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O n e R e g i o n I O n e P R o f e s s i o n I O n e V o i c e
AP
RIL
201
4
Birmingham
The BIRmInghAm LAw SocIeTy’S memBeRShIP mAgAzIne
foLLow uS on TwITTeRwww.twitter.com/bhamlawsociety
RePoRT on PAge SIX
The LegAL AwARDS 2014
genuinely Listening to clients and membersmortgage fraud update
editor - Judy Bonegal
Assistant editor - elizabeth [email protected]
graphic Designer -Paul Blyth
Stephens & george
Advertising Sales -Alison [email protected]: 01905 727907
Publisher -Pw media & Publishing Ltd2nd floor Richardson house, 21/24 new St, worcester. wR1 2DP.Tel: 01905 723011
The articles published in the Birmingham Bulletin represent the views of the contributor and are not necessarily the official views of the Birmingham Law Society, or of the editorial board. The magazine or members of the editorial board are in no way liable for such opinions. whilst every care has been taken to ensure that the contents of this publication are accurate, we cannot be held responsible for any inaccuracies or late changes. no article, advertisement or graphic, in whole in or print may be reproduced without written permission of the publisher.
conTenTS
President’s Report martin Allsopp
04LAwyeRS wARn on ImPAcT of LegAL chAngeS
LegAL newS 12
IRwIn mITcheLL TRAInIng SemInAR
eVenTS 30
ouR AnnuAL SPecIAL
foRenSIc AccounTIng 16
genuIneLy LISTenIng To cLIenTS AnD memBeRS
feATuRe 23
LegAcy gIVIng – IT’S ALL ReLATIVe
memBeRS’ newS 14
The LATeST cPD couRSeS fRom BLS
LeARnIng & DeVeLoPmenT 24
BLS cRownS LegAL AwARDS wInneRS
LegAL AwARDS 06
www.birminghamlawsociety.co.uk | 3
Birmingham Law Society Legal Awards 2014
04
editorial copy to:Birmingham Law Society, 43 Temple Row, Birmingham, B2 5LSTel: 0121 237 6004 DX 13100 Birmingham
Regulation ReportJayne willetts
27
The LATeST fRom The PRo Bono commITTee
PRo Bono noTIceBoARD 14
As with Past-Presidents I have mixed feelings about vacating
my post! There have been highs and lows in abundance. for
those of you that have asked I guess that my legal high was
attending the opening of the flemish Legal year in Belgium –
what a pleasure and an honour that was. The low has to be
the announcement by mr grayling of the cuts to Legal Aid,
which will savagely affect the profession and the legal rights of
the poor and equally as importantly the lack of young Lawyers
entering into the profession to cover specifically the criminal
and civil fields previously funded by Legal Aid. In the years to
come I fear that there may have been created a huge void of
legal talent in these specific fields and my own personal view is
that the LeTR Review will do little to address quality standards in
the profession that I entered more than 40 years ago.
As I said however there have been highs in abundance. As
President I have been fortunate to meet a number of highly
influential people and I am happy that the candle of the legal
profession that I shall leave behind is well lit and will continue to
burn for many years to come.
I write immediately following another of our legal highs – our own
Legal Awards ceremony held at the Icc. There was a record sell-
out for this event where competition for prizes was as fierce as I
have ever known it to be and I congratulate all of the prize winners
and certainly commiserate those that made the shortlist as there
were a number of eminent “failures” (I jest), many of whom would
have scooped the awards in years gone by. I express again in
writing my thanks to our shortlisting and impartial judges and also
each and every one of BLS’ famous Sponsors, whose feedback
I am pleased to say to date has been excellent. BLS needs its
Sponsors and the quality of the Sponsors and the contributions
made by those respective Sponsors to the success of BLS has
been magnificent and I thank each and every one of you Sponsors
personally for supporting BLS during my Presidential year.
During my year we have held a number of networking events,
the final of which will have been held at the Radisson on 10th
April jointly with the RIcS. It is important to my mind that the
legal profession should engage with other professions within the
city and I do hope that joint engagements with other professions
will follow in the months and years to come.
The Board in particular have been very helpful to me during my
year. They have assisted me in achieving all of the mandates that I
promised when I became your President, including at last the setting
up of a helpline – details of which will be announced in due course.
During the year we have engaged in two “meet your Local
Solicitors” events in Solihull and Sutton coldfield and the third
and final of such events will be my last event as President to be
held in the churchyard of St Phillips on 26th April. In the hope
that the Bulletin reaches you before 26th April I would hope that
as many of you as possible will pop into our marquee, both to
say goodbye and to offer any assistance to members of the
public too terrified to enter into the large and palatial buildings
of our city firms!
I believe that I have accomplished the promises that I made
when I became your President and I am only a little disappointed
that we have finally not concluded issues concerning what was
once our stately home in Temple Street. The Board are working
very hard in dealing with the issues concerning Temple Street
as I write this article and a special sub-committee has been
created by the Board specifically to deal with issues concerning
our former home.
Shortly before my final event on April 23rd I shall be delighted
to host our quarterly Joint IV meeting (the first in my year to be
held in Birmingham) at which we shall be comparing the problems
being felt here in Birmingham and other Joint IV areas. nick fluck,
our national President, has been invited and has agreed to attend
at our Joint IV meeting where the Presidents of the Joint IV and
others will be able to share problems facing the whole of the nation.
I refer particularly of course to Legal Aid (and with considerable
interest as a Property Solicitor) to the suggested privatisation of
hm Land Registry where more than 95% of the profession have
apparently voted against this suggestion. I shall lay my colours to
the mast and say that I am part of the majority and am completely
opposed to the privatisation of the Land Registry which, following
modernisation over the years, in my opinion has served the legal
profession well and confidentially, and generally speaking, with
one or two exceptions (in particular with applications for first
registration of title) efficiently for many decades.
As I said earlier in this Bulletin BLS is going from strength to
strength. your new President, eileen Schofield, is already known
to many of you in the city and across the west midlands area.
eileen will prove to be an excellent President and she will be
well supported by our newly to be appointed Vice-President,
mushtaq Khan. I wish eileen and mushtaq all the very best in
their years and they know that I am on standby to assist should
the need arise.
It remains for me now all Bulletin readers to thank you for your
very kind comments over my Presidential year, which have been
much appreciated. It has been an absolute honour and privilege
to have served as your President. n
PReSIDenT
President’s ReportmARTIn ALLSoPP | PReSIDenT, BIRmInghAm LAw SocIeTy
This is my last opportunity to write to you as your President.
4 | www.birminghamlawsociety.co.uk
www.birminghamlawsociety.co.uk | 5
6 | www.birminghamlawsociety.co.uk
LegAL AwARDS
more than 550 people attended the event, held at the Icc,
to recognise the achievements of the city’s legal sector
over the last year.
The night’s big winner was gateley, which walked away
with the coveted award for Law firm of the year (16+
partners). A special lifetime achievement award was
also presented to Anthony collins of Anthony collins
Solicitors. The event was hosted by ITV central weather
presenter emma Jesson, with sports personality and
olympic medalist Steve cram providing the after dinner
entertainment as guest speaker. n
Birmingham Law Society crowns Legal Awards winnersThe city’s legal and business community donned its best black tie attire for Birmingham Law Society’s 13th annual Legal Awards.
