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PPI – more twists and turns than a thriller movie …

Despite the very welcome climbdown by the major banks on the PPI mis-selling issue, iot seems that some may still be relying on the letter of the law to avoid paying out where possible.

The issue arises in relation to claims which have previously been lodged and rejected by the banks. The new rules state that the banks do not have to investigate such complaints. In those cases, the complainant then has the option to formally complain to the Financial Ombudsman Service and has 6 months to do so. Many complainants state that in these circumstances the banks stalled them and many didn’t get a complaint lodged within the 6 month timeframe, and these cases are the ones where there will be a degree of controversy.

Before giving any impression that all banks and financial institutions are adopting the above line, this will not necessarily be the case, but it does appear that Santander, RBS and NatWest will adopt the line of rejecting such claims. On the other hand, Lloyds Banking Group, which includes Halifax and Cheltenham & Gloucester and Barclays and HSBC, advise that customers should contact them about the issue.

Agency worker regulations

The Department for Business, Innovation and Skills has released guidance on the Agency Workers Regulations (AWR) which will come into force at the beginning of October this year. The most important aspect of the new rules is that agency workers will accrue similar employment law rights as permanent employees after a period of 12 weeks in line with the European Union Agency Workers Directive.

For more information, click here.

Massive provision made by Lloyds for for mis-selling PPI policies

Lloyds has set aside a provision of the massive sum of £3.2 billion as compensation for  mis-sold payment protection insurance (PPI). The move will now increase the growing calls for the other major lenders to take similar steps and follows the recent highly significant High Court decision which effectively obliges the banks to proactively assess all the policies sold and to actively contact any customers possibly mis-sold these types of policy.

However, Lloyds have not yet gone as far as the FSA rules, which were ultimately endorsed by the High Court, require. Those rules require the banks to contact all past purchasers of PPI, inviting them to lodge a claim if appropriate, whereas the Lloyds position does not go as far as “inviting” the customer to lodge a claim. To it’s credit, Lloyds has designated phone numbers for customers and will have a complaints procedure to complete online.

Those whose recent claims have been put on hold pending the outcome of the recent High Court case will be processed without any further prompting, she said.

Last year, the FSA estimated that if the UK’s banks contacted past customers, approximately 20% may respond,  which ultimately could result in claims worth a total of perhaps £3billion. Under the FSA rules, given the obligation on the banks and other PPI sellers to actively invite and later customers, the figure is likely to be considerably higher than £3billion.

Legal aid has always been a controversial and political topic. On one side of the argument, without legal aid, particularly for areas such as family law, access to justice would be denied to many and the implications for families and children may be severe. On the other hand, legal aid is expensive and some argue that clients and lawyers “milk” the system. One things is clear, this present government are commited to slashing the availability for legal aid.

How much is spent on family law legal aid currently ?

Recently published data suggests that some £645 million was spent on legal aid cases relating to family breakdown issues last year.

Which law firms received the most costs from legal aid cases ?

Acoording to data from 2008/2009 the top 10 firms undertaking legal aid work received a total income from it of some £45million. The most prominent of these firms were Duncan Lewis & Co, number 1 on the list at just under £10 million of fee income and number 10 on the list recieved some £2.6 million.

Elizabeth Taylor’s will – inevitable legal wrangles

No sooner do we lose another great icon of the entertainment industry, the wrangles and fights begin over the assets. In an all too familiar scenario, played out not only on high value estates but also commonly with family disputes, the late Dame Taylor’s family are reportedly arguing over the estate.

It seems, according to US reports, that Dame Taylor’s family may be aggrieved that her personal  manager, Jason Winters, may be the administrator of her will. It is rumoured that Dame Elizabeth’s estate may be worth in the region of £370 million, so this could turn out to be a high value, lengthy and bitter dispute, potentially also involving charities, since it is believed that considerable sums have been left to charities.

Resignation or dismissal ?

Some employment tribunal cases can involve interesting considerations as to whether an employee resigns or has been dismissed, as matters can often reach an untenable situation in an employment relationship where it is unclear whether someone has “jumped or been pushed”. Ultimately, this is a question of fact in each case.

