This is a professional negligence case against a firm of solicitors. The facts of the case were as follows:

Two companies, Levicom and NetCom, had become embroiled in dispute. Levicom felt that Netcom had breached a shareholders agreement to which each were party that served to regulate the affairs of a Baltic Telecoms company. Levicom argued that Netcom were in breach of the shareholders agreement by subsequently buying a separate telecoms company trading in the Baltic region.

Netcom offered terms to settle, but Levicom approached Firm X for advice as to what their prospects of success would be should they wish to bring an action against Netcom. The advice from Firm X was positive. Levicom were told they had not less than a 70 percent chance of success should they wish to commence arbitration against Netcom and that they should reject Netcom’s offer. Levicom did therefore arbitrate, but as time went by, the advice from the solicitors became less strong. Eventually, Levicom accepted an offer from Netcom which was not as good as the previous offer.

Levicom sued Firm X. It argued that if the solicitors’ initial advice had not been so positive, they would have accepted the initial offer and would not have arbitrated.

The Court of Appeal held on the facts that the advice given was negligent, as whilst Firm X’s analysis of the construction of the Shareholders agreement was one possible interpretation, they should not have advised that it had such high prospects of success, and shouldn’t have advised Levicom to reject Netcom’s original offer.

The interesting point is that Levicom succeeded in showing that the negligence caused the loss. The argument could be raised that even if correct (more cautious) advice had been given, Levicom would still have rejected the initial offer and arbitrated. The Court of Appeal found that there was good evidence to show that Levicom would not have proceeded with arbitration if the advice was not so positive. Further, the Court of Appeal felt that it was for the solicitors to show that its advice did not cause Levicom to arbitrate. They did not do so.

It appears also that the Court were influenced by the fact that the solicitors involved were a large London firm. As Lord Justice Stanley Burnton stated, “one has to ask why a commercial company should seek expensive City solicitors’ advice (and do so repeatedly) if they were not to act on it.”

It is unclear whether the Court is drawing a distinction on causation between the larger City solicitors’ firms and others, and whether the test on causation on this point is thus more difficult for the larger firms to overcome, but what is clear is that all professionals should provide their advice carefully in a reasoned manner following thorough analysis of all the facts and evidence. If they fail to do so and the client suffers loss, they open themselves up to a potential professional negligence claim, and can not rely with all certainty on a court subsequently blindly accepting the submission that the client would have followed the course it did irrespective of the advice given.

Why does moving house take so long?

Buying a house is the biggest purchase you every make so it has to be right for you and for your Building Society. Your Conveyancer will investigate all legal aspects of a move including searches, the contract you will sign, the title to the house you are buying and any ancillary documents, for example, planning permissions, guarantees for works done and any paperwork for window replacement, boiler and electrical work. Only when it is safe to proceed will your Conveyancer ask you to sign a contract. You may have a special time scale to work to and this will also need to be considered.

Why is the house not definitely mine even though it is sold “subject to contract”?

These words mean that there is not yet a concluded contract only a hope that there will be. The parties are at liberty to change the price or terms of sale for example items included in the price. When everyone in the chain is happy and ready to proceed a date is set and contracts are “exchanged”. Once exchange has occurred it’s a done deal.

Why does the chain sometimes “collapse”?

A chain means there is more than one party involved in the move. You may be selling as well as buying and there will be other people below and above you. Everyone has their own problems and sometimes cannot proceed due to legal, structural, personal or mortgage problems. If someone pulls out the chain “breaks” until a new person can be found. If everyone changes their mind and withdraws the whole chain collapses. This sometimes happens due to unforeseen circumstances but thankfully not that often.

At Jordans we are committed to efficient moving with as little stress to you as possible. Our staff and systems deal with all aspects of property transfer and are ready to help you when you need us.

This case raises significant issues that both tenants and landlords need to take on board. One of the judges even stated the position is a good example of the law of unintended consequences.

In the case, Day & Anor v Hosebayn Limited, the Court of Appeal confirmed that for the purposes of the Leasehold Reform Act 1967, which gives tenants of let houses the right to buy them in appropriate circumstances, a ‘house’ need not be used as a residence in order for the right to buy to be exercised. Also, the legislation governing the right to buy does not require tenants to live in the property.

