Laura McDowall accredited as specialist in Incapacity and Mental Disability Law

Blackadders are delighted to announce that Laura McDowall has been accredited as a specialist in Incapacity and Mental Disability Law by the Law Society of Scotland.

The accreditation system recognises lawyers with exceptional quality and skill that have developed specialist knowledge during their careers. Laura joins an elite group of solicitors after becoming only the 9th person in Scotland to receive the accreditation in what can often be a very challenging area of the law. She is also the only solicitor in Dundee with this qualification.

Laura joined Blackadders as a trainee in August 2006 and was made Partner in April 2013 and has specialised in private client work for more than 10 years. Laura has been influential in growing the guardianship unit at Blackadders having developed a high level of expertise in Adults with Incapacity, dealing with incapable adults of all ages. She is instructed by local authorities, throughout Scotland, to assist with their duty to make arrangements for financial intervention and guardianship orders. She also regularly prepares financial suitability reports for other firms of solicitors, in applications for guardianship and intervention orders. Laura also advises on, and prepares, Wills and Powers of Attorney.

Laura has a number of other roles outside of Blackadders that include being the course organiser and tutor for the Private Client course of the legal diploma at the University of Dundee, whilst also being a tutor and examiner on the Society of Trust and Estate Practitioners (STEP) Diploma for Scotland.  Laura is also a Director at Wave 102’s Help for Kids charity and secretary to the City of Dundee Burgess charity.

Johnston Clark, Managing Partner of Blackadders commented: “We are thrilled that Laura has received this award. We have always rated very highly the work and level of expertise that Laura has delivered for our business and to our clients; being awarded the specialist accreditation further affirms that view”.

Solving the Problem of Being Alienated From Your Kids

Professionals working in the field of Child Law are more than likely to have heard of the expression “parental alienation”.

For some years now this concept, which some classify as a “syndrome”, has been used to describe the steps taken by one parent to isolate, or ‘alienate’, the other parent from the lives of the children of the relationship.  For example, a mother with primary care of the children may say that contact between the father and the children is not in the children’s best interests, focusing on failings and shortcomings of the father as support for denying contact.  Other tactics might be more subtle, such as deliberately arranging an activity for a child to coincide with a contact opportunity with the non-resident parent.  More concerning are the things said and done by the parent with care to the children themselves, as a means of fostering the child’s negative view of the other parent.

A parent’s motivation for taking the approach of alienating the other parent may be complex, but family lawyers will regularly see a parent suffering from emotional hurt happy to “punish” the other parent by denying, or at least controlling, a relationship between a child and their non-resident parent.  Often the views of the child will be used as justification, with the resident parent saying that the child has no desire to see the other parent.   It is not always easy to examine the reason for a child expressing such a view, and establishing the extent of the influence of the resident parent is difficult to judge.  So, these cases can be very hard to manage, not just for the parent looking for contact, but also for the solicitors involved, and indeed the Court, if it goes that far.

In Scotland we have a legislative framework which creates responsibilities upon parents, and rights which flow from those responsibilities.  One of the rights is the privilege of having a child living with you, but partly that is a function to fulfilment of the duties imposed by the legislation, and that includes doing what is right for your child’s development and welfare.  In a situation where parents live apart, the non-resident parent has a right to contact with a child, but this follows from the responsibility the parent has to maintain contact with the child, because contact between a child and its parents is deemed to be in the child’s best interests.  Unless there is a very good reason why it would not be in a child’s best interests, the development and welfare of children must include maintaining a relationship with the non-resident parent.  Scotland’s judges recognise the long term benefits to children of them having a relationship with both their parents, as explained to the courts by psychologists.  The negative impact upon children by being denied a relationship with the parent is well documented.  Children who are said to have experienced parental alienation are more likely to suffer from mental health issues in adulthood.  Crime and addiction can become a problem.  And what is often not realised at the time is that children can turn against the parent with care upon realisation in adulthood that they have been manipulated away from a relationship with the other parent.

