CreditFILE December 2010

Brethertons Appointed Corporate Partners Of  The Institute of Credit Management (ICM) in respect of Legal Services

Brethertons is delighted to announce that they have this week agreed to become one of the corporate partners of the Institute of Credit Management (ICM).

The award winning and nationally recognised Corporate Recoveries team at Brethertons has worked with the ICM and their members for many years. The corporate partnership arrangement will see Brethertons advising and assisting ICM members from all over the world through a new legal email helpline.  ICM members can seek assistance with their commercial recoveries needs but also  across all Brethertons work areas including employment, company commercial, conveyancing and wills to name a few.  The partnership deal will also see Brethertons holding legal training sessions for ICM members at their offices in Oxfordshire, Warwickshire and London. 

Brethertons will also be writing a legal column in the ICM’s monthly magazine and will provide a variety of speakers at ICM road shows across the UK. It is also anticipate that Brethertons will hold a series of training webinars covering a wide range of subjects specifically for the Credit Management industry.

Brethertons is one of the largest and fastest growing solicitors in the region offering a full range of private client and commercial law.

The Institute of Credit Management (ICM) is the largest professional credit management organisation in Europe. It represents the credit profession across trade, consumer and export credit, as well as in related activities such as collections, credit reporting, credit insurance and insolvency.

Brethertons were chosen to work alongside the ICM as they were identified as one of the top law firms to offer the best opportunities to the ICM members and the wider business community.

Jackie Ray, Head of Commercial Recoveries at Brethertons explains: “We are pleased to have been selected as legal corporate partner with the ICM as our joint organisations moves forward together. We believe the close relationship will be highly beneficial for both organisations, their members and employees.”

Outstanding Legal Professional Wins Prestigious Law Society Award

The exceptional achievements of local Solicitors Brethertons LLP have been recognised by the Law Society in its annual Excellence Awards.

Almost 600 leading lawyers and their guests joined the President of the Law Society and BBC Broadcaster Mishal Husain at the black tie dinner and presentation ceremony at Old Billingsgate in London.

Sioban Calcott, Litigation specialist from Brethertons was presented with their award by Law Society President Linda Lee. The President said she was “extremely impressed” by the high standard of entries.

Sioban Calcott won in the category of Legal Executive ‘Legal Executive of the Year’ and Brethertons was also noted as highly commended in ‘Excellence in Practice Management’ recognising their award for the Law Society’s Lexcel Quality Certification and were finalists in the category for Excellence in Learning and Development.

Sioban explains: “It’s a real honour and mark of success to be awarded such a prestigious award which saw us judged alongside some of the best firms operating in the legal profession.”

Law Society President Linda Lee said: “Winning a Law Society Excellence Award is a huge achievement and brings great recognition for individuals and firms.  The winners of this year’s awards should be very proud of this superb accolade.  The awards reflect the Law Society's commitment to celebrating excellence in the legal profession.  Winning an award is more than recognition from their professional colleagues; it is also a symbol of quality for members of the public.”
Richard Pell, Senior Partner explains:  “These awards recognise all the work, effort and specialist legal expertise Sioban Calcott together with her team has delivered to their clients, they are very much deserved.” 

Two Rugby Law Firms Merge

Brethertons LLP confirms that from 1 December 2010, Hodsons solicitors in Rugby formally merged with Brethertons LLP. Hodsons is incorporated with Brethertons LLP and the merged firm is called ‘Brethertons LLP incorporating Hodsons’. 

The merger brings together two well-established Rugby law firms with reputations for quality advice and service.  The two firms have been practising law in Rugby for a combined period of over 275 years.

The merger between Brethertons LLP and Hodsons recognises increased opportunities both for clients and staff as the combined reputation of both firms is significant in Rugby.

Brethertons LLP has just celebrated its 200th Anniversary year in 2010 and is a firm with an award-winning and recognised reputation in many fields of private client and commercial law. Brethertons was recently recognised for the Law Society’s “Lexcel” quality mark for practice management excellence and received a Lifetime Achievement Award at the Rugby Business Awards 2010 for its contribution to the local community.

Hodsons has a reputation for legal excellence and client service that goes back generations and is well known in the town for its specialist advice in Wills, Conveyancing and Family law.

