Private Client Titles – Winter 2007/2008


A Promise is a Promise
A woman who was widowed mere hours after getting married has been ordered by the Court of Appeal to honour a promise her husband had made to his ex-wife.
Kathleen Soulsby married her husband Owen in 2000 at the London hospital where he was being treated for leukaemia. He had divorced his ex-wife, Elizabeth, in 1986 and they had agreed a settlement under which he was to pay her £12,000 a year plus maintenance for their children. In 1993, he agreed to give her £100,000 on his death in exchange for being relieved of the obligation to pay further maintenance payments. His will was altered to give effect to the agreement.
Under UK law, however, marriage invalidates any previous will and Kathleen argued that the bequest was therefore invalid.
The Court of Appeal considered that the agreement between Owen and Elizabeth was enforceable. She had ceased to receive maintenance in 1993 and had not pursued him for the payments. She had therefore complied with her part of the bargain and his estate was bound to honour his side of it.
Says <<CONTACT DETAILS>>, “It is often forgotten that marriage or civil partnership invalidates an earlier will. It may not be very romantic, but it is practical to make sure that after the ceremony a new will is executed as soon as is practicable.”
Partner Note
Soulsby v Soulsby. See New Law Journal, 19 October 2008 p 1439.
Acting Too Soon Prevents Claim
It is not uncommon for someone who has suffered serious personal injuries in an accident to die as a result of them. Sometimes, however, the death which results from the injury may occur years after the injury itself. When injuries are incurred which may lead to death in the relatively near future, one of the problems which arises is whether a claim for compensation should be brought whilst the injured person is still alive or after their death.
The Fatal Accidents Act 1976 allows the dependants of a person fatally injured in an accident to bring a claim for compensation. However, if an injured person brings an action for damages against the person responsible for the accident and this is settled prior to death, the dependants cannot then bring a claim under the Act.
Recently, a woman who died of cancer after her GP mistakenly diagnosed a malignant tumour in her breast as benign settled her negligence claim against the GP for £120,000. She died two years after the settlement. Her family sought to make a claim under the Act after her death. The court rejected the claim.
In similar circumstances, it would make sense to make a claim for an interim payment based on the value of the lifetime award and adjourn the claim until after the death of the victim. The Government is said to be reviewing this area of the law with a view to ensuring that the rights of dependants of the deceased are not extinguished by a settled claim.
Partner Note
Thompson v Arnold [2007] All ED (D) 38.
Adoption Agency Need Not Consult Father
The Adoption and Children Act 2002 does not require a local authority or other adoption agency to consult the father or extended family of a child put up for adoption by its mother. This was the ruling of the Appeal Court in a case involving a mother who wished to give birth without the knowledge of her family or the baby’s father.
In this case, the pregnancy arose from a one night stand. The mother did not want the father, or her own family, to know about the pregnancy and wished to put the child up for adoption at birth. As a consequence of a County Court judge’s ruling, the authority wrote to the mother’s parents, which led to them finding out about their grandchild.
Relying on the Adoption and Children Act 2002, the Court of Appeal held that when a decision needed to be made about the long-term care of a child whom the mother wished to be adopted, there was no duty of an absolute kind to make inquiries. There was only a duty to make inquiries if it was in the interests of the child to do so.
It was further held that the provisions of the European Convention on Human Rights concerning a father’s right to respect for his family life did not apply in this case. The father had no family life with the child. He had never lived with the mother nor expressed any commitment to the child, because he was unaware of the child’s existence.
The Adoption and Children Act requires the interests of the child to be considered. It does not give the family the right to be involved in decisions relating to the child in circumstances such as these.
For advice on adoption, fathers’ rights and other family matters, contact <<CONTACT DETAILS>>.
Partner Note
Times Law Reports, 5 Dec 2007 – Court of Appeal: re C (A child) (Adoption: Local Authority duty).
Animal Danger for Owners
Owners of animals that are known to be potentially dangerous are usually aware that if their animal causes an injury, they will most likely be held responsible. However, owners of animals not normally considered dangerous may well assume that they will not be held liable for an injury caused by their animal, for example if their animal causes an accident.
A recent case has brought further clarification to the law and spells out a warning for animal owners.
The case concerned a horse which reared up and threw its rider, a 17-year-old girl. The girl suffered a serious head injury as a result. The horse had no history of misbehaviour and the girl was considered competent to ride it. The girl sued the owners of the horse for negligence, or in the alternative, claimed that the owners were strictly liable for the injury under the Animals Act 1971.
The court rejected the allegation of negligence. However, it accepted that the owner of the horse was strictly liable under the Act.
The Act places strict liability on the keeper of an animal that does not belong to a dangerous species if the animal causes harm where the following points are satisfied:
a)     where the damage is of a kind which, unless restrained, the animal was likely to cause or which, if caused, is likely to be severe; and
b)     where the likelihood of the damage or its being severe is due to the characteristics of the animal which are not normally found in animals of the same species or are not normally so found except at particular times or in particular circumstances; and
c)      where those characteristics are known to the keeper of the animal.