In Scotland, it is often perceived as difficult to deal effectively with an uncooperative parent, even with the existence of Court Order.  Some other jurisdictions take a very firm view, however. For example, in Canada, there is a strong jurisprudence about the enforcement of contact orders.  It is not considered a “defence” to flouting any Court Order on the basis that children say they won’t go for contact.  There is an onus on the resident parent to show clearly what they have done to encourage contact.  The analogy is often drawn with a child attending school.  If a resident parent cannot ensure a child’s attendance at school, it calls into question parenting ability.  A similar approach is taken in relation to a child’s contact with the other parent.

Mediation is an opportunity for parents to be educated as to the fall-out that affects children, not only by a denial of a relationship, but also by being exposed to conflict and acrimony between parents.  There is a perception that mediation will be unsuccessful if a party is not willing to engage in it, but I would suggest that mediation is an opportunity for parents to be encouraged to “hold up the mirror” and reflect on their conduct and whose interests are, in fact, being served when disputing care arrangements for children.   Some countries demand parents’ attendance at mediation before allowing them to set foot in Court.  Interestingly, here in Scotland the Scottish Legal Aid Board will soon require parents to participate in mediation before agreeing to fund these types of cases.

A relatively recent initiative in Scotland has been the introduction of “parenting apart” sessions.  These provide an opportunity for separated parents to meet with other separated parents, but not with the other parent of the relationship.  Trained mediators and counsellors explain in detail how separation affects children, and what parents can do to ensure that a child’s best interests are being considered at all times.  It is not mandatory (yet) but certainly in my experience, Sheriffs deciding cases involving children are keen to promote the use of the service.

But are these initiatives enough to prevent a very bitter parent from “freezing out” the other? In my experience, a parent determined to punish their ex will not be easily persuaded to look at their situation objectively.  In that event, it is reasonable to expect the law to have the power to intervene in an effective and decisive way.  One wonders if, as a last resort, the failure to do what is appropriate having regard to responsibilities of parents would be justification for a radical restriction on parental responsibilities and rights afforded to an individual.

Gareth Masson 
Partner – Family Law 
@FamilyLawGareth 
www.blackadders.co.uk

‘Bear’ Necessities – Why New Parents Should Make A Will

Bear Payne.

This is the name the media and fans have been eagerly awaiting on following the much anticipated arrival of Cheryl and Liam Payne’s baby boy in March. I remember agonising over baby name books trying to decide what to name our children and Bear’s arrival brought me back to the time when I became a new parent and my life changed forever.

Becoming a parent is an exciting if not hectic time and it takes a while to adjust to the lack of sleep, constant feeding and changing nappies! Being a parent brings an enormous responsibility to care for your children during their lifetime, but there is also a responsibility to care for your children should you no longer be around.

The Childhood Bereavement Network estimated that in 2015, 23,600 parents died in the UK, leaving an estimated 41,000 dependent children aged 0-17. Where does that leave them?

So whether you are a brand shiny new parent like Cheryl and Liam or a more experienced, but utterly exhausted parent with young and demanding children (I fall into the latter category!), now is an ideal time to think about putting your affairs in order to ensure that your children are cared for by the person or people of your choice and that financial provisions are in place should anything unforeseen happen.

The answer is simple – make a Will.

In this document you can appoint a guardian who would be responsible for your children’s welfare should you not be around and set out the financial provisions determining when your children will receive their inheritance.

As a parent, appointing a guardian is probably the most important thing parents with young children need to consider. You may wish to consider a family member such as your own parents or a sibling, but if the grandparents are elderly or perhaps there are no or unsuitable siblings, you may wish to consider appointing a friend or friends of a similar age to you or perhaps even younger.

Often a couple are considered rather than two unrelated individuals. The person(s) you choose would take over your legal rights and responsibilities so it is vital you are comfortable with your choice! It would of course be prudent to discuss matters with the person(s) to ensure that they would accept such an appointment prior to making your Will.

If you do not appoint a guardian in your Will, it is left to the courts to decide. This will result in a time consuming and costly process which is obviously stressful for those involved. It would be cheaper, quicker and easier for everyone if a guardian was appointed so staying away from court procedure altogether.

