FCPA and UK Bribery
Act are just two examples of global anti-corruption legislation, other
national legislation in regions like China, Brazil, Canada and Europe aims
to achieve the same objective, imposing severe penalties on corporations
and individuals who resort to bribery.
The UK perspective
The UK Bribery Act came into force on 1 July 2011. Prosecutions here
have been relatively few compared to worldwide enforcement but it’s
abundantly clear that UK prosecutions will steadily rise. This will
happen as worldwide regulators and enforcement agencies increase their
efforts to clamp down on corporate and financial crime.
We can expect to see an increase in prosecutions of individuals in
positions of responsibility within multinational corporations, for example
those who have engaged in bribery both domestically and in foreign
countries where their business is conducted.
The global perspective
PwC’s 2014 Global Economic Crime Survey reported that economic crime
continues to be a major concern for organisations of all sizes, across all
regions and in virtually every sector:
“As our 2014 Global Economic Crime Survey reveals, the real story
is not so much that economic crime stubbornly persists. The real story is
that economic crime is threatening your business processes, eroding the
integrity of your employees, and tarnishing your reputation”
In the US, the FCPA is extensive in its territorial application.
Many international companies with formal ties to the US (which includes
a company that has securities registered in the US) fall within its scope,
and could potentially face prosecution by US enforcement authorities.
We have seen the Department of Justice (DOJ) and the Securities and
Exchange Commission (SEC) fighting corruption with unprecedented
levels of anti-corruption activity, increasing the number of investigations,
settlements and prosecutions. This culminated in 2014 with an eye-
watering $1.46 billion paid by 10 companies to resolve FCPA cases.
The main UK prosecutor for offences under the Bribery Act is
the Serious Fraud Office (SFO). Together, the SFO, DOJ, SEC and other
worldwide enforcement agencies are increasingly demonstrating their
willingness to cooperate and coordinate investigations across the globe.
They are also achieving global corporate settlements following actions
by the authorities in different jurisdictions.
Our perspective
As a firm, we are increasingly being asked to advise on the risks
relating to bribery, both in terms of prevention and risk management but
also at the ‘sharper end’, meaning the investigation and prosecution of
clients in the UK and abroad. More and more, we are seeing investigations
that have their origins in the US and which are then coordinated
with the SFO and other national enforcement agencies to investigate
under reciprocal bribery and corruption legislation. The result is
that multinational and individual employees are being prosecuted in
numerous different jurisdictions.
Bribery and corruption is a serious issue within the global
marketplace, and Lupton Fawcett Denison Till has a dedicated team who
can guide and advise you through the complex legislation. They can also
provide both commercial and practical advice on risk management.
In view of the often very urgent nature of these issues, we field
an emergency response team which can help you 24/7, for example by
advising, assisting and representing you in the event of a
dawn raid or similar corporate crisis. In circumstances like
this, immediate on-the-ground access to legal and practical
commercial advice can often avoid the potentially negative
– and possibly disastrous – consequences of dealing with
the authorities without representation. If you’d like to talk
about any of these services, please don’t hesitate to contact
Jonathan Cripwell on 01904 561410 or Jeremy Scott on 07971 520407.
04/05
Jonathan Cripwell
For many corporations, the risks relating to bribery and corrupt commercial payments represent one of the most serious operational threats.
A Lupton Fawcett Denison Till Periodical. Issue 5
Lupton Atticus Journal issue 5_AW.indd 5 05/01/2016 17:11
There is often a stigma surrounding Insolvency
Practitioners and businesses who seek
insolvency advice. However, the facts tell a
different story. According to a 2010 report, the
UK insolvency industry assisted businesses with
a combined turnover of £363 billion and helped
to save two million jobs.
The UK is also rated as one of the best
insolvency regimes in the world, ranking
seventh out of 189 countries, by the
World Bank and International Finance
Corporation. The reality for many is that
calling for the advice and assistance
of an insolvency practitioner can in
many cases benefit and save a business.
However, the negative stigma of calling
for the advice of a qualified insolvency
practitioner continues to influence
companies in financial difficulty. As
a result, organisations often delay
seeking the advice they need and miss
opportunities, or seek advice from unregulated advisors. Both
of these actions can contribute to the failure of a business
that could otherwise have been saved.