All three of these must be present for the animal’s keeper to be liable under the Act. The court considered that it was clear that an accident involving a horse rearing is likely to be severe and that in certain circumstances horses are likely to rear if not restrained. The court accepted that in certain circumstances horses are likely to act unpredictably and that the owners, as experienced keepers of horses, would know this. Accordingly, the court found the owners liable.
The owners appealed. In the Court of Appeal the case turned on whether the behaviour of the horse was ‘normal’. The Court held that normal means ‘conforming to type’ and that rearing is natural behaviour for horses in certain circumstances. The owners’ appeal was therefore rejected.
“The implications of this case for animal owners are potentially far-reaching,” says <<CONTACT DETAILS>>. “If the likely result of an accident is severe and it occurs because of the normal behaviour of the unrestrained animal in particular circumstances, then the owner is likely to be found liable, even if the behaviour of the animal is unusual.”
At present, the practical solution to the problem this raises for animal owners is probably to be found in their insurance policies, which should be read carefully.MP Stephen Crabb is proposing changes to the Animals Act which would mean that strict, non-fault based liability would only be applied to genuinely dangerous animals and that an owner’s liability for damage caused by a non-dangerous animal would be limited to cases of fault via common law negligence claims or under health and safety legislation. The Government is reported to be sympathetic to a change in the law.
Partner Note
Welsh v Stokes [2007] EWCA Civ 796.
See also Bill Aims to Change Animal Harm Rule, Western Mail, 4 December 2007 at
Broken Homes – Split Houses
A recent House of Lords case has emphasised that when there is a break-up of a relationship and there is joint legal ownership of the house, the division of the value of the house will depend on what the couple’s intentions were. All of the relevant circumstances need to be taken into account. In the case in point, the fact that the couple maintained separate financial arrangements was germane to the decision.
But what is the case when the owners of the house are not a couple, for example where the property is owned jointly between family members of different generations? In one such case, a woman died and the property she lived in was owned jointly by her and her son. There had been no declaration of what proportion of the house each owned. Each had contributed equally to the household expenses and mortgage until the mother and son had quarrelled, at which time he moved out and the mother then met all of the mortgage payments herself. The son claimed a beneficial interest in the property and this was contested by the woman’s other beneficiaries.
The judge hearing the case considered that the purpose of buying the property was to provide a home for the mother, who could not obtain a mortgage on her own. Mother and son had kept their finances separate and the solicitor who acted for them on the purchase considered that there was no intention that the property should be beneficially jointly owned. Furthermore, the judge considered that the mother would not have wished to deprive her other children of a share in her property.
The court therefore ruled that the son had no beneficial interest in the property.          
In another case, a divorced couple bought a property with a view to being reconciled. The property was put into the husband’s sole name. When the relationship failed again, he left and his ex-wife remained living in the house. The court ruled that because the husband had given his ex-wife assurances that she could remain in the property as long as she wished, it could not be sold by her ex-husband without her consent.
Says <<CONTACT DETAILS>>, “Houses are usually the major asset of a family. It is therefore advisable to make sure that any details regarding the ownership of, and people’s rights to, the family home are put down clearly in proper form when the property is acquired. This may save a great deal of expensive argument later.”
Partner note
Stack v Dowden [2007] UKHL 17.
Adekunle v Ritchie – see Lawtel ACO114650 or The Legal Executive Journal October 2007, P20.
Holman v Howes [2007] CA 27 July 2007.
Buying Abroad – Take Care
Recently, the newspapers have once again been featuring the plight of British people who have bought foreign properties (this time in Spain) only to discover that there are defects in their title, the ramifications of which can be catastrophic for the owners as their dream of a place in the sun turns into a nightmare.
It is estimated that 400,000 Britons have homes abroad and there are many amongst that number who have had problems which could have been avoided had they been more circumspect in their dealings.
Here are some of the things you need to take into account if you are considering buying abroad:
  1. Don’t overstretch yourself financially. Buying abroad often involves a much higher level of costs than is typical in the UK and fitting out a home is never as cheap as you think it will be. Make sure there is plenty of slack in your budget and that when the total costs are in, you are not taking unnecessary risks with your mortgage arrangements. If you are contemplating having a foreign mortgage, remember that there are two components to the cost – the rate of interest which applies and the rate of exchange between the local currency and the pound. Both of these can significantly affect the amount you pay. Don’t forget the ongoing costs also – check the applicable taxes and other costs. Don’t rely on having rental income to cover your expenses. In many cases such promises, if made by a developer, fail to materialise. In other cases, renting may not be possible – for example, it may be prohibited in the deeds or by local byelaw.
  1. Committing yourself too early. Most countries require a deposit to be paid before completion, as is normal in the UK. Such deposits may not be refundable, even if the builder never seems to get around to building the property or goes broke before the title has been transferred to you. Indeed, in some countries it can be the buyer who is responsible for any debts the builder runs up relating to the property.
