Private Client Titles – June 2007


Actual Loss Only, Rules House of Lords
The House of Lords has taken a surprisingly strong stance on the limits of compensation to be paid in claims for wrongful imprisonment.
The Law Lords were considering the amount of compensation to be paid to Michael and Vincent Hickey, who were wrongfully imprisoned for the murder of newspaper delivery boy Carl Bridgewater and who were held in prison for 18 years.
After the Court of Appeal overturned their convictions, the two men were released and claimed compensation. Michael Hickey was awarded nearly £1m and Vincent Hickey just over £1/2m. However, the financial awards were reduced to take into account the expenses they would have incurred had they lived as free men during that time. The Hickeys appealed against the deductions.
The House of Lords ruled that the deductions must stand. Lord Bingham commented that it is ‘fair, just and reasonable’ that the awards should be made for the amount of actual loss suffered and no more.
“The Lords have stood up for the principle that compensation should be based only on restoring the claimant to the position they would have been in had they not suffered the wrong in the first place and that awards for damages should not be punitive,” says <<CONTACT DETAILS>>. “However, in this case the decision seems somewhat harsh, especially as in the view of Lord Rodger, who issued a dissenting opinion, the Hickeys’ position was similar to that of people who had been subject to a prolonged kidnapping.”
Partner Note
O’Brien and others v Independent assessor [2007] UKHL 10. See
Care Homes and the Human Rights Act
A 72-year-old man has successfully used the Human Rights Act (HRA) in a case against a local authority care home which prevented him from leaving the premises. The man is blind and is further incapacitated as a result of having had a stroke. He did not wish to remain in the home however, preferring to live at home with his wife.
The care home did allow residents to come and go, but this necessitated operating a keypad, which the man could not do. He was told by the staff at the home that he could not leave and his wife had been discouraged from visiting him when he was initially placed in the home.
The couple claimed that, in effect, the man was being deprived of his liberty, contrary to article 5 of the European Convention on Human Rights. The High Court agreed and the fact that this arose through misrepresentation of the degree of authority the care home staff held over him, and that they could not legally have prevented him from leaving, was not in point.
Many families experience difficulty in dealing with local authorities over matters such as this and, on occasions, staff may overstep the mark. If you are having problems of this nature, we may be able to help.
The provision of care for the elderly is often contracted out to private care homes. The House of Lords recently ruled that a woman placed by Birmingham Council in a private care home was not entitled to bring an action under the HRA to contest a decision to remove her. The woman claimed that her threatened eviction interfered with her right to family life, which is guaranteed under the Act.
The House of Lords placed weight on the fact that the private care home was a ‘for profit’ organisation and not one which had a primary ethos of public service. It concluded that the HRA does not apply in such circumstances.
It would therefore appear that one’s ability to rely on the HRA in such cases depends on whether the care home is run by a public or private body.
Partner Note
JE v Surrey County Council and others [2006] EWHC 3459 Fam.
YL v Birmingham City Council and others [2007] UKHL 27. Reported in the Times, 21 June 2007. See
Carrying Cash – New Rules
In a bid to comply with European Directives designed to combat money laundering, HM Revenue and Customs (HMRC) have announced that people either entering the UK from or leaving the UK for a country outside the European Union must now declare to HMRC any sums of cash of 10,000 Euros or more (or the equivalent in another currency). In this context, cash includes bank drafts and travellers’ cheques.
Undeclared sums in excess of £1,000 are subject to seizure by HMRC if they have reason to believe that the money is to be used for, or is the proceeds of, unlawful conduct.
Failure to disclose can lead to a penalty of up to £5,000. The necessary declaration forms are available from HMRC at ports and airports.
If you are going on a holiday and plan to carry a substantial sum in cash or travellers’ cheques, make sure you retain the documentation showing where the money came from as well as completing the necessary forms. Note also that many countries have similar requirements. For example, the USA requires sums of $10,000 or more to be declared on a customs form on entry.
Partner Note
For more information, see
For the purposes of this requirement, the countries of the EU are:
Austria, Belgium, Bulgaria, Cyprus, the Czech Republic, Denmark, Estonia, Finland, France, Germany, Gibraltar, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain (including the Canary Islands), Sweden and the United Kingdom (not including the Isle of Man and the Channel Islands).
The HMRC press release is at
Case Sounds Foreign Will Warning
A man who died in Barbados leaving a will there as well as a will made in the UK created a problem for his family. The will made in Barbados was drawn up after his English will and contained the usual clause ‘revoking all former wills and testamentary dispositions’. The will contained details of various bequests and dealt with the man’s property in Barbados, but it made no mention of any arrangements for his interment or his UK assets.
