Data Protection

Data Protection

Data Protection what are the risks ?

The majority of businesses currently operating in the UK hold data and accordingly must ensure that they comply with the Data Protection Act 1998 (DPA). What does this mean in simple terms? Businesses often hold data about their employees, customers, clients or have information retained following market research exercises to name but a few. How this data is dealt with and held is governed by the DPA and breach can lead to some serious consequences such as a large fine.

To try and protect your business from falling foul of the DPA it is important to ensure compliance one way to try and do this is by introducing a data protection policy setting out how you handle and store data and ensure that all of your employees are fully appraised of this.

Many companies now do much trade and marketing through the internet which has increased the amount of data being collected and held by these businesses and further increased the risk of data being mishandled.

Any business which “processes” and personal information about individuals is governed by the DPA for example peoples age, addresses etc. Information is likely to be considered data if a living person can be identified from it.

It is important to ensure that once data is collected it is only stored for the period of time that is required to use the data for the purpose for which it was collected.

The rules under the DPA apply to all data controllers within the UK. A data controller is a person or entity who determines how personal data is dealt with. All data controllers must register with the Information Commissioner who regulates data controllers in order to notify of their intention to process data. Even if a data controller fails to register this does not exempt them from the obligations under the DPA.

The main principles set out in the DPA that the data controllers must comply with are that the data must be processed fairly and accurately and in accordance with the guidelines set out in the DPA. It should also only be collected and used for specific and lawful purposes and not used for any other purpose than that which it was collected for. It must be adequate relevant and not excessive for the purpose for which it was collected. It should be accurate and kept up to date (if relevant) not be kept for any longer than is considered necessary, appropriate measures must be taken to ensure that it is protected against unlawful processing, accidental damage etc not be transferred outside of the EU unless the country to which it is transferred has Data Protection laws that are compliant with the UK laws.

In order to ensure that the processing is fair it is best practice to advise the individual of the data processing.

Data protection not only represents a regulatory risk for businesses but also for almost all businesses, there are other issues – see here about employment law policies which may be needed and this page which is helpful on when you may need a confidentiality agreement.

Insolvent estates

Insolvent estates

With the current economic conditions and taking into account that the majority of people still do not make a will, it is perhaps surprising that the issue of what happens to an insolvent estate is not more widely discussed or commented upon, especially as regards how administrators or executors should deal with an insolvent estate and what are the risks, if any, for administrators or executors ?

Below are some quick tips on dealing with an insolvent estate :-

  • An executor can refuse his or her appointment but not after starting in the role in any substantive way.
  • When liabilities exceed  assets, the duty of personal representatives is to creditors not beneficiaries.
  •  Debts must be paid before any payments are made to beneficiaries. If this executor(s) fail to do this, he/she/they can be personally liable.
  • A possible way of dealing with an insolvency of this type is for executors to apply for an Insolvency Administration Order which will then result in the estate administration legal responsibility transferring  to the appointed insolvency practitioner.

Is interest payable on court judgments ?

Statutory Interest is the interest rate applied pursuant to Section 35A of the Supreme Courts Act, or Section 69 of the County Courts Act 1984. That rate is 8% and has stayed at the level for several years.

Statutory interest applies on debts due. That figure is usually expressed in a Statement of Case as a total figure from the date due, until the date of issue of Proceedings, and thereafter at a daily rate of ‘x’ until  Judgment or sooner payment.

Contractual rate of interest is precisely that; A figure expressly written within a Contractual document. It could be higher or lower than the statutory rate, but if expressed too highly, it may be considered penal in nature, and void, or voidable.

When bringing a case, does the Statutory or Contactual rate apply?

Interest must be expressly claimed in the Statement of Case. It seems that the Claimant, or a Part 20 Claimant can opt to choose one or the other, but usually both figures are expressed as alternatives, or indeed ‘for such rates and for such amounts as the Court deems appropriate’.

Does the Court have discretion as to what rate of Interest to apply?

The answer is categorically, yes. Courts are usually loathe to vary any contractual position, but can prevail upon the Parties a lower rate of interest.

 Can one argue against the contractual rate?

Yes. See Director General of Fair Trading v First National Bank plc [2001] UKHL 52.

 Does the position change if an agreement is regulated under the Consumer Credit Act 1974?

Yes. If the Courts deem an interest rate to be excessive, or that lending for example, was irresponsible, then the Courts have wide powers to set aside the interest position taking into account the realistic prospects of a sum of money being repaid, and whether advancing such funds in the first instance were deemed responsible or irresponsible lending. If the latter, arguing a low bargaining position and necessity and a rush for monies to be advanced whatever the circumstances, may be frowned upon by the Courts.

David Rosen is a Solicitor-Advocate and Partner at Darlingtons, Solicitors in London, EC4. He is a specialist litigation solicitor member of the London Solicitors’ Litigation Association, and a visiting associate Professor of Law at Brunel University.

Fascinating facts about wills

A nation of animal lovers

Britain is indeed a nation of animal lovers, as is shown by a survey on wills.