The night’s winners line-up. Bottom row: ekaterina wild (Dwf), Jane Plant (weightmans), hayley Simonds (mills & Reeve), Pam Sanghera (The family firm Solicitors), Victoria garrad (gateley) middle row: Sam harris (weightmans), caroline coates (Dwf), David ho (christine Lee & co), Richard Atkins Qc (St Philips chambers) Top row: Phil Shiner (Public Interest Lawyers), Dean Parnell (Sydney mitchell), martin Allsopp (BLS president), Anthony collins
www.birminghamlawsociety.co.uk | 7
LegAL AwARDS
Al willcox (SRA), Sam Burns, Bernadette griffin, clare coburn, Paul frith (all The university of Law)
Peter cottrell (wesleyan), Tony Rollason (Landmark Information group), Rebecca Blaymires (wesleyan for Lawyers), Tracey Allsopp (Allsopp & co), martin Allsopp (BLS president)
Paul Bleasdale Qc ( no5 chambers), Denise Brosnan, caroline coates, Derek Adamson (all Dwf LLP)
Joanna Seabright (chiltern Railways), claudia Santillo (Santillo consulting), michael Shepherd (BPS Birmingham future), Alan Riley (chiltern Railways)
Stephen gowland (cILex president), Dawn Slow (cILex council member), mary Kaye (Sgh martineau), martin Allsopp (BLS president), clive Read (Sgh martineau), eileen Schofield (BLS vice president), chris owen (BLS chairman)
martin hall (giles Insurance Brokers), Sue hatton (Pickerings Solicitors), chris Price (giles Insurance Brokers), michele Drinkell (giles Insurance Brokers), eamon mooney (Kennedys), Jason mole (giles Insurance Brokers)
Sundeep Bilkhu, Raj Bains, Dean Parnell (all Sydney mitchell)
Andy casey, mark eddows, michael Jackson (all marston group)
LegAL AwARDS
8 | www.birminghamlawsociety.co.uk
his honour Judge william Davis Qc (Recorder of Birmingham), ed Beever, Joe wilson (both St Philips chambers)
Left to Right: chris owen (chairman BLS), martin Allsopp (President BLS), eileen Schofield (Vice President BLS), mushtaq Khan (Deputy Vice President BLS)
Steve Allen (mills & Reeve), chris Loughran (Deloitte), Victoria Lineton (mills & Reeve)
www.birminghamlawsociety.co.uk | 9
10 | www.birminghamlawsociety.co.uk
LegAL AwARDS
Trainee Solicitor of the year Award, ekaterina wild (Dwf) with sponsor Bernardette griffin (The university of Law)
Barrister of the year Award, Richard Atkins Qc (St Philips chambers) with sponsor zoe Daley (Phs DataSolutions)
chartered Legal executive of the year Award, Pam Sanghera (The family firm Solicitors) with sponsor Paul Sparrow (university of wolverhampton)
Paralegal of the year Award, Sam harris (weightmans LLP) with sponsor mark Jarvis (Severn Trent Services)
Assistant / Associate of the year Award, Jane Plant (weightmans LLP) with sponsor martin hall (giles Insurance Brokers)
International Lawyer of the year Award, Phil Shiner (Public Interest Lawyers) with sponsors mandy haque, Selim ozturk (Birmingham Airport / Turkish Airlines)
Partner of the year Award, caroline coates (Dwf) with sponsor Adrian Keeling Qc (no5 chambers)
corporate Social Responsibility / Pro Bono Lawyer of the year Award, hayley Simonds (mills & Reeve LLP) with sponsor Paul hackett (Key forensic Services Ltd)
www.birminghamlawsociety.co.uk | 11
LegAL AwARDS
Law firm of the year Award (sole practitioner - 4 partners), christine Lee & co Solicitors with sponsor Thomas Ableman (mainline from chiltern Railways)
Law firm of the year Award (5 - 15 partners), Sydney mitchell LLP with sponsor Tony Rollason (Landmark Information group)
Law firm of The year Award (16 + partners), gateley LLP with sponsor Joe wilson (St Philips chambers)
Lifetime Achievement Award, Anthony collins with sponsor nathan Darby (Rathbones)
Birmingham Law Society wishes to thank all of our kind sponsors
12 | www.birminghamlawsociety.co.uk
commercial property landlords
in Birmingham need to take
note of the new commercial rent
arrears recovery scheme which
came into force on 6 April 2014.
The remedy of distress allows a
commercial landlord to instruct a bailiff
to enter a tenant’s premises to seize,
impound and sell goods belonging
to the tenant of an equivalent
value to any rent arrears owed.
Although distress has been the
subject of much criticism over the
years, it is regarded by landlords
as a highly effective process for the
recovery of commercial rent arrears.
however, the remedy of distress
will be abolished in April 2014
and replaced with a new statutory
process, namely commercial Rent
Arrears Recovery (cRAR). Landlords
who have tenants in rent arrears
are advised to act quickly before
these changes and, if in doubt, to
take legal advice on their options.
“These changes have been in the
pipeline for a number of years and
will no doubt be welcomed by
tenants”, said litigation solicitor,
Susan ford of george green LLP.
“There is little doubt that the new
scheme will represent the loss
of a significant weapon from a
landlord’s armoury when dealing
with defaulting tenants”, she said.
one of the key criticisms of the
cRAR scheme is the fact that the
obligation upon the landlord to serve
7 clear days’ notice before entering
the tenant’s premises would diminish
the effectiveness of the remedy, as
the tenant, having been given notice
of the landlord’s intentions, will
remove any goods of value from the
premises during the notice period.
wolverhampton based property
litigation partner, James coles of
george green LLP, carried out a
survey regarding the key changes
of the new scheme with 50 Black
country landlords, all of whom
believe that the changes represent
a real erosion of landlords’ powers
when dealing with defaulting tenants.
James commented, “it is likely
that the new scheme will result in
landlords more regularly deploying
alternative remedies, such as
forfeiture, tenant insolvencies
or pursuing Court proceedings.
In addition, landlords may be
forced to take protective steps
at the outset, such as taking
larger rent deposits and more
frequently obtaining guarantees”.
James coles concludes, “the key
message for landlords is to remain
diligent, to watch for early warning
signs of tenant financial difficulty
and to take legal advice at an early
stage, in order that all of the relevant
options can be explored”. n
LAwyeRS wARn on ImPAcT of LegAL chAngeS
chAIRmAn of The LegAL SeRVIceS BoARD
The Legal Services Board (LSB)
welcomes the appointment of
Sir michael Pitt as the chairman
designate of the LSB. he will
succeed David edmonds cBe
whose second term as chairman
comes to an end on 30 April 2014.
Sir michael, whose appointment
has been announced today by the
Lord chancellor in consultation
with the Lord chief Justice, will
become chairman on 1 may 2014.
Lord chancellor, chris grayling
said: “I am pleased to announce
Sir Michael Pitt as the new Chair
of the Legal Services Board,
LegAL newS
and congratulate him on his
appointment. He brings with him
experience which will be invaluable
to the LSB as it moves forward
in its important work overseeing
the regulation of legal services
in England and Wales. I wish
him good luck in his new role.”
current chairman of the Legal
Services Board, David edmonds
said: “I am delighted to welcome
Michael as my successor as
Chairman of the Legal Services
Board. He will take over at
a exciting, interesting and
challenging time for legal services
in England and Wales. He will
lead an organisation of committed
proponents of competition,
market liberalisation, and putting
the consumer interest at the heart
of regulation. I wish him well.”
Incoming chair of the Legal
Services Board, Sir michael
Pitt said: “It is both an honour
and a privilege to have been
nominated as the new Chairman
of the Legal Services Board. I
know that in succeeding David
Edmonds I am succeeding
an outstanding Chairman.
I also know that I will take over at
a key point in the development of
the legal services market and its
regulation. I look forward to the
challenge of continuing to drive
forward the positive changes for
consumers and new opportunities
for providers which the Act
has initiated in legal services
in England and Wales.” n
The Solicitors Regulation
Authority (SRA) has signed up
to play its part in the second phase
of a government scheme that
should see a legal apprenticeships
programme developed by law
firms which can for the first time
lead to qualification as a solicitor.
on Tuesday 4th march the
Department for Business, Skills
and Innovation launched Phase 2
of its Trailblazers Scheme as part
of national Apprenticeship week
celebrations. The Trailblazers
scheme is aimed at improving
apprenticeships by using standards
designed by the industry itself.
Law is one of the business areas
in Phase 2, and the SRA will be
working alongside organisations like
Addleshaw goddard, eversheds,
Irwin mitchell, Pinsent masons
and wragge & co, together with
BPP, cILex and the university of
Law to develop the standards for
Apprentice Trainee Solicitor and
Apprentice Trainee Lawyer. Solicitors
who qualify through this route will
have to demonstrate to the SRA that
they meet the same standards as
anyone who has come through more
traditional paths to qualification.
Julie Brannan, SRA Director of
education and Training, said:
“We are delighted to be a part of
the Trailblazers higher level legal
apprenticeships scheme. It will
provide a new way for school-
leavers to benefit from education
and training, to demonstrate
they meet our high standards
and to qualify as a solicitor.”
The Trailblazers Scheme was
launched in october 2013
following an independent
review of apprenticeships by
Doug Richards and a further
consultation exercise. further
information on the programme
is available at https://www.gov.
uk/government/consultations/
future-of-apprenticeships-in-
england-richard-review-next-steps
matthew hancock mP, minister
for Skills and enterprise, said:
SRA SIgnS uP foR TRAILBLAzeRS APPRenTIceShIP Scheme
www.birminghamlawsociety.co.uk | 13
LegAL newS
“National Apprenticeship
Week is designed to celebrate
apprenticeships and the positive
impact they have on individuals,
businesses and the wider economy.
