Legal Professional Privilege

A recent case in the Supreme Court has seen the issue of Legal Professional Privilege considered.

The case, R (on the application of Prudential) v Special Commissioner of Income Tax [2013] UKSC1 related to a matter in which the Prudential had refused to hand over documents to HMRC in connection with a marketed tax avoidance scheme. HMRC took exception and issued proceedings and, given the issues, the Law Society and the Bar Council intervened in proceedings.

The outcome was not unanimous but it did make very clear that the principle of legal professional privilege applied only to advice given by qualified lawyers and accountants providing tax advice could not claim such privilege.

Will we see more accountants considering ABSs in an attempt to qualify for such privilege and will it work?

Local firm walks to support

Staff of local law firm, Whatley Weston & Fox, joined over 4000 people on the 7^th July to raise money for local charities at the Free Radio Walk for Kids.

The firm raised around £260 for the charity.

Louise Chipchase, head of Family Law at the firm (pictured left with Karen Roberts and Lisa Mitton) said: “walking the 10.5 miles this year was a challenge made more difficult by the heat but the atmosphere on the day was amazing and we’re proud to have been a part of raising the massive £124,070 for such great charities – we’ll be there next year!”

Flooding the property market

Although the UK is no stranger to rain, the sheer volume of it in more recent times has seen severe flooding around the country, most notably in 2007 and 2012.

The vulnerability of communities to the devastating effects of flooding has been apparent and recently DEFRA estimated that 5.2 million properties were at risk of flooding in England.

The Flood and Water Management Act 2010 came into force in August last year to try and protect communities from the risk of flooding and to try and improve the way we manage water. There are of course several different types of flooding; Surface Water Flooding, River Flooding, Coastal Flooding and Ground Water Flooding – all of which can be very expensive for affected home-owners.

The Act itself moves the focus from flood defence to risk and water management and encourages the use and development of Sustainable Drainage Systems (SuDs for short) which manages rainwater in developed areas in a way that mimics what would have happened to it had there been no development on the land so that is it efficiently drained away and released back into the system slowly.

The Act also creates bodies called Lead Local Flood Authorities (LLFA) that will maintain a register of features that are likely to have a significant effect on flood risk in their area. Those might be natural or man-made and might include walls, embankments, raised ground, channels etc. Once a feature has been placed on the register it cannot be altered, removed or replaced without the consent of the Environment Agency or the LLFA.

That might have an impact in the future on how land is developed or dealt with in terms of planning.

More significant for home-owners, however, are the risk of flooding and the issue of insurance.
Checks and searches are ordinarily done during a property purchase but those commonly cover only river and coastal risks. The issue of surface water flood risk needs careful consideration. Sellers should be aware about these issues and how they might affect the saleability of the property or their ability to obtain the asking price. Buyers are best advised to make sure that full checks are undertaken, as this may affect not only the price of the property that they are purchasing but also how easily the property can be insured and mortgaged.

There is currently an agreement in place between the Government and the Association of British Insurers dealing with insurance for properties at risk of flooding. That ensures that people can still insure properties even where there is a significant risk of flooding, as long as there are plans to reduce the risk within the next 5 years. That agreement comes to an end in June 2013 and at present it is unclear what the position will be after that. It may well be that home-owners will struggle to find insurance for their properties after that time or that policies will become very expensive.

Property transactions can be stressful and usually all parties want to make progress as quickly as possible. Skipping searches or not undertaking sufficiently detailed searches as to flood risk could have major implications for any property purchase – a small amount of effort at the outset, as with so many things, can avoid problems down the line.

A Double Portion?

Many may not realise that there is a rule against "Double Portions" when dealing with legacies on death. It relates to situations where a parent leaves a portion of estate by their Will but makes a lifetime gift of a portion to that child before their death.

The Court assumes that parents would not want to benefit one child twice to the detriment of the others and will consider the lifetime gift as part payment of/payment on account of the legacy.

But what is a "portion"?

Caselaw says that it is something given by the parent with the intention of establishing the child in life or to make provision for him.

Intention is, as it is in many other areas, the key!

If there was no intention by the parent to establish the child for life or make provision for him then it is not a "portion" that the child is being given - this could be the case where a parent makes a "mere gift" or where a parent makes a payment with the purpose of meeting some moral obligation of the child's.

The rule causes more problems than people might imagine and there have been several cases dealing with this. In all cases where there has been a lifetime gift made and a legacy left, it is important to consider the intention of the parent when the lifetime gift was made, which more often than not has not been expressed in writing and must instead be drawn from the circumstances of the case.

