Legal Costs for Management Time!

If you have been involved in litigation you will know that you cannot recover the costs to you of time spent dealing with it, such as looking for documents, putting files together, reconstructing files with emails, time spent with solicitors and so on. In the case of Versicherung the Court has decided that wasted management time can be recovered if you show there was a significant disruption to the business. ‘Significant' is, as often the case, a matter of impression for the Judge, but note that you do not have to show a loss of profit – just a significant disruption. Therefore, if you are undertaking litigation, you should keep full records of management and employee time spent if you believe that the conduct of the dispute will cause a ‘significant' disruption to your business.

Review your Terms and Conditions

In Euro London v Claessens a recruitment company had a sliding scale for the repayment of fees to its customer if an employee placed left the customer within a period of time. A customer claimed on this sliding scale after an employee left and the recruitment agency said they could not have their money back because they had not paid the invoice within 7 days. The customer went to Court saying that term was a penalty. The Court of Appeal said it was not a penalty clause. Therefore, if you are offering refunds to your customers in certain circumstances, you can insert a clause in your Terms and Conditions specifying that the refund is only payable if your invoice is paid within a short time period. You may not wish to impose the clause at the time, but at least it gives you the option.

IHT changes to Trusts

At the time of going to press the situation is changing rapidly. But from Budget Day (announced on 22nd March 2006) the government intends to tax all future lifetime gifts made into trusts for a spouse's children or grandchildren at 20 per cent unless the children are disabled or take the assets outright at 18.Trusts are also used by parents who wish to protect vulnerable young adults, such as drug addicts, from themselves by controlling how their money is spent. Now they may face a 20 per cent tax charge on gifts into trust. The proposals could also affect Life Policies written in trust where the life assured is in ill health or has died just before the ten-year anniversary of a trust. Children's trusts in Wills (usually known as Accumulation and Maintenance Trusts) may become chargeable to the periodic and exit charges which previously only applied to Discretionary Trusts. Some Trusts continue to stay outside the charging regime (ie Trusts created on the death of a parent for a minor child if they become absolutely entitled at the age of 18) but if you have any doubt at all, it is a good time to review your Will.