“We want to see apprenticeships
become the new norm for all
ambitious young people and
employers who are dedicated
to growing their own talent and
increasing the skills base of
the nation. I would like to thank
everyone who has been involved in
Trailblazer for their commitment to
apprenticeships and traineeships.”
further information on national
Apprenticeship week is available at
https://www.gov.uk/government/
news/the-start-of-a-great-national-
apprenticeship-week-2014 n
occuPATIonAL hAzARDS: PoweRfuL men ARe much moRe LIKeLy To Be unfAIThfuL To TheIR SPouSeS
Victoria milan, the dating site
for married or attached people
who are looking for an affair, has
just released the results of a survey
of 2,500 of its members. The
subject of the survey? how power
and cheating are related. every
year politicians, businessmen,
and royals are caught cheating;
does this mean that power and
infidelity go hand in hand?
The majority of the men who
participated in the survey—81%—
think that having a powerful
position makes men more likely
to cheat due to the inherent
stress that comes with powerful
positions and the lack of quality
time available to spend with the
family. In contrast, only 26% of
cheating women who participated
in the survey think that power can
influence a woman’s faithfulness
directly; women instead thought
that typically only power in
conjunction with other factors
influenced women to cheat.
The majority of women agreed
that power attracts them, however.
78% of the female respondents
of the survey indicated that they
would like to have an affair with a
powerful man. on the other hand,
only 42% of male respondents
felt the same way, answering
that they would like to have an
affair with a powerful woman.
Sigurd Vedal, ceo and founder of
Victoria milan, states: “Women has
always demonstrated more control
over stressful situations in day to
day life than men have; whether you
call it multi-tasking or something
else, they are more clever and
open-minded, and this leads to
good stress management. Men,
on the other hand, are more likely
to cave to pressure and this leads
to more infidelity and escapism.”
Surveyed men and women also
chose the top five powerful
career choices most likely to
cheat: 42% chose politicians,
followed by 21% picking
businessmen, 19% brokers,
10% bankers, and 8% judges
as most likely to be unfaithful.
“Regarding the top five positions,
brokers jumped into the top three
thanks to Leonardo DiCaprio and
The Wolf of Wall Street, and it’s
most likely that politicians are
still number one after so many
political scandals over the years—
most recently that of Hollande,
President of France.” comments
extramarital dating site founder.
Victoria milan is one of the world’s
leading discreet social networks
for men and women seeking a
secret affair. The service was
launched by happily married
media executive mr. Sigurd Vedal
in 2010, and has today become
one of the world’s fastest-growing
and leading social networks for
discreet extramarital affairs. n
Birmingham Law Society
International committee
supported by uKTI presented the
first in a series of seminars looking
at topics within international
fraud for 2014. The seminar
targeted commercial businesses
already working internationally,
or with aspirations to do so.
Satinder hunjan Qc chaired the
event, which took place on friday
14th march and attracted over
100 delegates from a wide variety
of law firms, businesses and
organisations. Speakers included
mark Surguy from eversheds’
fraud & Investigations group, and
no5 speakers michael Duck Qc,
Paul marshall and Alexander Stein.
The event was sponsored
by wesleyan for Lawyers,
expert Investigations and
midlands fraud forum.
chairman of Birmingham Law
Society’s International committee
Tony mcDaid commented:
“Birmingham continues to
develop its profile and presence
internationally, the city and
surrounding regions boasts
some of the countries leading
businesses, international Law
firms and barristers chambers.
The Birmingham Law Society
and its International Law
Committee, assisted by UKTI
have drawn upon an array of
talent and experience from the
regions legal experts to produce
an insightful conference on
a pivotal topic that will assist
Birmingham in its continued
international development.” n
BIRmInghAm LAw SocIeTy InTeRnATIonAL commITTe
www.birminghamlawsociety.co.uk | 15
16 | www.birminghamlawsociety.co.uk
one of the key impacts of the Jackson reforms has been
the effect of the electronic Data Questionnaire (eDQ) and
Disclosure Report, requiring consideration of all aspects of
electronically Stored Information (eSI). The key risk here is the
potentially adverse impact that incorrect assumptions (with
regards to the costs and time elements of the e-disclosure
process) may have on the recoverability of costs. This has
become increasingly more challenging as today’s data
landscape involves much more than the collection and review
of unstructured data (i.e. emails, word, spreadsheets, pdf files
etc.). Structured data (i.e. databases such as trading systems,
accounts, cRm), smartphones, audio and instant messaging
are all increasingly common ‘data areas’ that require highly
specialised human and technological resources
In completing the eDQ, most lawyers are moving into a highly
complex technological area where most will be dependent
on an e-disclosure specialist for the advice upon which costs
will be calculated, managed and reported. consequently,
the scoping and costing of data sources, processing,
filtering, review and production must happen much earlier
in the litigation process than ever before. new protocols will
undoubtedly assist in this area, but only to a point.
for the client and their legal advisors (both internal and
external), this has meant much greater focus on eSI i.e.
what potentially relevant data types are stored, where, why,
and how to best secure, retrieve, review and produce them.
Legal hold, Information governance, Records management
and e-disclosure are beginning to get onto the Board’s
agenda with a view to helping reduce legal spend and, in
regulated industries, reduce and negate damaging fines and
reputational risk.
Review costs have remained the most expensive component
of the e-disclosure process and clients and law firms law
firms have tried to decrease the review costs by using Legal
Process outsourcing (LPo) companies to conduct the first
(and sometimes second) tier document review. The next step
in the drive for time and cost reduction is the application of
intelligent software solutions such as computer Assisted
Review (cAR) to assist the lawyer with the review tasks
currently performed by paralegals or more junior lawyers.
cAR is just the next generation of technology to assist the
lawyer achieve better quality work product in less time and
with a lower cost. many of the arguments against cAR
reflect a mistrust of the technology being unable to do what
a human can; however, the same argument was also once
made against the use of any form of database to support
document review.
The introduction of cAR to assist law firms and their clients
in helping prioritise and conduct document review more
efficiently is changing the legal business model. It has in the
main been viewed with caution by the larger law firms whilst
mid-size and specialist firms have adopted it more readily.
when applied properly, cAR does substantially reduce the
time and cost of the review exercise, and as the intelligence in
the software will keep learning, the work product is likely to be
more consistent and of higher quality. These are benefits that
are too substantive for a client to ignore and cAR technologies
are increasingly being taken in-house to reduce the time and
cost of the e-disclosure process.
many organisations are beginning to consider how to best
implement a strategic approach to e-disclosure including:
• whether they should take technology in-house,
outsource (and if so to whom)
• Apply cAR in their legal processes
• Leverage LPo resources
• Address wider data sources such as Audio,
Databases and Smartphones
we are seeing corporate clients adopt innovative approaches
and new technologies to achieve more efficient, cost effective
methods of managing, retrieving and producing data with
particular focus on the costs and time of the legal and review
phases.
ultimately price will always be a factor in any business
decision, and has often been the key factor in the selection of
e-disclosure suppliers. Post Jackson, price must be balanced
against the risk of inaccurate / incomplete scoping and its
ramifications on the time, resources, cost, quality of work
product and ultimately the ability to recover costs. n
The new regime for budgeting of litigation costs gives the potential for costs to be wholly or partly irrecoverable if not properly budgeted and approved. Therefore it is vital to ensure that the e-disclosure costs submitted by parties to litigation are duly considered and submitted in accordance with their obligations under the civil Procedure Rules.
RIchARD coVeLL | DeLoITTe LLP | T: 0161 455 6098 | [email protected]
Jackson Bytes
foRenSIc AccounTIng
www.birminghamlawsociety.co.uk | 17
Jackson Bytes
most of us would seek a reimbursement, replacement or
some other form of compensation if we weren’t happy with
our purchase.
The corporate world works in the same way in the form of
value adjustments, albeit with a few extra complexities thrown
into the mix.
And, as the economic recovery picks up speed and
ambitious growth plans come to the fore, post transaction
value adjustments – the corporate form of transactional
compensation - are likely to become more frequent.
Typically value adjustments arise either via the completion
or earn out accounts process, or under the warranty period
noted in the Sale and Purchase Agreement.
Potential claims arise from a Buyer’s position where they could
seek a value adjustment from the total purchase consideration
paid, or indeed additional consideration payable by way of
deferred consideration to the Sellers.
A maximum Buyer value adjustment often comes from
misrepresentation or fraud claims against the Sellers; while
a minimum value adjustment usually arises from breach of
specific warranties provided by the Sellers.
