Author: Wellers

Neighbours Encroaching on Your Right of Way? Consult a Lawyer Today

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Many homes or businesses are only accessible via neighbours’ land and that can prove fertile ground for dispute. However, as a High Court case showed, expert lawyers are adept at ensuring their clients’ unhindered use of rights of way.

A couple’s home and holiday accommodation business was accessed via a track that ran across land that formed part of the grounds of a country house hotel. They took action against the hotel’s owners, asserting that they had for a number of years engaged in a persistent and systematic course of conduct that substantially interfered with the exercise of their right of way over the track. The owners denied the allegation and characterised the couple’s complaints as an attempt to gain greater access rights than those to which they were legally entitled.

Ruling on the matter, the Court found that a succession of works carried out by or on behalf of the hotel’s owners over the years – including the installation of a gate, the placing of boulders on the track’s verges and changes to its entrance splay – amounted to unlawful interference with the couple’s right of way.

Aerial photographs and other evidence indicated that the works had resulted in the track being significantly narrowed in places, making it harder for cars to pass each other and for heavier vehicles to access the couple’s property. The Court was satisfied that the installation of the gate had nothing to do with security but was rather a deliberate attempt to inconvenience the couple.

The Court granted the couple an injunction that required the hotel’s owners to, amongst other things, remove the gate and boulders and to broaden the entrance splay. The couple were awarded £1,000 in damages to reflect the inconvenience they had suffered and, importantly for them, the Court recognised their right to repair and maintain the track, which had at times fallen into a very poor condition.

Do you need a freezing injunction to protect marital assets?

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If you feel there is a danger that your spouse might be hiding assets and money in divorce, or is already disposing of assets before divorce, and this action is intended to deprive you of your rights to matrimonial wealth during a divorce financial settlement claim, a freezing injunction might be a suitable course of action.

A freezing injunction (also known as a freezing order) is an interim court order which can be granted under Section 37 of the Matrimonial Causes Act 1975 to prevent the dissipation of assets.

Speak to Wellers Law Group, so that our experienced divorce solicitors can listen to your concerns and explain the options available to you.

Disposal of marital wealth and financial misconduct

Before the court grants a freezing injunction, you will need to prove that your matrimonial wealth is at immediate risk and that any movement and/or disposal of assets is substantial enough to affect the size of the matrimonial pot to be divided in a financial settlement on divorce.

If proven, the court may consider any reckless, frivolous or unusual disposal of wealth by your spouse to be financial misconduct.

Some of the signs of asset disposal include:

  • Abnormal spending and expensive spontaneous purchases
  • Unplanned and extensive gifting to family and/or friends
  • Unplanned, quick sales of property and investments
  • Large cash withdrawals from savings accounts
  • Unplanned and unexplained trips away and/or expensive holidays
  • Unusual transactions on credit card statements
  • You suspect funds are being transferred into hidden bank accounts
  • Gambling

How do I put a freezing order in place?

You will need to apply to the court for a freezing injunction. In most cases, this will be ‘without notice’, in other words, your spouse or civil partner will not be informed of your application. This will prevent them from having time to dispose of assets before the court grants the freezing order.

You may be expected to attend at least one court hearing in person before the order is granted and there will be fees involved, however, the potential loss of significant assets is likely to far outweigh the cost of seeking a freezing injunction.

You will need to provide strong evidence that your spouse or civil; partner intends to hide or dispose of assets and that, without the order, you would suffer unfairly when the financial settlement on divorce comes before the court.

You will also need to prove that there are sufficient assets to meet your claim and you will almost certainly need to make an undertaking (solemn promise) to compensate your spouse or civil-partner in the event of any loss they incur should the freezing injunction be later set aside.

This ‘cross undertaking’ might include legal costs for the main proceedings, as well as the injunction application. If a third party suffers losses as a result of the freezing injunction, you also undertake to compensate them.

What can a freezing injunction protect?

Any asset to which a judgment may be attached can be frozen under a freezing injunction. For example:

  • Bank accounts
  • Property – real estate and land
  • Shares and investments
  • Valuable items such as cars, jewellery and artworks

It may be possible to seek a freezing injunction on assets held in trust for a beneficiary, however, this is more difficult and uncommon.