  1. Make sure you understand exactly what you are buying, the title which is being bought and, especially, what rights others may have over your property. One of the biggest areas for dispute is the validity of the title to the property, so make sure you use a reputable law firm to represent you. Never be tempted to ‘do it yourself’.
  1. Make a local will. This should almost always be done and should normally deal only with your foreign assts. Make sure your UK lawyer has a copy of a notarised translation.
  1. Location, location, location. The future value of your property will be heavily affected by where it is and how easy it is to get to. If, for example, the budget airline which flies to the local airport were to drop the route, what effect would that have?
  1. Be sceptical. If a deal looks too good to be true, it probably is. If you are asked for a ‘commitment fee’ in cash up front, be careful. It is not uncommon for people who do not own a property to try to sell it to an unsuspecting foreigner by pretending they have the authority of the owner or that it is held in a different name ‘for tax purposes’.
If you are thinking of buying a foreign property, do make sure you take even more care than you would at home, where at least you have the benefit of understanding the system.
Partner Note
‘Which?’ offers a good general guide to buying abroad – ‘The Which? Essential Guide to Buying Property Abroad’.
Care Orders – New Procedures
A care order is a court order that places a child under the care of a local council. The local council then shares parental responsibility for the child with the parents and will make most of the important decisions about the child's upbringing, such as where they live and how they are educated.
The legal processes relating to making arrangements for the custody of children are often criticised for being too lengthy. Recently, the Government has announced new procedures which are being introduced in an attempt to reduce the often substantial delays between the application for a care order and the completion of the arrangements for the care of the children involved (termed the ‘disposal’ in legal parlance).
Currently, the time taken between application and disposal in care proceedings is, on average, just under a year. This is clearly too long, especially as in many cases the children are returned to the care of their parents, rather than being taken into care, at the end of the proceedings.
A new system is being trialled, in various cities across the UK, which it is hoped will reduce the time required for the completion of care proceedings. In order to be a success, the new system will require a great deal of preparatory work to be carried out earlier in the process than is currently the case. This burden will fall on local authorities. The rest of the process, after the initial stage, will be subject to a strict timetable.
The pilot scheme has been launched in ten areas. If it is successful, it will be rolled out nationally in the spring of 2008. However, since no extra resources have been allocated by the Government, it remains to be seen how well local authorities will cope with the extra burden this will impose.
Partner Note
There is a more detailed summary in New Law Journal, 12 October 2007.
Child Custody – Expert Evidence Crucial
A judge who in her verdict in a child care case failed to give adequate reasons for departing from the clear evidence of experts recently found her decision overturned by the Court of Appeal.
The case dealt with the residency arrangements for four children whose parents were getting divorced. The mother of the children had a long history of addiction to amphetamines. At the custody hearing, evidence was given to the court that she had tested negative for use of amphetamines at the time of the hearing, but there was evidence of earlier use. The mother claimed that she had ceased to use drugs altogether.
A psychologist, a psychiatrist and a social worker submitted reports suggesting that a residence order should be made giving custody of the children to their father.
Surprisingly, the judge ordered that the children should reside with their mother on weekdays during the school term-time. The father appealed against the decision.
The Court of Appeal was of the view that the judge had placed a disproportionate amount of weight on the mother’s evidence and had not given a good reason for taking a decision which differed so sharply from the opinion of the experts. The Court ruled that the residence arrangements should be referred back to another judge to determine.
Says <<CONTACT DETAILS>>, “It is not often that judges ignore clear expert evidence in such cases and, when they do, it is incumbent on them to give sufficient reasons for so doing. It is very important to use an expert who is good at presenting evidence clearly. We ensure that clients relying on experts for evidence use those who are well-qualified and experienced.”
Partner Note
Re M (A Child) CA (Fam), 24 August 2007.
Children Say ‘No’ and the Court Agrees
In what has been described as a highly unusual decision, two English boys who disliked living in France with their mother have had their wish to remain in the UK with their father granted by the Court of Appeal.
The two boys, aged 11 and 16, were taken to France by their mother in 2005. At that time neither spoke French and they found that they were unable to settle into their new life. When they came to England to visit their father, in July 2007, they refused to return to France. Their mother alleged that the father had abducted the boys and started court action to recover them.
The court was critical of the mother’s attitude towards her sons. She was described as dealing with their concerns by ignoring or stifling them and closing her eyes to their problems.
Lord Justice Thorpe, one of the three Appeal Court judges who heard the case, commented that he had “rarely, if ever, heard such strongly expressed views by children of this age.” The mother was refused the right to appeal against the decision and will now have to apply to the court for contact arrangements with the boys to be settled.
Although this case was described as ‘not just exceptional, but very exceptional’, the courts are paying an increasing amount of attention to the views of the children involved when matters of residence are concerned. With one in six marriages in the UK now involving a spouse from abroad, such ‘cross-border’ disputes are likely to become more common.