The merger brings together two established and well-regarded Rugby-based law firms and the combined firm will offer an enhanced legal service to individuals and businesses in the region.

Richard Pell, Senior Partner at Brethertons LLP explains: “For Brethertons, we are delighted to welcome our Hodsons colleagues to the merged firm and look forward to working together. It is true to say that our two separate firms have been servicing the legal needs of Rugby clients for some time albeit as two separate firms.  Now the bringing together of our two operations provides a greater presence in Rugby as one single law firm, and introduces to our clients a greater and deeper range of legal services in both private client law and commercial law.”

Jeffery Glenn, Managing Partner at Hodsons said: “For clients, the bringing together of Hodsons' and Brethertons' expertise is an opportunity to benefit from a greater pool of knowledge and experience that will be available to clients.  We are very pleased to be merging with Brethertons at this time in our two firms’ histories.” 

All employees at Hodsons are being given the opportunity to transfer to the merged firm as employees. The Hodsons premises in Rugby, Glebe House, will remain open well into 2011.

Schedule of Brethertons Credit Control Webinars 2011

Our schedule of Credit Control webinars for 2011 is detailed below. For further details and to book on one or more of the events, download a booking form here.

Company Director Faces Massive Confiscation Order

A director of a Staffordshire refrigeration company was recently jailed for 44 months after pleading guilty to charges of false accounting, fraud and theft.

The man had been perpetrating a fraud against the company he worked for, which involved falsifying rental agreements, disposing of the company’s assets and misappropriating funds. The fraud was eventually detected and the director was charged after the company had failed.

He had used the proceeds of the fraud to buy a villa in Marbella, Mercedes cars, a 47-foot yacht and a luxury home in Derbyshire.

However, the court also handed down a confiscation order of £919,482.

According to Brethertons: “The courts are increasingly exercising the powers given them by the Proceeds of Crime Act to confiscate assets of criminals and to use the seized assets to compensate their victims.”

Recently, two men who failed to pay confiscation orders, after being part of a VAT fraud said to have netted more than £35 million, have had their prison sentences increased by a further ten years. The two, who were part of a gang of 21 engaged in ‘missing trader’ fraud, now face sentences totalling 34 years and still face liability for the orders.

If you have been the victim of commercial fraud and the perpetrator has assets, establishing your losses may lead to your receiving compensation.

Competition Law – OFT Gets Tough with Directors

The Office of Fair Trading (OFT) has published revised guidance on Competition Disqualification Orders (CDOs), which are orders under which company directors are disqualified from acting as directors where the company of which they are a director is in breach of UK or European competition law.

A CDO can disqualify a director for up to 15 years if the court deems them to be unfit to act as a director. CDOs can be applied to anyone acting in a directorial capacity, no matter what their notional status in the company.

The major changes in the new guidance are:

• Directors who should have known of competition law breaches, as well as those directly involved with breaches, will be potentially liable to receive a CDO;
• Directors who fail to cooperate with an OFT investigation will not be offered immunity from a CDO. Those who do cooperate will be offered immunity where the company qualifies to be treated leniently; and
• The OFT will be able, in exceptional cases, to apply for a CDO before judgment has been made with regard to a breach of competition law by the company, if it can satisfy the court that an offence has been committed.

The changes in procedure should ring warning bells for company directors who are aware of breaches of competition law, or suspect breaches may be being committed by their company.

When You Agree Terms and Conditions

When you do business with someone else, it is important to agree the applicable terms and conditions – merely exchanging terms can be a recipe for dispute, as a recent case shows.

The case involved a US company, which ordered goods from a British company. Both companies used standard terms of business, which were (of course) different. In particular, the US company’s terms of business contained a clause that made a supplier liable without limit for consequential losses to the purchaser resulting from certain breaches of the contract. The vendor’s terms limited its liability in such circumstances.

The goods supplied were defective and caused a considerable loss to the US company, which then sought compensation. The defendant argued that because the purchaser had taken delivery of the goods after having been sent a notification of its terms and conditions, its terms and conditions applied. The purchaser argued that by accepting the order in its terms and conditions, those applied.

The court held that:

• A contract will be formed on the most recent set of terms and conditions supplied unless the recipient objects;
• Acceptance of one party’s terms can be inferred in certain cases by the behaviour of the other party. However, merely taking delivery of the goods would not be sufficient to justify that inference; and
• Where there are two ‘competing’ sets of terms and conditions and no agreement as to which applies, the inference is that neither does.