I have seen many claims won or lost from both a claimant
and defendant position on the strength of the evidence, which
often involves issues of disclosure and who said what to
whom and when. As a forensic expert, my advice is always
to involve professionals at an early stage to address issues of
liability and evidence before proceeding to quantum.
How mucH can I get back?
This is often the Buyer’s question. The answer broadly depends
on whether the liability evidence dictates a misrepresentation
or fraud claim, or a specific breach of warranty.
normally when determining quantum the amount claimed is
calculated as the difference between the value of the company
as warranted (i.e. what it was worth on the basis of the
warranted facts) and its actual value at the date of completion
(i.e. what it was worth on the basis of the true facts). however,
if misrepresentation or fraud is proven, quantum increases to
include all consequential losses.
A Buyer will consider the loss to be the value of the breach
itself, or a multiple of the value of the breach if the price
agreed upon was based on a multiple of profits. however,
the quantifications are not this simplistic in reality and what
is really required is an assessment of the valuation of the
company based on the true facts being known at the time the
deal was transacted which is never straightforward.
If, from a Sellers position, it can be shown that the Buyer would
have paid a similar price even if the full facts were known, e.g.
if it were a special purchaser who had reasons for acquiring
the company at a premium, it could be argued that no loss had
been suffered by the breach.
common cHallenges on quantum
over the last few years, claims have often related to the
‘commonly’ seen Sellers warranty that ‘since the date
of the last audited accounts, there has been no material
deterioration in the turnover or trading position or prospects
of the company’.
In assessing the quantum of loss, it is important to determine
whether the decline in performance after completion was
indicative of a decline in maintainable profit or just a temporary
drop. In addition, if sales and profits have been recognised in
earlier periods, it should be investigated as to whether this
has been occurring over a number of years. If this is the case,
although the Buyer may have a claim for misrepresentation of
figures, the annual maintainable profitability and value of the
company may not be affected significantly.
Therefore, although liability may be proven, quantum of loss
may be negligible. In such cases, early assessment of the
claim is important so as not to waste time and professional
fees in pursuing a claim with no monetary benefit to the
claimant.
are tHese claIms goIng to Increase?
The price paid on a transaction is often the Buyer’s perception
of its value after any commercial bargaining, compared to the
Seller’s view of what they perceive the value to be.
In addition to the value, consideration is often adjusted for
working capital, net debt and an earn out based on earnings
after completion. This focuses the Buyer’s mind on asking,
‘have I got what I have paid for?’. The inclusion of what is
said on the ‘package’ is often written into Seller’s disclosures
and warranties, the accurate completion of which is often
a commercial bargaining point. As corporate mergers and
acquisitions activity increases, commercial bargaining is
also expected to increase, which in my view will result in an
increase in these value adjustment claims. n
what happens when you purchase an item and you find it’s not exactly what is said on the packaging?
SAT PLAhA | foRenSIc SeRVIceS PARTneR | BDo LLP | T: 0121 352 6210 | [email protected]
Transactions That Go Wrong
foRenSIc AccounTIng
18 | www.birminghamlawsociety.co.uk
20 | www.birminghamlawsociety.co.uk
In a situation where the parties fail to reach agreement during
the negotiation period over the value of assets and liabilities in
the completion accounts, or the quantum of the earn-out profits,
an experienced, independent accountant is the natural choice to
determine the items in dispute.
There are a number of benefits from using an independent
accounting expert to issue a determination:
• An expert determination is a confidential process and the
result is private between the parties. This is in contrast to
the publicity that typically accompanies litigation and court
hearings.
• where the commercial dispute relates to a series of
accounting related issues, a more efficient and informed
process can often result from the matter being determined
by an accounting specialist rather than by a court.
• In general, the time taken to obtain a decision from an
independent expert is much quicker than litigation. The
independent accounting expert will also involve the parties in
establishing a timetable to allow the determination to be issued.
• An expert determination is a lot less costly than litigation.
Although the parties may still decide to appoint lawyers and
expert advisers, the time factor should mean that the parties’
costs will be less.
• There can be flexibility in the precise specification of
the determination framework from case to case. Typically,
following appointment of the independent accounting
expert, there will be a dialogue between him or her and the
parties as to the process to be followed.
• The expert’s decision, save for manifest error, is final and
binding on the parties, giving them absolute certainty and
the chance to move forward from it.
however, there are also a number of potential pitfalls that need to
be avoided:
• The independent accounting expert must have the
experience required to deal with the process and the issues
in dispute, as the whole point is to be able to reach an expert
determination.
• Both parties need to agree to the terms of the independent
accounting expert’s engagement before the determination
can begin. This can often represent the first area of difficulty
as the reason that the independent accounting expert is
being used is because the parties have been unable to settle
the dispute between them by negotiation.
• The independent accounting expert is unable to force the
parties to sign up to a process that one or both are unhappy
with. In the most extreme cases, one side may disagree with
the most reasonable suggestions purely because the other
side has agreed to them.
• Alternatively, the parties may be unable to agree exactly
what is in dispute and, therefore, the scope of the
independent accounting expert’s work. for example, there
may be questions about whether items have been validly
disputed in accordance with the process set out in the sale
and purchase agreement.
The ability to navigate through the potential pitfalls can depend
upon the skill of the independent accounting expert to manoeuvre
the parties to a position of agreement on process and scope. In
order to do so, the independent accounting expert must gain the
trust of the parties. The parties must trust that he or she is fair,
even-handed and open in relation to the process.
In conclusion, to maximise the benefits of an expert determination
process it is crucial that a suitable qualified and experienced
independent accountant is appointed. failure to do so can lead
not only to a flawed decision, but to significant additional costs
being incurred as a result of inexperience in dealing with the other
potential pitfalls of the determination process.
KPmg forensic professionals have significant and wide range
of experience in preparing and reviewing completion accounts,
assisting parties in completion accounts dispute and expert
determination processes. we can therefore advise on all aspects
of the completion accounts process and assist our clients in
dealing with the issues that arise.
KPmg forensic professionals have also been appointed as the
independent expert accountant to conduct an expert determination
on numerous occasions. our team is represented on the Institute
of chartered Accountants in england and wales’ (IcAew) list of
independent expert accountants. n
It is common for business sale and purchase agreements to provide for dispute resolution through the use of an independent accounting expert.
John RouSe | DIRecToR | KPmg LLP | T: 0115 935 3419 | [email protected]
Expert determinations – the benefits and pitfalls
foRenSIc AccounTIng
foRenSIc AccounTIng
22 | www.birminghamlawsociety.co.uk
The statistics - gDP and so forth- paint an increasingly rosy picture
but do not tell the whole story. we all recognise the importance of
confidence, that essential yet often fragile component of any recovery.
on this more subjective benchmark, things also look good. every
quarter, we at grant Thornton together with the Institute of chartered
Accountants in england and wales produce the Business confidence
monitor report. our last update, in Q1 2014, showed a record high for
the confidence Index.
As a forensic accountant, I just can’t stop myself analysing and measuring.
I find it interesting to see how our work changes at different stages of the
economic cycle. I’ll illustrate this by referring to business valuations: an
important area for accountants and for many of you lawyers too.
During recent difficult times, we saw a higher level of disputes following
corporate acquisitions. we often quantify losses in breach of warranty
claims, as the difference between the value as warranted and the true
value. with an improvement in the economy, we anticipate a greater
need to value businesses for transactional purposes and less appetite
to look back at what went wrong.
Another impact is on business valuations that we do in divorces. In
our recent matrimonial Survey, three quarters of family lawyers said
that couples have delayed divorce proceedings to see out the difficult
economic times. Perhaps we will now start to see more divorces,
“conscious un-couplings” or otherwise!
we are undertaking valuations as our clients incentivise employees
under the “employee shareholder” status that was implemented
in September 2013. Such employees give up certain statutory
employment rights to achieve capital gains tax exemption on the
future sale of shares. This becomes more attractive as confidence
improves.
Locally, we are increasingly speaking to businesses about the impact
of hS2, including compensation and relocation.
So, times change and the key is to capture the zeitgeist and adapt our
services to meet the changing needs of our clients. As true now as it
ever was, for accountants and lawyers alike. n
The economy is in better shape.
STeVe ThomPSon | DIRecToR | gRAnT ThoRnTon
Business valuations - time for a change?
www.birminghamlawsociety.co.uk | 23
If the answer to this question is ‘not really’ then it’s
probably very unlikely that you have considered the
benefits of a client engagement programme for your firm
– in other words, putting systems in place to collate the
views of people who matter most and validating that you
deliver what you promise.