Partner Note
Reported in the Times, 8 November 2007.
Dementia is Health Care Issue
A 94-year-old Plymouth woman has won a landmark decision that could mean hundreds of elderly people will no longer be required to fund their nursing home fees out of their own pockets.
Hilda Atkinson had been diagnosed with Parkinson’s disease, osteoporosis and angina, but needed around the clock nursing care mainly because she suffers from dementia.
Mrs Atkinson’s local health authority, Plymouth Teaching Primary Care Trust, argued that her need was one of ‘social care’, which in practice meant that the cost of the care was met in part out of Mrs Atkinson’s savings. She and her family argued that her health problems were such that her care requirement was dictated by a medical need, not a social one. In case of medical need, the responsibility for paying for the care falls on the NHS.
The High Court accepted the Atkinsons’ argument and ordered the Trust to repay £43,000, which Mrs Atkinson had paid for nursing care since 2004, and to pay for her future nursing care costs.
Says <<CONTACT DETAILS>>, “Families seeking the best care for elderly relatives who are unable to look after themselves often fail to realise that ‘social care’ can be charged for by councils, whereas ‘medical care’ is free under the NHS. It is not uncommon for the NHS to try to pass responsibility for the elderly and infirm to the local council, which, in turn, often claims that what seem to be medical issues are ‘social’ ones – passing the financial liability on to the infirm person and their family. If you think your NHS or council has attempted to avoid its responsibilities in this way, we may be able to help.”
Partner Note
Reported in the Times, 22 November 2007.
Family Gifts Part of Marital Assets
When couples divorce, their assets can be considered to arise from two sources. There are the assets created during the marriage, which are called ‘marital assets’, and those which are brought into the marriage by the spouses individually, termed ‘non-marital assets’.
The normal assumption is that marital assets will be divided more or less equally, but that assumption does not hold as regards the non-marital assets. Needless to say, there is often a dispute over whether assets are marital or non-marital.
Recently, a man appealed against an order which ‘ring-fenced’ assets that had been given to his ex-wife by her family. These were regarded by the judge as non-marital assets and, as such, not to be divided equally between the couple. The assets had been held in the wife’s sole name. She had not worked for many years in order to look after the couple’s two children, who are now adults.
The husband had continued to work and had acquired various assets. His wife had received £70,000 from her father and a further £12,000 from an inheritance. She had used this money to reduce the mortgage on the couple’s property. She also owned a 50 per cent share in her parents’ home and had been given an investment bond worth in excess of £114,000. Her ex-husband believed that she would inherit the bulk of her parents’ estate, said to be worth more than £1m.
At the end of their marriage, the husband was retired. He was earning about £5,000 per annum and also had a pension. His wife was working at a school, which gave her free board as well as a wage of £1,000 per month. The judge ruled that the couple’s assets, which now included two houses, should be divided equally, except for the bond and the share in her parents’ home, both of which were reserved for the wife.
The husband argued on appeal that this was unfair. He claimed he had introduced assets at the start of the marriage and had made the major contribution to the creation of the assets of the marriage. He also claimed that the judge had failed to take proper account of his wife’s expectations with regard to her parents’ fortune. The Court of Appeal accepted these arguments in part.
On the question of the expected inheritance, the Court could not agree that the husband had suffered any loss that needed to be compensated for, especially as his ex-wife’s parents were free to direct their estates in whatever way they thought best. However, the Court agreed that ring-fencing the wife’s other assets was unjustified.
Partner Note
S v S [2007] EWCA Civ 1975 (Fam).
See Solicitors Journal, 14 September 2007, p 1165-6.
Family of Dead Motorcyclist Receives £110,000
The family of a motorcyclist who died as a result of an accident caused by diesel spilt on the road has won £110,000 in compensation from the Motor Insurers’ Bureau (MIB), an organisation set up for the purpose of compensating the victims of negligent uninsured and untraced motorists. It is believed to be the first claim of its kind in the UK.
Richard Cooper, 58, was travelling to a motorcycle rally when he hit a fuel slick on a B-road in Lincolnshire. He lost control of his motorbike and hit an oncoming transit van. He later died in hospital from his injuries.
To make a direct claim for compensation in such circumstances it is necessary to track down the person or company responsible for the spillage. However, this is not always possible. In this case, there was no way for Mr Cooper's family to find out who was responsible for the spilt diesel, so they submitted a claim to the MIB.
Figures from the Department for Transport show that motorcyclists are twice as likely to have a serious or fatal accident as a result of spilt fuel than they are because of ice on the roads.
It is not widely known that it is possible to receive compensation when the person responsible for an accident is uninsured or cannot be traced. For further information on the MIB, see
Free Will the Determinant in Manslaughter Defence
The decision as to whether an act is criminal or not sometimes turns on quite small differences, as a recent case concerning the death of a heroin addict shows.
