Further to my blog of 8 August 2017, the President of the Employment Tribunal (ET) has made a case management order stating that:

1. All claims and applications brought in the Employment Tribunal in England and Wales in reliance upon the decision of the Supreme Court in R (on the application of UNISON) v Lord Chancellor 2017 UKSC 51 (26 July 2017) shall be stayed to await decisions of the Ministry of Justice and Her Majesty’s Courts and Tribunals Service in relation to the implications of that decision.
2. Any party wishing to make representations for the further conduct of such claims or applications should do so upon application to the Regional Employment Judge for the relevant Employment Tribunal region.
3. A copy of this case management order shall be sent to ACAS and all known interested parties or persons and shall be published on the Judiciary website.

What this means is that the Government and the Courts are likely to come up with a universal system for dealing with claims and applications that people may want to make after the recent Supreme Court decision.  Whilst this is happening, there is a stay on these claims and applications which means that they are effectively on hold.

So, what do we mean by ‘claims’ and ‘applications’?  By way of background, before the UNISON decision, everyone making a claim in the Employment Tribunal either had to pay a fee or apply for remission if there was a reason that they couldn’t pay.  The Supreme Court declared the fees unlawful, and so arrangements now have to be made to refund them.  However, people may also complain that they were unable to start or continue a claim because they could not pay the fees at the time, and so may now ask for those claims to be reconsidered.

The sorts of claims that are likely to be affected by the order are:

• Claims without a fee or an application for remission that would be within the timescale usually allowed by the ET i.e. a normal claim but without a fee because a fee is now unlawful;
• Claims without a fee or remission application that would be out of time but where it is argued that the introduction of fees prevented the claim being brought within the usual timescale.

These are basically new claims that people may want to make in light of the recent decision.

Individuals can also make applications to change actions already taken by the ET rather than making a new claim.  The types of applications that the President’s order is likely to put on hold are those where:

• Claims which did not have a fee paid or remission and were therefore rejected;
• Claims which did not have a hearing fee paid and were therefore dismissed;
• Claims with a notice from the ET requiring a party to specify a date when the fee would be paid;
• Claims that required the employer to pay back fees to a successful claimant;
• Claims where claimants paid the fee, lost the case and therefore now want this refunded.

We will provide regular in relation to this hot topic but if you have been in one of the situations described above, and wish to discuss this further, please contact Elaine O’Connor on 0207 940 4000 or at eoc@anthonygold.co.uk

* Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*

Unlike in personal insolvency, the estate is bankrupt when its liabilities are greater than assets.  There is no need for an order declaring an estate bankrupt.  Equally, there is, therefore, no specific, different Grant appointing those responsible for administering an insolvent estate.  A bankrupt estate may be administered by its appointed executor or administrator (PR), applying insolvency rules in the administration process.

As an alternative, PRs may relief themselves of a responsibility for administering an insolvent estate by applying for an Insolvency Administration Order (IAO).  The application is made by a petition (in relation to which a court fee is payable).   Following issue, a hearing of the petition is scheduled and an Insolvency Administration Order (IAO) is issued.

Once issued, the IAO appoints an Official Receiver (OR).  The OR will collect from the PRs information about assets and liabilities of the estate in order to establish if there are reasons to administer the estate (e.g. there are properties that need to be sold etc.) If there are reasons to administer the estate, a Trustee in Bankruptcy will be appointed.  This ends the PRs role, save that if at the end of the process there are any funds left for payment to beneficiaries, those will be paid by the Trustee to the PR for onward distribution to beneficiaries.  The Trustee in Bankruptcy will not distribute to beneficiaries direct.

A petition for an IAO may be made by the PRs themselves.  When PRs of a bankrupt estate are not taking steps to administer the estate, a petition for an IAO may also be issued by a creditor of an undisputed debt of over £750.  There is no need for the creditor to serve a statutory demand before the petition is issued.

Why would a PR petition for an IAO instead of administering the estate themselves?  After all, this adds costs to the administration process so, how can it be viewed of benefit?