Accordingly, neither set of conditions applied. Because the applicable law was that of England, the provisions of the Sale of Goods Act 1979 applied instead.

“It is critical to make sure that when you form a contract, the terms of the contract are known and agreed by both parties,” concludes Brethertons.

Absence of Agreement Document Does Not Waive Debt

A Barclaycard customer who sought to have his £13,000 credit card balance set aside, because Barclaycard could not produce the original document showing that he had agreed to their terms and conditions, recently found the High Court unsympathetic, following an appeal by the finance firm.

The judge who heard the original arguments said, “It would have been quite simple for the bank, if they have the agreement to produce it, if they have not to say so, and if they have secondary evidence that the agreement did exist, though it does not any longer exist, to produce the secondary evidence. If the deluge of requests means they need more time, they could have asked for it. To have done none of these things but simply in a blanket way flatly to refuse to produce the document is in my judgment unreasonable....in my view the entirety of the costs in this application have been incurred as a result of the unreasonable attitude of the bank. In those circumstances the bank should pay all the costs of the application.” He awarded the claimant costs.

However, the Honourable Mr Justice Flaux considered this approach to be ‘deeply flawed’. With regard to the line of reasoning that the customer could only be sure of what he had signed if the original document were produced, there was simply nothing to suggest that any other form of agreement had been used by the bank. If such an argument could be made out, the Judge said, “It seems to me inconceivable that, if the solicitors and claims management companies who lie behind this and similar applications had any evidence from past cases that, at any given time, more than one form of Barclaycard terms and conditions was extant, they would not have deployed it in support of this and similar applications.”

Barclaycard had a standard agreement to which all users had to agree: the absence of the man’s signed agreement was not proof that he would have been given a Barclaycard on different terms.

Acceptance Can Follow Rejection of Counter-Offer

When a claim is brought for damages, the party that is claimed against can make an offer to the claimant under a procedure contained in Part 36 of the Civil Procedure Rules. ‘Part 36 offers’ are designed to make it more likely that a case will be settled before coming to court.

A recent case in the Court of Appeal looked at the position in which a Part 36 counter-offer was made and rejected, but subsequently accepted. Although the procedure includes the principles of offer and acceptance – key principles in contract law – the other principles of contract law are not applicable.

The case involved a claim for an injury resulting from a trip. The council responsible offered £1,150 in compensation, which was rejected. The claimant made a counter-offer, indicating that she would accept £2,500, which the council rejected. Later, the council sought to accept the offer, which had not been withdrawn. The Court confirmed that in the absence of a formal withdrawal of the offer, it could still be accepted. This differs from the position in contract law, in which an offer, once rejected, ceases to have effect.

Getting the strategy right regarding Part 36 offers is important because if an offer is not accepted and the court subsequently rules that the sum payable to the claimant should be less than or equal to the Part 36 offer, the claimant will normally bear some of the costs of the action. On the other hand, if the settlement ordered by the court ‘beats the offer’, it is the defendant who stands to pick up the bill for the costs.

The Court recently considered the question of who bears the costs when the Court awards judgment in a sum only slightly more than the Part 36 offer. The ruling indicates that in general, if the judgment ‘beats the offer’ by even a small amount, the loser will bear the costs.

Read and Understood Not Enough, Says FSA

When purchasing goods or services on the Internet, it is common for websites to include, normally at a stage before a contract is formed, a tick-box which must be completed to confirm that you have read and understood the necessary terms and conditions.

This may be all well and good when a contract is relatively straightforward, but the Financial Services Authority (FSA) recently claimed that where contracts involving regulated financial products are concerned, such an approach is insufficient and constitutes a breach of the Unfair Terms in Consumer Contracts Regulations 1999.

According to the FSA, consumers must be given a clear warning that they should read and understand the contract terms before agreeing to them and should make any necessary enquiries regarding any terms they do not fully understand.

The logic for this is that it is well known that consumers often do not read the small print of contracts and just tick the appropriate box as a matter of course.

Businesses using standard contractual terms in their contracts with the public should ensure that these are fair, clear and easily understood by those reading them and that consumers have a proper opportunity to read and consider them before the contract is formed.