Dave Ruston, Associate Director at Research by Design
observes “we find that practioners in professional
services often excel at engaging clients in technical
dialogue about a matter. They’re not so great at taking
a step back to really listen, analyse the vocabulary of
clients and understand what it might mean for their
business offer. That’s what differentiates a great brand
from just a good brand”.
wHere does clIent engagement
fIt Into your strategy?
In an increasingly ‘data heavy’ business world, many
organisations now realise that they don’t have systems in
place to extract the necessary insights from this information.
To be truly effective, ‘listening campaigns’ need to be built
into the core of organisational planning. occasionally, these
systems will also throw up unforeseen issues that need
emergency response (e.g. extremely dissatisfied clients at
risk of loss). As work published by the Legal ombudsman
highlighted last year, there is a strong business case for
improving complaint handling within firms.
Lindsey nadin, Research manager, says “It’s no
longer acceptable to consider client engagement as a
secondary thought. Brands that don’t have this built into
the DNA of their core strategies will not keep pace with
changes to the marketplace”.
A significant component of this model is communicating
that you have listened and spelt out what has been
done in response. The most successful brands in any
sector can clearly demonstrate ‘you Said, we Did’.
we are working with leading firms in Birmingham who
recognise this and are setting the pace with their client
engagement strategies.
bIrmIngHam law socIety are lIstenIng
Birmingham Law Society are also leading by example -
their members are effectively their clients - by launching
their inaugural membership survey in December
2013, delivered in close partnership with Research by
Design, also based in Birmingham. over 300 members
participated from all across the legal profession and
region.
The results of the listening exercise have given BLS
invaluable insights into what makes members tick -
what they really value about their membership and
what additional elements, if any, they would like to see
included in their package.
overall, the Society is perceived by members to be
traditional, very member-focussed, helpful and feels
relevant for members. The benefits package is felt to be
appropriate although there is an appetite for even more
customised cPD and networking events.
what is clear is that members often have very different
reasons for joining the Society initially. Those in firms
outside Birmingham city centre join to benefit more from
support and advice services, whereas those based in the
city are more likely to have joined for career progression
opportunities.
engagement tools also help us to test new ideas and
propositions, checking the interest levels of prospective
new audiences. for example, we also gained feedback
on a new initiative, the proposed members’ helpline,
which suggests that engaged members feel that they,
and their peers, would benefit from. Those who currently
say they would find a members’ helpline most useful
are likely to be sole practitioners, individual members,
younger members and those working in the city centre.
How can I fInd out more?
If you would like to learn more about our approach to
enabling client engagement in professional services
then please visit our website www.researchbydesign.
co.uk or call David Ruston or Lindsey nadin on 0121
643 9090. In conjunction with BLS, we are also planning
a seminar to discuss these issues later in the spring, so
watch this space! n
have you ever wondered what your clients say about you after a meeting? we mean, what they really say?
DAVID RuSTon | ReSeARch By DeSIgn
Genuinely listening to clients and members
The most successful brands in any sector can clearly demonstrate ‘You Said, We Did’
feATuRe
course List April - June 2014
course highlights
full details of all our seminars are advertised on our website and regular emailers are sent out to our members. we are currently in the process of confirming further seminars, debates and conferences; if you have any specific training
requirements or would like to suggest future topics, please do email me at [email protected]
Please see our website for further seminars: www.birminghamlawsociety.co.ukTelephone: Fiona Newby, Learning and Development Co-ordinator on 0121 230 1709 email: [email protected]
Management Course Stage One (MC1) April Session
Date: Tuesday 8 April 2014
Time: 9:15 registration and breakfast, 9:30 - 17:30 workshop,
*lunch is provided
Venue: Shoosmiths, 2 colmore Square,
38 Queensway, Birmingham, B4 6BJ
CPD: 7 hours cPD Accredited by the SRA
Fees: £170 + VAT for members, £210 + VAT for non-members
Speaker: Doug Robinson
Why MC1?
It’s compulsory for all solicitors, to be completed within
the first three training years post qualification.
Why this MC1?
you will get a clear understanding of:
• the challenges facing law firms in the current economic climate;
• law firm finances, in a way that will help you understand
how your actions affect profit and cash flow;
• how you can change your behaviour to contribute more
effectively to your firm’s performance and financial results;
• how you can help your firm to develop a competitive advantage; and
• the key changes affecting law firm regulation and the
code of conduct effective 06 october 2011
The course features a realistic law firm simulation
allowing participants to see exactly how to
apply learning back into the workplace.
Course Content
The day is split into three sections covering
core elements of the SRA’s syllabus:
Managing Finance
• Business planning
• Key Performance indicators
• funding and solvency
• understanding profit
• controlling costs
• working capital control and cashflow
Managing Clients
• understanding what motivates clients
• Delivering what clients want in the way they want it
• The retainer and solicitors’ professional obligations
• organising client relationships effectively
Managing People
• Delegation and managing other people’s work
• effective teamwork and decision-making processes
• how to get the most from a meeting
• motivation and performance appraisal
using a model firm, participants will assess the impact of
management decisions, develop their own approach to good
management, and share ideas on current best practice. The
course will also review the SRA handbook and changes to the
Solicitors’ code of conduct effective 06 october 2011.
Date Time cPD hrs course Title Area Speakers fees £ members non members
08-Apr-14 09.15 - 17:30 7 Management Course Stage One (MC1) Management Doug Robinson £170 + VAT £210 + VAT April Session
09-Apr-14 14:45 - 17:00 2 Private Client Update 2014 Private Client Matthew Hansell £55 + VAT £70 +VAT John Grundy
09-Apr-14 17:30 - 19.30 N/A An opportunity to meet ACAS Conciliators Employment Malcolm Boswell, Free Free Regional Director of ACAS
08-May-14 17:30 - 19.30 1.5 Lawful Investigations in the Legal Sector Regulatory David Kearns Free Free
20-May-14 13:00 - 16.30 3 Tackling Fraud and Cybercrime - Regulatory Allison Mathews £99 + VAT £115 +VAT Protect your Practice
10-Jun-14 13:00 - 17:00 3 Solicitors’ Accounts Rules Update - Management Linda Lambert £99 + VAT £120 + VAT Half day session Support Staff: £55 + VAT Support Staff: £75 + VAT
Learning & DevelopmentProfessional Services
BIRMINGHAM LAW SOCIETY
24 | www.birminghamlawsociety.co.uk
Key Outcomes
As a result of attending the course, participants will be able to:
• appreciate the importance of planning;
• understand financial data and key performance indicators;
• act confidently on information contained in financial reports;
• recognise what impresses clients and eradicate what upsets them;
• organise their relationships with clients to deliver great service;
• delegate more effectively; and
• manage meetings and make decisions which
lead to improved performance.
Speaker
The speaker Doug Robinson is a director of Kinch Robinson Limited,
the accredited course provider. he is a chartered Accountant who
has worked exclusively in the field of professional development
since 2003. Doug teaches management course Stage 1 and 2,
PSc financial and Business Skills and a range of other financial
and management courses aimed specifically at lawyers in
practice. his clients include top 50 uK law firms, regional firms
and local Law Societies. he is a consultant to the college of Law,
regularly delivering training on public and in-house courses.
If this is a compulsory course for you, please ensure you attend for
the full day to comply with SRA requirements. Participants cannot
claim for attending the course if they arrive late or leave early. If the
SRA ask whether a participant has attended the course, notes of
arrival and departure times will be passed on to them; so please
ensure that you arrive at the venue on time. If you arrive late or
have to leave early you may be required to repeat the course.
Private client update 2014
Private Client Update 2014
Date: wednesday 9 April 2014
Time: 14:45 registration & refreshments,
seminar from 15:00 to 17:00
Venue: mills & Reeve LLP, 78 - 84 colmore Row,
Birmingham, B3 2AB
CPD: 2 hours Accredited by the SRA
Fee: £55 + VAT for members, £70 + VAT for non-members
Why attend?
This seminar will update busy practitioners on private client
law and tax and will cover some of the latest ideas on estate
planning, wills, probate, wealth protection and recent case law.