How can advice help?
From helping you to deal with the loss of a major customer,
to managing cash flow problems, there are a number of ways
a qualified insolvency practitioner can assist your business.
On initially meeting a client, my first thought is always “how
can I help?” As a qualified insolvency practitioner,
I look for the positive solutions in every set of circumstances
and ask myself how I can add value to a situation. Through
stimulating discussions with business owners as to the
challenges faced by their business, I am able to outline the
options available, with various solutions, to agree a way
forward. In many cases, this meeting is a real relief for owners
and directors enabling them to understand the position they
are in and the options available.. Naturally, ‘when’ a business
chooses to seek advice will dictate which options are
available, and as a rule, sooner is better. Waiting until the last
minute to seek professional advice can not only limit your
choices, but also reduce your business’s chances of recovery.
Recognising the warning signs
Any business can have a financial crisis and no business
is immune from the impact of a recession or many other
external challenges. What separates the survivors from
those that fail is that they often have a financial plan to
minimise the potential damage to their business and to
recover from any such damage.
The old adage of “failing to plan is planning to
fail” is particularly relevant today and quality financial
information is key to your preparations. Having accurate
data at your disposal can help you solve problems
before they arise, identify problems and seek timely
advice. While we appreciate the demands on business
owners, directors and management teams are already
high, the following checklist will assist you in assessing
whether you are doing the right things to monitor your
business, examining your ability to recognise weaknesses,
and reviewing your contingency plans:
• Do you have a business plan?
• Do you prepare and review regular management
accounts?
• Do you prepare and review annual cash flow forecasts?
• Do you review business costs and overheads as well
as turnover?
• Do you prepare and review aged debtor and
creditor lists?
• Do you and your fellow directors meet regularly to
review business performance?
• Do you set time aside to understand your
financial position?
Without these measures in place, your business
is unlikely to be in a position to identify and
act on future problems. It is also important to
watch for the warning signs that signify your
business is in trouble. These can include any of
the following scenarios:
• You have difficulty in paying your creditors on time
• Your outstanding debtors or potential bad debts
have increased
• You are facing increased pressure from creditors
for payment
• You are having difficulty paying HM Revenue and
Customs on time
• Creditors have commenced legal action
• Your overdraft is always up to its limit
• Your bank has returned cheques
• Your bank has asked that its facilities be reduced
• Your bank requests personal guarantees or requests
that they are increased
• Your bank requests additional security
(e.g. a legal charge against your property)
• You have difficulty in paying wages
• You are not drawing money from the business yourself
• You are using your own money to fund the business
If you are experiencing difficulties, it pays to act quickly and consult a licensed insolvency practitioner.
Insolvency Practitioners – We’re here to help!Seeking the advice of an Insolvency Practitioner is often seen as a ‘last resort’ for businesses facing financial difficulties. However, as Gareth Peckett of BHP Clough Corporate Solutions LLP explains, insolvency practitioners are far from the ‘grim reapers’ they are sometimes portrayed to be.
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Gareth Peckett
06/07A Lupton Fawcett Denison Till Periodical. Issue 5
What to do if your business needs assistance?
If you are experiencing difficulties, it pays to act quickly
and consult a licensed insolvency practitioner. Calling in the
professionals at an early stage could mean the difference
between business failure and survival.
BHP Clough Corporate Solutions LLP offers free initial
consultations with one of our fully licensed insolvency
practitioners. All discussions and consultations are treated as
strictly private and confidential.
A case in point.
We were approached by the directors of a limited company
with 65 employees. The company services the construction
industry and had suffered setbacks in recent years, and as a
result, its facilities were reviewed by its bank and reduced to a
level that left the company unable to service its debts.
The company had subsequently fallen behind with
its payments, and found itself presented with a winding up
petition from HM Revenue and Customs and debts of
around £800,000.
We helped the company to negotiate with key
stakeholders, including the bank, secured lenders, HM
Revenue and Customs and trade creditors. We then established
proposals to facilitate a payment to creditors over a 5 year
period in full and final settlement of their debts.