The court accepted that the later will was an additional will, intended only to deal with the man’s assets in Barbados, and therefore his English will was the basis under which his other assets should be distributed.
The important issue here for people with assets (such as a holiday home) abroad is that whilst it is normally very sensible to create a ‘local will’, this should specify the assets it covers. In the worst case, an inappropriately drafted will may revoke an earlier English will, but at the very least, as in this case, it may add time and expense to the administration of the estate.
Contact <<CONTACT DETAILS>> for advice on estate planning, wills or any related matter.
Partner Note
Benjamin v Bennett and others [2007] All ER (D) 243.
Cohabiting Couples – Case Shows Wisdom of Formal Agreements
Setting down on paper their intentions regarding the ownership of assets is not likely to be one of the first things two people think about when they start living together, but a recent case shows the wisdom in such circumstances of making sure that at least some aspects of your arrangements are properly agreed and evidenced.
The case, which reached the House of Lords, concerned the division of the value of a house. The property had been bought by Barry Stack and Dehra Dowden and was in their joint names. They lived together for almost thirty years and had four children, but they eventually parted.
When the house was purchased, Mr Stack paid both the endowment premiums required to repay the mortgage and the mortgage interest. There were two policies, one in his name and one in their joint names. The house cost £190,000, of which Ms Dowden had contributed nearly £129,000 from her savings and the sale of her own house. The couple had lived together in that property for ten years, but it had been owned in Ms Dowden’s name only. During the time they lived in the house they owned jointly, Mr Stack paid £27,000 and Ms Dowden paid £38,435 in capital repayments. The arrangements of the couple were unusual in that their financial affairs were kept completely separate and each was responsible for specific areas of expenditure.
When a property is bought jointly, there is a presumption that it will be owned equally. However, that presumption can be overturned if there is evidence that equality was not the common intention of the owners. Mr Stack claimed he was entitled to a half share in the value of the house. Ms Dowden disagreed.
Lord Hope of Craighead, in his judgment, said, “I do not think that it is possible to ignore the fact that the contributions which they made to the purchase of that property were not equal. The relative extent of those contributions provides the best guide as to where their beneficial interests lay, in the absence of compelling evidence that by the end of their relationship they did indeed intend to share the beneficial interests equally.”
In this case, the fact that the couple’s resources were never ‘pooled’, together with the greater contribution made by Ms Dowden, led the Lords to conclude that her share should be 65 per cent of the total.
Says <<CONTACT DETAILS>>, “Cohabiting couples are well advised to have their intentions as regards beneficial ownership of properties they buy properly recorded and evidenced.”
Partner Note
Stack v Dowden [2007] UKHL 17. See See also, NLJ, 4 May 2007 p 634.
Compensation Ordered for Duped ‘Dad’
A woman who misrepresented the paternity of her child to her ex-partner, and thereby obtained financial support from him as he believed himself to be the father, was recently ordered to pay him compensation.
The woman gave birth to the child whilst in a relationship with the man. She had assured him that he was the father and he had supported both mother and child. When their relationship later foundered, she disputed that he was the father and a DNA test confirmed that he was not. Subsequent to the results of the DNA test, the man stopped making any payments to her.
The man sued his ex-partner. In the view of the court, the woman had made fraudulent misrepresentations with the intent that the man should rely on them. Since he had suffered a loss because of the misrepresentations, he was entitled to damages. The court also held that he was entitled to special damages on account of money spent on the mother, but not for money spent for the child’s sole benefit.
Says <<CONTACT DETAILS>>, “Under the provisions of the new Fraud Act, making a fraudulent statement with the intention of benefiting from it constitutes an offence, carrying a maximum sentence of ten years’ imprisonment.”
Partner Note
AvB QBD 3 April 2007. Reported In the Law Society Gazette, 19 April 2007.
Consumer Law Gives Protection in Standard Form Contracts
In many commercial situations, businesses are used to dealing with each other by the use of ‘standard form’ contracts. One of the common instances of the use of such contracts is in the building industry, where construction projects are often governed by standard JCT contracts.
In a recent case, a builder who entered into a standard JCT ‘minor works’ contract with a residential occupier sought to enforce the decision of the adjudicator that he should receive interim payments which had been withheld by the customer. The payments were withheld because of disputes about delays in the work and the quality of some of the workmanship. The withholding of the interim payments was not accompanied by the issuing of withholding notices, which are required under the JCT agreement. The adjudicator therefore ruled that the interim payments were due to be made, because the customer had not complied with the terms of the contract as regards the withholding of payments.
