We are always surprised that few companies and individuals even know what before the event legal insurance is. Subject to the usual small print, caveat and exclusions in insurance policies, bearing in mind the cost and risk of legal issues, insurance against those costs, subject to the cost must be a good idea.

One controversial aspect of these before the event policies, which has always gone against the legal principle and professional conduct requirement that a client must be able to choose their own lawyer, is that the insurers for these policies make this freedom of choice very difficult. From the insurers point of view, they want to retain control of the case and to have specialist lawyers involved that they trust. The other view is that they want to use firms who they can negotiate bulk fees with who will assist them in influencing insureds to perhaps accept a settlement of a dispute which is less than the best they would obtain.

Anyway, a court case has now ruled that it is unlawful for insurers to refuse to pay if a policyholder’s insists on choosing their own solicitor. The rationale for the decision made in the case of  Webster Dixon v Equity Syndicate was not about freedom of choice for the insured as such but instead that the insurers attempts to force solicitors independently chosen by the insured to accept low hourly charge rates breaches European regulations

This is obviously a victory for access to justice but a likely implication will be, yes you guessed it, increased before the vent insurance premiums !

There seems to be almost a “perfect storm” – we have the arab spring, a seismic shift in economic power away from the West and on a micro level, unrest, anger and discontent seem to be just below the surface.

In addition to this, the writer can only vouch for the UK but in the last decade there seems to be a tangible erosion of moral values and respect for the law. On the lowest level this equates to widespread lying on mortgage applications, a general increase in fraud and greed in society. Just last night there were riots in Tottenham in London, events not seen for some 30 years. There are allegations of corruption at the highest level of society and Western Governments seem to be playing a dangerous game of “pass the parcel” in terms of the huge debts and deficits faced by Western economies.

There is much discussion on the press about “uncertain times”. This is certainly true but I would go further, I think we are moving from uncertain times to dangerous times.

What do you think ?

First, the good news. A report is due to be published tomorrow, commissioned by the Government, which is likely to recommend that the considerable stress, anger and anxiety currently felt by the elderly about their homes being sold to pay for long term care costs should be somewhat allayed, with a cap on the amount they can be asked to pay. This cap is likely top be suggested at perhaps around £50,000.00.

The bad news is that if this is the recommendation, it could cost over £2 billion annually in the short term and much more in the long term as the population lives longer and it is likely the government may baulk at the cost. The other issue is that any family law changes are likely to be delayed until 2014, which will not help some 250,000 families in the short term, with costs for residential care being generally upwards of £25,000.00 per annum.

Apparently, at the moment 1 in 5 elderly people in care spend over £100,000.00 on care costs.

This article co-authored by Blackhawk Investigations & by Waring solicitors. many thanks guys.

Particularly in the current economic climate and as is always the case, there is a bull markey somewhere. That bull market can arise from negatives rather than positives and this is a case in point.

Few people will be unaware of the biggest financial scandal of modern times, the Madoff fraud. As matters have unraveled and asset tracing has had time to reap rewards, a proportion of the funds fraudulently obtained by Madoff are being collected and work continues to lay claim to other amounts. This of course will only ever be a fraction of the huge total lost, but one aspect also now coming to the fore is debt trading relating to Madoff.

Some banks and financial institutions, apparently on behalf of clients, are starting to look at buying the debts owed to other institutions by Madoff, on the basis they will pay a small percentage of the value of the debt and then seek to collect, hopefully a much bigger percentage by way of any ultimate payout  to creditors.

Among those banks understood to be buying such debt from other creditors are Royal Bank of Scotland and UBS.

The amount payable for debt can vary widely from as low as less than 10% with very risky unsecured debt for consumers to as high as 70% of the debt where there are reasonable prospects of recovery and the payor is financially quite sound. Apparently, Madoff related debt has fluctuated at somewhere between 30-70%.

For bespoke debt sale, debt purchase and debt recovery, Bluestone ARM is an up-and-coming niche player in this market, which has a highly individual approach to individual, hard to recover debts.