A domestic freezing injunction applies to assets held in England and Wales, while a worldwide freezing injunction applies to assets held overseas, although this type of order can be limited depending on the jurisdiction in which the assets are situated.

The importance of full financial disclosure in a freezing injunction application without notice

As the applicant, you must provide full and frank disclosure of all relevant information, including any material that may be unfavourable or potentially damaging to your own position.

If full disclosure does not occur and is not ongoing, the court can set aside the freezing injunction. You may also be ordered to pay for losses suffered by the other party whether or not the court decides to leave the freezing injunction in place.

The consequences of knowingly attempting to mislead a court are very serious and carry the risk of serious penalties, including criminal charges of perjury and contempt of court.

Contact the divorce solicitors at Wellers Law Group for expert legal advice

It is crucial to have expert legal advice when applying for a freezing injunction. Contact our Family Law team for more information.

We offer an initial fixed fee interview so that we can discuss your situation. Call 020 8464 4242 for our Bromley team, 01732 457575 for Sevenoaks, 020 7481 6393 for central London or 01372 750100 for our Surrey team. Alternatively, you can email an enquiry to enquiries@wellerslawgroup.com.

Divorce and the Family Business

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If you run a family business with your spouse or civil-partner and you are undergoing a divorce, one of your foremost thoughts is likely to be, “What will happen to the business?”

The ending of a business relationship is always a complex consideration and here we answer some of the most frequently asked questions about divorce and the family business.

What will happen to the business on divorce?

Like many of the arrangements that will need to be negotiated on divorce, there is no one size fits all approach to dividing a business, so, it is crucial that you seek guidance from an experienced divorce solicitor as soon as possible in order to evaluate the business asset and build a plan as to how it could be divided fairly.

Depending on its structure and ownership, at least part of the family business is likely to be treated as a matrimonial asset that will need to be divided on divorce. Wherever possible, the court will work towards seeing that the business stays with the original owner, however, if the business was set up by both spouses as a partnership during the lifetime of the marriage or civil-partnership, this makes the division more complex.

Why is my business considered a marital asset?

A family business is an asset in the same way as the family home, property and savings and although it’s unlikely to be a liquid asset, it will need to be divided. Many spouses do not actually ‘work’ for the business, but if they have supported the owner as a homemaker and/or taken care of children while the owner built up and worked for the business, the company will be considered matrimonial property and both parties will have an interest in it as an asset.

Unless the divorcing parties are amicable and determined to keep working together in the business, the court is likely to seek a remedy that will keep the business stable and maintain a workable platform for the future, while ensuring fair division of the value and share of assets that creates a clean break.

How can my spouse claim part of a business that has been in my family for generations

Firstly, if the marriage or civil-partnership was very short-lived and there are no children, the court may not consider the business as part of the assets to be divided. However, a family business does, in many cases, become a matrimonial asset on marriage, even if the other party is not actively involved in running it.

Unless a pre-nuptial agreement was signed stipulating that your spouse would not seek part of the company on divorce, the financial settlement on divorce will need to attribute each party’s appropriate share of this asset.

Even with a prenup in place, the court will always seek to achieve fairness during a financial settlement and if the other spouse’s needs cannot be met from other assets in the matrimonial pot, any argument that ‘ring-fenced’ the family business is likely to fail.

Will a divorce end the business?

The court will, wherever possible, consider the future stability of the business when dividing it as a marital asset and if splitting the business would damage it, or other shareholders’ stakes, then the court may order an offsetting method, such as a larger share of other marital assets or maintenance payments to ensure financial fairness.

When there are other shareholders or business owners outside of the marriage, their stake will not be included in the financial settlement on divorce; only the financial interest of the two divorcing parties will be part of the divorce settlement.

What are the relevant factors the court will consider?

The court will need to know:

  • Who owns the business?
  • Who runs the business on a day-to-day basis?
  • What income does the business produce for the spouses, such as salaries and dividend income?
  • What the business consists of, i.e. property, capital, other assets, etc
  • Does the company have a pension scheme?
  • Whether it’s possible to extract capital sums from the business?
  • Whether it’s possible to borrow against the business or its assets?

Who should value the business for a divorce financial settlement?

If the business is a small business with little or no assets, for example a sole trader with a single work premises providing an income for the family, it is unlikely that an independent valuation will be required.