This seminar will cover:
• Top Inheritance Tax Tips and Ideas
• wills – using will Trusts Latest contentious Trust and Probate cases
• Lasting Powers of Attorney update
• Law Society wills and Inheritance Quality Scheme and the
STeP code for will Preparation
• Simplification of the Taxation of Trusts
• other topical private client updates
Speakers
Matthew Hansell
matthew is head of Private wealth at mills & Reeve LLP, solicitors.
matthew is a member of STeP and Sfe and is a member of
the capital Taxes committee of the Law Society. he frequently
writes and lectures on private client issues and acts for a wide
range of entrepreneurs and owner managers of businesses
advising them on inheritance tax planning, wills and trusts.
John Grundy
John is a Private client Partner at mills & Reeve LLP, solicitors.
John is the current chairman of the STeP Birmingham Branch
and he sits on the Programme and Technical committee. John’s
work includes estate planning, drafting and advising on wills,
Trusts, Powers of Attorney, Administering estates and Trusts and
protecting assets for the benefit of the next generation. he acts
for both uK based and international clients. John is recognised in
chambers 2013 as the “Rising Star” in the Birmingham region.
An Opportunity to meet ACAS Conciliators
Date: wednesday 9 April 2014
Time: 17.30 for Drinks and networking 18:15 Presentation
Venue: no5 chambers, fountain court, Steelhouse Lane,
Birmingham, B4 6DR.
Fees: free event - Booking Required
CPD: n/A
Speaker: malcolm Boswell, Regional Director of AcAS.
An opportunity to meet AcAS concilliators
The employment Tribunals (early conciliation: exemptions and
Rules of Procedure) Regulations 2014 come in to force on the 6th
April 2014. under the new regime, on or after the 6th may 2014
potential claims to the employment Tribunal need to be lodged
with AcAS who will try to conciliate within a fixed period of time.
If unsuccessful, they will issue a certificate enabling the
claim to proceed to the employment Tribunal. The changes
represent further significant reform of the eT system
and are part of the package of measures included within
the enterprise and regulatory Reform Act 2013.
BLS have agreed with AcAS that it would be beneficial for
AcAS conciliators to meet with members of BLS to get to
know each other and discuss the changes at 5.30 on 9 April
for drinks and nibbles at no5 chambers. There will be a brief
presentation from the Regional Director of AcAS, malcolm
Boswell at 6.15pm. This is a really good opportunity for lawyers
who advise their clients on Tribunal cases to get to know the
conciliation staff and to establish what AcAS will be expecting
from advisors and what advisors will be expecting from them.
www.birminghamlawsociety.co.uk | 25
26 | www.birminghamlawsociety.co.uk
Lawful Investigations in the Legal Sector
Date: Thursday 8 may 2014
Time: 17:30 registration 18:00 - 19:30 Seminar
Venue: eversheds LLP, 115 colmore Row, Birmingham, B3 3AL
CPD: 1.5 hours cPD Accredited by the SRA
Fees: free
Speaker: David Kearns
expert Investigations is a nationwide commercial Investigations company
that has worked within the legal industry for 13.5 years, we understand
how important it is to inform and educate the legal profession on the lawful
investagative approaches that can be taken, especially due to the recent
media coverage on ‘rouge investigating’,when dealing with issues such
as theft, fraud, false absenteeism, fraudulent claims and employment
issues (breaches of contract,restrictive convernance, false absenteeisms).
David Kearns, managing Director of expert Investigations is a former
Police field Intelligence Detective, and prides the company on
delivering high quality and lawful investigations. David delivers the
presentations - so you can be confident in the knowledge you will
be getting first hand, experienced, lawful and reliable information.
Why attend?
our presentations are always very well received due to their
interactive nature plus delegates will examine real life case studies
and video footage plus see the equipment we use to carry out
covert surveillance and investigations. The presentation will aim
to cover: Some legislation; Legal investigative methods - how
hacking is noT lawful; The alternative investigation routes to a
successful outcome; how to manage your clients’ expectations
as they search for a positive outcome to their issue.
Tackling Fraud and Cybercrime – protect your practice
Date: Tuesday 20 may 2014
Time: 13:00 registration and lunch 13:30 - 16:30 seminar
Venue: yorkshire Bank, Temple Point, 1 Temple Row
Birmingham, B2 5yB
CPD: 3 hours cPD Accredited by the SRA
Fees: member: £99 + VAT, non-member: £115 + VAT
Speaker: Alison matthews
Legal practices are at risk of fraud, not only from clients/third parties but
from employees and from suppliers (do you vet your employees? who
checks the invoices are correct?) Are you familiar with the threats and do
you have effective systems in place to protect your practice and your staff?
what about your clients? Is their data at risk of being lost because
your computers have been hacked? gchQ has referred to legal
practices as representing the “soft underbelly” through which hackers
can try to access the systems of the client/target organisation. Their
director reports that the uK is experiencing ‘industrial espionage on an
industrial scale’. David willetts, the universities and Science minister
has said that cyber attacks are a threat to all businesses today.
Do your staff know how to avoid being “scammed”? Do they know
what “spearphishing” is? Are you cyber Streetwise and are you familiar
with the 10 steps to cyber Security? If you are using the cloud, have
you considered the risks, outsourcing issues and the SRA’s guidance?
This seminar builds on existing AmL and data protection
knowledge to highlight fraud and cyber crime risks for legal
practices and provides practical suggestions as to how to
protect you, your employees, your clients and the practice.
Alison matthews is the author of the AmL Toolkit and the Data Protection
Toolkit published by the Law Society. She chaired the Law Society’s
money Laundering Taskforce until August 2012, having been a founder
member. Before becoming the mLRo and Data Protection compliance
officer for Irwin mitchell LLP, she was the Investment Business executive
in Professional ethics at the Law Society/SRA. She now has her own
training and compliance consultancy, Alison matthews consulting Ltd.
She lectures for all the uK Law Societies as well as the Isle of man Law
Society and cLT and is a regular contributor to various legal publications.
Solicitors’ Accounts Rules Update - Half day session
Date: Tuesday 10 June 2014
Time: 13:00 registration & lunch, 14:00 - 17:00 seminar
Venue: Shoosmiths, 2 colmore Square, 38 Queensway,
Birmingham, B4 6BJ
CPD: 3 hours cPD Accredited by the SRA
Fees: member fee for fee earners: £99 + VAT,
member fee Support Staff: £55 + VAT,
non-member fee for fee earners: £120 + VAT,
non-member fee Support Staff: £75 + VAT
Speaker: Linda Lambert
As you will know, the Solicitors Regulation Authority’s Accounts
Rules have been substantially updated and these updates included
new rules, a new regime and new roles. The rules were applicable
from october 6th 2011and the new roles that also came into place,
coLP and cofA, are in place from January 1st 2013. This half day
course covers the main rules regarding the handling and recording of
client and office monies and includes the new rules. The aim of the
course is to ensure those attending are made aware of the current
regulations with regard to use of client’s monies for today’s Legal
Practice.This course will cover the following topics: client Account
and client money; use of client Account; withdrawals from client
Account; Interest Rules; Bank Reconciliations; what is a Bill?; office
monies and Professional Disbursements; Accountant’s Report
Speaker
Linda Lambert: Linda lives and works in the west midlands where she
came to read Accountancy at Birmingham university. After obtaining
her degree she then worked in the banking and financial sector and as
a trainee chartered accountant before joining the legal profession some
25+ years ago. Linda has in her career worked as a sole Legal cashier
for a small city practice, a finance manager for a 14 partner provincial
firm and as a Practice manager before working freelance. She has
experience of accounts systems from hand written to computerised
and has been responsible for introducing new systems in the practices
she has worked in, in particular dealing with management information
and credit control. Linda has trained as a lecturer for further education
and is currently the Institute of Legal finance and management (ILfm)’s
lecturer in ‘The Solicitors Regulation Authority’s Accounts Rules’, the
tutor for the ILfm’s Associate Accounts course, as well as working as
a freelance Legal cashier, mainly in Birmingham. Linda has also acted
as a consultant for a two partner firm of solicitors in worcestershire
and more recently with a medium sized worcestershire practice (for
maternity cover) with special emphasis on Risk and compliance work.
www.birminghamlawsociety.co.uk | 27
In Santander UK Plc v R.A. Legal Solicitors [2014] EWCA Civ 183 it was
held that a conveyancer’s careless performance contributed to the loss
suffered by Santander when completion monies were misappropriated
by the vendor’s solicitor (“Sovereign”). The court refused to grant RA
Legal (“RA”) relief under section 61 of the Trustee Act 1925 and found it
liable to the lender for the loss of the mortgage funds.
RA acted for the lender and for the lay purchaser in the purchase of a
residential property. The transaction was unremarkable save that the real
vendor was entirely unaware that the property had been sold on her behalf.