The answer is that sometimes, the appointment of a Trustee in Bankruptcy may use his Insolvency Act powers to increase assets or reduce liabilities of the estate for the reasons set out below:

1. An IAO takes effect on the date of death.  This allows the trustee the option of setting aside transactions that were incurred from the date of death to the date of the Order. IAO is, therefore, a relatively hassle free and cost effective way of voiding all the costs improperly incurred by PRs.
2. The issue of the IAO gives the court the ability to bring back to the estate 50% of any jointly owed assets which passed to the surviving joint owner by survivorship.  PRs would have no access to the jointly owned property passing by survivorship.  The trustee in Bankruptcy can ask for an order pursuant to s.421 of the Insolvency Act.  It effectively severs the joint tenancy and brings back to the estate 50% the joint asset, at its value on death.  The order will be made unless the surviving owner can show exceptional circumstances.
3. The estate may also be increased by virtue of the Trustee’s ability to challenge what has gone on prior to death. For example, he might set aside transactions at an undervalue, entered into as far back as 5 years prior to the date of the deceased’s death.  The Trustee can also set aside preference transactions entered into within 2 years of the date of death.
4. The Trustee in Bankruptcy appointed under IAO can disclaim ownership of a Property.  For example, if the deceased had a leasehold interest which continued post death (e.g. a leasehold of unused shop premises). The Trustee can disclaim the ownership, whereas PRs might be stuck with the liability.
5. There are restrictions on the creditors’ right to bring claims to e.g. seize goods when an IAO is in place.

Should you need assistance with weighing up the benefits and disadvantages of the different ways in which an insolvent estate may be administered, or if you need practical assistance with preparation of an application or Grant or a petition for an IAO, please contact me.

* Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*

On 13 July 2017, the Law Commission published Consultation Paper 231 “Making a Will”.  Pointing out that much of law on will making comes from the Victorian era, which means that it is not all ideally suited for modern life – let alone for the challenges which are coming in respect of changing family and social life, greater reliance on technology and our increased understanding of diseases such as dementia and their impact on mental capacity – it makes a series of provisional proposals to modernise the law.  It also raises a number of questions for consideration.

1 – It proposes introducing ‘dispensing powers’ – a method of allowing a Court to recognise a will as being valid even where not all of the formalities have been observed. So long as the document was thought to reflect the testator’s intentions (on the balance of probabilities) then it could be admitted to probate.

2 – It questions whether a formal support scheme should be introduced in order to assist those who have diminished capacity to make wills, thus avoiding the cost and time of an application to the Court of Protection for a statutory will.

3 – It requests views on the principle of electronic wills, and the technical consequences of this (for example, signature by typing your name is too open to fraud whereas a biometric system would require a huge amount of infrastructure which may make the cost prohibitive).

4 – It proposes that the age at which someone can make a will be lowered from 18 to 16 (or potentially even lower where the testator understands the consequences of what they are doing and there are good reasons for it).

5 – It proposes various changes to the law of ademption, in order to ensure that the testator’s wishes can be met.

6 – It proposes further protection of vulnerable testators, by creating a statutory doctrine of testamentary undue influence, following either a structured approach (which would be very similar to presumed undue influence which does not currently operate in respect of wills) or a discretionary approach (where undue influence could be found where it appears just to do so in all the circumstances of the case).  This would also lead to a narrowing of the scope of knowledge and approval of wills to focus on two independent questions – a) whether the testator knew and approved of the contents of the will and b) whether the will was freely executed.

7 – It proposes limits on who can sign on behalf of the testator (in the rare cases where this is required) to exclude people who might benefit indirectly.  There are also limits proposed on who can witness the will, so that any cohabitant of a witness cannot benefit – with a question as to whether a parent/sibling/family member of a witness should be able to benefit.

8 – It proposes that the test for capacity set out in Banks v Goodfellow be replaced, and that capacity to make a will be judged by the test set out in the Mental Capacity Act 2005.  This includes a presumption of capacity, the requirement to help someone to make a will if possible and not to treat someone as lacking capacity simply because they make a bad decision.  It also suggests introducing a code of practice of testamentary capacity to provide guidance on how and when capacity should be assessed.

9 – It questions whether reform to the rule that marriage revokes a will is required.  The Law Commission believes that the rule is not widely known and could be a trap for the unwary.

10 – It proposes reform to the law on privileged wills (which do not require the testator to comply with formalities) which currently allows merchant seamen to make privileged wills, along with various members of the armed forces who are not in any imminent danger.  It is proposed that privileged wills be reserved for those who are in the British armed forces and civilians subject to service discipline.

11 – It proposes keeping mutual wills but allowing the property covered by the will to be available to satisfy a claim under the Inheritance Act 1975.

12 – It questions whether the concept of donatio mortis causa (deathbed gifts) should be abolished and whether the doctrine causes any particular problems

Our Contentious Probate team is producing a response to the Commission Report, which is to be submitted by 10 November 2017. We would be very grateful for your thoughts on the issues raised and have produced a very short survey to obtain responses on some of the questions which particularly request feedback.

Please click here to participate! If you would like to discuss any of the issues raised or get a copy of our response when it is finalised, please contact David Wedgwood.

* Disclaimer: The information on the Anthony Gold website is for general information only and reflects the position at the date of publication. It does not constitute legal advice and should not be treated as such. It is provided without any representations or warranties, express or implied.*