Consumer news 

For further information about the articles listed below, or advice on consumer issues, please contact Duncan Crine on 01865 781054 or duncan.crine@freeths.co.uk.

'Muddled Wills' decision overturned by the Supreme Court
24 January 2014

When Alfred and Maureen Rawlings made their Wills in May 1999 they were not to know that this would begin a course of events culminating in a Supreme Court decision, on the validity of those Wills, some 14 years later.

At the time that the Will was signed, each spouse was mistakenly given the other’s Will to sign. Mr and Mrs Rawlings signed each other’s Wills and, even after Mrs Rawlings died in 2003 leaving her entire estate to her husband, the mistake was not spotted. It was only after Mr Rawlings died, some three years later, that the error came to light.

Terry Marley was named as the executor and sole beneficiary of Mr Rawlings’ Will.  He was not a relative, but had been treated as a son by Alfred and Maureen Rawlings. As Mr Rawlings had not signed his own Will it was treated as invalid  Mr Marley instigated proceedings, seeking to have the Will rectified on the basis that it clearly stated Mr Rawlings’ intentions, notwithstanding that it had been signed by his wife.  The Judge decided that the Will was not valid.

This meant that Mr and Mrs Rawlings’ natural sons, who were not named in either Will, became entitled to Mr Rawlings’ estate under the intestacy rules. Mr Marley was not prepared to accept this, and, after unsuccessfully trying to reach agreement with the intestacy beneficiaries, appealed the court’s decision. Unfortunately for Mr Marley, in 2012 the Court of Appeal upheld the original judgement that the Wills were invalid.    

Mr Marley, remained unconvinced, and took the case to the Supreme Court (the final court of appeal in the UK and his last hope for a decision in his favour). The judgment, published yesterday, concluded that the Wills made by Alfred and Maureen were valid and, the fact that the couple had signed each other’s Wills was a ‘clerical error’.  Mr Marley will now receive his entitlement under the Will of Alfred Rawlings.

This is a landmark decision, as it clarifies that the clear intentions of the deceased concerning their estate must be taken into account. Lord Neuberger (one of the Supreme Court Judges) said in his judgment: ‘Whether the document in question is a commercial contract or a will, the aim is to identify the intention of the party or parties to the document by interpreting the words used in their documentary, factual and commercial context.’ This means that Wills which are disputed should be interpreted in the same way as the interpretation of a contract.

The Supreme Court’s decision also widens the definition of ‘clerical error’, which had previously only been applied to correct typographical errors, and not to an error in the execution of the Wills.

Sadly, as Mr Marley and the Rawlings’ sons’ were not able to reach agreement about the division of the estate, this dispute has taken over 6 years to resolve and considerable legal costs have been incurred.  This highlights how important it is to consider whether a claim can be compromised, or settled without having to go to the lengths in this case. 

This case also reinforces the importance of making a valid Will to ensure that your estate passes to those who you wish to benefit.  It is also important to be sure that your Will is prepared (and signed) correctly.  This is reinforced in the newly published STEP code for preparation of Wills in England and Wales (see our earlier news posting on this subject which can be seen here).

For further information concerning the preparation of your Will, or if you have questions concerning the validity of a Will or a potential claim, please contact Jane Robinson, senior associate.

Giving Couples Options
23 January 2014

The recent judgment from Sir James Munby, the president of the Family Division, in the case of S v S is good news for separating couples and their solicitors in terms of supporting alternative ways of reaching settlements rather than court proceedings.

In this case, the parties chose to use arbitration in order to reach a financial settlement and asked the court to approve the arbitral award they received so that it became binding. The President said that such an award is a single magnetic factor of determinative importance when any judge is considering the parties’ financial matters and it will only be in the rarest of cases that it will be appropriate for a judge to do otherwise than approve the order recording that award. He also suggested that such orders should be fast tracked in the same way as where settlements have been agreed between the parties through mediation or collaborative practice.

We are one of the few family teams in the country who can offer all forms of alternative dispute resolution, such as mediation, collaborative practice, arbitration and negotiation between solicitors. We believe that in addition to representing our clients in court proceedings where necessary, it is important for them to have a range of options available to them to reach a settlement, so that they can deal with matters in the most suitable way for them and their family. Arbitration is a relatively new option, but for example, just as with above alternative dispute resolution options, can help couples who have made progress towards agreeing matters up to a certain point, but have certain key issues that they simply cannot decide between themselves.

If you or someone you know is keen to try to deal with their financial matters on divorce without involving court proceedings if possible or would like some more information about any of the above options, please do contact Gemma Nicholls, solicitor and senior associate, either by e-mail gemma.nicholls@freeths.co.uk or by direct dial 01865 781115.