This decision was challenged, using EU consumer law, on the grounds that the contract entered into took away normal standard consumer rights and thereby created an imbalance of rights between the builder and his customer. To rely on the provisions of the contract, it would be necessary for the builder to have specifically drawn the attention of the customer to the relevant terms of the contract. Because this was not done, the court ruled thatthe stage payments were not payable.
Says <<CONTACT DETAILS>>, “Any business that relies on standard contracts and whose customers are private individuals must make sure that where the contract contains clauses limiting the usual consumer rights, these are brought to the customer’s attention and agreement to them is specifically evidenced. Failure to do so could result in the relevant clauses being considered to be void by the court.”
Partner Note
Domsalla (T/A Domsalla Building services) v Dyason [2007] EWHC 1174 (TCC).
Divorce – Future Earnings Not Taken Into Account
A judgment in the High Court may signal a shift in the ground rules governing the financial settlements in divorce cases.
The case involved a woman whose ex-husband is a high-flyer in the banking industry, earning a substantial salary and bonuses. The woman was awarded £13m in settlement of her claim, but the Court refused to order any further payment by her ex-husband to compensate her for her potential loss of his future earnings. She had sought an additional £1.5m.
The couple have four children and the wife had given up working in order to be with them and to support her husband in his career. However, the Court was of the view that as a teacher she had not sacrificed a career that was likely to provide a substantial income. The judge concluded that the ex-husband’s fortune had been made primarily as the result of his own talents, hard work and good fortune.
Several well-reported cases, such as that involving footballer Ray Parlour and, more recently, the well-known Miller and McFarlane judgments, have permitted the wife’s contribution to a marriage to be assessed in terms of contribution to future earning potential. This case may well be a precedent for the limitation of the extent to which ex-wives can claim on the basis of their husband’s expected future income.
The key points of the decision are that:
·        the contribution of a homemaker is not deemed to be equivalent to that of a wage earner;
·        settlements for child maintenance do not extend beyond provision for their maintenance; and
·        claims on the joint assets of the divorcing couple will cease at the end of their emotional involvement.
It remains to be seen if this case is appealed. Even if it does mark the start of a new approach by the courts in such cases, the UK remains a jurisdiction under which financial settlements to ex-spouses are still generous by comparison with most other countries.
Partner Note
H v H, reported in the Times, 14 April 2007. See also New Law Journal 4 May 2007, p 627-8.
Drink Driving Ambush Fails
A prosecution for drink-driving, which was ‘ambushed’ when the defence raised a new issue in its closing speech, made headlines recently when the Court upheld the right of the prosecution to introduce evidence to meet the point after it had closed its case.
Norinder Malcolm was charged with drink-driving and her case was heard in Barnet Magistrates Court. Ms Malcolm had been arrested in unfortunate circumstances. She had gone to her mother’s home and found her mother’s boyfriend (Mr Killen) there. He had kicked and punched her and, although she had drunk alcohol, she was frightened and drove away. She did not go home because her mother’s boyfriend knew her address and she was scared he would pursue her. She called the police from a telephone kiosk to report him, hoping that he would be arrested. Although she was told by the police to wait where she was, she drove to another place and contacted them again.
When the police attended her, they noticed that she smelled of alcohol and breathalysed her.
In Court, she acknowledged that she had been drinking. Her defence was based on the doctrine of duress. She claimed she had been attacked and was fearful of further attack. The police sergeant who administered her blood alcohol test at the police station did not give evidence.
In her final speech, the lawyer representing Ms Malcolm submitted that the required warning that a failure to provide a specimen might render her liable to prosecution had not been given.
The magistrates were mindful to acquit Ms Malcolm because of the claimed procedural irregularity. However, the prosecutor requested that the police sergeant be called to give evidence. The magistrates agreed to hear his evidence in which he confirmed that the warning had been given and the correct procedure had been followed to the letter.
Ms Malcolm appealed against her resulting conviction, arguing that the prosecution had closed its case and the evidence of the police sergeant should not have been heard. Normally, once the prosecution has closed its case and the magistrates have retired to consider their verdict, further evidence will not be heard. However, there is precedent for evidence to be admitted at that late stage in certain circumstances.
Interestingly, the magistrates indicated that they were of the opinion that whilst the defence of duress was available to Ms Malcolm prior to her stopping at the phone box, “the decision to drive on from that place knowing police had been informed and had told her to wait, and without having seen Mr Killen since leaving her mother's property, was not from an objective standpoint reasonable or proportionate to avoid what we accept had been a frightening and upsetting incident.”