With regards to financial provision, you can, in your Will, set out how much of your estate your children will inherit and at what age. The age of legal capacity in Scotland is 16 and most people feel this is far too young for their children to inherit a potentially large sum of money. If there is no Will in place or your Will does not specify an age to inherit, then your children will receive funds at 16 years old..

To avoid this, trust provisions should be considered and included in your Will. Inclusion of a trust will set out the age that you wish your children to inherit, usually 18, 21 or 25. The trust can be flexible to allow the advancement of both income and capital before that age, to assist with ongoing costs including education, if thought suitable by the trustees you have appointed in your Will. It would be sensible to have at least three trustees so that there is a majority and the trustees do not have to be the same individuals that you have appointed as guardians.

Your Will should be reviewed when your family circumstances change and having children is an ideal time to put your affairs in order and make/update your Will. It will only take a few hours of your time to make a straightforward Will, but it could make all the difference to your children’s future. Once in place, you can then go back to the hardest but most rewarding job in the world!

If you would like to discuss anything regarding a Will, please get in touch with a team member at Blackadders.  

Karin Bousie
Associate Solicitor – Private Client
@LawyerKarinB
www.blackadders.co.uk

Time to get crafty about brand names?

Craft brewing and craft distilling is becoming big business.  A recent report by UHY Hacker Young claimed the sector was going through a period of “explosive creativity” and a quick look around the region shows Tayside is not immune to this booming market.  Across the UK, craft breweries have hit a record high with 520 opening in 2016 alone.  The craft distilling sector follows a similar path, more than doubling since 2010, with 45 of the current 273 distilleries established in the last year. These figures make clear there is a growing demand for locally brewed beers and locally distilled spirits, and with that growing demand comes an increased risk of intellectual property infringement due to the sheer number of brand names already in use.

What’s in a Name?

In short, a lot.

As with all businesses, there is substantial value to craft brewing/distilling businesses in creating a good brand name and/or logo and suitably protecting that brand once created.  If you have spent a lot of time and money in creating a brand, the last thing you want to do is to either (i) change it due to overlap with an existing brand or (ii) lose out on sales or profits if a new rival starts encroaching on your brand.

Creating your Brand or Logo

Effective branding ensures products are readily identifiable in a competitive and ever expanding market (and of course enables consumers to recommend your brand to fellow craft beer or spirit enthusiasts).  While the craft brewing and distillery sector is known for being friendly, it is still important not to inadvertently infringe into another business’ brand (whether in the craft sector or not).  To avoid this, it is vital to carry out thorough searches before settling on a brand for your business.  A little bit of time at the start (and a proper planning process) should ensure that you select a brand that is unique and distinctive, helps distinguish your products from the crowd and saves any headaches from infringement claims down the line.

Protecting your Brand

Brands within the craft beer and distillery sector are increasingly valuable commodities worth protecting – you want to make sure that rivals do not establish a competing brand that might confuse your loyal consumers.  Trademark registration makes clear that you own the brand and enables you to protect the value of your brand and goodwill in that name or logo by taking legal action to prevent unauthorised use of your brand or a similar brand.  Enforcement of registered rights is normally less expensive and more straight forward than relying on unregistered rights.  You also get the additional benefit of being able to object to any future trademark application that is the same or similar to your own trademark.

Trademarks can cover (amongst other things) words or a logo or a combination of the two.  They are also territorial so should be registered in the relevant areas you intend to sell your products.  It takes about 4 months to register a trademark in the UK (providing there are no objections) and a registered trade mark lasts 10 years.

The benefit of trademark protection would apply to individual product names/logos as well as your brand name or logo.  If you have a distinctive product name, you might consider registering this separately.  It is not likely to be cost effective to register every product name, but if you identify key products or “best sellers”, they may benefit from the additional protection.

Won’t it cost a lot?

There is a common misconception that it is expensive to register trademarks and not worthwhile for a new business or a small business.  However, with prices for the application starting at £200 via the Right Start process for 10 years of protection (based on registration in one class), it is not as expensive as most people think.  The benefits provided by trademark registration mean it can be worthwhile to all business, not just the larger multinationals.