A Company Voluntary Arrangement was agreed, which
allowed the company to retain its workforce. HM Revenue
and Customs ultimately withdrew its petition to wind up the
company, allowing the business to continue.
In the current period of economic uncertainty,
businesses in every sector face challenges. By
‘keeping a tight rein’ on your finances, planning
ahead and ignoring the stigma around seeking
advice, you can give your business the best possible
chance of staying on track.
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There’s no doubt that ‘entrepreneurship’ is a
buzzword of the current era. Asked what their
ambitions are, many of today’s students reply that
they would like to have their own business or that
they see themselves as a ‘serial entrepreneur’,
when once professions like teaching, medicine
or law would have been more common.
A few figures on UK businesses
Let’s consider some interesting statistics. Here in the UK,
large businesses are classed as those with more than 250
employees, and they account for less than 0.1% of all business
enterprises. Meanwhile, more than 99% of all businesses
– 5.2 million in total – are classed as small and medium
sized enterprises, or so-called SMEs. If we break that down
still further, 96% of all businesses are what we call ‘micro-
businesses’: businesses employing just 0-9 employees.
Between 2013 and 2014 the number of micro-businesses
increased by 7%, together employing nearly 8.3m people
with a combined turnover of £655 billion. Even though
small businesses make up 99% of all business in the UK,
they account for just 12% of firms engaged in international
trade. The European Commission’s SME Performance Review
describes the UK as having “a very competitive environment
for SMEs compared to other EU member states. With a
positive outlook with increases expected in the number of
SMEs, employment and value added”.
Overcoming challenges
Lupton Fawcett Denison Till is already the law firm of
choice for many SMEs, and for good reason. Our aim is to
help entrepreneurs increase the wealth generated by their
businesses and then help them to protect that wealth. Many
of our clients are recent start-ups, falling squarely within the
‘micro-business’ category. Of those, many are businesses
in the formative stages of their evolution, when money
is especially tight and when a single decision can have a
fundamental impact on how that business develops.
The UK Government recently trumpeted the passing of
the Small Business, Enterprise and Employment Act, designed
to make the UK the best place in the world to start and grow
a business. The Act is wide ranging, and it paves the way
for businesses to get improved access to finance, including
creating fairer provision for tied pub tenants and ending
exclusivity clauses in zero hour contracts. Forcing banks
to share credit data and improve access to finance for small
businesses has been a laudable move, but in reality we expect
the Act to have minimal impact on the majority of SMEs in
the UK. In our view, it is far more important for a young and
growing business to employ the right staff and identify the
right market for its goods or services. We also think it’s vital
that new businesses retain the best advisors: people who
understand how businesses work and invest the time it takes
to really get to know a business owner, their ambitions and
their preferred way of working.
How we’re helping Yorkshire’s entrepreneurs
Lupton Fawcett Denison Till have recently partnered with
Leeds Beckett University to provide six Business Advantage
Awards, offering a £5,000 package of legal and mentoring
support to each winning business. The winners come from
varied business sectors and will gain access to one-to-one
enterprise mentoring support from a solicitor with expertise
in the relevant field required by the business. Here, specialist
subject areas include IP protection, advice on business
structures, taxation, HR conditions and employment terms,
premises advice and regulatory compliance. Our firm also has
an extensive network of industry contacts and access to other
specialist expertise, all of which we’ll be making available to
the award winners.
The 2015 Business Advantage Scheme
Award winners are:
Achille Traore
Achille is Chief Executive at Leeds Digital Hub tenant
TopScreen Media, which specialises in providing technology
and consultancy to improve companies’ customer engagement.
The firm has recently won a major contract with New York’s
World Trade Centre to help create its digital strategy.
Emma Koczy
Psychology student Emma is the founder of Atlas Insight,
a business providing intelligent insight to some of the biggest
oil, gas, engineering and power companies across the globe.
Karl Lenton and Claire Shepherd
Karl and Claire run Safe Offender Healthcare (SAFE), which
supports organisations in the health, prison and social care
sectors by helping them develop strategies, improve services
and patient outcomes, and reduce deaths in custody. The
company is currently working with prison and social care
services, the NHS and various patient groups to rethink
environments for vulnerable people. It’s currently launching
a mobile treatment unit into the Prison Service.