The survey of over 14,000 pet owners by insurers More Than found that :-

  • Over 1/3 say that they plan to leave more than £10,000.00 to their pets
  • A similar number said that their pet would get a bigger inheritance
  • Some 20% even said that they would leave their home to their pet
  • About 25% would leave sentimental items such as their pet’s favourite chair or photographs.
  • Adding up all the figures, the survey would suggest that animals would be left the huge sum of £26 billion

There are of course practical realities of leaving money or assets to a pet – they still need humans to look after them and a pet has no legal status to receive a bequest. We would take this survey with a pinch of salt; it certainly shows how much we love our pets and that many wills do leave assets to animal charities. Clearly, these kinds of provisions should be carefully thought out with the benefit of good professional advice.

For more help with wills or probate, an innovative new option is offered by Epoq and can be found at

Disciplinary hearings

Disciplinary Hearings

Most organisations or businesses should have  at least basic procedures in place when it comes to dealing with discipline within the work place. It may be incorporated already into the employee’s contract or it will be a standard policy used throughout the organisation.

Whatever the procedure, the final stage incorporates a formal disciplinary hearing. This is where a senior figure in the organisation or business will hear both sides and make a decision on what penalty, if any, to place on the employee, including possible dismissal.

Even the disciplinary hearing itself has its own procedures and both employers and employees should be aware of these as if they do not follow them correctly it could impact on their position.

Before conducting a disciplinary hearing an employer must write to the employee alleging what it is that they have done wrong and inviting them to the hearing. This letter should also state where the hearing is to be held and should inform the employee of his right to be accompanied by a colleague or friend. Should the employee intend to bring someone with him, they should inform the employer who that will be.

A reasonable time should be given between this notice and the hearing itself. This is to allow both sides to prepare properly. If the employee feels that there is insufficient time to do this, they may request that the disciplinary hearing be rearranged for a later date.

It is also important that the employer has carried out an investigatory meeting with the employee first. Alternatively, they need to conduct other investigations to collate evidence which must then be provided to the employee so that they will have a chance to answer any allegations.

At the disciplinary hearing itself both the employer and employee should be allowed to set out their case and answer any questions raised by the other party. It is essential that the employee is given reasonable opportunity to ask questions, present his own evidence and call any witnesses that they may have. It should be noted that where witnesses are to be called – by either party – advanced notice of this should be given to the other side.

To enable this hearing to be conducted properly the chairman should make sure to explain the procedure of what is going to happen. They should make sure to give the employee all the opportunities and rights which are accorded to him. Failure to comply with this could mean the possibility of a claim of unfair dismissal. It is best for the chairman to keep the approach formal and polite, allowing the employee to speak freely at all times. It is also important that neither party get involved in arguments nor make personal or humiliating remarks.

The standard procedure at the disciplinary hearing itself is as follows:

  • The employer will introduce everyone and explain why the hearing has been called.
  • They will briefly outline the case against the employee and go through their evidence.
  • They will ask if there is any special circumstance that the employee will wish for them to  take into account.
  • The employee will then have a turn to state his case and answer the allegations. He will also be allowed to ask questions of the employer and present his own evidence or witnesses.
  • The Chairman will then summarise both sides of the discussion and will ask the employee if he has anything else to add.
  • The disciplinary hearing should always be adjourned before a decision is actually taken. This is to allow time for reflection and proper consideration by the Chairman.

In some cases it may be necessary to adjourn the hearing. This would include circumstances where new facts come to light at the hearing and it is necessary to investigate them further before the disciplinary hearing can be continued.  Similarly, where the employee becomes too distressed or upset to be able to continue with the hearing then it should be adjourned.

When a decision is made it should be put in writing and sent to the employee. Employees with one year’s service or more also have the right to request a written statement of reasons for dismissal.

Should the decision not be one that the employee is satisfied with, they have a legal right to appeal. When the employer informs the employee of the decision they should also inform them how they can appeal along with the time limit for doing so. As it is important for the issue to be dealt with quickly, the time limit is usually quite short.

The appeal can be raised by the employee on any number of grounds including new evidence, undue severity of the decision, inconsistency of the penalty etc. The appeal may take the form of a review of the sanction given or even a re-hearing. This will depend on the grounds of the appeal.

The Appeal of the disciplinary hearing will take place in much the same way as the disciplinary hearing itself. As at the original hearing, the employee has a right to be accompanied by a friend or colleague. Some employees may have contractual rights to bring other people, such as legal professionals.

The Chairman at the appeal is usually someone more senior in authority than the one who chaired the original hearing and if possible, be someone who was not involved in the original hearing at all.

Once a decision on the appeal has been made, it should be set out in writing and sent to the employee stating whether that decision is final or whether a further appeal can be lodged.

It should be noted that if the employee fails to attend a hearing, then the employer is entitled to make their decision without further notice to the employee. It is therefore essential that the employee turn up to the hearing or arranges it on a day when they are available. Even if the employee were to later take the employer to a Tribunal and successfully win his case, the Tribunal is likely to reduce the amount of compensation due to the employee’s failure to follow the disciplinary procedure.