Regrettably for Ms Malcolm, the High Court was unimpressed with her barrister’s arguments. Mr Justice Burnton stated that, “Criminal trials are no longer to be treated as a game, in which each move is final and any omission by the prosecution leads to its failure.” Lord Justice Maurice Kay, also sitting to hear the appeal, went so far as to disagree with the claim that “this was not a case in which the defence had sought to ambush the prosecution.
Partner Note
Malcolm v Director of Public Prosecutions [2007] EWHC 363 (Admin). See
Failure to Act Causes Loss of Claim
A recent case illustrates the point that where a personal injury claim is anticipated, it is important to commence the claim promptly and not to adopt a ‘wait and see’ attitude.
It involved a serviceman who was partially deafened by a thunderflash whilst on a training exercise in 1993. He immediately noticed the effect on his hearing and in 1993 and 1994 had audiometric testing, which confirmed that he was suffering from tinnitus (ringing or noises in the ears) and deafness in his left ear.
The hearing loss was of the sensorineural type, which is irreversible. In the case of noise-induced hearing loss, the loss of hearing is particularly acute in the band of frequencies necessary to make speech intelligible. It is often accompanied by an inability to tolerate loud sounds, with the difference in sound level between a sound being inaudible and being painful becoming problematically small.
The serviceman’s hearing loss eventually caused his status to be downgraded as a temporary measure in 2001. In 2003, he was formally downgraded. This meant that he was likely to be permanently excluded from active service.
In 2004 he commenced a claim against the Ministry of Defence (MoD). The MoD argued that the claim should be rejected for being ‘out of time’ since the injury had been sustained more than three years prior to the commencement of the claim. In the case of a personal injury claim, the normal rule is that legal action must be commenced within three years of the incident giving rise to the claim or its having an impact on the claimant. In all cases, an injury must be significant to give rise to a claim. The court rejected the MoD’s argument and it appealed against the decision.
The Court of Appeal came to a different conclusion, ruling that the test of whether an injury is significant in such cases is an objective one, based on the injury itself, not a subjective one based on its impact on the claimant’s quality of life or ability to earn a living. The reaction of the man to the injury was not in point – he was in possession of all the facts he needed to be aware that the injury was significant in 1994. Accordingly the claim was out of time.
Says <<CONTACT DETAILS>>, “If you are injured in circumstances which might give rise to a claim for compensation, take advice as soon as practicable. Waiting to see what happens later as a result of the injury may mean you lose your right to claim at all if you delay too long.”
Family Must Face Facts
A couple who applied to the court to have their granddaughter legally known by their surname were unsuccessful recently.
The couple had had a special guardianship order made on their behalf and were raising the girl as if she were their child. Her parents were drug addicts and due to their inability to provide appropriate care for her she was placed with her grandparents. They gave her outstanding care of the kind her parents could not provide. The grandparents placed great store on the name change, arguing that it would be emotionally problematic for the girl to continue to be known by her father’s surname. In essence, they wanted to be able to preserve the fiction that she was their daughter and not the daughter of her real parents.
The Court of Appeal decided that in cases such as this honesty was the best policy. The child would have to be made aware of and face up to the fact that her family circumstances were such that she was being brought up by her grandparents, not her parents.
The request was therefore refused and occasional visitation rights were granted to the parents.
Partner Note
Re E (a Child) – Special Guardianship Order – COA, 13 March 2007. Judgment – the Times, 11, April 2007.
Family Receives £74,000 for Mesothelioma Death
The family of a Lancashire man has received more than £74,000 in compensation after he died from asbestos-related mesothelioma – a cancer of the lining of the lungs.
The 65-year-old man had worked as a labourer for a firm in Chorley and was exposed to asbestos during periods in the 1960s when he worked inside railway carriages. His work involved putting asbestos into a machine from which it was then sprayed onto the carriage ceiling. Some of it fell back down onto the workers and asbestos dust filled the air. He worked in this environment without protective clothing or breathing equipment for around two years.
Although the company went into administration in 2001, compensation was provided from a special fund of money set aside for those with claims against the business.
This latest case comes as the Health and Safety Executive has published figures showing that the number of deaths from mesothelioma continues to increase. In Great Britain 1,885 people died from mesothelioma in 2003 and this number rose to 1,969 in 2004.
This trend looks set to continue for the foreseeable future. Mesothelioma can take a long time to develop and by the time it is diagnosed the survival rate is poor, with around 75 per cent of sufferers dying within one year of diagnosis. It is therefore vital that compensation is paid to those affected at the earliest possible time.
If you or someone in your family becomes ill because of exposure to a harmful substance at work, we can advise you on how to go about bringing a claim.