For more complex business structures, an independent accountant should be appointed to prevent any valuation bias that could be challenged by the other party. Specialist assets, such as overseas property and complex plant or intellectual property assets, should be valued by specialist independent valuers.

An in-house accountant may assist in the independent valuation process and look over the valuation appraisal before it is submitted as part of the financial settlement on divorce, however they should not, as a rule, undertake the valuation themselves.

How will the court divide the family business on divorce?

There are a number of approaches the court can take to family business assets during a divorce financial settlement and these include:

  • One party retains control of the business – the other party will be compensated, perhaps with a lump-sum payment or maintenance, or a combination of the two.
  • Both parties become shareholders – the business does not need to be sold and both parties share the risk. A shareholders agreement will need to be drawn up to protect the interest of the business and all other shareholders.
  • Transfer of shares – suitable in situations where only one party will continue running the business, but both parties are owners.
  • Selling the business or shares – courts generally only order the sale of a business or shares in exceptional circumstances where no other remedy achieves fairness and one party is unable to “buy out” the other party. If this approach is adopted, the court should allow enough time for the sale so that a fair price can be achieved.

Divorce financial settlements to protect the family business

Our divorce solicitors and family specialists are committed to making the divorce process as clear and straightforward as possible. We aim always to encourage amicable settlements relating to the issues of relationship breakdown, and to help our clients understand the options available to them.

Talk to Wellers Law Group today about your situation and your aims, so we can discuss how we can help you through the divorce process.

Contact our office in Bromley today to arrange an appointment with a family law solicitor on 020 8464 4242. For our Surrey team call on 01372 750100, for Sevenoaks the number is 01732 457575 and for central London please call 020 7481 2422.

EU Settlement Scheme for Construction Employers – What you Need to do Now

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The deadline for EU nationals to apply for residency under the EU Settlement Scheme (EUSS) has come and gone. If you employ EU nationals in your construction business, there are some important factors to consider now.

Hopefully, your employees all applied under the EUSS and their status has either been confirmed or is in the process of being adjudicated. However, if any of your EU employees have not yet applied and/or you intend to employ EU nationals in the future, there are several issues you should be aware of.

Can EU nationals still apply under the EU Settlement Scheme?

While the EUSS application deadline of 30 June 2021 has indeed passed, this particular date was relevant only to those who were able to apply for ‘full settled status’ due to their having five years of continuous residence in the UK prior to 31 December 2020.

EU employees with ‘pre-settled status’ (that’s around 2.3 million EU nationals who had not achieved five years of continuous residence by 31 December 2020) now have up to five years to accumulate the required amount of time in the UK to apply for full settled status. So there is likely to be a steady flow of applications up until mid 2026 for those who wish to live permanently in the UK.

What is the difference between pre-settled status and full settled status?

EU workers who had been living and working in the UK before 31 December 2020, and wanted to continue to do so, had until 30 June 2021 to apply under the EU Settlement Scheme. What type of status they could apply for depended on their employment status and the evidence they were able to supply to the Home Office.

Pre-settled status applies to EU citizens who had lived in the UK for at least one day in the six months until 31 December 2020. It is a temporary status of up to five years and allows limited leave to remain (meaning that if the applicant does not apply for full settled status they will be required to leave at the end of the applicable period).

Full settled status was available to individuals who had lived and worked in the UK for at least five years prior to the deadline and fulfilled the continuous residence criteria. It provides indefinite leave to remain.

Valid reasons for late applications under the EU Settlement Scheme

If your employees have yet to apply for settled status, it will be their responsibility to prove to the Home Office that they had a genuine reason for failing to apply during the application period if they wish to remain living and working in the UK.

If the applicant can prove that an application should reasonably have been made on their behalf, such as by a parent, guardian or local authority, this may be seen as reasonable grounds. Typical scenarios are likely to include the EU parents of a child born in the UK not realising they needed to apply within three months of the birth of the child, and EU parents who applied themselves but did not realise the requirement to apply separately for their children.

The following are also possible valid grounds for late application to the EU Settlement Scheme.

