“In this world nothing is certain but death and taxes” said Benjamin Franklin – over two centuries later this holds as true.

Whether we approve of it or not, Inheritance Tax is here to stay for the foreseeable future but whereas in the past it only affected the estates of those at least moderately wealthy, now with UK average house prices at approaching £200,000 and London average property prices at over £300,000 even after the latest price falls, Inheritance Tax applies to the majority of homeowner’s estates....

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"Following the recent controversy concerning the payment of referral fees for divorce clients, as reported in the Sunday Times on the 16th October 2011, the matrimonial team at Bishop & Sewell wish to make it clear that we do not, nor have we ever, paid referral fees for clients.  We prefer to rely on our own reputation built up over many years, providing an excellent service to our clients.  We are happy to let our client's make their own independant judgments about the quality of service that we provide and are grateful to former and existing clients and professional colleagues, who refer work to us without the need to require any remuneration.  We hope that payment of referral fees for divorce work is the exception rather than the norm and agree with the Government that referral fees, in general, paid by solicitors should be banned both in cases of divorce work and for personal injury work also".

The Litigation and Insolvency Team are pleased to announce that Lauren Hales joined the team on 12^th September 2011. Lauren is a solicitor who specialises in property and insolvency litigation having previously worked at Blandy & Blandy LLP in Reading.

Karen Bright, head of our Litigation and Insolvency team comments as follows:

“We are delighted that Lauren has joined the team. She is an experienced landlord and tenant litigator who has acted for both landlords and tenants in a variety of situations. In addition to this Lauren also specialises in contentious insolvency involving individuals and companies. Lauren joins our expanding team of specialists in these areas.”

• Alternative dispute resolution (ADR) refers to methods of resolving disputes outside the court process. Examples of ADR include mediation and collaborative law. Parties are now expected to consider using ADR methods throughout their case.
• In most cases, before making an application to court, parties are now expected to attend a meeting with a mediator to consider whether the dispute can be resolved through mediation, although mediation itself is not compulsory.
• At the first court hearing the Judge will enquire about the steps the parties have taken to explore ADR.
• If the parties have not complied with this requirement, a Judge has the power to adjourn a hearing and require parties to meet with a mediator before matters proceed further. At this stage it is difficult to predict to what extent Judges will enforce the requirement to consider ADR in this way.

• Making an application to the court should not be viewed as a hostile act, but as a way of starting the court timetable, aiding the production and exchange of information and evidence and ultimately trying to avoid a costly final hearing.
• Provocative letters which might cause the other party to take a hostile approach should be avoided. This is altogether new and was not contained in the previous rules.

• A cost order is when the court orders one party to pay some or all of the others party’s legal costs.
• Although a Judge has the power to make any cost order at any time, as a general rule cost orders will not be made in applications for financial remedies unless the conduct of one of the parties during the case is felt to be unacceptable.
• When deciding whether to make a cost order based on conduct a Judge will consider:
• Failure to comply with the rules or a practice direction
• Any open offers to settle made
• Whether it was reasonable to raise, pursue or contest an issue or allegation
• The manner in which a party pursued or responded to an issue or allegation
• Any other relevant conduct
• The financial effect of a cost order
• In the past it has been relatively unusual for Judges to make cost orders in family cases, however, the new rules may mean that we see more cost orders being awarded.

On 11 January 2011 the Law Commission released a consultation paper reviewing the current law of Marital Property Agreements (also known as pre/or post nuptial agreements), discusses options for reform and seeks responses. Although the consultation is of great importance there remains some doubt whether reform will lead to radical change.

Marital Agreements made between spouses or civil partners either prior or during a marriage or civil partnership are currently not legally binding; although the court may have regard to them when determining financial issues following divorce or dissolution of a civil partnership.

A number of cases, where parties had entered into such agreements, attracted wide attention, in particular the Supreme Court's decision in the case of Radmacher v Granatino which decided that Pre-Nuptial Agreements (or Martial Agreements) can be upheld by the court unless it can be shown that the result would be unfair or unreasonable in meeting the needs of the parties.

The Law Commission considered arguments for and against reform to make Marital Agreements legally binding and asks to what extend a couple should be able to enter into a binding agreement not to seek ancillary relief (i.e. financial relief) on divorce or dissolution of a civil partnership. The Law Commission raises the question whether agreements should allow parties to deal with all their assets or whether the answer would be to recognising only those agreements that relate to pre-acquired, gifted and inherited assets.

In the event that Marital Agreements are to become legally binding the Law Commission suggests that the following formalities should be complied with:

1. Certain contractual requirements will need to be met so that each party must intent to be legally bound by it and get something from the bargain. An agreement may be invalid if one of the parties was mistaken about the fundamental nature of the agreement, was placed under duress or undue influence;

2. The agreement should be in writing and signed by the parties;

3. There should be financial disclosure;

4. The parties should have legal advice prior to entering into the agreement to include as a minimum an explanation of the effect of the agreement on the legal rights of the party and the pros and cons of the agreement;

5. It is not proposed that there should be a time limit to conclude the agreement prior to the marriage.


The Law Commission also said that certain outcomes should be unacceptable, for example if the agreement:

The Law Commission also mentioned that Marital Agreements may be inappropriate in cases where the assets are insufficient or just sufficient to meet the parties' needs.

So we will watch this space with interest and see if any change takes place. Reform of Family Law is always fraught politically and often governments, of whatever political persuasion, find it easier not to bring formal legislation. In the meantime we are reliant on the decisions of Judges in individual cases to lead the way.



Monika Pirani
mpirani@bishopandsewell.co.uk
14 January 2011

For further information or preliminary discussion please contact Michael Gillman or Monika Pirani on 020 7631 4141 so that we may assist to find a way forward.

Central London Solicitors, Bishop & Sewell LLP have been shortlisted in the national Landlord & Letting Awards in the category of Legal Services. 

The Landlord & Letting Awards are the premier nationwide private rented sector awards in the UK. Trophies will be presented by TV presenter, businessman and landlord Craig Phillips, winner of the first ever Big Brother series, at a glamorous awards ceremony in Birmingham on Wednesday 17^th November.

Mark Chick, partner and Head of Landlord and Tenant at Bishop & Sewell LLP said: “I am delighted that we have been shortlisted for an award and this shows the general awareness of our expertise in this area as well as our professionalism, hard work and commitment. These awards have seen entries from a variety of sectors and from right across the UK. It will be fitting testament to the achievement of the Landlord and Tenant Team at Bishop & Sewell LLP, if we are able to bring home an award. ”

Oliver Romain, head Awards judge and editor of Landlord & Buy to Let magazine, the leading magazine for the residential letting sector, said: “The response to this year’s Awards was phenomenal and we received over 550 entries, so Bishop & Sewell LLP have done well to be shortlisted. The private rented sector gets a tough time in the media, however, the vast majority of people have a positive experience and it’s great that we have the opportunity to recognise and reward the best in the industry”.