Do I need to register a brand?

You do not need to register a brand, and can look to rely on unregistered rights like “passing off”.  The difficulty with unregistered rights is they are less clear-cut and can be more difficult (and more expensive) to enforce.  Additionally, unregistered rights rely on goodwill which may be localised for craft brewers or distillers, meaning you could struggle to show passing off by a competitor based in another region.

Final Message (In a Bottle)

If you have made the decision to get involved in the craft brewing/distilling sector, do not lose valuable rights in the brand you are creating. Make sure your branding is distinguished from others in the sector and registered with a relevant registry to enable you to efficiently protect your brand and your hard earned space in the market.

Ruth Weir
Senior Solicitor – Corporate & Commercial
@CorpLawyerRuth
www.blackadders.co.uk

Lenders Beware the Statutory Forms

Recently Sheriff Mann at Banff Sheriff Court issued a judgement which he stated he came to “reluctantly because it is apparent to me that the defenders know that the pursuers are the creditors in the mortgage, even though they may not be secured creditors,…know that the debt must be repaid and yet have been able to resist decree passing against them in this action by virtue of what can only be described as a technicality.” So what was the nature of this technicality that so frustrated the court and the lender?

The case in question was OneSavings Bank PLC v Burns & Others. In this case the lender claimed that they wished to enforce a standard security in respect of the property owned by the defender. The standard security had been assigned to them through a sequence of assignations from the original lender. The defender argued that as the form in question did not follow the exact wording of the statutory form prescribed in these cases, it was ineffective. This is particularly troubling to the lender community as the form used by the lender is one commonly employed within the industry.

The defender’s first argument was that the statutory form made reference to deeds of assignation in the singular rather than plural and as such, given that a series of assignations were being relied upon, it was not competent to rely upon a form referring to multiple assignations. However, lenders can breathe a sigh of relief as the court dismissed this argument as being ill founded for various reasons.

The defender’s second argument was more effective. The defender argued that given that the relevant legislation required that the form used be “exactly the same in terms of style and content” as the statutory form or at least “so conforms as closely as may be.” Any deviation from the statutory form would be fatal. To be precise the form used did not include the statutory wording “to the extent of £      being the amount now due thereunder” to establish what the debt was at the time of the assignation. The court drew upon several legal texts in this area and determined that effectively an assignation in the statutory form converted an all-sums security into a fixed sum security and for that reason the exact sum at the date of assignation must be stipulated in order for the form to be effective.

The lender drew to the court’s attention an earlier case where deviation from the statutory form was permitted and thereby claimed that the wording was not mandatory but advisory. However, the court did not accept this argument and emphasised that a pressing need to vary the statutory form must be present (for example in the earlier case, the agreement was a triparty rather than a biparty agreement and as such the wording needed to be amended to reflect that). In the absence of such a pressing reason the Sheriff held that the statutory wording ought to have been used, for the reasons stated above, and in their absence the form used failed to put the lender into the shoes of the original lender with all the rights associated with the standard security.

This case is perhaps a timely reminder to all not to blindly follow company forms but to ensure that where the law has prescribed a set form that this is used.

If this article has raised any issues which you would like to discuss with a solicitor please do not hesitate to contact our dispute resolution team who will be happy to advise and assist.

Alastair Johnston
Senior Solicitor – Dispute Resolution
@BlackaddersLit
www.blackadders.co.uk

Out with the old, in with the new…(and almost in and out again, with the nearly new!)

Out with the old and in with the new – Corporate Insolvency

As of today (Thursday 6th April 2017) the Insolvency (England & Wales) Rules 2016 come into force. The Rules introduce much needed significant reform and consolidation of the Insolvency Rules 1986. The 1986 Rules have been amended on numerous occasions and have increasingly become cumbersome, out-dated and unsuited to current corporate insolvency practice.  The Rules provide the procedural framework for the Insolvency Act 1986.