Tom Martin
Tom is the founder of JetSoft, a company developing software
to change the way material test data is archived and analysed
in the aerospace industry.
Martin Woods
Martin is a Director at Leeds-based search engine optimisation
(SEO) consultancy, Subpixel – a team that helps businesses
to resolve issues affecting traffic from search engines. The
company is looking to launch a software product called
SpamFlag, designed to help people deal with Google penalties
and spam.
Tam Owen
Tam is a BA (Hons) International Business student who
recently launched his new company, Nutrition2go.
The business aims to provide healthy vending machines
using state of the art touchscreen technology.
Energising Yorkshire entrepreneursLupton Fawcett Denison Till’s Director Dan McCormack
looks at how our exciting Business Advantage Scheme is promoting
entrepreneurship and helping high-flying start-ups across the region.
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08/09
The thinking behind Advantage
The idea for the Advantage Scheme came after the firm
heard about the Enterprise & Innovation Hub set up by
Leeds Beckett University. Over the past 10 years the Hub
has supported over 600 emerging businesses at a number
of affordable office locations across West Yorkshire. Award
winners will be mentored in conjunction with the University,
so they’ll receive advice, reasonably priced accommodation
and access to the business and professional networks of both
the University and Lupton Fawcett Denison Till.
Through this award scheme, Lupton Fawcett Denison
Till is helping support the next generation of high-flying
entrepreneurs, playing a vital part in creating the stars of the
future while supporting job creation and growth within the
local economy.
We will be pleased to hear from any micro-businesses
and start-ups that think they might deserve a future Business
Advantage Award. Those wishing to be considered on a
confidential basis should contact Dan McCormack via email
A Lupton Fawcett Denison Till Periodical. Issue 5
Dan McCormack
Lupton Atticus Journal issue 5_AW.indd 9 05/01/2016 17:12
For those of you who don’t know, some HR and Employment Law consultancies offer fixed-fee employment support backed by an insurance product. The big selling point here is that as well as providing HR and Employment advice, these consultancies will also defend any employment claims brought against your business. Better still, if the consultancy loses your case, they will pay the compensation, not you.
Sounds impressive, doesn’t it?
Actually, we don’t think so, and we think you need to be aware of exactly what you are signing up for. Here’s a list of some key points to be aware of: • Most of these advisors are not legally qualified,
so they don’t have the necessary skills, experience and expertise to look after you properly. Also, advisors at these consultancies lack commercial awareness of what businesses are trying to achieve, and that’s another reason their support is likely to be inadequate or unsuitable.
• Consultancies like these typically use flowcharts to advise their clients, relying heavily on a scripted ‘one-size-fits-all’ approach to their client work. This means their advice may well be inappropriate for dealing with the very specific needs of your business.
• As the advisors are usually not legally qualified, their advice is not covered by legal privilege, which means that all of their communications with you are ‘disclosable’ during litigation. In other words, if one of your employees brings a claim against you,
Lupton Atticus Journal issue 5_AW.indd 10 05/01/2016 17:12
Andy Gilchrist
Look out for some HR and Employment Law consultancies
Andy Gilchrist, a Director and Head of Employment here at Lupton Fawcett Denison Till, has a stark warning for anyone considering using the services of some so-called ‘specialist’ HR and Employment Law consultancies.he or she is entitled to see the advice
that you received from the advisors.
• It’s almost impossible to build a trusting and lasting relationship with an advisor, as you rarely meet them face-to-face, dealing instead with whoever picks up the phone (which is often a different person each time).
• Last but not least, as employment litigation has reduced by around 80% since the introduction of fees, there is much less need for an insurance-backed product.
As well as all of the points above, there’s a more fundamental reason why the advice of these consultancies is flawed from an employer’s point of view. What they don’t
tell their business clients is that they typically advise in an extremely conservative way: by this, I mean an employee friendly way rather than an employer friendly way. This means that there are very few, if any, claims. While on the face of it few claims sounds good to some businesses, there’s more to this than meets the eye. In reality, few claims simply means that the employer is not actually doing anything which may result in a claim. Or, in other words, the employer is in fact doing everything the employee wants.