Family lawyers for when your family matters.

Was the preparation of your Will in 'step' with the latest service standards?
15 January 2014

The Society of Trust and Estate Practitioners (STEP) have launched a new Code for Will preparation in England and Wales. The Code, which will take effect from 1 April 2014, details the ethical principles that will demonstrate the standard of service a client can expect from a STEP member preparing their Will.

The Code has been put together in response to the Government’s decision not to regulate Will writing, which many felt was bad news for consumers. The decision means that anyone can write a Will, with the risk that unregulated Will-writers are untrained and uninsured.

A Will is a powerful document that details how your estate is to be distributed after your death. A poorly drafted Will can lead to mistakes, financial loss, practical issues and problems with the estate administration, which would most likely not come to light until after the death of the testator, causing delays and additional stress for family and friends at an already difficult time.

Most of the lawyers in our Private Client department are already STEP qualified, or are currently working towards STEP qualification, and Henmans Freeth welcomes the new STEP Code.

If you wish to discuss making a Will, please contact Rachel Wos, who is a solicitor in the Private Client department at Freeths LLP.

Just the ticket! (Parking problems part II)

22nd October 2012


With the ban on private wheel clamping in force in England and Wales, private firms and property owners will be looking at alternative ways of enforcing parking restrictions on private land.

It should be noted that the new law only applies to parking on private land, or privately owned car parks.  If a motorist parks on double yellow lines on a public highway, or any other ‘civil enforcement area’, the police or a local authority where the power has been delegated, may issue a penalty charge notice (PCN), and may legally immobilise or tow a vehicle. The power to issue PCNs or take other enforcement action are derived from statute. This is completely different to parking tickets issued for parking on private land, which has its legal basis in general contract law.

More often than not, a private parking ticket will be designed to look like a PCN issued by a Civil Enforcement Officer and a motorist would be forgiven for believing that the ticket derives its enforceability under the same statutory law. They should not be fooled: in order for a ticket for parking on private property to be enforced, the driver of the vehicle must have entered into a valid contract with the land owner, and he must have breached that contract by parking on the land, or overstaying the agreed amount of time.

A contract is not formed by simply parking on any private land - instead, the landowner must go through the general process of forming a contract: offer, acceptance, consideration and intention to create a legal relationship. Of most importance in these matters are offer and acceptance. In order to prove that a contract has been offered and accepted, it is for the landowner to place signs in prominent places so that the motorist will clearly see the terms, and understand that by parking on the land, the terms are accepted. It is important that any charge for parking is made clear. If this is not the case, the landowner would only be able to legitimately recover the loss they actually suffered. This would typically be nominal.

Where an individual has been issued with a private parking ticket and it is not paid, the issuer is only able to enforce the matter in the same way as a breach of any other contract. The claimant would need to issue a civil claim in the county court. In order to succeed, the claimant would need to ensure they have enough evidence to prove, on the balance of probabilities, that the contract was formed, breached, and they are entitled to the damages they are claiming. A motorist should, therefore, take into consideration whether the terms of the contract were made clear at the time they were parking before deciding to pay a parking charge.

Previously, a private parking ticket would only be enforceable against the driver who parked the vehicle, as it is they who would be a party to the contract. This is now no longer the case in England. Although the new law has made it a criminal offence to clamp, tow or immobilise a vehicle, it does provide that private parking tickets may be issued to the owner of a vehicle where the driver who parked the vehicle cannot be identified.

Beware of your Tiny Monsters

15th October 2012


A recent news story has highlighted the risk of saving passwords on your computer and leaving children to play online whilst also raising an interesting legal point. 

The story in question involved a young lad, Will Smith, aged 6, his grandfather Barry Slatter, aged 55, an iPad and a game called Tiny Monsters. 

I have not personally played Tiny Monsters, but understand it is a ‘breeding’ game where gamers collect and create monsters to fill their virtual island.  While the game is free to download, the app has 'premium currency' which gamers can buy using real money.  According to the website of TinyCo, the game's creator, "Premium Currency can be used on limited edition items, speeding up the game, and other extras." 

Unbeknown to Mr Slatter, while playing the different levels on the game to reach the Dark Monster, young Will used his grandfather’s iTunes password to purchase virtual food and coins at a cost of up to £70 each.  This led to a bill of £2,000 and one rather distraught grandson and grandfather I would imagine. 

The issues set out above, raise an interesting legal point.  That is, in English law, the age of capacity for the purposes of contract law is 18 years old.  Therefore, the general rule is that a minor's contracts are voidable at his or her option.  A minor can enforce most contracts but they are not binding on the minor until he or she expressly ratifies them on coming of age.