In the case of Hussey v Photogenic Ltd., the following sequence of events occurred :-

• The claimant claimed that on 6th June 2008 his boss had criticised his works and told him he ‘could quit now or’…‘quit at the end of the month’. The employer stated that he had said that he had requested a meeting the following week to review the complainant’s position with the company
• On 9 June 2008, the claimant left a note on his bosses desk claiming that he had been dismissed and seeking a written explanation of the reason, leaving his keys and never returning
• On 9^th June 2008 the employer, upon finding the note and keys, emailed the claimant stating that the claimant had not been dismissed
• The Claimant then lodged a grievance on 13^th June 2008 claiming constructive dismissal and making other allegations. The employer responded by stating that the claimant was no longer considered an employee

The Employment Tribunal found in this case that the employee had resigned on 9^th June 2008 and had not been dismissed, and he was not entitled to treat himself as having been constructively dismissed, since at that time, the employer had not committed a fundamental breach of his employment contract.

Relatively few businesses, regardless of the fact that for reasons of flexibility and cost, use of commercial agents has markedly increased, are aware that under European law, on termination of an agency agreement, the agent may well be entitled to significant financial compensation. So in what circumstances can a principal legitimately terminate an agency agreement based on breach of contract by the agent, and be confident of not having to pay compensation ?

In a recent case, the ECJ held that there needs to be a direct causal link between a breach of contract by an agent with the principal’s decision to terminate the contract to avoid compensation but also that any breach of contract by an agent should be considered on equitable grounds as regards compensation.

Clear as mud !

A recent survey suggests that the English reticence to discuss personal matters certaionly seems to extend to lifetime planning and wills. The study suggests that some 35% of people are unaware of their parents’ wealth management plans with an even greater number having not spoken with thier parents about the whereabouts of  important financial documentation or the sissue of wills. Around six per cent claimed they were too embarrassed to enquire about inheritance, despite 25 per cent of  British people admitting that they would rely on the money in the future. perhaps most staggering of all, a consensus of reaserach suggests that some 30 million people in the UK have not made a will.

With an increasing number of people either unable to get a start on the housing ladder and with the current inertia in the conveyancing market, it is worthwhile perhaps considering that the residential letteings market will take on an ever increasing significance long term. With this in mind, the following may be trends to watch out for :-

Longer Residential Tenancies

Typically, most residential tenances tenant to currently be for a 12-month period, often with a six-month break clause, which encourages a  high degree of churn, possibly suiting neither landlord nor tenant. Statistics suggest that only  some 20% of residential tenants have remained at their current address for 5 years and some 40% move every year.  This contrasts with the position in many other European countries and there can be downsides for both Landlord & tenant such as Landlords seeking to increase rent at every iopportunity whilst tenants may not look after a property they simply see as another stop-gap address.

Provide greater protection for Landlords with tenants on benefits

From a landlords perspective, the system whereby Housing Benefit has been paid to tenants rather than them has been a source of huge problems. Regrettably, some tenants simply retain the benefit and a Landlord then has to take action, often instructing solicitors to recover possession, incurring delay and further cost. Many landlords who have been through such situations vow never to accept another tenant on benefits, in turn creating a shortage of suitable  accomodation in some areas. In fact, it also appears that tenants may prefer for hosuing costs to be paid directkl to Landlords instead, according to a survey by the Joseph Rowntree Foundation. The plans for payment of a single universal credit by the current Government may make this debate academic, but could exacerbate the problems described above.

Faster evictions

It cannot be right or fair that the process of evicting a non-paying tenant often takes 6 to 8 months or more. With more county courts closing things are going in the wrong direction.

Aspects of UK insolvency law have created considerable controversy and perhaps the most contentious area of all relates to so -called pre-pack adminsitrations or “phoenix companies”. In a recent survey carried out by a leading debt recovery organisation, as many as 96 per cent of individuals responded by saying that directors of insolvent firms should not be allowed to restart similar companies, leaving creditors with little or no funds or legal recourse.

It seems that in line with the recent increase in insolvency levels (although interestingly this seems to relate more to administrations rather than liquidations), the number of  so-called phoenix companies, starting up again and often using virtually identical names, has also increased. This creates the additional risk that customers can be misled into believing that the compnay they are dealing with is solid and trustworthy.

The counter argument against more stringent action to prevent phoenix company tactics is that often the  only alternative to a pre-pack administration is  liquidation, which may result in an even worse outcome for creditors. Frankly, we do not buy that argument.