Failure by an employer to follow the proper procedures will almost certainly mean that an Employment Tribunal will find any dismissal to be unfair. Unless there are exceptional circumstances, they will also increase the amount of compensation to be awarded due to the failure on the part of the employer.

It is clear that both employers and employees must be careful when dealing with disciplinary hearings and its procedures.

Insurance law

Significant changes to insurance law

Many businesses and consumers will be all too familiar with difficulties with insurers centring on the issue of whether an insurance claim is payable due to a technicality. This often surrounds the small print in an insurance proposal claim where the prospective insured is required to state any facts which may be relevant to the decision to provide cover. This of course is a highly open ended question, where is the line drawn on this ?

In essence, this question on the proposal form is only likely to benefit one of the parties to the contract i.e the insurers. Many insurers will argue that as a matter of law they should have been told something and if they aren’t, even if it is not directly relevant, they wouldn’t have insured, and therefore can avoid a claim under the insurance contract. Issues on insurance contracts often arise relating to medical conditions or driving offences.

Change is coming …..

Finally, the Government seems willing to deal with the highly unfair situation described above, unfair particularly since few individuals or businesses have the resources to dispute anything with an insurance company which may end up anywhere near a court.

The Consumer Insurance (Disclosure  and Representations Bill) will result in a change to a position where, if insurers want to know anything, they will need to ask it specifically. This will provide certainty although it remains to be seen whether it will also mean an even lengthier list of questions on a proposal form.

Below are some examples of situations where insurers have refused to pay out on claims :-

  • A lady who had been diagnosed with a degenerative spine condition was refused payment on a critical illness insurance policy on the basis that she had not mentioned one episode of lower back pain 3 years prior to taking out the policy.
  • motor insurance claim being rejected due to failure to declare a stereo and satellite navigation system.
  • Refusal of a water damage claim due to failure to declare a conviction for common assault.

The current highly favourable laws for insurers have been in place since 1906, so change is long overdue !

If you have any examples of problems with insurers and/or have any interesting comments on the above, please let us know.


Personal Guarantee tips

Personal Guarantees FAQs

What is a personal guarantee?

Relatively new companies do not have a track record/long credit history with which to rely on when applying for finance.  Where this is the case, the lender may ask the person applying for finance to give a personal guarantee that the loan will be repaid according to the lender’s conditions.  A personal guarantee will make the debtor personally liable for the debt.  If it is not repaid, the debtor’s personal assets may be put at risk.

Do I need to give a personal guarantee if I apply for an overdraft on my business account?

It depends on how new your business is and the terms and conditions on which your bank authorises overdrafts.  If you are a new business, and the size of the overdraft is relatively large when compared to the funds that are coming into your business, you may have to give a personal guarantee.  If the amount is small relative to the amount of funds coming into your business and you are relatively established, you may not have to give a personal guarantee.

What things should I avoid when giving a personal guarantee?

When giving a personal guarantee, you should negotiate to limit the amount the guarantee covers and the length of time it lasts.

If you giving a personal guarantee where the others in the business a, you should try and avoid giving a guarantee where you are “jointly and severable liable” with others giving guarantees, as you could be responsible for the whole debt if the others cannot pay.

However, depending on the lender you are dealing with, it may not be possible to negotiate the lender’s standard terms for personal guarantees.  However, it never hurts to try.

What is the “Enterprise Finance Guarantee” scheme?

This government scheme is aimed at businesses with viable and promising business plans and guarantees 75% of the debt.  This scheme can be applied for on loans between £1,000 and £1,000,000.

Will I need a guarantor when personally securing a loan?

In some cases, the lender may require you to have a personal guarantor, which can be another person or business, where you cannot meet your liabilities.  Whether you need a guarantor or not depends on how much you are boring, your credit history, the size and age of your business and the bank’s terms and conditions.

Renouncing probate

Renunciation of Probate

A United Kingdom will provides for one or more Executors to carry out the wishes of the person who made the will (Testator or Testatrix) after his or her death.

After the death of the Testator or Testatrix all the deceased’s property vests in (is held by) the Executors, and they must apply then  for a Grant of Probate, which costs approximately £90.00,  in order to obtain full legal authority to administer the Estate (to carry out the Testator’s wishes in the will).

An executorcannot be forced to take on the role of administering the estate. He, she or they may go through a procedure known as renunciation of probate following which he, she or they will no longer be involved in the administration of the estate. An executor is not permitted to renounce the role, if already involved in the practicalities of dealing with the will.

The procedure in order to renounce is as follows:-

1.         Draw up a formal legal document called a Renunciation of Probate which clearly states your wishes and is in satisfactory legal format. A solicitorcan help with this.

2.        Sign the Renunciation of Probate in the presence of an independent witness.

3.         Hand or send the signed Renunciation of Probate document to the local Probate Registry office. There are Probate Registry offices in all the regions of the UK.