I am unfamiliar with the contracts entered into by the players of Tiny Monsters, but, in circumstances where a contract is entered into by a minor, and the applicable law is English law, it may be that the contract is voidable and the debt incurred not therefore recoverable. 

Best advice – be careful not to store passwords where children may use your PC, iPad or smart phone, for, whilst the law may protect you, you’ll have no need for protection if no contracts can be entered into. 

Ban on private wheel clamping

8th October 2012


As of 1 October 2012, private wheel clamping has been banned in England and Wales. It is now a criminal offence to clamp, tow away or immobilise a vehicle without lawful authority. The ban has meant that private firms who previously held an SIA (Security Industry Authority) licence will no longer be allowed to clamp, immobilise or remove vehicles parked illegally on private land. The same goes for private individuals who clamp other vehicles parked on their land. Individuals will still be allowed to clamp their own vehicle for security purposes.

The BBC has reported that about 500,000 clampings took place annually on private land, with an average release fee of £112.

Clamping is only prohibited by persons ‘without lawful authority’. This leaves a loophole where by-laws give landowners the right to manage parking on their land in any way they choose. Examples include car parks at railway stations, airports and ports. Public bodies with statutory powers will continue to be allowed to clamp vehicles – the obvious example is the police. The DVLA will still be entitled to clamp vehicles if, for example, the owners fail to pay road tax. 

The ban on clamping does not mean that motorists can park wherever they like on private property without fear of repercussions. The new law does not ban individuals or firms from distributing parking fines for parking illegally on private property. It also provides that, in England, such parking fines will be enforceable against the registered keeper of the vehicle as well as the driver at the time.

Private parking charges are primarily actionable as a breach of contract between a landowner (or parking enforcement company) and a motorist. Signs will need to be prominently displayed prohibiting parking in the area in order for a motorist to breach the prohibition on parking. A scheme called FlashPark has been set up whereby subscribers can send a digital picture of an illegally parked car, and FlashPark will automatically send a parking notice to the DVLA registered keeper of the vehicle.

It may well be the case that instead of your car being clamped, you will now return home to a parking fine waiting on your doorstep.

Spreading the Risk – Sometimes it doesn’t always pay to lose

2nd October 2012


Before 2005, the law on gambling was pretty straight forward - in simple terms, you could not enforce a gambling contract.  However, since 2005 and the Gambling Act, all that has changed.

There have been two remarkable cases about gambling in the past couple of months.  The more recent of the two is an amazing decision and one which I would imagine few, except perhaps Mr Cochrane and his advisors, predicted.

The facts:

On the morning of 2 May 2011, Mr Cochrane went on line on to his Spreadex account.  It was a bank holiday and he was in his girlfriend's house together with her young son.  As he made his trades, he explained what he was doing to the son as a kind of guessing game.  At about 2.15 p.m., he made his last trade, leaving only two trades open, a matching buy and a sell in gold with a loss of about £9,000.  He then left the house to drive his car to a garage for servicing and thereafter to spend the afternoon with a male friend.  And because his friend was not feeling well, he stayed two days in his house, during which time he did not use a computer.

When he picked up his car and recharged his mobile phone, he found a message from Spreadex asking him to give them a call.  On doing so, he was told that his account was down by almost, £50,000!  Returning to his girlfriend's house and going on line he found that there had been numerous trades in his absence, not only in gold and silver but also in crude oil. His girlfriend said that his computer had been used by her son, and the son told him that he had been playing games on it.

You would be forgiven for thinking that Spreadex must have won in this case.  However, they didn’t. 

The reason given by the court in awarding the case to Mr Cochrane was not attributable to the use of the machine by the son, but rather the lack of consideration for the contract of each individual trade.  I shall not go into the reasoning in full (if you are interested, a Google search of Spreadex v. Cochrane should produce results leading to the full judgment) but it is a salient reminder that terms and conditions are vitally important to all businesses and in all contracts whether you are a firm engaged in gambling or a one man band.  If your terms and conditions are not up to date and regularly revised to keep up with changes in the law, then recovering what you think you are entitled to can often be harder than you think, or, in the case of Spreadex, impossible. 

As for the issue of gambling itself, my instinct is that this is a one-off decision decided on its facts and therefore those of you who like a flutter should not assume that the “I left the house and when I came back I found the girlfriends son had started trading on my account” defence shall succeed if you suffer a loss or two!