The addict was given a pre-prepared syringe of heroin, which was made for him by a drug dealer. The intention of both parties was that the drug should be taken by the drug addict. The dealer then assisted the addict by putting his belt around the addict’s arm to raise a vein so that he could inject himself. The addict did so and returned the empty syringe to the dealer, who then left the room. As a result of the injection of heroin, the addict died. There was no dispute that the drug dealer had committed the offence of supplying a class A controlled substance. At issue was whether, having prepared the fatal dose, he was guilty or not of manslaughter.
The case went to the House of Lords, which concluded that the charge of manslaughter could not stand as the drug dealer had not ‘administered’ the injection to the dead man. The man had chosen of his own free will to inject himself with the heroin. In the opinion of the Law Lords, there is a difference between acts contributory to the administration of a noxious substance and the act of administering it.
Partner Note
R v Kennedy (no 2) House of Lords, 19 October 2007. Reported in the Times.
Hearing Loss Damages of £3,500
A factory worker whose hearing was damaged because of exposure to noisy machinery has been awarded £3,500 in compensation.
Stuart Capell, 61, worked for Alcoa Extruded Products (UK) Ltd. as an extrusion operative from 1974 to 2005. During this time he was exposed to excessive noise from presses and surrounding machinery. His employers did not offer him any hearing protection until the mid-1980s.
Mr Capell realised his hearing had been affected after he had a medical in 2005. He was diagnosed with noise induced hearing loss which is a permanent condition.
Whilst the law on controlling noise levels at work was tightened up when the Control of Noise at Work Regulations 2005 were introduced in April 2006, employers have been required to protect workers from damage to their hearing for decades.
Research suggests that as many as 170,000 people in the UK have suffered deafness, tinnitus or other ear conditions as a result of exposure to excessive noise at work.
Meanwhile, the Health and Safety Executive estimates that more than a million workers are exposed to potentially damaging levels of noise at work.
Not only can prolonged exposure to excessive noise cause hearing damage but it is also a safety hazard. A noisy environment can hamper communication as well as cause psychological stress to workers.
The Control of Noise at Work Regulations 2005 place a number of duties on employers. These include implementing noise prevention measures as well as providing workers with ear protection.
If you have suffered damage to your hearing as a result of exposure to high noise levels at work, you could be entitled to compensation. Contact <<CONTACT DETAILS>> to discuss your claim.
The exposure limit values and action values laid down by the Control of Noise at Work Regulations 2005 can be found at
House Owner Pays Price for Contract Failure
Failure to make contractual terms clear is a sure recipe for trouble and in construction contracts, where the sums of money involved can be substantial, getting the contract terms agreed up front is always sensible.
In a recent case, a woman arranged with a property developer that the developer should carry out refurbishment work on her property. The development of the property was to proceed in three stages and it was agreed that the developer would start the first phase as soon as the necessary planning permission and building control permission were obtained.
The woman made up-front payments to cover professional fees and to fund the commencement of the works. Unsatisfied with the subsequent progress, she demanded an account of how the money had been spent and decided that now was the time to have a formal contract. She refused to make further payments until a schedule of payments based on progress achieved was agreed. The developer refused to continue without further progress payments. He sent a solicitor’s letter to the woman demanding payment of the sums due.
Each side accused the other of repudiating the original contract and eventually the dispute ended up in court.
The court had to decide the following issues:
  1. Was there a binding contract or contracts?
  2. If there was a binding contract or contracts, what were the contractual terms?
  3. If there was a binding contract or contracts, was either party to the dispute in breach of the contract(s)? and
  4. If there was a breach of contract, what damages resulted?
The court concluded that the woman had entered into two separate contracts with the developer. The first was with regard to the first phase of the works. She had repudiated this contract when she regarded the developer’s breach of the contract as a repudiation of it. Her response had not been the correct one. She had herself created a repudiatory breach of contract by failing to pay the second instalments due under the contracts. The developer was therefore entitled to damages for the profits he would have made had the contracts been completed and paid for as agreed.
This case shows how what may seem to be a reasonable reaction – in this case declining to make payments when a development falls behind schedule – can lead to difficulties. In this case, the problem was compounded by the woman’s response to the solicitor’s letter sent on behalf of the developer. Had the original contract contained a clause which linked payments to the meeting of specific targets, then each side would have known where it stood and the dispute could probably have been avoided.
The time to get a contract right is at the beginning. We can help you negotiate a building contract that ensures your interests are protected. Contact <<CONTACT DETAILS>> for advice.
Partner Note
Mirimskaya v (1) George Evans and (2) Dezigner Living Ltd. [2007] QBD (TCC)
5 September 2007. See The Solicitors Journal, 28 September 2007, p1226.
In Brief
Bankrupt Ex-Spouses – Court of Appeal Rules
The Court of Appeal has reversed the decision of a lower court and decided that the financial settlement between a man and his ex-wife could not be used to pay the husband’s debts after he became bankrupt two years after their divorce.