A typical example of this situation – and how it works against employers – would be an under-performing employee or an employee with a bad attitude. Although the employer will usually want to resolve the problem quickly and in a cost-effective or ‘commercial’ way, these consultancies will generally advise the employer to go through an extremely lengthy and time consuming performance management process, and even then will be reluctant to advise to dismiss. An employer will have no option but to follow the consultancy’s advice, otherwise the consultancy won’t cover the cost of litigation.
Essentially, these HR and Employment Law consultancy services are exploiting employers’ nervousness of litigation and its costs in order to sell their product. The reality is that due to the introduction of the fee regime, there is very little litigation for businesses to worry about. On top of this, most cases settle relatively early on, so a large legal cost occurs only very rarely. If this sounds familiar, or if you’re about to embark on a ‘relationship’ with one of these types of consultancies, please talk to us first, as most of our clients spend less with us than they would do with these consultancies, and crucially they receive the advice and service they want.
10/11A Lupton Fawcett Denison Till Periodical. Issue 5
You need to be aware of exactly what you are signing up for.
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The regulations are designed to protect
consumers who buy goods or services from your
business, and they cover sales in a wide range of
channels, including:
• sales by mail order
• sales over the phone
• online sales
• door-to-door sales
• in-store or over-the-counter sales
In-store sales:
If you sell goods or services in-store, you are
required to include the following information
at the point of sale:
• An accurate description of the goods or services sold,
which clearly outlines the characteristic of each.
• Your contact telephone number and address, and the total
price of the goods.
In addition to this, if goods are to be delivered, you must
meet the agreed delivery date within 30 days of the date of
the contract (unless another delivery period is agreed).
Sales via your website, by phone, through the post
and on the doorstep:
• You must advise your customer, in writing, that they have
a right to cancel the contract for a period of 14 days. If you
don’t inform your customers about their right to cancel,
the cancellation period will automatically be extended to
12 months.
You should note that these cancellation periods don’t
apply if you supply bespoke goods or perishable items.
• If you sell services, your customer has the right to cancel
the contract for those services. In these circumstances,
where you are authorised to commence the provision of
the services during the cancellation period, a customer
must be specifically advised that they will become liable
for your costs if you continue to provide services up to
the date of cancellation.
• You must also advise your customers if they are to be
responsible for paying the cost of returning unwanted
goods. Customers must actively indicate that they are
aware of these costs, or other additional costs, for example
by clicking on a button to acknowledge that the payment
will be due.
Under the regulations, failing to provide the customer with
the correct information is a criminal offence, so it pays to
ensure your retail practices are compliant.
If you’d like to discuss your current
approach and policies with our experts,
please contact Darren Carter on: 0113 280 2087,
or email him at [email protected].
Senior Commercial Solicitor, Darren Carter, asks whether your consumer contracts are up to date, because you could be breaking the law if not. Under the Consumer Contracts (Information, Cancellation and Charges) Regulations 2013, retailers must offer consumers clear information at the point of sale, whether that’s in-store, online, on the doorstep or over the telephone.
The detail behind retail
Darren Carter
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If you had predicted two years ago that by mid
2015 I’d have established a social enterprise that
involved running a café, I would have laughed.
If you’d said that its
two core principles
were to use only ‘waste’
food and to allow
customers to pay what
they wanted, then
I’d have thought you
had lost all sense! In
actual fact, you would
have been right on
both counts.
It was responding to an email in autumn 2013 that led me
to where I am now: part lawyer, part social entrepreneur. The
email came from Adam Smith, a young man determined to reduce
the amount of food that goes to waste. Then in Australia, Adam’s
initial email asked for advice on setting up a social enterprise. He
had – and still has – a desire to “really feed the world”, but he’d
been advised to start in his own backyard, Leeds. So, with advice
from me on the legal structure, Adam then established The Real
Junk Food Project (TRJFP) in December 2013. The first ‘Pay As
You Feel’ café opened in Armley shortly after.