  • The applicant has diminished physical or mental capacity and/or specific care or support needs.
  • The individual has a serious medical condition or was undergoing significant medical treatment including, in certain cases, hospitalisation with COVID-19.
  • The applicant has been a victim of modern slavery.
  • The individual is in a controlling, coercive or abusive relationship.
  • Other compelling compassionate reasons including a lack of permanent accommodation which prevented them from applying, complex needs that meant they were not aware of the support available to help them apply, they were hampered in accessing the support available to help them apply by restrictions associated with the COVID-19 pandemic.

When an EU citizen is attempting to prove they have a valid reason for late application under the EU Settlement Scheme they will benefit from the assistance of an experienced immigration solicitor who can help them build their case. Without sufficient evidence an EU worker who has does not have settled status will no longer be able to live or work in the UK and could be removed by the Home Office.

What do construction employers need to do?

There are many EU workers employed in the construction industry and UK employers now have a duty to ensure that all new non-UK citizens they employ have the right to work in the UK. Employers who do not check the right to work status of all new hires may face fines of up to £20,000 per illegal employee with no limit on the number of employees that could incur fines. In the worst cases, employers may face a custodial sentence.

Employers who carried out applicable right to work checks prior to the end of the EU Settlement Scheme application period will have fulfilled their legal duties to ensure employees have the right to work. As long as EU employees’ passports and national id cards proved their right to work prior to 30 June 2021, EU construction workers employed prior to the deadline will still be eligible to work in the UK from 1 July onwards. If they have received full settled status they have indefinite leave to remain in the UK and if they have achieved pre-settled status, they will need to apply for full settled status once they achieve the five years of continuous residence in the UK.

Home Office guidance makes it clear that employers are not obligated to check whether existing employees have secured settled status under the EU Settlement Scheme, and that employees have no obligation to prove their settlement status.

How to stay compliant with ‘right to work’ obligations while avoiding discrimination

The application deadline created a fine line for employers between discriminatory behaviour and ensuring the ongoing stability of their workforce. During the application timeline, new hires from the EU could volunteer their status under the EU Settlement Scheme but were not compelled to do so. Thus creating a conundrum for the employer regarding the applicant’s long-term commitment to working in the UK. However, discriminating against employees who had not applied under the EUSS could contravene UK Employment Law.

In order to ensure the future stability of your construction workforce you may wish to carry out retrospective settlement status checks, but this must not lead to discriminatory action against employees who have not applied. Employers may wish to hold informal meetings with EU employees and contractors to make sure they understand the rules around ‘right to work’ following Brexit.

New EU hires, after 1 July 2021, must provide their prospective employer with evidence of their status under the EU Settlement Scheme or prove they have the right to work through another source, such as sponsorship under the new points-based-visa system or via a partner visa.

The introduction of the points-based visa system for EU workers has created a new layer of costs involved in hiring overseas staff, including the need for many more businesses to seek sponsor status.

COVID-19 adjusted measure checks

Despite the global health pandemic, it remains a statutory obligation for employers to carry out ‘right to work’ checks for all new hires. Temporary COVID-19 adjusted check measures were introduced on 30 March 2020 and have been extended until 5 April 2022. These measures include:

  • Using video calls to carry out checks rather than face-to-face meetings.
  • Allowing scanned documents or legible photographs of documents, sent via email or suitable messaging platform, to be provided by job applicants or existing workers instead of sending originals.
  • The provision of the online Employer Checking Service for instances when a prospective or existing employee is not able to provide the accepted documentary evidence.

There are a number of rules that apply in order to ensure the right to work check is valid including:

  • During the right to work check video call, the employer must see the original documents and check them against the digital copies. The date of the check should be added to the copy and marked “adjusted check undertaken on [date of check] due to COVID 19”
  • If the worker has been granted the right to work under the EUSS or via the points-based-visa programme, or if they have a current Biometric Residence Permit or Biometric Residence Card, the employer can use the online Right to Work checking service during the video call so long as they have the applicant’s permission to view their status details.

Wellers Law Group immigration services for business

Post Brexit immigration is a hot topic and despite the guidance about post-Brexit changes to freedom of movement and right to work being available in plenty of time before the deadlines expired, many businesses had not fully comprehended how the changes might affect their workforce.

If your construction firm hires migrant workers, you will need to ensure that you have carried out the relevant right to work checks and have applied for the right level of sponsorship if you are going to employ EU workers on a points-based-visa in the future.