Similarly RA was unaware that the transaction was not a genuine one.
RA was due to exchange contracts and complete the transaction
simultaneously on 29 July 2009. however, it released funds to
Sovereign the day before on 28 July prior to exchange of contracts.
There was no letter notifying Sovereign that the money had been
released nor any requirement that the funds were to be held to
the order of RA. RA did, however, check with the Law Society that
Sovereign was registered as a law firm.
The court emphasised the fundamental principle that solicitors who hold
a loan advance on trust until completion necessarily commit a breach of
trust if they part with the advance otherwise than upon completion.
In his judgment, Lord Justice Briggs undertook a forensic examination
of the standard practice for completion by post, the purpose, meaning
and effect of the standard Requisitions on Title and the non-standard
replies by Sovereign. he concluded that the following departures from
best practice were connected with the lender’s loss:
1. making and receiving inadequate requisitions on title
Sovereign answered “confIRmeD” to the whole of Paragraph 4(B) of the
Requisitions which raises a series of questions about the discharge of the
mortgage including details of the terms of the undertaking to be provided.
under Paragraph 5 (A) regarding the arrangements for completion,
Sovereign answered “foRmuLA B”. This was a meaningless answer in
relation to completion as it was a reference to a standard method for
exchange of contracts. RA did not question any of these inadequate
replies, nor did they raise any supplemental Requisitions.
2. failure to obtain the vendor’s solicitors written
commitment to follow the completion code before
transferring the completion money to them
Sovereign did not answer Paragraph 7(D) of the Requisitions where
they were asked to confirm that they would comply with the Law
Society completion code. This meant that the completion money
was transferred to Sovereign the day before completion without RA
imposing any written obligation upon Sovereign to hold it to its order.
3. failure to appreciate that completion had gone
seriously wrong when no confirmation that the mortgage
had been discharged was received in the post
The fact that their client had not received the keys by 4 August 2009, and
they had not received the mortgage discharge form, did not alert RA to
the possibility that there was a problem with the transaction. RA’s post
completion correspondence with Sovereign was confused in that on the
one hand they stated that the sale had been completed and on the other
they served a notice to complete on 10 August. The completion monies
remained in client account from the date of purported completion until
the misappropriation took place on 13 August.
his Lordship was also very critical of the practice of submitting an
unqualified certificate of Title before investigation of title had been
completed. RA had yet to inspect a 1986 transfer when it sent off
the coT. This was on the basis that it could halt the transaction if a
defect in title was subsequently discovered. Leading counsel for RA
submitted that this practice was common amongst conveyancers
to minimise delays by lenders in releasing mortgage monies. This
explanation was noted unenthusiastically by his Lordship who
regarded the practice as a deliberate misrepresentation to the lender
but not one which in this case had contributed to the loss.
Ironically, his Lordship was prepared to assume that even if RA had
followed best practice the fraud would probably have succeeded but
that was not in his view the legal basis for granting relief under s.61.
whatever pressures are imposed by clients or by others in the
chain, conveyancers should adhere meticulously to the correct
procedure. close attention should be paid to the Requisitions and
to the arrangements for completion. The fact that duties are owed
to two clients, namely the lay purchaser and the lender, can often
be overlooked in the strain of complying with unrealistic timescales.
This judgment provides a stark reminder that residential
conveyancing is not a purely administrative process. It is a legal
transaction upon which legal advice and expertise is required.
As Lord Justice Briggs stressed: “Departure from best practice by
making inadequate requisitions and accepting inadequate replies
before transferring completion money was serious and consequential”
Trusting other solicitors in order to assist your clients would sadly no
longer seem to be an option. n
Jayne Willetts is also a director of Infolegal Ltd – providing the
Colpline practice advice helpline and consultancy
advice for law firms – www.infolegal.co.uk
not without reason does conveyancing work remain high risk for both the firm and its indemnity insurers alike. The importance of following best practice at all times was highlighted in a recent case in the court of Appeal.
JAyne wILLeTTS | SoLIcIToR ADVocATe | JAyne wILLeTTS & co | SPecIALISTS In PRofeSSIonAL ReguLATIon
Mortgage Fraud Update
ReguLATIon RePoRT
west midlands-based
QualitySolicitors Talbots
has successfully attracted yet
another high-profile name as it
looks set to grow again in 2014.
Adrian mabe joins the firm as head
of Trusts and estates bringing over
30 years of experience in this area.
“Last year, we grew annual
turnover by 12% and one of
our undoubted successes
was Trusts and Estates” says
martyn morgan (Director).
Adrian is a chartered Tax
Adviser and a member of both
The Society of Trust and estate
Practitioners and The charity
Law Association. he advises high
net individuals how to structure
their wills, trusts and other
personal affairs to maximise tax
efficiency and asset protection.
“The area of Wills, probate and
estate planning is not immune from
the many challenges facing the
legal profession today. It is exciting
to be joining QualitySolicitors
Talbots as they have demonstrated
their ability to adapt and prosper
in the face of these challenges”.
Adrian is another high-profile
name for QualitySolicitors Talbots
following Peter Adkins, who heads
up the firm’s Dispute Resolution
team based in Dudley. n
28 | www.birminghamlawsociety.co.uk
memBeRS’ newS
wesleyan Assurance Society is
celebrating after it was named
as one of the uK’s top performers
for customer satisfaction.
The Birmingham-based financial
services mutual won the award
for Quality Service Provider of
the year at the uK customer
Satisfaction Awards.
The awards, held by the Institute
of customer Service, recognise
and reward organisations that
deliver excellent and innovative
service to meet customers’ needs
and enable them to thrive.
wesleyan, which provides specialist
advice and products for doctors,
dentists, teachers and lawyers,
was praised for its commitment
to supplying quality service to
its professional customers.
clive Bridge, group operations
Director at wesleyan, said: “We
are determined to put quality
and continuous improvement at
the heart of everything we do. In
recent years we have increased
our emphasis on this as we
strive to deliver the best service
for customers and colleagues
both now and in the future.
“In such a competitive
marketplace, it is vital we deliver
value and satisfaction to our
customers, so we are delighted
to have been recognised at
these national awards.” n
weSLeyAn wInS foR ITS QuALITy cuSTomeR SeRVIce
west midlands law firm
The wilkes Partnership
has advised on a complex
inheritance dispute, acting
on behalf of the successful
claimant. After a high court
trial a nephew has won back his
aunt’s entire £300,000 estate
after she disinherited him in
favour of her window cleaner.
cecil Bray, now 82, gave up
his retirement job to care for
his elderly aunt who, in return,
promised that she would
leave him her house in her
will. his aunt Julie Spalding
then subsequently prepared
wills leaving her estate to her
window cleaner breaking that
promise. Julie Spalding was
also alleged to lack the requisite
capacity to execute these wills.
The wilkes Partnership
presented several claims
to court and proved that
mrs Spalding promised to
leave her property to her
nephew. They also proved
that mrs Spalding lacked the
capacity to draft a valid will.
The case highlights the
importance of obtaining expert
legal advice when preparing a
will. for instance, the fact that
mrs Spalding’s advisors did not
obtain medical evidence that
she had capacity – arguably
essential when a will is being
made by an elderly person
– was key in the judge’s
decision that her amended
wills were not valid. n
wILKeS ADVISeS on comPLeX InheRITAnce DISPuTe
steve boyle, Harriet bramley and dave Parry from wesleyan assurance society collect the quality service Provider of the year award from Institute of customer service Vice President Jonathan cowie (far right) and awards host trish lynch.
mIDLAnDS LAwyeR STRengThenS BLAcK counTRy LAw fIRm
As legacy giving funds four out
of ten missions by the midlands
Air Ambulance, it remains an
extremely important income stream
for the charity. Therefore when a
will is contested and the amount
donated to the charity is affected,
it has adverse repercussions
for the life saving service.
Brian James, legacy officer for
midlands Air Ambulance, is
becoming increasingly concerned
about the rise in claims on
estates by family members
and other dependents, and is
urging solicitors to make sure
their clients’ wills are backed
up with detailed will files.
mr James comments: “Since
2006, statistics produced by the
High Court state the number
of people challenging a Will
has risen by more than 100 per
cent*, which is an alarming rate.
For Midlands Air Ambulance,
and other charities, claims on
estates by family members and
other dependents is a relatively
new but expensive problem.
“Until about a decade ago claims
upon estates were comparatively
rare and the courts could be
relied upon to take a robust
approach in rejecting such claims.