In this case, three terraced houses in London were being used for short-term accommodation by tourists when the tenant, who had a lease over all three properties, applied for the right to buy them. The 1967 Act was not created to allow commercial tenants to acquire residential property freeholds but, when the necessary circumstances are met, it does allow this, because there is no requirement that a tenant must occupy a property in order to exercise the right to buy it.

On the basis of the definition of a house, the three buildings qualified as houses and thus the tenant was able to exercise the right to buy them. In his judgment, Lord Neuberger described this as a good example of ‘the law of unintended consequences’.

If you feel you may need advice, either as a claimant or as a defendant Helen Atkinson can advise you on the latest law in this field. Call Helen Atkinson on 01924 457171 or send an email

In an increasing number of cases the family home has been used to finance the care of an elderly surviving parent in either a residential home or a nursing home. With fees in the region of 2,000 per month, the capital can soon decline, leaving a significantly reduced inheritance for the children. Such a scenario is unwelcome to parents who wish to preserve their estate in order to pass it on to their children.

The family home will only be taken into account in a financial assessment when the survivor of the couple requires long term care or both of them do. The reason for this is that the family home is disregarded in any financial assessment provided that the other spouse continues to live in the property.

Couples can use their Wills as a financial planning tool designed to help preserve the family home for the next generation. We set out below one of the options available.

The following steps need to be taken:

1. Where they co-own their property, they own the property upon trust for themselves. There are two ways in which the property can be vested in their ownership, either as joint tenants or as tenants in common. Where they own the property as joint tenants the deceased’s interest in the property passes automatically to the survivor upon the first death. Where they own the property as tenants in common they each have a defined interest in the property. They are therefore able to leave their interest in the property under the terms of their respective Wills. A couple should therefore convert the nature of the ownership of their property to tenants in common.

   If the property is in the sole ownership of one spouse, which is sometimes the case, it should be transferred into their joint names and held as tenants in common.

1. They each make Wills giving each other a right to live in the property in respect of their individual share therein. Upon the first death, the survivor will continue to own their half share interest in the property. He or she will also have a right to live in the property by virtue of the terms of the will of the first one to die. Their continued residence in the property will therefore be secure. In the event that the survivor goes into a nursing or residential home, the right to reside in the half-share interest of the first to die will cease. The half share interest in the property will then pass to the children. It will not form part of the estate of the survivor. As such it will not be taken into account in any financial assessment of him or her.

By adopting the above steps, the first one to die will be preserving at the very least his or her interest in the property for the children. It is an exercise well worth considering for the potential financial savings available.

For further information upon this subject contact Peter Kirrane or Dot Sharpe at:

Jordans Solicitors
Neil Jordan House
Dewsbury
West Yorkshire
WF13 1HL

Tel. 01924 457171

There are two rates of inheritance tax, 0% and 40%. No tax is payable upon the estate of the deceased between 0% and 312,000, which is the nil rate band for this financial year. Tax is paid at the rate of 40% upon the estate above the amount of 312,000.

One of the main features of the inheritance tax regime is the spouse exemption. Lifetime gifts made between spouses are usually exempt for Inheritance Tax purposes as are gifts made upon death.

Lifetime measures can be undertaken by an individual or a couple in order to reduce the potential inheritance tax liability.

The following lifetime measures can be adopted in order to reduce an individual’s inheritance tax liability:

1. Using the annual exemption of 3,000. Each individual has his (or her) own annual exemption. If it is unused in any financial year it can be carried forward to the next financial year. A maximum of 6,000 can be given away by each individual.
2. An individual can make any number of small gifts of 250 in any tax year provided that the gifts are to different recipients.
3. Gifts can be made in consideration of marriage e.g. 5,000 can be made by a parent of either party to the marriage.
4. Normal expenditure out of income paid to a recipient can be exempt from inheritance tax provided that it is part of the income of the individual and that individual has sufficient income to maintain his present standard of living.
5. Gifts to charities.
6. Gifts to political parties.
7. Putting in place potentially exempt transfers (PETS). An individual can make a lifetime gift of assets within his estate e.g. 100,000. The gift will fall outside his estate for Inheritance Tax purposes provided that the individual lives for a period of seven years from the date of making the gift.