The claim by the man’s receiver in bankruptcy that the arrangements under which the wife retained the family home constituted a ‘transfer at an undervalue’ was not accepted by the Court. The decision will be welcomed by those who are divorced and whose ex-spouses have become insolvent. Had the receiver’s argument carried the day, the ex-spouse of a bankrupt would not have known for certain that assets derived from the financial settlement would be safe from a future claim.
However, the relief may be short lived. An appeal to the House of Lords is said to be likely.
Partner Note
Hill and another v Haines, COA 5 December 2007.
In Brief
Credit Card Coverage Extends Abroad
The House of Lords has confirmed that UK credit card companies can be held liable under the Consumer Credit Act for breaches of contract or misrepresentations arising out of foreign credit card transactions.
The decision makes the card issuer jointly liable with the supplier where the misrepresentation or breach of contract applies to a purchase of between £100 and £30,000 and gives rise to a valid claim by the consumer.
The ruling will come as a welcome relief to holidaymakers who will now benefit from protection on their holiday purchases in certain cases. In practical terms, it is likely that banks will seek to recoup the extra cost by a slight amendment to the exchange rate applied in foreign currency transactions.
Partner Note
The Office of Fair Trading v Lloyds TSB plc, Tesco Personal Finance Limited and American Express Services Europe Limited [2007] UKHL 48.
In Brief
Hunting Ban Not a Breach of Human Rights
The House of Lords has ruled that the ban on hunting is not a breach of the human rights of people affected by it. It was argued that the ban adversely affected the private life, cultural life and use of home of some of those affected and would result in a loss of livelihood for others. It was also claimed that the ban infringed the rights of country people to assemble and associate with one another. All of these arguments were rejected.
Partner Note
R (on application of the Countryside Alliance and others) v Attorney General and another, UKHL 52.
Also on the subject of hunting, prosecutions of alleged illegal hunting have been postponed after Mr Tony Wright, the first person to be convicted of breaching the Hunting Act 2004, was acquitted on appeal at Exeter Crown Court of hunting illegally with dogs. Judge Cottle described the relevant law as…“far from simple to interpret or apply” with the result being “an unhappy state of affairs which leaves all those involved in a position of uncertainty.” The Crown Prosecution Service is appealing to the High Court, seeking clarification of where the burden of proof lies in such cases.
Reported in the Times, 27 December 2007.
Last Minute Pleas Fail to Get Sympathetic Hearing
The courts seem to be showing increasing impatience with drivers who attempt to overturn convictions for speeding by raising technical objections to them.
Recently, an application was made by a driver convicted of exceeding a temporary 30 mph limit. A number of issues were raised concerning the measuring device which had been used to record the driver’s speed. However, at the very end of the proceedings, during the closing speech, it was argued that the signage relating to the temporary speed limit was a factor in the case and that this did not comply with the relevant legislation. This claim had not been submitted in earlier evidence, during which the driver had argued that there was insufficient evidence that the speed measuring device had been adequately tested.
The magistrates hearing the case considered that the prosecution must have the chance to address the issues raised by the new evidence, so they adjourned the case part-heard for this purpose. The driver claimed that this showed partiality and that the magistrates were acting with bias against him. He considered that they were ‘trying to convict him’.
The court would have none of it. The magistrates were entitled as a matter of law to adjourn the case. The driver had attempted to ‘ambush’ the prosecution case by raising issues after the prosecution case had closed.
Says <<CONTACT DETAILS>>, “If a defendant fails to identify issues at an early stage in the proceedings that he wishes to raise later on, he cannot seek to derive an advantage from that by raising them in his final arguments, leaving the prosecution no opportunity to deal with the points raised.”
Partner Note
R (on the application of Lawson) v Stafford Magistrates Court 3, October 2007. Reported in the Law Society’s Gazette, 18 October 2007.
Long-Term Care Costs and Negligence
The high cost of long-term care in the UK is a well known problem to anyone responsible for funding it. Depending on the circumstances, the cost of such care can be the responsibility of a number of different entities and sometimes costs may be shared. Where this is the case, there is room for argument, as a recent case illustrates.
It involved a young man referred to as ‘C’, who was born with a vascular injury. The treatment he received for this from his local NHS Trust was negligent. As a result, he was left with serious injuries and requires around the clock care in his home. On reaching the age of 18, he sued the Trust, using his father as ‘litigation friend’ – someone who sues on behalf of another person who is unable to represent their own interests because of actual or legal incapacity. The NHS Trust admitted liability but disputed the sum claimed as compensation.
The Trust’s argument was based on the principle that any compensation award it made would be ignored by C’s local authority when calculating its contribution to his care costs. The practical effect of this would be that the local authority would need to provide for C’s care free of charge, which in turn would mean that any settlement made by the Trust would constitute a windfall, being surplus to C’s needs. Accordingly, argued the Trust, it should not be ordered to pay compensation.
This argument has been accepted by the courts in cases in which the care was being provided on a residential basis.