New regulator to govern pay-day loans

 

The Government has unveiled plans to house regulation for most financial products under one roof. The Treasury wants the yet-to-be created Financial Conduct Authority (FCA) to look after credit cards, loans, and overdrafts – all currently covered by the Office of Fair Trading.

Under the plans, the FCA would also police pay-day lending, which is currently subject to only light regulation. Critics blame this approach for the huge debts racked up by many borrowers.

The FCA was already due to take over the regulation of the consumer products currently policed by the Financial Services Authority (FSA) next year. These include mortgages, some types of insurance, savings, investments and banking (other than consumer overdrafts). The transfer to the FCA would also mean tougher regulation. It will have much greater powers than the OFT, such as the ability to levy huge fines.

The plan to police consumer financial products under the FCA's jurisdiction, forms part of proposals under the Financial Services Bill. If the bill is passed, the FCA will have these much wider powers when it takes over from the FSA next year.

Mark Hoban, Financial Secretary to the Treasury, says: "This is good news for consumers. The FCA will have much stronger powers to better protect customers who access credit, including from pay-day lenders.  It will be a more proactive regulator, empowered to tackle problems before consumers are harmed and able to respond much more quickly to market developments."

Solar power - it pays when the sun shines

 

The coalition government was last week on the receiving end of a robust judgment from the High Court the effect of which is to prevent the government reducing the sum that households receive from the creation of electricity via solar panels.

Prior to the High Court’s ruling it was the government’s intention to halve the feed-in tariff for anyone who installed and registered their solar panels after 12 December 2011.  However, the High Court has confirmed that they are not able to do so, meaning that until 1 March 2012 at least, the feed in tariff for generating electricity via solar panels shall remain at 42p per unit. 

Whilst this is good news in the short term, the stark reality is that the government’s proposal to halve the feed in tariff on 1 March 2012 from 42p to 21p is not under threat of any court ruling.  Therefore, in an era of souring energy prices and an over reliance on diminishing fossil fuel stocks, it would appear that alternative energy creation remains a long way down the list.

Excessive credit and debit card charges to be outlawed in 2012 

 

Excessive fees for using a debit or credit card to buy items such as travel, concert, football or cinema tickets will be banned by the end of 2012, under new government plans.  The move comes amid complaints that airlines, booking agencies and even councils were imposing excessive charges for using a card. 

As many of you know, consumers buying online tickets are regularly charged a significant amount when paying by credit or debit card.  The sum paid is often disproportionate to the sum to be paid and the actual cost to the retailer or supplier (usually around 2-3% of the sale cost).  One further issue is that some suppliers’ websites only make that sum visible after the consumer has ploughed their way through a number of pages to get to the checkout thus, in effect, making the charge less visible.

Examples of charges which have received considerable scrutiny are a £6 per person, per leg "administration fee" charged on all but one card by Ryanair, a £4.50 per booking credit card fee from British Airways, and a charge of up to 17 Euros (£14.16) per person by Air Berlin.  In terms of the concert ticket agencies, their “service charges” can be as much as 14% of the cost of a ticket.  For example on one agency's site, a £20.00 ticket for Phantom of the Opera costs £22.80 and that’s before postage costs have been added on.

Easy Jet are trying to get around these regulations it would appear by introducing a £9 flat administration fee to replace the previous £8 booking fee levied on anyone paying with most debit cards.  That is, previously Easyjet charged £8 for all bookings made with a debit card, except for those by Visa Electron. The charge for credit cards was £8 plus 2.5% or £4.95, whichever was greater.

The issue of high surcharges prompted the consumers' association Which? to call on the regulator to investigate, saying "the price you see should be the price you pay".

The regulator, the Office of Fair Trading (OFT), published a report in June about the travel industry's use of surcharges.  It said charges must be clearer and surcharges for using a debit card should be banned.

The government is planning to go further than the OFT's recommendations and change the law so all excessive surcharges are banned.  What the government are therefore doing is bringing forward the implementation of new European Rules (Consumer Rights Directive), which were pencilled in for mid-2014.  These rules, amongst other things, say that only the actual cost of processing card payments could be charged to consumers.

The process of accepting credit or debit cards as payment is quite complex and retailers, quite rightly, are keen to point out that they have to absorb this cost in their sale price.  Indeed, Ryan Air responded to the government's announcement by saying that it charged an administration fee which also covered the cost of running the website rather than a surcharge.

However, it is one thing absorbing a 2-3% charge and another being charged £8 for a £75 flight on a budget airline.  In this regard, the OFT calculated that travellers spent £300m on card surcharges in the airline industry alone in 2010.

The government will shortly launch a consultation and legislation is expected to follow. It can not come too soon.
 

