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Entries for April 2008:

School Appeal advice Website launched

30 Apr 2008, 10:02 by Ian Jones

Labels: admission, disability-discrimination, education, exclusion, school-appeal, school-governor, sen

School appeals are a specialist area of work for one of our barristers Mr Ian Jones. Most secondary school places have now been allocated and primary school places are being announced at the moment. Many parents are already contacting Ian Jones for advice. Some need help writing the appeal statement, while other parents want to be represented at the appeal hearing. Ian Jones has launched his own website www.school-appeal.org.uk. This gives details of the service provided for:

Written by Ian Jones, Barrister at New Walk Chambers, specialising in Civil Law.

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Bank Overdraft Charges Test Case - The End of the First Chapter

24 Apr 2008, 15:03 by Christopher Jeyes

Labels: bank-charges, breach, commercial-law, contract, overdraft, penalty-clauses, unfair-terms

  After what seems like an eternity, Mr Justice Andrew Smith has released his judgment in the Bank Charges Test Case (Office of Fair Trading v. Abbey National plc and 7 others [2008] EWHC 875 (Comm) - BBC News), dealing with the questions of whether overdraft "penalty" charges are covered by the Unfair Terms in Consumer Contracts Regulations 1999 (SI 1999/2083, "the 1999 Regulations") and therefore subject to an assessment of fairness, whether the terms and conditions of the banks who took part in the case were in plain and intelligible language, and whether the relevant terms were penal in nature and therefore unenforceable at common law.

In a gargantuan judgment of 119 pages and 450 paragraphs, which one expects will cause the Courts some headaches when the millions of charge-reclaiming consumers lodge copies of it in support of their claims, Andrew Smith J concludes that the charges levied by the banks are not charges for services provided, and are therefore not excluded from the assessment of fairness by reg.6(2)(b) of the 1999 Regulations. Although the Judge accepted that services are provided when a bank makes payment upon receipt of an instruction from a customer and thereby allows a customer to borrow funds, the way in which such fees had been packaged and expressed did not suggest that they were in fact fees for services, only fees arising from the circumstances in which a transaction took place. In any event, the banks had contended that the fees were part of the "free if in credit" banking structure, and that they financed the system as a whole. Given that situation it is not surprising that the Judge held that the 1999 Regulations do not exclude assessment of such terms.

As expected, "Money Saving Expert" Martin Lewis (from whose website millions of template claim letters have been downloaded) proclaims this decision to be a "major victory" for the consumer, but whilst it certainly does the consumer's case no harm (consumer in the singular because the 1999 Regulations have a bearing only on individual contracts), there is still a long way to go. For a start, the ruling applies only to the terms and conditions of the banks involved in the case, and only the current editions of those terms. The banks could now re-write their terms to clearly express the erstwhile penalty fees as the fees for services provided, or even re-structure their charging regime such that the "free if in credit" system comes to an end, and all bank customers have to pay the price. And of course, there may yet be an appeal to a higher court.

That being said, it is anticipated that the Office of Fair Trading ("OFT") will now rapidly produce its conclusions as to the fairness of the "penalty" fees applied by the banks, most probably in line with its decision on credit card default charges, in which charges were generally considered fair if they were £12 or less.

The penalty issue was decided in favour of the banks, the Judge considering that on the terms before him, the fees charged were not occasioned by a breach of contract, because the consumer was not under a relevant contractual obligation. Given that the sum was payable otherwise than on breach of contract, the rules on penalties did not apply. This was an argument I raised in an article in the New Law Journal ("Highly Charged?" 20 April 2007 pp.536-7). Disappointingly for me, my other argument (that by agreeing to an ad hoc overdraft the banks waived any contractual breach and charged a fee pursuant to a variation of the contract) did not find favour with the Judge, but I can take heart from the fact that it seems to have been adopted by the ten QCs appearing for the various banks!

The millions of outstanding bank charge claims will remain on hold for the time being, but I suspect that, unless there is an appeal and a further stay of the claims, the solicitors for the banks, and the courts, had better be steeling themselves for a summer deluge!

Written by Chris Jeyes, Barrister at New Walk Chambers, specialising in Contract, Banking, Civil and Commercial Law.