Whilst the Rules only apply in England and Wales, corporate insolvency regimes are extremely similar North and South of the border and the ways in which the Office Holder in these regimes acts is also very similar.

 It is expected that a new set of Rules will come into force in Scotland to replace the Insolvency (Scotland) Rules 1986, which like the Insolvency Rules 1986, are in need of reform and consolidation, probably sometime in later this year.

The Insolvency (England & Wales) Rules 2016 are lengthy and it is likely to take some time for practitioners to become familiar with the Rules and how to implement them in practice. Practitioners will in advance of 6th April 2017 have been undergoing an arduous task of updating Forms, checklists and the like to ensure compliance with the new Rules.

An “Explanatory Memorandum” to the Rules has been published and is useful reading as to the background to the reform and as to the principal reasons why reform was required.

The Rules have been restructured to make them easier to follow and have distinct parts for each corporate insolvency regime, including separating out Rules relevant to voluntary liquidations and those relevant to Compulsory liquidations.

The Rules reflect current working practices and allow for, amongst other things, the ability for electronic communications with creditors, remove the automatic requirement to hold physical creditors meetings and abolish the requirement for certain other meetings, and allow creditors to opt out of communications.

The 2016 Rules represent possibly the most significant reform in corporate insolvency practice since 1986.

Ready, Steady, Go!

Almost in (and out again!) with the nearly new – Personal Insolvency.

The Bankruptcy (Fees) (Scotland) Regulations 2017 were due to come into force on Monday 3rd April, however did not! The Regulations were intended to revoke and replace the Bankruptcy (Fees) (Scotland) Regulations 2014. The fees which the Regulations govern are fees charged by the Accountant in Bankruptcy where he acts as interim Trustee or Trustee in sequestrations bankruptcy), and also those which are charged by the Accountant in Bankruptcy where other statutory functions are exercised.

In a rather unusual turn of events, on 28th March 2017, just days before the Regulations were due to come into force, the Bankruptcy (Fees) (Scotland) Revocation Regulations 2017 came into force.  The 2014 Regulations will therefore remain in force.

Representations were made to the Scottish Parliament’s Economy, Jobs & Fair Work Committee by, amongst others, the Institute of Chartered Accountants in Scotland. Views were put forward that the proposed Regulations were ill-advised and unfair and that there should be a full review of how the Accountant in Bankruptcy is funded and operates.  Further, representations were made that there required to be a fundamental review of the structure and setting of fees.

As a result of the debate and revocation of the Regulations, there is expected to be a full Consultation process as to any future reform as to the fees applicable in sequestrations.

If you  are looking for advice on the new regulations, the Blackadders Dispute Resolution team are always here to help!

Stephanie Carr
Partner – Dispute Resolution 
@StephanieYCarr
www.blackadders.co.uk

 

The new Residence Nil Rate Band: 6 Things You Need to Know

The waiting is almost over!  The new Residence Nil Rate Band (RNRB) for Inheritance Tax (IHT) that the Government announced in summer 2015 will come into play from 6 April 2017.

The RNRB will allow more people to pass on their family home to their descendants without paying IHT.  It works by giving homeowners an additional IHT allowance that can be set against the value of their home when it is being passed to a “direct descendant” following their death.

The original intention seems to have been to address the disproportionate amount of IHT that is paid by estates in the south east of England, caused by higher house prices in that region.  However the RNRB will also take a large number of families in Scotland outside of the reach of IHT.

This is the biggest change to the IHT laws in around a decade, so here are six things that you need to know:

  1. It is NOT a change to the general IHT allowance for individuals

Individuals already receive a Nil Rate Band (NRB) of £325,000.  This allows them to leave up to £325,000 to their beneficiaries when they die without paying any IHT.  Any estate left above that level is taxed at a rate of 40%.  Inheritance passing from one spouse or civil partner to the other is exempt from IHT – known as “the spouse exemption” – and if one spouse does not use all of their NRB when they die, then the unused portion can be used by the other spouse on their death – which can effectively double-up the available NRB to £650,000 by the time of the second death.

The NRB has not been changed since 2009/10, and it will remain frozen at that level until at least 2021.