Tenancy Deposits - Landlords and Agents Beware



The Housing Act 2004 (specifically sections 213 and 214) was heralded by tenant’s bodies, tenants and charities alike because, for the first time, the government was stamping down on unscrupulous landlords.  No longer, it was assumed, could landlords refuse to return a tenant’s deposit on spurious grounds, and, if there was a dispute regarding the deposit it could be adjudicated through an approved scheme such as the Tenancy Deposit Scheme. 

The Act seemed clear that if landlords failed to comply with the requirements of the statutory regulations, they would have to pay a penalty fine of 3 times the amount of the deposit plus the deposit itself. 

All seemed well for the protection of tenants…

Unfortunately, whilst the majority of practitioners read the statute in the only way it seemed capable of being read, the Court of Appeal saw it differently (in the cases of Gladehurst Properties Ltd v Hashemi, Draycott & Draycott v Hannells Letting Limited, Tiensia v Vision Enterprises Ltd (t/a Universal Estates) &_Harvey v Bamforth)

As a result, and in the flick of a switch, the protection for tenants from unscrupulous landlords was gone…

Until now.

Localism Act 2011



The Government have fought back and the Localism Act 2011 is set to, from April 2012, reverse the decisions of the Court of Appeal.  As a result, the obligation to properly protect and secure tenant deposits and provide the Prescribed Information has been put back squarely at the door of the landlord or their letting agent and a failure to comply shall have serious consequences.

The Localism Act is unlikely to greatly affect those landlords who were already complying with the spirit of the Housing Act 2004.  That having been said, some of the rules imposed on landlords have changed and therefore agents and landlords alike must familiarise themselves with the new rules, summarised below. 

For those not already complying, they must now do so because they shall be unable to hide behind the aforementioned court rulings to escape liability.  

The main legislative changes are as follows:

Landlords shall have 30 days after receipt of the deposit to:

    • Comply with the initial requirements of the scheme be that MyDeposits, Tenancy Deposit Scheme or Deposit Protection Service;
    • Register the deposit; and
    • Provide the tenant(s) and any relevant person with the Prescribed Information.
  • The tenant can bring a claim after the tenancy has ended (thus reversing a Court of Appeal ruling in Gladehurst Properties v Hashemi);
  • The penalty will be payable if the Landlord fails to comply with the time limits imposed by statute, i.e. within 30 days of receipt;
  • The Landlord can not avoid liability for the penalty by complying with the requirements of the Deposit Scheme just before the matter goes to trial (thus reversing the Court of Appeal decision in Tiensia v. Vision Enterprises Limited);
  • The amount of the penalty will be at the Court’s discretion but no more than, in total and including the deposit, three times the amount of the deposit.
  • No Section 21 Notice (for the recovery of possession) can be relied on if the deposit has not been protected and all the Prescribed Information given to the tenant within 30 days of the money being received unless: 
    • He first returns the deposit to the tenant in full or with such deductions as the tenant agrees; or
    • If the tenant has taken proceedings against him for non-protection and those proceedings have been concluded, withdrawn or settled.

The amendments to the rules regarding the service of Section 21 Notices is a very severe penalty for landlords and letting agents alike who rely on the ability to remove tenants in situations where they are in breach of their obligations under the tenancy agreement, in particular, the obligation to pay rent.  Indeed, this sanction may be more serious a threat to landlords than the potential penalty they must pay to a claimant tenant.

Landlords should also be aware that the value of tenancy to which a landlord is obliged to protect the deposit has significantly changed from a yearly rental value of £25,000 to a yearly rental value of £100,000.

It is therefore vital that landlords and letting agents comply with the rules because a failure to do so may have serious ramifications. 

Disputes between Landlord and Letting Agent

 

A tenant has the option of suing the landlord or the letting agent in the county court for the recovery of the deposit/ a penalty under the Localism Act.  Therefore, it may be that landlord becomes liable for the penalty when the fault for the failure to register lies squarely with the letting agent. 

Letting agents and landlords should ensure that their obligations, including such matters as who is to register the deposit, are clearly set out in a written agreement.  Where there is no such express provision the court will have to determine whose obligation it was from the available evidence such as:

    • Previous conduct of the landlord and letting agent; 
    • Other documentary evidence such as emails or correspondence between the parties;
    • Oral Evidence; 
    • Custom or Trade practice; and
    • Who physically received the deposit.

Whilst the court’s consideration of these facts may achieve the “right” outcome for one of the parties, the reality is that the parties should not leave it to chance because, whilst one party may go away happy, it is likely to cost many thousands of pounds and a great deal of time and resource to get to that outcome.