This has changed somewhat as in
my view, as I find some charities
are advised to settle such claims
by negotiation, which ultimately
affects the work of the charity. In
Midlands Air Ambulance’s case,
this affects the vital life saving
work of the service, as every
mission undertaken costs £2,500.
“Negotiated settlements usually
LegAcy gIVIng – IT’S ALL ReLATIVe
worcestershire law firm, Thomas
horton LLP, has added two
new members to its partnership,
increasing its Partner count to
seven across its three offices.
The appointments of Tina
circus, head of wills, Trusts
& Probate, and Lisa Johnson,
head of Property Services, are a
further sign of Thomas horton’s
continued development.
Tina has been at the firm for three
years. As a member of STeP (the
Society of Trusts and estates
Practitioners), she specialises in
the creation and administration of
trusts, estate tax planning, probate
administration and wills & court
of Protection work for the firm’s
private and business clients.
Lisa joined Thomas horton
last year and has contributed
enormously towards the growth of
the firm’s reputation for local and
memBeRS’ newS
www.birminghamlawsociety.co.uk | 29
involve a payment to the claimant
plus payment by the estate of the
claimant’s legal fees. Claims are
therefore a ‘one-way bet’ for those
disputing a Will, which has led to an
environment where Will contests are
actively encouraged by advisers.
“Defending such claims can be
problematic as apart from the
Will itself the defendant, who
is likely to have good cause to
stand their ground, has little other
evidence of the wishes of the
deceased, while the claimant has
the benefit of selective memory
and evidence from friends and
relatives as to the verbal intent of
the deceased. This is particularly
difficult where the claimant was
estranged from the deceased
at the time of drafting the Will
and reconciliation may have
occurred prior to their death.”
mr James elaborates on how
solicitors need to play their part to
ensure the number of contested
wills is reduced going forward.
“The will file of the solicitor who
drafted the will is important
evidence and, thankfully, these are
becoming more complete. It would
be very helpful for the solicitor
taking instructions to enquire in
greater detail the reasons for any
excluded relative or dependent
and note these on the will file.
“In addition, after 50 years of
age clients’ Wills should be
updated via a codicil every five
years, or after a major life event.
This will help to ensure the
lasting wishes of the deceased
are current and indisputable.
“Although Will disputes can’t be
avoided, by following a number of
simple steps, claims can be easier
to defend, helping to eliminate
any unnecessary heartache for all
involved. This will ensure the correct
recipients are benefitted, and where
a person has kindly named a charity
in their Will, such as the Midlands
Air Ambulance, that charity rightly
receives the donation it deserves.”
If you would like to find out
more about the midlands Air
Ambulance charity and for
details about the organisation’s
gifts in a will service, please visit
www.midlandsairambulance.com
or call on 0800 8 40 20 40. n
ThomAS hoRTon AnnounceS DouBLe PARTneR APPoInTmenT
national commercial property work.
going forward, Lisa will apply her
extensive technical knowledge and
Thomas horton’s ‘client-centred
service ethos’ in a wider role as
head of Property Services. n
l-r: lisa Johnson, richard Hull, tina circus and matthew Horton
Birmingham-based law
firm, cartwright King has
sponsored the local heat of the
2014 magistrates’ court mock Trial
competition, a national competition
aimed at 12-14 year olds to help
them learn about all aspects of
the criminal justice system.
The local heat was part of a
national competition run by
the citizenship foundation in
partnership with the magistrates
Association which is funded by
her majesty’s courts and Tribunals
Service, an executive agency of
the ministry of Justice, and the
Jomati foundation. Around 160
young people from twelve schools
in areas including Bordesley
green, erdington, handsworth and
edgbaston competed in the heat.
The competition is an opportunity
for competitors to adopt all
the roles that would be found
in a real-life court, including
lawyers, witnesses, magistrates,
court staff and a defendant.
The Birmingham local heat was
opened by the Lord mayor of
Birmingham, councillor mike
Letty, who wished all participants
a fair trial. Its overall winner was
King edward VI handsworth girls
School and woodrush community
high School was the runner-up.
The Prosecution Plate went to
the crown Prosecution team also
from King edwards VI handsworth
and the Defence Plate to
Sutton coldfield grammar.
other awards, presented by
Regan Peggs of cartwright King,
went to Perry Beeches Academy
for their journalism skills and
Sutton coldfield grammar School
for girls for the best court artist.
A fantastic learning tool first
introduced 20 years ago, the
competition aims to inspire
young people who might wish
to pursue a career in law as a
result of their participation. It is an
event which enables students to
develop crucial life skills, such as
the ability to speak confidently in
public, work well as part of a team
and use analytical techniques.
The students are given a
mock case and coached by
local magistrates and legal
professionals before the
event so that they understand
every aspect of what they will
experience at the trial. This
year’s local heat involved the
case of a stolen bike which
has been acquired without
knowledge of the item’s history.
Regan Peggs who is an
associate at cartwright King and
who assisted at the competition
alongside one of the law firm’s
interns, Saydie farrell, said: “it is
important that young people who
are considering a career in law
are presented with opportunities
such as the one offered by
this competition, to get more
of an insight into what a future
career in law might involve.”
The 63 local heats are now to be
followed by regional finals for the
midlands and wales on Saturday
10 may and the prestigious
national final takes place at
Birmingham’s Victoria Law court
on 28 June. members of the
Birmingham Law Society are
more than welcome to volunteer
in both of these next rounds.
Please contact Dr Amanda
grant JP (vlcmocktrials@gmail.
com) for more information. n
cARTwRIghT KIng SPonSoRS weST mIDLAnDS mocK TRIAL conTeST
eVenTS
Irwin mitchell hosted a training seminar for student members of Birmingham Law Society on 24 march 2014. Presented by trainee solicitors at Irwin mitchell, mark cawley and Rebecca fitzgerald, the session focused on developing commercial awareness and its importance for a successful legal career. The talk provided advice on becoming more commercially aware as well as how to use it in the application and interview process. The event follows a number of successful training and networking sessions which have been organised by the BLS Student committee. The committee’s aim is to encourage students studying at local institutions to become involved with Birmingham’s legal community by offering unique training and networking opportunities. n
Irwin Mitchell Training Seminar
30 | www.birminghamlawsociety.co.uk
(1) Laura Ralfe (Irwin mitchell) and Ben henry (Jonas Roy Bloom)
(2) Kirko Profirov, Rebecca fitzgerald (Irwin mitchell), hannah fox
(3) Adam wright, ellie williams, nick Little (All Irwin mitchell)
(4) Kohi michaili (Bcu), harminder Saund (Bcu), ellie williams (Irwin mitchell )
(5) mark cawley (Irwin mitchell), Ben Thompson (Bcu), christian Alifoe (Bcu)
(6) Rebecca murray–Butcer, masi mutonono, Rebecca fitzgerald (Irwin mitchell )
(7) harmandeep Sandhu (Bcu), Laura Ralfe (Irwin mitchell), Tajinder Singh Ranshi (Bcu
1 2 3
4 5 6
7
networking event - SoLD ouTLocation: Radisson Blu Birmingham Thursday, 10 Apr 201406:00Pm - 08:00Pm freeBirmingham Law Society invites you to an evening of drinks and canapés. Join us for the President’s
last event of the year for an opportunity to meet new and past colleagues in a venue ideal for business and pleasure. All members and non members are welcome! Places are limited so apply as soon as possible to avoid disappointment.
Annual general meeting Location: Birmingham Law Society Tuesday, 29 Apr 2014 05:00Pm - 08:00Pm freeAnnual general meeting 5pm - 6.30pm followed by networking with drinks and canapés.
members only.
cLASSIfIeDS
Translations
expert witnesses
eVenTS
To book please visit the website www.birminghamlawsociety.co.uk If you have any enquires please email: [email protected] or call: 0121 237 6004
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congratulations to the winners of the Legal Awards prize draw:
1. Return flights from Birmingham to any of 242 destinations in the world, sponsored by Turkish Airlines: Peter Burden (howell & co)
2. IPad Air, sponsored by Sgh martineau LLP: David fisher (Thompsons Solicitors)
3. Dinner for two and overnight stay in a junior suite, including breakfast at the hyatt Regency, sponsored by hyatt Regency hotel: Adam Pipe (no.8 chambers)
4. Six bottles of Rose champagne and luxury chocolates, sponsored by Allsopp & co: caroline coates (Dwf)
5.overnight stay for two at Radisson Blu hotel, including breakfast, sponsored by Radisson Blu: Peter Riddleston
6. £100 of house of fraser vouchers, sponsored by St Philips chambers: Alexandra Jones