  1. It is NOT an exemption from IHT for houses worth up to £1M, however…

The figure of £1M is significant here, but not for that reason.  Rather, providing certain conditions are met, the RNRB will give estates a further allowance to set against the value of the deceased’s family home.  The new allowance will be worth £100,000 in 2016/17, growing each year until reaching £175,000 in 2020/21.  Any RNRB that is not used when one spouse or civil partner dies can be brought forward to the second person’s estate when they die.  Accordingly, once the full £175,000 allowance is in place, spouses or civil partners will potentially receive an aggregate £1M in IHT allowance to set against their combined estate (i.e. £325,000 + £325,000 + £175,000 + £175,000 = £1M).  The level of available RNRB will be tapered off for estates worth more than £2m.

  1. It cannot be used against assets other than a single “qualifying residential interest”

The RNRB can only be used against one property.  That property must have been used as a residence by the deceased person, though it does not have to be their main or current residence.  Accordingly, the RNRB could be used to cover the value of second home, but not an investment property that the deceased never lived in.  Where more than one property could qualify, the executors of the estate can choose which one to apply the RNRB against – and naturally they would likely choose the more valuable property.

If the property is worth less than the available RNRB, then the ‘excess’ allowance will be lost and cannot be used against other assets such as cash, investments or other properties.  That means, for a married couple with an estate of up to £1M, it will still be possible to pay IHT:  it all depends on the makeup of the estate.

If Mr & Mrs A have a house worth £400,000 and cash of £600,000, then they would avoid paying IHT, as they would be able to use the full amount of the RNRB.  Whereas if Mr & Mrs B have a house worth £200,000 and cash of £800,000, then they would not be able to use their full RNRB, and their estates could have to pay £60,000 in IHT.

  1. It will only be available where passing the property to “direct descendants”

This will include children and grandchildren etc., and also adopted children, stepchildren and foster children.  The spouses or civil partners of those people would also qualify.  Property passing to other relatives such as nieces or nephews would not receive benefit from the RNRB.  There is also the potential for losing the RNRB where property is passing into certain kinds of trusts, even if those trusts are actually for the benefit of “direct descendants”, as the property is not passing “directly” to them.

  1. It can sometimes help even if the deceased did not own a share in the family home

When you are talking about transferring the first spouse’s unused RNRB over to the estate of the second spouse, you would think that the first spouse would actually need to have owned a share of the house at the time that they died – otherwise they would not have owned a “residence”, and so seemingly would not have been able to benefit from the RNRB.

Curiously, that is not the case.  Even if the first spouse had never owned a house in their life, they will still be considered as having not “used” their RNRB, which means that the second spouse, who was the one who perhaps owned the home, will still be able to benefit from the unused RNRB at the time of their death – allowing them still to reach the theoretical £1M allowance as outlined above.

  1. The rules do allow for downsizing

Even if you had sold your property before your death, whether to go into a smaller property or into sheltered housing or nursing care, the RNRB will still be available to give relief against the full value of the property as long as assets of an equivalent value are passed to “direct descendants”.  The downsizing provisions will only apply if the house was sold on or after 8 July 2015.

This is likely to be complex to administer, but the policy reason is clear enough:  during times of housing shortages, the Government does not want older people holding on to large houses just for fear of losing tax benefit.

IHT has long been an area where there is a lot of scope for productive planning to be done.  The new allowance will give comfort to a great many families, but it is not a cure-all:  some people will not benefit from the RNRB at all, and so will need to take other measures to reduce their exposure to IHT, while others will need to take careful steps to ensure that they maximise the benefit from RNRB.  The most effective IHT planning tends to be a combination of different approaches – so the existing methods of tax planning should not be forgotten about.

The Trusts, Tax and Care team at Blackadders are experienced in assisting individuals and families with Inheritance Tax planning, and we are ready to assist with anything from small queries to more bespoke planning packages.

Don’t miss out!

Stewart Dunbar
Associate Solicitor – Private Client
@LawyerStewartD
www.blackadders.co.uk