Government Proposes Changes to Law on Damages
The Department for Constitutional Affairs has issued a consultation document on the civil law relating to claims for damages. The paper considers making it possible for a wider range of people to bring claims for damages where someone has been killed as a result of the negligence of another. It is proposed to extend the categories of persons considered to be dependants and of those eligible to claim damages for bereavement.
The main proposals are:
  • to extend the statutory list of those able to make a claim as a dependant so that it includes ‘any person who was being wholly or partly maintained by the deceased immediately before the death’;
  • to include any person who had been living with the deceased as husband and wife (or in an equivalent same sex relationship) for at least two years immediately prior to the accident;
  • to extend the list of claimants able to claim bereavement damages to include children of the deceased who were under 18 at the time of the death; and
  • to provide for a fixed sum of £5,000 in bereavement damages for each eligible child of the deceased under the age of 18.
Another idea under consideration is the possibility that in the case of injury, the injured person could claim the cost of private medical treatment where appropriate.
The consultation paper can be seen at
HMRC Announce Anti-Crime Strategy
HM Revenue and Customs (HMRC) have announced a new strategy aimed at maximising seizures of cash and other assets which represent the proceeds of crime. The strategy places an increased emphasis on the use of intelligence and, it would seem, a commitment by HMRC to upgrade their legal skills.
Of most concern is the statement that HMRC intend to ensure that ‘financial investigation with a view to confiscation is a feature of all criminal investigations’ and that restraint orders (which prevent the movement of assets) are obtained at the earliest appropriate stage during an investigation.
In addition, criminal funds seized by HMRC are to be recycled into ‘new and innovative measures to enhance our attack on criminal activity and related profits’.
A recent case has shown that assets gained through tax evasion can be considered to be the proceeds of crime.
Partner Note
See ICAEW ‘Taxline’ no 359, 29 May 2007.
The executive summary can be seen at
Holiday Club Warning
As the summer holiday season comes around again, the thought of a permanent arrangement for discounted holidays in the sun could seem attractive, but take care! The Office of Fair Trading (OFT) has warned that there are many bogus ‘holiday clubs’ being marketed.
Holiday clubs are marketed as a more flexible and often lower cost alternative to timeshare ownership, offering worldwide holidays at attractive prices for life. However, warns the OFT, many of these offer little or no real benefit.
The OFT’s advice for avoiding being scammed is to beware any ‘cold call’ over the telephone or being approached whilst on holiday. Typically, a holiday resort tout will offer a free scratch card (all of which will be ‘winners’). To collect the prize, a presentation must be attended at which high-pressure sales tactics may well be used, or you may be lured by the ‘exclusivity’ of the offer.
Techniques used by bogus holiday clubs include:
·        presentations that last so long that you are tempted to sign up just because you are desperate to leave;
·        making sure you are not left alone to discuss anything with your partner and giving you a very limited time to view the contract; and
·        telling you that they have made you a special discounted offer which is only valid for that day, placing you under pressure to sign on the spot.
In practice, many of the holidays that can be obtained after paying thousands of pounds for membership are the same as those which could be booked elsewhere without the need to belong to a holiday club.
Says <<CONTACT DETAILS>>, “Many people who buy a holiday club membership or a timeshare whilst on holiday live to regret it. Given the cost involved, it makes sense to take time to think it over, check out the vendor and take advice on your legal rights.”
Partner Note
See the press release at
Husband Loses Big Money Decision
The Court of Appeal has ruled against insurance magnate John Charman and confirmed that the UK’s largest-ever divorce settlement should stand.
In September 2006, the Family Division of the High Court ordered that Mr Charman’s former wife Beverly should receive a lump sum of £40m and retain existing assets of £8m already in her own name. To accomplish this, it ordered that a trust set up by the couple should be divided, not retained for the benefit of their children.
The family wealth was estimated to exceed £130m and the couple had been married for 28 years before their divorce. Virtually all of their wealth had been created during that time. Mr Charman had offered his wife a settlement of £20m, unforgettably stating that it was ‘more than anyone could spend in a lifetime’.
The decision confirms that there is a presumption by the courts that ‘assets of the marriage’ (i.e. those that are created during the marriage as opposed to being brought to it by one of the spouses or created after the couple separates) belong to the ex-spouses in equal shares.
The judges were critical of the current law in this area and called for pre-nuptial agreements to be made binding in law. “How much difference this would have made in a case such as this is moot,” says <<CONTACT DETAILS>>, “as prior to their marriage, the Charmans were of modest means.”
This decision and similar ones prior to it are not necessarily the ‘bonanza for wives’ that they are being portrayed as in the media. For example, in a recent case in which a wife claimed a share of her husband’s expected future earnings, the claim was rejected as she had not contributed to his success at work. The UK does, however, remain a very attractive place for divorce proceedings to be brought where there is a successful spouse and significant family wealth.