It doesn't matter that any gift was made by an attorney instead of a parent themselves, for example where a parent had lost capacity, and it doesn't matter whether any gift was made to the child directly or to some third party, as long as the child benefitted from it.

Cases where it has been held that lifetime gifts were not "portions" and did not fall under the rule  have included parents gifting some of their children monies to repay the efforts or finances that the child has expended in caring for their parent during their lifetime or through illness.

Ultimeately, to avoid difficulties, parents who are planning to make lifetime gifts to one of their children are best advised to make a clear note of their intentions and to detail whether they intend this gift to be instead of any legacy, as part payment of it or entirely in addition to it. That action may well avoid costly disputes after their death.

Contact Norman Snowball on 01905 731 731 if you need further information on this topic.

Maintaining Quality as Standard

 

Whatley Weston & Fox Solicitors, has been reaccredited by the Law Society to the Conveyancing Quality Scheme.

The Scheme, known as CQS, acknowledges the firm’s high standards in residential conveyancing, something that will reassure both purchasers and sellers of property alike when deciding who to trust with the important task of dealing with possibly their biggest investment.

Andrew Duncan, Managing Partner and Head of Residential Property says: “We are delighted to have been reaccredited to CQS again this year. It is recognition of the high standards and excellent service that we continue to provide to our residential property clients at what is often a stressful time for them. The firm has had to undergo rigorous assessment of its procedures and practice management standards for reaccreditation and has met the demanding standards required. We look forward to continuing to provide a personal, reliable and efficient service to all of our clients.”

 

LPA – Will going online send us all off track?

The Office of the Public Guardian has announced plans for the process of applying for LPAs to go online. The proposals are open for consultation until the 19^th October 2012.

Lasting Powers of Attorney (LPAs) exist to allow a person to appoint someone that they trust as an “attorney” to make decisions on their behalf when they no longer wish to or when they lack the mental capacity to do so.

The LPA allows a person to plan which decisions they wish the attorney to make and how they wish the attorney to make the decisions, for example in conjunction with a second attorney or alone.

The decisions that may be made by an attorney may relate to a person’s health or wellbeing (such as decisions on medical treatment etc.) or may concern property or financial affairs (such as paying bills, selling your home etc.)

It provides an attorney with a significant ability to take decisions on behalf of the donor and it follows, therefore, that some considerable thought should be given when executing an LPA.

Currently, when an LPA is prepared by a Solicitor, they are able to discuss face to face with the donor their personal circumstances and work through the possible issues that they may face in the future. The Solicitor will have experience of various different situations that might arise, which the donor may not even have thought of. How is this level of consideration to be ensured with an online application?

There are also a number of elements needed to ensure that the LPA is effective, for example someone must provide a “certificate” confirming that the donor understands the significance and purpose of the LPA and the signature of the donor and their attorneys must be witnessed.

If the application is to be made online what checks are there to be as regards the “certificate”? How will we ensure that the certificate provider is genuine, that they have properly discussed issues with the donor and that the donor understands the gravity or purpose of the process? This could leave the process wholly open to fraud and abuse/influence – even more of a risk as we are often talking about elderly or vulnerable people needing LPAs.

In addition, the donor must have capacity at the time that the LPA is registered for it to be valid. At present, a Solicitor meeting the donor alone is placed to assess whether the donor has capacity to execute the document. Who is to check the issue of capacity if the process is to be automated and digital? This is of serious concern and, again, leaves the process open to abuse and fraud.

Finally, it is proposed that basic information about people who are subject to Lasting Powers of Attorney will be available online, protected only by a password – some real concerns about confidentiality arise.

The above is combined with a real concern as regards whether any IT system will be fit for purpose. Our own concerns arise here, having had to deal before now with government departments developing online processes, only to find that the system is inadequate or insufficient resources have been focused.

Generally, it is to be accepted that times move on and online/digital processes can speed matters up. However, it is absolutely vital when we are dealing with protection for the elderly or vulnerable that everything is done to limit the possibility of fraud or abuse.

On the proposals as they stand, there must be concern as to how the process will ensure proper protection.

Norman Snowball - Head of Wills & Probate.

Local firm supports Worcester charity

Staff of local law firm, Whatley Weston & Fox, joined over 4000 people on the 1^st July to raise money for local charity Acorns Children’s Hospice at the Walk of Worcestershire. The firm raised around £260 for the charity.

Louise Chipchase, head of Family Law at the firm (pictured left with Sam Whelan and Lisa Mitton) said: “walking the 10.5 miles was a challenge but the atmosphere on the day was amazing and for a charity like Acorns, who gives such a great amount of support to so many families, it was well worthwhile – we’ll be there next year!”