The High Court calculated that the cost of domiciliary care for C was £122,000 per annum. It also deduced that the cost of care which would be provided by the local authority was £70,000 per annum. The Court ruled that the Trust’s liability would therefore be limited to the shortfall of £52,000. This decision was appealed.
The Court of Appeal considered that the High Court had failed to appreciate the difference between capital derived from a personal injury and income derived from that capital for the purposes of charging for domiciliary care. The capital of such an award is ignored for the purposes of calculating liability for care costs.  However, the guidance on such awards is silent on how the income derived from the invested capital is to be treated. The Court of Appeal ruled that the High Court was incorrect in its assumption that the income derived from the capital sum would also be ignored by the local authority, although no evidence had been heard on that point. Until the local authority’s policy on its treatment of income derived from the capital sum were known, the appropriate compensation could not be decided upon.
The claim was remitted back to the High Court so that the local authority’s evidence could be obtained and the appropriate sum calculated.
In such cases, it is evident that the responsibility for paying for the future care needs of the injured person can move from the person who caused the injury to the local authority (and hence to the taxpayer), because the local authority is obliged by law to pay for care. The Court of Appeal commented on this unfairness, but said it was a matter for Parliament, not the courts, to resolve.
Partner Note
Crofton v NHS Litigation Authority [2007] EWCA Civ 71.
Lover Awarded £1m from Estate
The long-term lover of a man who had promised to marry her but died before they could wed has received more than £1m from his £3m estate.
Multimillionaire Henry Bahouse and former dental nurse Cyd Negus had a ‘flamboyant lifestyle’ before he committed suicide in 2005. His will made no provision for 50-year-old Ms Negus, who therefore claimed for financial provision to be made for her from his estate.
Mr Bahouse’s family contested the claim, arguing that Ms Negus had already received the proceeds of a life assurance policy, taken out by Mr Bahouse for her benefit, and a half share in a Spanish property. Together, these were worth in excess of £600,000. According to Ms Negus, she and Mr Bahouse were intending to get married and even hoped to start a family.
According to Mr Bahouse’s family, the couple were on the verge of breaking up and Mr Bahouse had no intention of marrying Ms Negus.
In the view of Deputy High Court Judge Roger Kaye QC, Ms Negus had become a housewife ‘in all but name’ and had a reasonable basis for believing that her future financial needs would be met by Mr Bahouse. There had been no diminution in the couple’s love for one another. He awarded Ms Negus the ownership of the flat she had shared with Mr Bahouse (valued at approximately £400,000) and a lump sum of £240,000. The balance of the estate, worth about £2m, went to Mr Bahouse’s family – mainly to his son Gordon. The court action cost the Bahouse family approximately £100,000 in legal costs.
Says <<CONTACT DETAILS>>, “If a person has been supported financially by another, under some circumstances a claim can be made on the estate after the death of the person providing the financial support. In such cases, the court, not the will of the deceased, determines how the estate is to be divided. If you have been financially reliant on another person who has died and have not been made a beneficiary under their will, you may be entitled to make a claim on the estate. Contact us for advice.”
Partner Note
Bahouse v Negus
Daily Telegraph, 24 October 2007.
Mortgage Holders ‘Clueless’ About Interest Rate Impact
Experian, the UK’s leading credit search agency, has recently undertaken a survey of mortgage holders and concluded that most homeowners are ‘clueless’ regarding the impact changes in interest rates will have on their mortgages.
The results make staggering reading as the latest Personal Credit Index Survey shows that more than 70 per cent of homeowners were unable to estimate correctly the effect that a 0.5 per cent increase in interest rates would have on the monthly repayments on an interest-only mortgage of £100,000. The correct answer is approximately £40 per month. Almost a fifth of those surveyed thought the increase would be £80 or more and nearly a fifth thought the increase would be £10 or less.
Experian believes that the lack of understanding of the true effect of interest rate rises could be one of the reasons why consumer confidence showed an upward trend nationally in the early autumn, with more than half of those surveyed currently happy with their level of personal indebtedness. In the North, however, consumer confidence dipped somewhat.
“Thousands of fixed-rate and discounted mortgages are set to come to an end over the next few months and, if inter-bank lending terms remain tight, it could be difficult to find good re-mortgage deals, especially if your level of indebtedness relative to income is high,” says <<CONTACT DETAILS>>. “If you need advice on your mortgage or re-mortgage or with formulating a financial strategy for yourself and your family, contact us for advice.”
Partner Note
Reported by Experian, 24 October 2007. See
New HIPs Resolution Service
The rules governing Home Information Packs (HIPs) require that estate agents in England and Wales who market homes for sale with HIPs must belong to an approved redress scheme for HIP-related complaints. The schemes allow consumers to pursue compensation claims against agents where a complaint is justified. The administrators of approved redress schemes are required to pass information regarding misconduct of estate agents to Trading Standards Officers and to the Office of Fair Trading (OFT). The OFT has the right to ban persons it deems to be unfit from acting as estate agents.