In Brief – The End for Wigs in Court?
Over three hundred years of tradition may come to an end soon following a decision by Lord Phillips, Master of the Rolls, that the wearing of wigs for judges in the civil courts should be abandoned.
The decision follows Lord Phillips’ review of court procedure and is aimed at changing the perception of the public that judges are out of touch. This perception was not improved by the widely-reported case in which a judge asked to be told what the world-wide web was.
Wigs are to be retained for the time being for criminal cases. No date has as yet been suggested for the change.
Neighbour From Hell Has Sentence Cut
Gertrude Evans, an 82-year-old Abergavenny woman who for a decade made her neighbours' lives hell through repeated harassment, has had her six-month prison sentence cut to four months by the Court of Appeal.
Ms Evans repeatedly ignored attempts by the courts to control her behaviour and also breached the terms of her Anti-Social Behaviour Order (ASBO) on numerous occasions. She was convicted in February 2007 of six counts of breaching her ASBO and one of harassment. When bailed pending sentence she failed to attend her appointment with her probation officer, which was a condition of her bail. She also repeatedly refused to acknowledge the inappropriateness of her behaviour and the effect it had on her neighbours.
The lower court judged that a six-month sentence was the minimum it could impose, but the Court of Appeal, in view of her age and physical infirmities, considered that the sentence should be reduced, but instructed her barrister to make sure Ms Evans was told ‘in words of one syllable’ that she should be under no illusions that the courts are perfectly prepared to pass a further prison sentence if there are future serious breaches of her ASBO.
Says <<CONTACT DETAILS>>, “What is significant here is not that her sentence was cut, but that the courts are willing to imprison such an elderly person where their behaviour warrants it.”
Partner Note
No Legal Privilege for Incriminating Data
The Court of Appeal has surprisingly upheld a ruling which conflicts with the centuries-old right not to incriminate oneself.
The ruling came when a firm was granted the right to obtain data from an ex-employee, an IT specialist, whom they had accused of removing confidential information belonging to them. The firm obtained a search warrant permitting them to copy information from the computer hard drives on the man’s home computers. He resisted the application on the basis that his computers might contain illegal images which could result in his being prosecuted. He was content to allow them to look for relevant material, but claimed the other data on his computer was legally privileged.
The Court of Appeal supported the decision of the High Court that the data on the computer was not privileged, ruling that legal privilege was limited to oral evidence in such circumstances and did not protect data.
The practical effect is that a search which turns up information or data which is unrelated to the search could lead to unforeseen consequences, such as (in this case) a potential criminal prosecution.
An appeal to the House of Lords is expected.  
Partner Note
Reported in the Times, 29 May 2007.
Oral Agreement Gives Rise to Property Rights
It is a well-established principle of English law that contracts involving land must be made in writing. However, that is not to say that just because an agreement relating to land is not made in writing, it is unenforceable.
One circumstance in which rights over property can be created orally is when a constructive trust arises due to an oral agreement being made with regard to a property. A constructive trust is where a person has responsibility over another person’s property as a result of the operation of law. A recent case illustrates such a circumstance. It involved two men, Mr Oates and Mr Stimson, who bought a house jointly in 1995, each paying an equal share of the mortgage. Mr Oates had financial problems and moved out in 1997. He agreed to sell his interest in the property to Mr Stimson for £2,500 and that Mr Stimson would pay him when he was able. Mr Stimson then took over sole responsibility for making the mortgage payments and for the maintenance of the property.
In 2000, Mr Stimson attempted to pay the £2,500 to Mr Oates. Mr Oates denied that the agreement existed and claimed £50,000 as his share of the value of the house.
The judge accepted Mr Stimson’s evidence that the agreement existed and that by taking over the responsibility for the mortgage payments and repairs he had suffered a detriment. He therefore found that this gave rise to a constructive trust in Mr Stimson’s favour. Once he had paid the £2,500 to Mr Oates, therefore, the full value of the property belonged to him.
Says <<CONTACT DETAILS>>, “This is another example of a dispute ending in litigation which could easily have been avoided had the agreement been properly documented in the first place. Relying on someone else to confirm an agreement for which there is no written evidence is risky at best. If you find yourself in similar circumstances, take legal advice.”
Partner Note
Oates v Stimson [2006] EWCA Civ 548. See
Proposals to Protect Cohabitees
The number of people who are living together in a relationship but who are neither married nor civil partners continues to rise. Many of these people are probably completely unaware that they have few rights in the event of a break-up of their relationship and that such rights as they do have centre around any children of the relationship. It is estimated that within fifteen years, nearly a third of all households will be made up of cohabitees as opposed to married couples or civil partners.