For assistance on all business immigration matters, contact Rosalind Nunoo on 020 8290 7982 Ros provides expert support which can help you understand and uphold your legal obligations as an employer of EU and all overseas workers.

Wellers help to create award-winning social impact investment

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We are extremely proud to announce that Water Unite Impact (a collaboration between Water Unite and Wellers Impact, our impact investment manager) has won the Impact project/investment of the year: Water category in the prestigious Environmental Finance IMPACT Awards 2021.

The Wellers Law Group commercial and charity law teams carried out the structuring for this innovative investment for Water Unite. Water Unite Impact uses micro-contributions, for example from bottled water sales (1 cent/pence per litre sold) in the form of donations from international retailers, as Catalytic Capital to attract commercial capital and expertise that has the power to transform the water, sanitation and plastics recycling sector.

It supports corporations to meet ESG goals through impact investment and helps retailers and investors report transformational impact to their consumers, clients and stakeholders. Micro-contributions make it possible for consumers to directly contribute to scaleable commercial solutions making water and sanitation more inclusive and removing plastics out of the environment.

Neil Sandy, CEO at Wellers Impact, said “It has been a privilege to work on the Water Unite Impact project with partners such as Water Unite, The One Foundation, The Coop and Elior. These are organisations that understand the very pressing issues of plastics pollution and access to water being experienced in many different parts of the globe and are addressing it.

We at the Wellers Law Group and Wellers Impact are delighted to have been able to play a part by using the legal and the impact investment knowledge we have under one roof to help structure this unique and important investment and bring it to market. We see this as a future model for both sustainable investment managers and charities to deliver positive outcomes and financial returns.”

Please see below for more details of the award:

https://www.environmental-finance.com/content/awards/impact-awards-2021/winners/impact-project/investment-of-the-year-water-water-unite-impact.html

If you are looking to structure an innovative social impact investment contact Neil Sandy at Wellers Impact on 020 7481 2422 or email neil.sandy@wellersimpact.com

Inaccuracies In Your Tax Return Are Serious – Seek Professional Advice

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Any inaccuracy when filling in your tax return can have severe consequences, so it really does make sense to seek professional assistance. The point was powerfully made by the case of a financier who narrowly escaped a stiff financial penalty after failing to declare all of his income and benefits.

After being made redundant by an investment bank, the man failed to include in his self-assessment tax return a severance payment of £176,738 he had received. He also made no reference to the bank having written off a loan to him of £143,420. As a result, his Income Tax liability was understated by £68,015.

After HM Revenue and Customs (HMRC) launched an enquiry and discovered the omissions, he was required to pay the additional tax due, plus interest and a penalty of £23,805. Given that his tax affairs were very straightforward, HMRC asserted that it was unlikely he had made an innocent mistake.

The man acknowledged the inaccuracies but asserted that he had made every effort to complete his return correctly, without professional help. He said that he had relied on documents provided to him by the bank and his subsequent employer and that he was unaware prior to HMRC’s inquiry that the severance lump sum and the written-off loan were taxable.

In upholding his appeal against the penalty, the First-tier Tribunal ruled that HMRC had failed to establish that the omissions were deliberate or that he had consciously or intentionally chosen not to find out his true tax position. Given that HMRC had not advanced an alternative case that the omissions were careless, the penalty was overturned.

Changes in the Tax Regime – Public Information Campaigns Have Limitations

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The tax regime is subject to constant change and it is generally up to taxpayers to keep their knowledge up to date in a fluid landscape. However, as a case concerning tax charged on high-income recipients of Child Benefit showed, HM Revenue and Customs (HMRC) is also under a duty to keep the public informed.

Until January 2013, Child Benefit was not means tested. However, the introduction in that month of the High Income Child Benefit Charge (HICBC) meant that those who earned more than £50,000 a year were subject to tax on Child Benefit that they or their partners received. Those who fell into that category who did not opt out of receiving Child Benefit were required to inform HMRC of their liability to HICBC.

HMRC carried out an awareness campaign prior to the introduction of HICBC. The measure was announced by the Chancellor in the 2012 Budget; it was debated in Parliament and adverts were placed widely in the media.