I’ve been advising charities and other third sector
organisations – sometimes called social enterprises – for over 20
years now, acting as trustee of various organisations for many of
those years. I’ve provided my legal know-how and, in return, gained
practical experience of being a trustee – experience that helps
when advising.
Following the creation of the first café, what I hadn’t
expected was quite how quickly the idea would spread, through
West Yorkshire, the UK and even internationally. There are now
over 60 cafes running on these principles, as far afield as Berlin,
Israel and Cape Town. Each café or group of cafes is independent,
but they all sign up to an agreement committing them to
supporting the movement’s key concepts.
My role quickly evolved from being the legal advisor to
dealing with a whole range
of queries. Some issues were
legal, others practical,
as TRJFP began dealing with
national and international
media organisations,
political groups and large
corporates, primarily in the
food sector. Out of this came
the development of a charity
designed to promote and
support education in the field
of food waste – TEJFP Charitable Foundation – which I became
a trustee of.
Lupton Fawcett Denison Till has been very supportive from
the outset, taking a flexible and open approach to accepting my
continued role as a director of the firm on a part-time basis. This
support enabled me to develop The Shipley Food Project CIC
social enterprise and, in December 2014, open Saltaire Canteen:
a café in the World Heritage Site operating on the principles of
TRJFP. The Canteen now opens 6 days a week with 3 full-time
employees. Since opening, we’ve intercepted over 9 tonnes of
food that would otherwise have gone to waste. Our food currently
comes from wholesalers and a local market, and we recently won
the support of a major supermarket who are trialling working
with us. We use this food to serve meals at the Canteen as well as
produce hot meals for a food bank we run, a local job club, and for
a monthly dinner for 70 asylum seekers. Central to what we do
though, is to confound expectations of what ‘waste food’ actually
is. We have two fantastic chefs and many eager volunteers who
together, enable us to produce inventive, varied and flavoursome
food. A typical recent menu included butternut squash soup, lamb
moussaka, mushroom risotto, aloo gobi with spiced parsnip crisps
and chicken Caesar wraps, together with cake and excellent coffee.
There are parts of running a small business that involve
dealing with personnel, administration, tax and property issues
as well as specific matters relating to food supply and media. For
example, I hadn’t anticipated doing a last-minute live interview
on the main Russia Today TV channel! There have also been
issues specific to third sector organisations – like dealing with
volunteers and considering funding streams –which I’ve been able
to adapt and implement in my client work. One particular theme
is the concept of cross-subsidisation. A social enterprise needs to
generate an operating surplus to be viable long term, so parts of
such an organisation should produce funds that can then be used
to support parts not expected to generate income.
There are aspects of the business that are unique. We want
to radically change the levels of food waste and, by doing so,
expect to put ourselves out of business within about five years.
This is not a model I’ll be expecting other clients to adopt!
As for the future, through a joint venture with a Bradford-
based charity we’ve now obtained a licence to occupy a 5000sq
foot warehouse in central Bradford. From here we’ll receive a
greater volume of food from across the district, and using the
cross-subsidisation referred to above, we’ll be able to support a
whole series of similar Pay As You Feel cafes across Bradford. The
majority of these will be in areas of significant urban deprivation.
Involvement with the project has given me a rounder, more
hands-on experience of life as a start-up enterprise where I’ve
had to act effectively in various roles including in-house lawyer.
I really hope this widened perspective will be reflected when
advising others.
It’s been an exciting and surprising 18 months since that
first email but I’m confident that in another 18 months we’ll be
significantly further on in our quest to “really feed the world”.
12/13
Social enterprise never tasted so goodDuncan Milwain is a Lupton Fawcett Denison Till Director and head of our Charities and Social Enterprises Group (CSEG). Here, he gives us a fascinating glimpse into his professional and personal involvement with a groundbreaking social enterprise transforming wasted food into much-needed (and mouthwatering) meals.
I’ve provided my legal know-how and, in return, gained practical experience of being a trustee – experience that helps when advising.
A Lupton Fawcett Denison Till Periodical. Issue 5
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Plotting the right route for company directors
One aspect of the financial difficulty that a company may face, and which can be often overlooked, is the duty of directors in such situations and the legal implications of them taking one particular course of action over another.