The problems that the current legal position has left unresolved have led the Law Commission to issue a consultation document called ‘Cohabitation: the Financial Consequences of Relationship Breakdown’, which runs to nearly 400 pages.
According to the Law Commission, a scheme is necessary to set out the respective rights of cohabitees. In the Commission’s view, these rights should be automatic, but couples should be able to ‘opt out’ if they so wish. Accordingly, the scheme would apply to all cohabiting couples unless they specifically elect for it not to. It would necessitate the creation of a ‘cohabitation contract’, which would be required to be in writing, signed and witnessed. It is possible that cohabitation contracts would be required to be made with the benefit of legal advice.
The Law Commission’s proposal is that the scheme should be available to all cohabitants who have children and to those who have cohabited for two years or more, whether or not they have children.
The proposals are that the financial arrangements on the termination of the cohabitation should resemble those currently applied in divorce cases. It is also proposed that the ability to make a claim for financial provision against the estate of a deceased cohabitee should be based on the reasonable expectation of the likely settlement in the event of separation. This would only apply were one of the partners to die without making a will or with a will which made inadequate provision for the surviving partner.
At the moment, there seem to be a number of loose ends in the Law Commission’s proposals, especially concerning the criteria applied in assessing the financial settlements when couples split up.
It is likely that the proposals will be debated for some time yet, so the legislation which will bring them into effect is not likely to appear before 2008 at the earliest. It is also likely to undergo many changes before it reaches the statute book.
“Until the proposals have passed into law, the position of cohabitees is best protected by having a formal written agreement, which should be made with the benefit of independent legal advice on both sides,” says <<CONTACT DETAILS>>.
If you are in a cohabiting relationship and are concerned about what happens if your partner dies or the relationship ends, contact us for advice.
Partner Note
There is a good review of the current proposals in New Law Journal, 16 March 2007 pp 386-387.
Revised Proposals on Murder
Under the current law, the offence of murder is committed when a person kills with intent or where death is the virtually certain outcome of their behaviour and they are aware of that. It is also murder when a death results from causing serious bodily harm with intent. A conviction for murder can currently be reduced to one of voluntary manslaughter where a defence of provocation or diminished responsibility (where the crime is committed when the person is not fully responsible for their actions) can be made out or where the death was part of a suicide pact. A conviction for murder carries a mandatory life sentence, whereas the sentence for voluntary manslaughter is at the discretion of the court.
Where death is caused without the intent to kill or cause serious bodily harm, the offence committed is manslaughter.
The Government is proposing to change the law on murder, which is seen as operating harshly in cases where there is no premeditation. Under the proposals, murder will be divided into first degree murder and second degree murder.
First degree murder will include intentional killing and killing where there is the intention to cause serious injury in the awareness that there is a serious risk of causing death.
Second degree murder will occur when death results from the intent to cause some injury with the knowledge that this carries a serious risk of death. The defences of provocation and diminished responsibility will be available to reduce first degree murder to second degree murder. They will not reduce second degree murder to manslaughter.
Manslaughter is intended to be retained for cases in which:
·        the death is a result of grossly negligent behaviour; or
·        the death results from a criminal act intended to cause some injury or where there is awareness that the act poses a serious risk of causing some injury; or
·        the death results from participating in a crime in which there is an obvious risk that someone might be killed.
There are also changes proposed to the law concerning infanticide, failed suicide pacts and the defence of duress.
One interesting change is that the defence of provocation, which currently depends on showing a sudden loss of self-control, will only require that the behaviour was a response to a gross provocation which caused the person to have a justifiable sense of being seriously wronged. This new definition will be of assistance in cases where the provocation has built up over a long period, as is often claimed in cases involving the killing of an abusive family member.
Also, the definition of diminished responsibility will be clarified and will only be linked to ‘medically recognised conditions’. However, the definition will be extended to cover children whose responsibility is seriously impaired by developmental immaturity.
The Government is also proposing to reform the current law governing the criminal liability of those who encourage or assist others to commit criminal offences.
Partner Note
See summaries in The Legal Executive, April 2007 pp 20-1 and May 2007 pp 13-14.
Rooftop Dancing Injury – Compensation Denied
A woman who, after a couple of drinks one evening, decided that it was a good idea to go up onto the roof and do some dancing, was given short shrift by the court recently when she claimed damages from her landlord after she fell through a skylight.
Ms Siddorn rented a flat next to a garage that had a flat roof with a skylight. The garage was owned by her landlord. She was able to access the roof from one of her windows and one night she was seized by the urge to go onto the roof and dance. Whilst doing so, she fell through the skylight and was injured.