The taxpayer involved in the case earned more than the £50,000 threshold but did not declare his liability to pay HICBC. In 2019, he was informed by HMRC that he owed several thousand pounds in HICBC, which he swiftly paid. HMRC also imposed a late payment penalty of £509.20, which he challenged.

Upholding his appeal, the First-tier Tribunal (FTT) noted that public information campaigns have their limitations. Even when a newspaper is delivered to one’s door, one does not always have the time to read it. Many media articles concerning the introduction of HICBC were in any event misleading, displaying a misunderstanding of a novel measure that required parents to make a choice between a charge to tax or a disclaimer of Child Benefit.

The FTT accepted that the taxpayer, a scrupulous record-keeper, had not received an HMRC letter informing him of the introduction of HICBC, nor had he become aware of the new tax by way of the awareness campaign. His children having been born prior to the inception of HICBC, he did not receive information supplied to new applicants for Child Benefit.

As he was taxed entirely through the PAYE system, he had never been required to submit a self-assessment tax return. The information campaign was not targeted at employers, who could have been expected to inform employees of their obligations. HMRC was throughout aware of the taxpayer’s earnings but had waited over six years before informing him of his HICBC liability. The penalty was overturned on the basis that he had a reasonable excuse for late payment of HICBC.

Unreasonable Behaviour in Family Law Matters

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Until no-fault divorce comes into being in the UK, the current fault-based divorce system requires one party to cite a ground for divorce; in other words, they must provide the court with a reason why the relationship has irretrievably broken down. The petitioner (person applying for the divorce) must provide evidence to support their chosen ground, and the respondent (the petitioner’s spouse) can either agree or disagree.

Citing unreasonable behaviour, no matter how bad the behaviour appears to be in the petitioner’s opinion, is purely the means by which the court will decide whether or not to dissolve the marriage and the severity of the behaviour will bear little or no relevance as to how the divorce is likely to proceed through the court system. However, one way in which it may affect a divorce is in relation to costs.

If unreasonable behaviour (or desertion, or adultery) is cited as the ground for divorce, then the respondent may become liable for at least some of the petitioner’s costs.

Unreasonable behaviour as grounds for divorce

One of the main criticisms of the current divorce process is that unless you can state one of the other grounds for divorce on your petition then you will have to provide the court with several examples of your spouse’s bad or unreasonable behaviour. You must include details of the behaviour that has adversely affected the marriage, dates of when it occurred, and how it made you feel. You will be expected to provide enough specific information to satisfy the court that you cannot reasonably be expected to continue living with your spouse.

The evidence provided to the court is also sent to the respondent who must either agree that the evidence is the reason for the irretrievable breakdown, and that they therefore agree to the divorce, or, If they don’t agree, they may wish to contest the divorce. And this is where the current adversarial system can get very difficult and costly.

Divorce court controversy in the 21st century

In the case of Owens v Owens, which has proved to be a persuasive argument for the introduction of no-fault divorce in England and Wales, Mrs Owens applied for a divorce citing that her husband’s behaviour was unreasonable. Mr Owens disagreed and defended the divorce petition. The court did not agree with Mrs Owens that her evidence was proof of irretrievable breakdown and the petition was dismissed. Mrs Owens appealed this decision and this was also dismissed.

Despite the spiralling costs, Mrs Owens maintained her position that she was trapped in a loveless and unhappy marriage and argued that this should be reason enough to be able to obtain a divorce. She took her case to the Supreme Court and while the judges stated in their judgement that the case was troubling, they agreed with the initial ruling that Mrs Owens had not sufficiently proved her argument of unreasonable behaviour.

Following Owens v Owens, a number of organisations and interested parties, including many divorce solicitors, suggested that the current adversarial divorce system is out of date and out of touch with a society which strongly believes in autonomy when dealing with personal feelings. Many believed that all the ruling would do would be to make sure that divorce solicitors urged their clients to use robust accusations of bad behaviour to ensure success. And this, in turn, will only serve to fuel the more adversarial and contentious nature of English and Welsh divorce courts.

Bad behaviour and financial settlements

Under Section 25 of the Matrimonial Causes Act 1973, there is no legal concept to provide financial compensation for bad marital behaviour; so the amount of unhappiness endured in a marriage as a result of a former spouse’s behaviour will not be taken into consideration by the court during a divorce financial settlement claim.