The above measures, used effectively, can go some considerable way to reducing the inheritance tax liability of an individual. It is a case of being aware of the measures available within the inheritance tax regime and planning accordingly.

For further information upon this subject contact Peter Kirrane or Dot Sharpe at:

Jordans Solicitors
Neil Jordan House
Dewsbury
West Yorkshire
WF13 1HL

Tel. 01924 457171

A good starting point is to consider the subject of making a Will.

In simple terms, a Will is a declaration of intention made by an individual in a prescribed form, which will take effect upon death. It is revocable until then.

Statistics indicate that as many as seven out of ten people do not have a Will. The reasons for not making a Will are obviously unique to the individual and can range from a fear of one’s own mortality to the perceived expense and complexity of putting in place a Will in the first place.

The process itself is not complicated and the advantages are many, as listed below:

1. You decide who receives the assets within your estate upon death.
2. The rules of intestacy will be avoided. Parliament has laid down the rules in relation to the distribution of an estate where a person dies without making a Will. A Will overrides these rules.
3. You can choose your own executors and trustees, i.e. the people responsible for acting in the administration of your estate and any continuing Will Trust.
4. The Executors derive their authority from the Will itself, and can act in the administration of an estate before the Grant of Probate is obtained.
5. A guardian of infant children can be appointed.
6. Special arrangements can be incorporated e.g. directions as to burial or cremation.
7. Trustees powers can be extended in order that they can act with greater flexibility than otherwise would be the case.
8. Wills are an effective vehicle for financial planning in the context of long term care.

For further information upon this subject contact Peter Kirrane or Dot Sharpe at:

Jordans Solicitors
Neil Jordan House
Dewsbury
West Yorkshire
WF13 1HL

Tel. 01924 457171

The ECHR held by 15 votes to 2 that the Civil Partnership Act does not breach the prohibition of discrimination under Article 14 by not giving them exemption from IHT. The court said that as a marriage or Civil Partnership Act union is forbidden to close family members it was right that the sisters were denied the exemption. The sisters have written to the Chancellor of the Exchequer every year since 1976 asking to be treated as a married couple. Although it is within the Government’s power to make an exception it is unlikely they will choose to do so.

However, there are a number of steps individuals can take to minimise IHT that in some quarters has been described as a voluntary tax on those not wise enough to plan to avoid it. For a start, assets given away more than 7 years before someone dies are entirely exempt and many individuals give their assets and houses away to avoid the tax entirely. There are complex rules against “reservation of benefit” but with legal advice many lawful arrangements that completely avoid the tax are possible. Secondly, for spouses there is no IHT until the second spouse dies and even then that spouse has the benefit of both their and their spouse’s IHT exemption band. Thirdly, most of those who die do not pay IHT simply because they are well below the threshold.

For 2008-2009 this is 312,000. It is only those with assets worth 312,000 or more who have IHT to pay. Fourthly, even with recent legal changes it is possible to put some assets in trust to avoid the tax. Many individuals put their life insurance policies into trust for their children, which avoids IHT in most cases. In addition, life policies can be taken out and put in trust and the proceeds used to pay the tax. Finally all the IHT does not have to be paid at once. HMRC allow payments over 10 years.

For further advice on reducing the impact of IHT on your estate when you die, contact Peter Kirrane or Dot Sharpe at:

Jordans Solicitors
Neil Jordan House
Dewsbury
West Yorkshire
WF13 1HL

Tel. 01924 457171

With the prospect of 45% tax rates for some and a budget on 22 April, it is wise to take some advice on how to minimise your tax bills. For 2009/10 the single person allowance for those under 65 is £6,475. The 40% tax band starts on income over £37,400 after allowances (£43,875 gross pay for those simply with the single personal allowance). The basic rate is 20% and there is starting rate of 10% on savings income only. The rates available for dividends are the 10 per cent ordinary rate and the 32.5 per cent dividend upper rate.

Inheritance tax remains at 40% and that now applies since 6 April to estates over £325,000. A deceased spouse’s unused band can also be utilised making a maximum of £650,000. It is wise to consider tax planning measures to reduce the risk of IHT applying however and always sensible to make a will for lots of other legal reasons too. The rules on dying intestate have recently changed as well and it is simpler for family if a will is made rather than wrestling with intestacy law.