Ms Siddorn sued her landlord arguing that he had failed to make sure the skylight was safe, had not warned her of the dangers attendant to going onto the roof and had not put in place any system of inspection and maintenance.
The landlord argued that the skylight was not unsafe and that he was not liable to Ms Siddorn because the injury resulted from her dancing near the skylight and not paying proper attention to it, rather than from the condition of the roof itself. The landlord was not aware that anyone other than workmen would access the roof and had not given Ms Siddorn permission to use it. Furthermore, he argued, she was an educated and sensible person who should have considered the risks involved.
Her claim was dismissed.
Partner Note
Siddorn v Patel and others. See New Law Journal, 4 May 2007, p 630.
Special Needs Duty not Unlimited
The Court of Appeal has ruled that a school which refused to clean and change an incontinent paraplegic student had not discriminated against him.
The child suffered frequent accidents and a special needs coordinator employed by the school had cleaned and changed him as required. However, when the coordinator suffered a serious back injury whilst lifting the child, that practice was discontinued. The headmaster concluded that the child’s continued placement in the school could no longer be justified because of the health and safety implications for staff.
The child’s mother appealed against the headmaster’s decision. The question at issue was whether the action taken by the school amounted to discrimination. The Court of Appeal concluded that the school’s actions were reasonable and it could not be said to have placed the child at a disadvantage compared with other pupils at the school.
Partner Note
K v X School & anor.
Reported in the Times, 11 April 2007.
Surround Not Integral Part of Speed Limit Sign
The courts are taking a dim view of motorists who attempt to avoid conviction for driving offences by bringing forward technical and/or somewhat specious arguments in their defence.
Recently, a group of six motorists, led by a man from Bromley, attempted to argue that they could not be convicted of speeding because a speed limit sign on London’s Tower Bridge failed to comply with the Traffic Signs Regulations and General Directions 2003 and so was not a proper warning of the prevailing speed limit. The relevant sign did not have the usual surround as specified in the Regulations.
The court rejected their submissions. In its view the surround was not an integral part of the sign. More than 150 other drivers, whose prosecutions were in abeyance pending the decision in this case, now face conviction.
The court ruled that the six motorists should contribute £1,500 towards the costs of the prosecution.
Partner Note
Canadine & ors v Director of Public Prosecutions [2007] EWHC 383 (Admin).
Tax Dodgers – Revenue Throws Down Gauntlet
HM Revenue and Customs (HMRC) have thrown down the gauntlet to offshore tax-dodgers following the expiry, on 22 June, of their amnesty for people who have undeclared bank accounts outside the UK to make disclosure of them.
HMRC have announced that they will proceed immediately to send out enquiry letters where they are aware of undeclared accounts belonging to taxpayers who have not taken advantage of the amnesty.
For those who have made a voluntary disclosure, HMRC’s amnesty allows the back tax to be paid with interest plus a ten per cent penalty. As penalties for evasion of tax can amount to 100 per cent of the underpaid tax, the terms of the amnesty are generous. This makes it rather surprising that HMRC report that take up of the amnesty offer has been lower than expected, with over 40,000 people with income-bearing offshore accounts failing to declare them.
Recently, HMRC were given the right to obtain details of those who hold offshore accounts with the major High Street banks and this information is being collated by a recently-created civil investigations unit, set up to collect as much as possible of the several billion pounds of unpaid tax thought to be due on money currently held in offshore accounts. More recently still, HMRC have announced that they intend to extend their examination of offshore accounts to include all of the 550 banks which have a physical presence in the UK.
If you have a bank account outside the UK which earns interest, you will normally be liable to UK tax on the interest received, although you will also normally be able to claim a credit for foreign tax you have paid.
The taxation of foreign income is a complex area. If you have income from abroad, take professional advice on dealing with your tax affairs.
Partner Note
See articles in Accountancy Age, 19 April 2007 and 6 June 2007.
Valuing Annuity Payments for IHT
When a person dies, there is often no right to receive any further payment under an annuity. However, many annuities are sold which have ‘guaranteed minimum payment periods’ – typically five years after the annuity first vests. In such cases, if a person dies before the end of the minimum payment period, further annuity payments will be receivable.
Valuing the right to receive such payments for Inheritance Tax (IHT) purposes can be problematic, but HM Revenue and Customs (HMRC) have an online calculator which provides an estimate of the open market value of the guaranteed annuity payments in straightforward circumstances. This consists of a form requesting the information necessary for the calculation to be made. In the view of HMRC, the estimate given by the electronic calculator constitutes a reasonable estimate of the open market value of the annuity for IHT purposes.
The form can be found at

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