However, when dividing matrimonial wealth the court will seek to make the fairest settlement possible determined by the individual circumstances of the case and if bad conduct has in some way affected the family finances (or the finances as they have been presented to the court) this may be considered in a number of other ways. These broadly fall into three categories:

Financial conduct in relation to the marriage
If the court can quantify how bad behaviour has affected the matrimonial pot, for instance in terms of reckless spending, gambling, or needlessly stopping working, then it may be able to apply this in the form of ‘adding back’ a sum to reflect the amount taken from the pot.

However, the court may not be able to add back in certain cases, for instance if it can be proved that the financial misconduct was not ‘wanton’ or deliberate but was the result of a medical condition or an addiction.

If fraudulent behaviour has damaged the matrimonial pot, the court may be able to award the wronged party a sum as part of the financial settlement to reimburse any financial loss.

Personal conduct and the financial settlement
In a financial settlement, the impact of bad personal behaviour is complex and, as seen in Owens v Owens, what constitutes bad behaviour is fundamentally subjective. It must be remembered that the family court is not punitive and is not able to stray into the realms of providing criminal judgement on behaviour within a marriage.

Where harmful personal behaviour, such as domestic violence for example, has caused a grossly unfair situation (perhaps injury has rendered one party unable to work or caused lasting psychological damage) and is so serious that it would be unfair not to factor it in to any settlement, the court may seek to distribute wealth so as to address the financial loss.

Unfortunately, there is no comprehensive test to determine when bad conduct will be given weight within a financial settlement and the courts are guided by a relatively small number of cases in which the type of conduct considered was extreme and “both gross and obvious”.

Litigation Misconduct
During divorce proceedings, both parties will be expected to abide by court rules and adhere to all requirements to enable divorce proceedings to run smoothly.

For example, both parties will be expected to provide full disclosure of their financial situations. If a party is found to be hiding assets or has disposed of them in order to prevent the other party from benefitting, the court can impose a costs order and, in very serious breaches, a fine and custodial sentence for contempt of court.

Similarly, if delay tactics are used or false evidence is presented to the court this could also see the parties ruled in contempt.

Using children as a bargaining tool

It is not uncommon to hear of one parent deciding to withhold child contact from the other party as a misguided form of punishment for bad behaviour. However, if the parties are subject to a child arrangements order whereby contact has been agreed, the party withholding contact could be seen to be in contempt of court. This could result in legal action against them.

Nevertheless, if any party believes that the bad behaviour of the other parent is putting children at risk of harm, then it is best to seek legal advice as soon as possible so that the correct authorities can be notified and the proper steps taken to ensure the children’s safety.

While it is a fairly common and sad fact of family law that children are used by some parties as bargaining chips in divorce, the court has no power to factor this behaviour into a financial settlement and the issues of child arrangements orders, child maintenance and parental responsibility are separate issues.

Divorce solicitors for financial settlement and family law matters

For help or advice on matters discussed in this article please call 020 8464 4242 for our Bromley team, 01732 457575 for Sevenoaks, 020 7481 2422 for central London or 01372 750100 for our Surrey team.

Alternatively email your enquiry to enquiries@wellerslawgroup.com .  We offer a fixed fee, no obligation one-hour interview so that we may provide you with initial advice and suggest the options for your next course of action.

Dangers Of Not Having An LPA

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In March 2020, 53-year-old Derek Draper, husband of Kate Garraway, contracted COVID-19 and was put into a medical coma in an intensive care unit. In the next few months, as her husband became seriously ill, the TV presenter learned first-hand the perils of not having Lasting Power of Attorney. The “financial mess” she described publicly should be a lesson to us all.

Thankfully, Mr Draper is now back at home and recovering slowly, but the couple’s story is one which many of us should heed.

Sudden illness, an accident; we could all lose capacity in the blink of an eye

The coronavirus pandemic has brought home to many of us how quickly our life circumstances can change, but it’s not just a global health emergency which could turn our worlds upside down.

Any circumstance which renders a person unable to make decisions for themselves (having lack of mental capacity) can lead to serious upheaval for loved ones and especially spouses, who may have shared many of the services jointly while the other spouse took care of all the details.