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TUPE and Administration

23 Apr 2008, 13:15 by Joseph Neville

Labels: administration, court-of-appeal, employment, insolvency, machinations, tupe, unfair-dismissal

  The recent Court of Appeal case of Dynamex Friction Ltd & Anor v Amicus & Ors is a fascinating look at the impact upon employees where a company enters administration and the business subsequently passes to a phoenix company. In many cases the owners and controllers of the phoenix are the same individuals who drove the original company into administration in the first place.

The Transfer of Undertakings (Protection of Employment) Regulations 2006 are designed to provide rights to employees where their employment transfers from one person or company to another. It provides that employees will have a claim of unfair dismissal if they were dismissed in consequence of the transfer. If the business had simply been sold on without the intervening administration, then the employees' employment would have transferred with it.

In this case however, when the company went into administration, the administrator decided that there wasn't enough money in the company to pay the employees so dismissed them all. He then sold on the business to a company which fell into the eventual control of the original director. Here the reason for the dismissal was not a transfer, it was because the administrator couldn't afford the wage bill.

The employees contended that their dismissal was the consequence of the transfer, as they alleged the overall process was a result of the ‘machinations' of the previous director and that he had planned it all along. Had this argument been successful it would have struck an important blow for the many employees who find themselves in this situation. The Court of Appeal however, by a majority, found that once it was established the dismissing officer made his decision independently, and for a particular reason, it was impossible to look behind that reason at any surrounding context or scheming.

Written by Joseph Neville, Pupil at New Walk Chambers, specialising in Employment Law.

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Burden of Proof in Unfair Dismissal

21 Apr 2008, 11:53 by Joseph Neville

In Kuzel v Roche Products Ltd (2008) EWCA Civ 380 the Court of Appeal has handed down a useful judgement on the burden of proof in unfair dismissal cases. When an employee brings a claim of unfair dismissal, section 98(1) of the Employment Rights Act 1996 provides that it is for the employer to show the reason for any dismissal, and that it is a fair reason within the meaning of the legislation. In the case, the employer contended that a dismissal was fair due to a breakdown in the trust and confidence between her and her manager. The employee, Dr Kuzel, claimed that her dismissal was connected with her having made a protected disclosure. The tribunal rejected both versions, and found that she had been dismissed because her manager lost his temper. Where an employer fails to prove it's reason for the dismissal, there is always a finding of unfair dismissal due to making a protected disclosure would disapply the usual upper limit of the compensatory award - important to a woman with a six figure salary! She failed to do this, and the argument before the court was where the burden lay in establishing the reason for the employee's dismissal once the employer's stated reason has failed.

 The Court of Appeal provided a useful analysis on the burden of proof in these cases, and confirmed that the burden was still on the employer to disprove the reasons advanced by the employee. The case provides a useful step-by-step guide to dealing with the issues which I've modified to apply generally:

(1) Has the employee shown that there is a real issue as to whether the reason put forward by the respondent was not the true reason?

(2) If so, has the employer proved his reason for dismissal? Failure to do so will render the dismissal unfair, and then coupled with a primia facie case from the employer will entitle the tribuanl to infer that the employee's stated reasons are correct.

(3) Has the employer disproved the reasons advanced by the employee? Even if the employer has failed to prove it's own reason for the dismissal it may still have disproved that of the employee.

(4) If not, dismissal is for the reasons stated by the employee. It is not however, at any stagae, for the employee to prove her reason.

Employees often couple a general unfair dismissal claim with another "automatic" reason, so this case is a useful research as to the evidential hurdles each party must cross.

Written by Joseph Neville, Pupil at New Walk Chambers, specialising in Employment Law.

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Direct Public Access

11 Apr 2008, 10:49 by Karl Prosser

Labels: bar-council, barristers, direct-access, instructions, public-access, services

Direct Public Access to the services of a barrister has been available to the general public since 2004; however only those barristers that are beyond thee years of call, have undertaken specific training and are registered with the Bar Council are eligible to provide such services.

 Since 2004 there has been a steady increase in the number of Direct Access instructions and in the number of barristers offering their services on a Direct Access basis. Due to the continued success of the Direct Access scheme a dedicated Public Access Bar Association was launched in 2007, and more recently an associated website has been launched which provides useful information to the general public and Direct Access barristers alike.

 Written by Karl Prosser, Barrister at New Walk Chambers, specialising in Civil Law.

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