Two schemes already in operation have now been joined by another, known as the Property Adjudication for Consumers (PACS) scheme, which commenced on 1 December 2007. PACS differs from the existing schemes as it is run by an independent dispute resolution provider rather than an ‘industry ombudsman’. This may give an extra level of comfort to some complainants.
Properties on the Market Prior to HIPs
Currently, any property that was already on the market on the date that HIPs were introduced (1 August 2007 for properties with four or more bedrooms and 10 September 2007 for those with three or more bedrooms) does not require a HIP. At some stage, a date will be set when all qualifying properties on the market will need a HIP, regardless of when they were first marketed. However, the Government has yet to decide when this will be.
Partner Note
PACS – Announced in ‘Progress’, issue 24, 1 November 2007.
Source for no ‘drop dead’ date – PROGRESS Newsletter, Issue 26, 30 November 2007.
Reduced Earning Capacity in Marriage Warrants Compensation
A recent case, in which a man’s ex-wife sought an increase in the financial provision originally made for her following their 1988 divorce, has raised an interesting issue regarding the calculation of the division of the financial spoils on the break-up of a marriage.
Although there were a number of issues raised, there were two points of primary interest. The first was that in the original settlement, even though the couple had been married for 24 years, the woman was awarded only 26 per cent of the capital of the marriage. She was, however, awarded 35 per cent of her husband’s income at that time.
Subsequent to their divorce, the woman’s ex-husband was able to increase greatly the value of his assets, becoming a multimillionaire. She had found a job after their divorce, but her argument that she should have an increase in her financial settlement was based not only on her increased financial need (by the time the case was brought, her only income was a pension of approximately £15,000 per year), but on the basis that she should be compensated for her reduced earning capacity during the marriage because she had not worked whilst bringing up their children.
The court accepted this line of reasoning and awarded her a six-figure settlement.
Partner Note
Lauder v Lauder [2007] EWHC 1221.
Ruined Holiday? What to Do
If you are subject to a long delay or the cancellation of your flight when on holiday, the airline is required to give you a leaflet outlining your right to compensation. If the delay or cancellation means that you must rearrange your holiday or incur significant extra cost, make sure you get an exact explanation of the reasons for it. We can give you advice on your rights in these circumstances if the airline or tour operator fails to compensate you adequately.
If you are on a package tour and suffer illness as a result of poor hygiene or some other preventable cause or you have an accident on account of a lack of proper safety considerations, make sure you get as much evidence as possible and as quickly as possible. Photographs or films of unsafe areas and unhygienic food preparation procedures can be very useful in cases of accident or illness, for example. Also, make sure your complaints are formally noted in writing and given to the holiday representative and/or the resort manager and make sure you keep a copy. Exchange addresses with any potential witnesses or fellow sufferers. If you are admitted to hospital, retain a copy of your medical notes.
If through no fault of your own you have suffered a preventable accident whilst on holiday or had a holiday ruined by illness caused by procedural failings at your resort, contact us as soon as possible for advice on the next step to take.
The website of the Air Transport Users Council contains useful information on passenger rights in the event of delays etc. by airlines. This can be found at
Squatter Must Prove Exclusive Occupation
When an application is made to register land by adverse possession (the legal term for ‘squatters’ rights’), the onus is on the person claiming possession of the land to prove their right to claim the title to it.
A recent case dealt with a situation in which agricultural land was claimed by a man who asserted that he had been in exclusive occupation of it since 1991 and had built fencing and a locked gate so that he could graze sheep and horses on it. He alleged that he had occupied the land to the exclusion of the owners of the legal title to it since that time. He claimed that he had therefore met the requirement to have had sole and exclusive occupation of the land for twelve years and was thus legally entitled to have the land registered in his name. The court upheld his claim. However, the owners of the ‘paper title’ appealed.
On appeal, the court judged that the man had failed to prove that he was in sole and exclusive occupation of the disputed land before 1995. His claim therefore failed.
Says <<CONTACT DETAILS>>, “Such cases will always be decided on the facts, so it is important to obtain and retain as much evidence as possible when bringing or disputing a claim or if such a claim is a possibility in the future.”
This case arose prior to the introduction of the Land Registration Act 2002, which made changes to the law. A system of notices was put in place which informs anyone with an interest in the land that an application has been made by someone to register title to it in their name(s). This allows the owner to prevent the application. However, if the squatter has occupied the land for the requisite period and is allowed to remain in possession unopposed for a further two years after the application is made (i.e. the owner fails to take steps to evict them), then a second application to register the land in the squatter’s name will be successful.
The system now in place should, in time, make such claims less frequent, especially as regards registered land. It is a worthwhile precaution to ensure that land is registered if there is a possibility that it might be occupied by squatters and title to it could be claimed by adverse possession as it makes the chances of failing to receive the relevant notices less likely.
Partner Note
SS Global and others v Christos Kyriacou Sava ChD 28 Septemebr 2007. See The Law Society’s Gazette 18 October 2007, p 27.

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