lucas-law.co.uk

Another serious race discrimination case involving a public body

There seems to be a spate at the moment of serious and expensive discrimination cases involving NHS Trusts. Over the last decade many people have complained about the huge increase in management roles and levels within these trusts. With a lot of managers, often comes politics and some unfortunate machiovellian type tactics in our experience, but the following case, reported this week, clearly is at the worst end of the spectrum.

The successful applicant to the Employment tribunal was awarded almost £1 million based on racial discrimination which caused him to leave his career and effectively needed his career. He was dismissed from the role of director of Central Manchester University NHS Foundation.

The applicant, Mr Browne had a 34 year career in the NHS. In 2007, concerns were raised about alleged overspending and poor management by Mr Browne. He responded by alleging that such concerns were unmerited and founded on race discrimination. As often happens in these situations, once a claim and counterclaim had been made, the relationship deteriorated but in this case, the Tribunal decided that certain senior members of staff closed ranks against Mr Browne and started disciplinary process which ultimately resulted in dismissal.

I wish to make a revelation: A eureka moment, if you will.

As head of Litigation a firm of solicitors in London, I am placed in a unique position of acting in a broad range of subjects, across different disciplines including Civil Litigation, Criminal Litigation, and Family Law.

It strikes me that some jurisdictions have developed faster than others.

In Family Law, during the course of a divorce where finances and the split of the matrimonial pot are in issue, there is in some cases, a direction that there be an FDR, a Financial Dispute Resolution.

One goes before a Judge, but not the Trial Judge, who considers all Without Prejudice communications; All Calderbank offers, any previous mediations or offers made and considered. That Judge also considers what Civil Practitioners understand as the Statement of Case, setting out the basis of claim and response.

The Judge then usually gives some welcome choice words about the costs of Litigation, the emotional roller coaster experienced, the futility of arguing of something broken. The Judge gives a sobering forecast of more costs to come, and why furnishing the pockets of their Lawyers is usually unproductive and not constructive.

The Parties then say where they have got to in terms of trying to reach settlement, and the Judge sends them on their way. However, the Judge remains available, subject to his case-load, throughout the day, whilst the Parties continue to attempt to thrash out a mutually satisfactory compromise.

As the Parties return, (usually because the Judge calls upon the usher to bring the Legal Advisors before him), that Judge gives a view on where he thinks a Trial Judge will decide (I.e. a 50/50 split, an 80/20 split of the financial estate). That usually focuses all concerned to be realistic about their prospects, to quickly develop mature emotional intelligence, and to set aside emotion, and concentrate on the commercial reality.

Why do we not have this in Civil cases?

Imagine a Judge independent of judging the case at Trial, casting an opinion on the position off the Parties. I can think of no better, more helpful way, than to have a Judge with experience of deciding such cases, giving an opinion on prospects of success. I believe that many a case has ended early because of such a mechanism, although I have no statistics on the matter.

When it comes to Trial, at the conclusion when it comes to considering costs, the Trial Judge is then shown the FDR Judge’s paperwork to consider w heather e Parties have acted reasonably I in trying to reach settlement, with the possibility of costs sanctions if they have not done so.

I have spoken to a variety of Judges in all disciplines, High Court, Recorders, And District Judges, all of whom have indicated with varying degrees of grunts, varying in pitch (the higher the Judge, the lower the pitch), and other non-verbal communication, that they would welcome such an opportunity to give the Parties a piece of their mind as to how the case may peter out when it goes to Trial in the absence of settlement.

I welcome development of this area in Civil Litigation. The best placed Association to steer such a concept is the London Solicitors’ Litigation Association, of which I am a member.

David Rosen is a Solicitor-Advocate, Partner, and Head of Litigation at Darlingtons Solicitors, based in London, EC4, and a visiting associate Professor of Law at Brunel University.

Hidden financial assets and divorce

Divorce, like all forms of litigation, can be a very dirty business. A common theme of litigation cases is where one of the parties strongly believes or knows that the other is concealing evidence, whether relevant to the issue of legal liability or the value of the claim or on the issue of enforcing a judgment.

It is always difficult in any legal jurisdiction for the courts to strike a balance. Judges will all be aware that hiding evidence and assets goes on all the time, and should not be allowed. As against that, the courts cannot allow a free-for-all “fishing expedition” where one party succeeds in demanding huge amounts of paperwork from the other party and connected 3^rd parties to prove or disprove a  “hunch”. Then there is the issue of privacy, data protection and improperly obtained evidence.

On this latter issue, the landmark case of Immerman from last year pushed the boundaries somewhat back in favour of the concealer, in that improperly obtained evidence, even where highly relevant, may not be accepted into evidence by the court.

As a consequence of this, a recent survey of lawyers indicates that  a high number of family lawyers believe that concealing assets is a serious problem in divorce cases. The findings of a recent survey by Grant Thornton accountants found that nearly 50% of family lawyers believe that individuals may conceal assets in divorce proceedings.

To us, this is clearly a serious problem. The intersection between family law, data protection and privacy is never going to be an easy one but has Immerman gone too far ?

A Limited Liability Partnership (LLP) allows for protection of its members as it is a corporate body which exists as its own legal ‘person’. The benefit of the LLP being its own legal ‘person’ is that any liabilities or debts of the LLP are the responsibility of the Company rather than the members themselves. This is of a great advantage to the members if the business unfortunately fails as they will not be liable personally except for what they have invested into the Company.

Individuals or other businesses can become members of a LLP. One restriction on a LLP is that it must have at least 2 members and fulfill the definition of a partnership, of it being a ‘commercial activity with a view to a profit’. Although it may be attractive for the members, due to a lack of liability, LLP’s aren’t seen as appropriate for charitable organisations.

All LLP’s should have an agreement in place, which is drafted to the entire member’s approval; this is normally referred to as the constitution of the Partnership. Failing an agreement being in place, the provisions of the 1890 Partnership Act will come into force. The 1890 Partnership Act has its shortcomings as any 120 year old piece of legislation will and therefore it can never been as substantial as a Partnership Agreement which is drafted to suit the preferences of the specific business. Some elements of the 1890 Act which will come into force in the absence of a Partnership Agreement are the sharing of profits equally between members and the equal participation in management.

A further benefit of an LLP being its own legal ‘person’ is that the members will not be liable for any debts if at some point the LLP becomes insolvent and is liquidated. Members will not have to contribute to the debt unless they have agreed to do so. It is possible, however, for members to be liable for a possible claw back of drawings up to a maximum of two years.

Another benefit of a LLP is that members do not become personally liable to a claim of negligence due to an act by another member of the LLP. Members are not totally free of any potential liability however as they may become personally liable for any negligent advice they themselves give.

Similarly to any other Partnership the members are bound by an implied duty of good faith. This duty will apply at all times.

The members of the LLP are placed under a fiduciary duty, this places the members under a duty to produce true accounts, not to carry out a competing business unless consent is received and not to benefit solely from the LLP’s assets, name or goodwill.

Accounts must be filed with Companies House every year. LLP’s are required to abide by strict accounting standards and they must be periodically audited. Failure to abide by these obligations will lead to sanctions.

Every LLP must have two ‘designated members’. These are members who have the role of performing the filing and administrative duties for the LLP.

At it’s inception an LLP must register an incorporation document which will include: -

(1)          the names and addresses of its members

(2)          the name of the LLP

(3)          and the location and address of the registered office.

If an individual is to be appointed as a member of the partnership, the registrar is to be notified within 14 days.

If a member wants to leave the LLP, they can do so with the agreement of the other members or by giving reasonable notice. If a member suddenly passes away, they will then cease to be a member.