January 2013 Archive

Annual Residential Property Tax: 1 April 2013 looms closer

The government announced a package of measures in Budget 2012 to ensure that individuals and companies pay a fair share of tax on residential property transactions and to tackle avoidance, including the wrapping of property in corporate and other “envelopes”.

Interest rate swap misselling

Interest rate swaps were originally devised for trading between financial institutions and big corporations. Difficulties have arisen when similar products have been sold to smaller businesses including property developers, hoteliers and so on. It is currently estimated that 40,000 SME’s were mis-sold interest rate swaps. Certain banks have, as a consequence, agreed they will provide redress to non-sophisticated customers.

Pension of a bankrupt: appeal vacated

The appeal of the decision in Raithatha - v - Williamson [2012] has been vacated following settlement. The outcome of the first instance decision was that an Income Payments Order (“IPO”) could be made in respect of the undrawn personal pension. This decision therefore stands as precedent.

Secured directors' loans - helping you to get your loan repaid

Do you intend to make a loan to a company? Would you like to increase the likelihood of that loan being repaid? Many directors provide loans to their companies on an unsecured basis. However, if a loan is unsecured and the company becomes insolvent, the director’s loan will rank alongside all the other unsecured creditors and there is a substantial risk that all or at least some of the lent monies may not be recovered. As an alternative, a director can provide a secured director’s loan.

Payment Protection Insurance - What does 2013 bring?

Following the failed judicial review bought by the British Bankers Association against the FSA and FOS, the number of PPI claims understandably soared last year. Numerous Claims Management Companies exploited this niche market (taking up to 30% of a consumer’s award) and flooded the FOS with complaints. As of September 2012 the FOS stated that it was receiving in excess of 1,500 new complaints per day and, with an estimated 16 million policies having been sold since 2005, there is little sign of the complaints ceasing.

OFT issues new guidance on continuous payment authorities

The OFT has issued a set of principles for businesses using Continuous Payment Authorities (CPA’s) to clarify core standards. Guidance is provided for pre-contracts, the life of the contract and cancellation of contracts to ensure customers know what they are signing up to and their right to cancel. Businesses failing to act within the principles may face enforcement action from the OFT. It is not sufficient simply to include brief details in the Terms and Conditions of a contract; details must “be set out clearly and in plain, intelligible language, and brought prominently to the consumer's attention”.

Valuer claims - how does a judge decide on the correct market value?

A recent appeal case considered whether the judge had erred in his approach when assessing the true market value of a property in a valuer negligence claim. The appeal court confirmed that a judge does not have to accept the experts' evidence on quantum claims. So long as the decision on quantum is reasoned, the judge can choose a figure he considers most appropriate.

The pitfalls of dispute resolution clauses

Contracts can provide for disputes to be referred to mediation or arbitration or adjudication as an alternative to court, or even a combination of these, say mediation, then arbitration and court as a last resort. The purpose is to avoid the significant costs (and often delay) regularly associated with court proceedings. A dispute resolution clause can be a sensible option but they are only as good as the drafting.
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