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Being in the eye of a financial storm is a difficult and
stressful position for any director to be in. It is therefore
of crucial importance to adopt a rational approach to all
matters and to carefully explore the legal and commercial
implications of taking certain decisions.
The period in question prior to the failure of a
company is often referred to as the “twilight period”.
This is the period of time ending with formal insolvency
proceedings, during which
transactions entered into
by a company, or decisions
made by directors, are
vulnerable to subsequent
attack by an insolvency
practitioner. These
decisions may also give
rise to personal liability
on the part of the directors and/or others involved in the
management of the company.
Under normal circumstances, a director has a
statutory duty to act in a way he considers, in good
faith, would be most likely to promote the success of
the company for the benefit of its members as a whole.
However, it is during the period when a company is
insolvent that this duty is displaced and at that moment,
directors must exercise their powers and discharge their
duties in line with the interests of creditors of the company.
Apart from the statutory penalties of wrongful
trading and fraudulent trading, directors can also be caught
out in numerous ways, including: fraud in anticipation of
winding up transactions, defrauding creditors, falsification
of books and records, destruction of books and records,
falsification of representations to creditors, misfeasance
and breach of fiduciary duties to the company and
creditors as a whole.
Furthermore, during this period of time, incurring further
credit in the company’s name will be subject to substantial
scrutiny, once formal insolvency proceedings have
commenced. If incurring that credit doesn’t worsen or
prejudice the interests of the creditors of the company
as a whole, then generally speaking that may not be
subsequently impeachable. However, careful consideration
needs to be applied to each decision.
It is against this
backdrop that directors
owe it to themselves to
take prompt and sound
advice in relation to all the
legal aspects arising from a
company facing insolvency.
In fact, failure to seek
guidance may easily land
directors in a far worse situation. The director who takes
sound professional advice and minutes his reasons for
taking a particular course of action will find himself in
good stead should his actions be subsequently challenged
post insolvency.
Needless to say, it is not only formally appointed
directors who can be subject to these considerations.
De facto and shadow directors, i.e. those who act as
directors in everything but name are equally liable to
attract the attention of an insolvency practitioner
following a formal insolvency.
Another consideration for directors of insolvent
companies is the potential for disqualification for acts
undertaken in the ‘twilight zone’. If the director’s conduct
has been such that it is in the public interest that he or
she should be disqualified, then the Secretary of State can
make an application to court seeking a disqualification
order. Alternatively, they may invite the director to offer an
undertaking not to act as such for an agreed period of time.
Interestingly, in a move to modernise and strengthen
the directors disqualification regime, there have been
some recent amendments to the Company Directors
Disqualification Act 1986. One of the new, and most
notable, provisions is that the Secretary of State can not
only seek an order from the court banning a director from
acting as such, but also for a compensation order to be
made against the director. A director may also be required
to give an undertaking to the same effect i.e. that a sum of
money is paid for the benefit of a certain creditor or class of
creditors, or to make a general contribution to the assets of
the company.
Rogue directors in the past have seen
disqualification orders as an occupational hazard.
However, now that the compensation provisions are
to be enacted, the Secretary of State has a further
set of teeth to deal with poor conduct on the part
of directors.
The provisions of the Small Business
Enterprise and Employment Act 2015 in relation
to the Company Directors Disqualification Act
are in force and the regulations determining
the operation of compensation orders and
undertakings have been in operation from
1 October 2015.
The new rules only apply to conduct after
this date, so the new regime will take some time
to bite, however we feel that directors of failed
companies will be facing a harsher regime than
hitherto. This regulatory change should certainly
make directors reconsider their conduct
and action.
James Richardson
14/15
Failure to seek guidance may easily land directors in a far worse situation.
A Lupton Fawcett Denison Till Periodical. Issue 5
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Our businessstrategy is simple.We help ourclients succeed.
Business is never as usual at Lupton Fawcett Denison Till – it’s 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’s a culture that’s helped us form solid partnerships with businesses all over the country. We call it The Law of Advantage.
Leeds: 0113 280 2000 Sheffield: 0114 276 6607York: 01904 611411www.lf-dt.com
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