As Kate Garraway found out, the minute her husband became incapacitated several important financial and business elements of the family’s life were now out of her control – it was her husband’s name on the bank accounts, insurance policies and car documents. Only he could make decisions.

She said in a TV interview, “There are lots of financial goings on which are making life very complicated because I can’t get access to things because legally, I haven’t got power of attorney.”

Being Next of Kin is not enough

Many of us mistakenly believe that our next of kin (husband, wife, civil partner, son, daughter etc.) will be able to make essential decisions on our behalf if we become incapacitated, but this is not legally the case.

To be able to represent a loved-one officially, a person will need to be named as attorney and a valid Lasting Power of Attorney (LPA) must have been set up. The attorney’s capacity will depend on whether they have been named on a property and financial affairs LPA or a health and welfare LPA, or both.

As Ms Garraway found out, only the donor (the person choosing the attorney) can nominate an attorney, so once the donor is incapacitated it’s too late and their next-of-kin will need to make an application to the Court of Protection to become their deputy.

Getting the legal aspects right

An LPA is a powerful legal document and it pays to seek advice from a specialist solicitor for LPAs to ensure it is set up correctly, an invalid LPA may only be discovered at a critical time and this can be devastating for loved-ones.

Similarly, if you need to apply to the Court of Protection, the advice and guidance of an experienced solicitor who specialises in deputyship issues, is crucial to ensuring an application is made correctly.

LPAs – the stats

According to research, 65% of adults believe next of kin will be able to make decisions on their behalf if they lose capacity.

Only 22% of UK adults have LPAs in place.

Around 22,000 LPA applications are rejected each year for anomalies which prevent them being set up in the first instance.

Putting it off is a false economy

Setting up Lasting Powers of Attorney does incur a cost and you’ll need to factor in fees for legal advice, but it can cost considerably more financially, as well as in terms of stress and emotional expenditure, to have to apply to the Court of Protection for deputyship.

As Kate Garraway has said, she and her husband talked about setting up powers of attorney in case anything happened but it was little more than a jokey aside, and although she remembers the conversation, nothing was actioned as a result: “It isn’t logged anywhere. Or if it is, I can’t find it.”

Contact Wellers today to talk to us about setting up an LPA or if you need to apply to the Court of Protection to become a deputy. We can provide the legal expertise you need to help your application go as smoothly as possible and to help minimise the possibility that your application is rejected. For our Bromley or Chislehurst offices please call 020 8464 4242, for our Surrey team please call 01372 750100, for London call 020 7481 2422 and for Sevenoaks the number is 01732 457575. Alternatively, you can email enquiries@wellerslawgroup.com.

In Dispute with Your Neighbour? A Lawyer Will Help to Restore Peace

Posted on by Wellers

Disputes between neighbours frequently inflict enormous emotional and financial harm on all involved. A High Court dispute concerning use of a shared driveway showed why any lawyer would advise sensible negotiation as a far better alternative to litigation.

A couple’s right of way over the driveway, by which they accessed their rural home, was restricted to passage on foot or by private motor vehicles. Their neighbour, with whom they shared the driveway, launched proceedings against them alleging that they were in long-standing breach of that restriction by permitting its use by heavy lorries, plant and machinery. The couple asserted that their use of the right of way was entirely lawful.

Ruling on the dispute, the Court found that the right of way permitted any reasonable and otherwise lawful vehicular use of the driveway for the purpose of maintaining or repairing the couple’s home or otherwise enabling its use as a private dwelling. That included use of the driveway by, amongst others, visitors’ cars, postal vans, trade vehicles and lorries required to empty the property’s septic tank.

The right of way, however, did not embrace large vehicles which might be used in construction or demolition works unconnected to the couple’s day-to-day domestic enjoyment of their home. The physical size of the driveway rendered it unsuitable for use by vehicles exceeding 2.6 metres in width or 10 tons in weight. The Court noted that, if the couple wished large vehicles to pass along the driveway, they would be expected to seek their neighbour’s permission in a friendly manner.

Lamenting the falling out between the neighbours, who were formerly on good terms, the Court noted that such disputes commonly grow out of all proportion from small seeds and are inevitably made worse by litigation. In order to resolve any further issues between them, both sides were strongly urged to seek creative solutions via mediation or a binding process of alternative dispute resolution.