• clear standards for conduct and performance.
• provide examples of appropriate and inappropriate use of electronic communications
• types of internet sites which should not be visited (including pornographic or obscene sites and sites which might be illegal for other reasons as well as sites which might be a source of viruses, such as webmail services);
• a clear policy on blogging or message rooms making it clear that there may be legal implications of commenting or issues likely to bring the employer into disrepute;
• clear rules and procedures for downloading software, generally this should not take place  without the approval of the IT department
• a prohibition on distributing chain e-mails or jokes
• a warning regarding forwarding of copyright information obtained from the internet;
• advice on house e-mail style; and
• a reminder that the content of e-mails must not breach equal opportunities, anti-harassment policies or be defamatory.
• Make it clear that inappropriate use of email and the internet and electronic communications policy generally will be dealt with under the disciplinary procedure.
• Provide a warning that e-mails can be used as evidence in court proceedings.
• Provide a warning that e-mails can be forwarded easily and should not be treated as confidential (any confidential information should be encrypted).
• State that the employer’s standard disclaimer must be used at all times.
• State rules for private use of office equipment when used away from the workplace or the employee’s home.
• Provide a warning that attachments to e-mail should be sent to the IT department for opening if from an unknown source.
• Provide guidance on passwords, any specific security guidelines and advice on excessive processing.
• State whether personal use of office computers is permitted and if so, what level and at what times personal use is acceptable.
• State the employer’s retention and deletion policy (and deal with any overlap with hard copy policy).
• cover the use of office telephones, mobile telephones, laptops, blackberries and similar devices and PDAs, and include guidance on blogging, social networking sites and “twitter”.

The policy should also be communicated clearly by:

• Being supplied to employees at the beginning of their employment.
• Regular reminders and updates on the policy.
• Insisting that employees read the policy and confirm this and accept the term of the policy formally.

It is imperative that the policy is applied consistently and fairly to avoid claims for unfair dismissal and discrimination.

Thanks also to Blackhawk Investigations for ther contribution to this post. Blackhawk offer a full range of business risk mitigation services, background checks and computer forensics and data recovery services.

Pre-emption rights are the priority rights shareholders may have to participate in new issues of shares in priority to those shares being offered offered to non-shareholders.

The most common entitlements for pre-emption are a pro rata right for existing shareholdings but subject to the number of shares taken up by the other shareholders. A key point is that pre-emption rights ensure that all existing shareholders have an opportunity to prevent their stake being diluted by new issues.

Shareholders do not have to take up their pre-emption rights and often refuse where the new shares on offer are perceived to be too expensive.

Pre-emption rights do not apply to the sale of treasury shares (which were introduced by the 2006 Companies Act) because transactions in treasury shares may not lead to dilution of holdings

The default position under company law now is for private limited companies under The Companies Act 2006 (CA) is that a company proposing to allot new shares may not allot them for cash unless they have previously offered them on the same or more favourable terms to the other shareholders. These pre-emption rights can be disapplied but a procedure needs to be followed and remember that this default right relates to the issue of new shares and not the situation where for example, an existing shareholder wants to sell his, her, their existing shares.

Relevant shares mean all the shares in the company except:

•          Shares of a different class, e.g a proposed allotment of Ordinary Shares will not trigger pre-emption rights in Preference shareholders

•          Shares allotted (or to be allotted) under an employees’ share scheme

Disapplication of pre-emption rights

A company can disapply the pre-emption rights of existing shareholders in relation to either a specified allotment or to allotments generally by passing a special resolution of the members in general meeting. The resolution must be proposed to the members, with sufficient notice, by the directors who must give reasons for their recommendation, the price for the shares being allotted and the directors’ reasons for determining that price

It is unusual for a company by way of a general meeting to disapply pre-emption rights in relation to specific allotments of shares. Instead, it is more usual for company directors to be granted general authority to allot shares. A company can, under company law, overrule the provisions of the Companies Act detailed above. However, it is vital that any decision to disapply is be contained in the articles of association of the company or clearly and specifically authorised by way of a special resolution, failing which shareholders rights may be breached and the directors could find themselves possibly liable.

Stock Exchange requirements relating to pre-emption rights

A listed company intending to issue shares must comply with specific rules  on pre-emption. For more information on this, commercial law solicitors should really be consulted as the rules are technical.

The astonishing figure of £3 trillion is the estimated amount pumped into the world economy during the economic crisis by the world’s 4 major central banks. Economists and lawyers have speculated that this sum, rather than a genuine recovery, is what is keeping stock markets stable and avoiding further seismic economic problems, but for how long can this be sustained ?

Measures which have been implemented include central banks  buying up bonds to keep  money circulating. Further cause for ongoing concern perhaps ?

Calls to the NSPCC Helpline reporting suspected child abuse and neglect have reached record levels, the children charity has disclosed.

• In 2010/11 NSPCC counsellors referred over 16,000 serious cases to police or social services, a 37% increase on the previous year and the biggest annual increase in referrals recorded.
• 46% of reported concerns so serious they had to be passed on to the authorities – a huge increase of 39% from the previous year.
• NSPCC research suggests nearly 1 in 5 secondary school children in the UK has been severely neglected during childhood, with figures up 81% to 6,438 cases, followed by some 4,100 cases of reported physical abuse, just over 1,500 cases of sexual abuse and 2,932 cases of emotional abuse.

These figures clearly reflect societal change, the breakdown of family law and extended families and the pressure on parents financially. There would appear to be no short term fixes for reform of legal services and the worry is that these figures are perhaps strongly indicative of a country or society underlying “health” and the signs are not positive. What do you think ?