For those involved in businesses now is a good time to consider tax planning there too. There is an annual lifetime £1m allowance for capital gains purposes – gains up to that level are taxed at 10% not the standard 18%. So if a business were owned by six family members – husband wife and four adult children they would have £6m lifetime allowances. If instead it were purely owned by one then more of the gains where it was sold for over £1m, would be taxed with the additional 8%. However legal advice should be sought as it is not always wise to transfer assets or set up a business under which other family members own shares in the family company as relationships change.

The decision in the Myerson divorce case in the Court of Appeal on 1st April (that a “clean break” divorce order was final and could not be undone even if less than a year later the husband’s shares were worth very little and the wife’s percentage of the assets ended up being over 100% of the estate as it was then) gives at least some certainty. It also illustrates the importance of insisting the lower earning spouse, where there is a company, takes shares in the business, perhaps 50% and that the higher earner takes 50% or whatever percentages are applied, of houses and other more tangible assets so that this position does not recur. This will only apply in the bigger money cases where there are substantial assets and shareholdings.

If you need any advice on your personal tax affairs call, contact Peter Kirrane or Dot Sharpe at:

Jordans Solicitors
Neil Jordan House
Dewsbury
West Yorkshire
WF13 1HL

Tel. 01924 457171

Our private clients are not always up to date with matters such as making a will. Although the government is looking at changing the law to give better rights on death to cohabitants who are not married, those changes are not yet in effect and many people believe common law marriages are legally recognised. They are not. However you can protect your position through a well drawn up will and other legal documents. It may be that you want to ensure that if you die your live in partner does not inherit but your children from a previous marriage will do so and if the law may change in this field to give new rights to a partner you may want to ensure you write a will now to make it clear who will inherit.

Another sensible precaution before moving in with a partner, or before or during marriage or a relationship is to agree in writing about certain important financial matters. If one partner moves into the home of the other, will the property go into joint names? Will the parties have equal shares? If, before marriage, one partner has substantial assets and income they may want to protect if they divorce, it may be worthwhile after the recent court recognition of a foreign law pre-nuptial agreement (in the Radmacher case) to have lawyers draw up a pre–nuptial agreement. It may not always be watertight but it is likely the court will give some consideration to such documents, particularly if both parties have had legal advice and the terms are reasonable. We can help you draw up such documents.

If you are concerned about losing capacity as you get older, it may be sensible to draw up a Lasting Power of Attorney setting out how your affairs will be managed if you lose legal competence, such as through Alzheimer’s or dementia. Again we can help you draw up the relevant documents. Looking at your tax position before the end of the tax year on 5th April is also wise. You may have tax allowances to use and seek methods lawfully to reduce the impact of inheritance tax were you to die.

If you need any advice on your personal tax affairs call, contact Peter Kirrane or Dot Sharpe at:

Jordans Solicitors
Neil Jordan House
Dewsbury
West Yorkshire
WF13 1HL

Tel. 01924 457171

The six part series sees management guru Sir Gerry Robinson, one of Britain’s most respected businessmen, and a specialist wills solicitor helping a range of modern British families through the process of writing wills. The programme highlights the changing nature of family structures and the need to seek the services of a solicitor who can prepare a will to make sure it reflects existing family circumstances and a person’s wishes.

Seeking advice from properly qualified solicitors is essential. Solicitors are all trained, regulated and insured if anything should go wrong. A poorly drafted will may have no legal meaning and can cause anguish for relatives who have to deal with what should be a straightforward process but can become complicated and costly.

Responding to the series of programmes, Law Society Chief Executive Desmond Hudson said: “A will is much more than a legal document containing instructions as to what to do after your death. …There are risks to consumers in using an unregulated and unqualified person who has set up as a will writer. Unlike solicitors, will writers are not robustly regulated by law, and not all are thoroughly insured to protect against risk. Solicitors are all trained, regulated and insured if anything should go wrong.”

If you need any advice on your personal tax affairs call, contact Peter Kirrane or Dot Sharpe at:

Jordans Solicitors
Neil Jordan House
Dewsbury
West Yorkshire
WF13 1HL

Tel. 01924 457171