Many clients these days find us through an online search, and check out www.russell-cooke.co.uk before making contact. Our website is certainly a good place to start if you want information in depth about a particular legal area or team. What a website can’t do quite so easily, perhaps, is give a full picture of our work in the round. And this is really the point of our review for clients: to show how different areas of expertise connect with trends in the wider world – and fit together in the real-life cases we handle for clients. If there’s an underlying theme, it’s the growing complexity of the problems that lead people to seek our advice – and the usefulness of cross-disciplinary teamwork in tackling them. We welcome feedback, as always; get in touch by emailing us at email@example.com.
...we’ve continued to expand both in specialist expertise and numbers. We rank as a top 100 UK law firm, with 170 lawyers. Reflecting the needs of our London client base, our work is increasingly national (or international) in scope, often involving more than one field of law. Our clients include big names in retail, property and sport; businesses of all kinds; hundreds of voluntary sector organisations; leading UK regulators; and many private individuals.
Negotiating complexity Complex multi-dimensional cases make up a significant and increasing proportion of our high-value work. Often referred to us by other London law firms or other professional advisers, these cases require both breadth and depth of specialist expertise, plus a certain flexibility of approach – notably the ability to put together cross-disciplinary teams at short notice.
Colleagues with a background in a specific area of law who have joined us since the last review include: Tom Bradford , a practising barrister, who works mainly in the field of administrative law and judicial review (more about Tom on page 4) Rebecca Fisher , a private client lawyer with a special focus on business succession planning (more about Rebecca on page 16) Alex Ground , a planning specialist (more about Alex on page 12) Crispin Jones , who has joined Lee Ranford in the insolvency team (more on the insolvency team on page 13) Ian Mohabir, a specialist in enfranchisement and a judge in the London Residential Property Tribunal Christopher Salomons , a private client lawyer who has worked in Guernsey and Switzerland and advises clients domiciled in both the UK and overseas on a range of tax, trust, estate planning and succession-related matters.
Super lawyers Twenty-two Russell-Cooke lawyers are described by legal directories as leaders in their fields, giving advice at the very highest level. They include: Deborah Blythe (clinical negligence) Peter Cadman and John Gould (professional discipline) Peter Dawson and Helen Edwards (real estate) Jason Hunter (property litigation) Samantha Little (children law) James Sinclair Taylor (charity and social business) More details at www.russell-cooke.co.uk/published-quotes The same number of Russell-Cooke lawyers featured in Thomson Reuters’ London Super Lawyers and Rising Stars .
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Cases with big footprints R (on the application of Hemming) v Westminster City Council A Russell-Cooke team is acting for five national regulators which are applying to intervene in Supreme Court proceedings on the issue of whether it is lawful to use professional membership fees to investigate and prosecute non-members. We have provided a group funding solution to minimise each client’s costs, following a successful model established in previous regulatory cases. Perenco UK, Wytch Farm oilfield The debate over fracking continues, but onshore oil extraction has been going on in Dorset for many years. A Russell-Cooke team advised in the submission of 39 planning applications to enable Perenco, an independent oil and gas company, to extend the operational life of its Wytch Farm oilfield in Dorset. The applications were approved in principle in autumn 2013 subject to certain conditions. Gandys Foundation Specialists from our commercial property, corporate and charity teams have helped the flip flop brand Gandys set up a charitable foundation and establish and protect their brand internationally. Gandys is the brainchild of Rob and Paul Forkan, who lost their parents in the 2004 tsunami. The Gandys Foundation aims to build a children’s home in India to commemorate the tenth anniversary of the tsunami in the region.
Russell-Cooke is a member of the International Child Abduction and Contact Unit (ICACU) Panel. It is one of a limited number of specialist firms accredited to deal with international child abduction and contact cases. Our commercial property team handles major prime London and UK deals with international buyers or sellers, many of them long-standing clients of the firm (see commercial property partner Peter Dawson’s reflections on the complications that can arise in international transactions on page 8). Our bilingual French law team provides a specialist service for those with property or other interests in France, and also works with other specialist colleagues to offer advice on cross-border estate planning, tax issues and family law.
The international dimension to our work has continued to expand since the last review, reflecting trends in the wider London and UK economy as well as our own substantial cross-border expertise. More details in the international section of our website www.russell-cooke.co.uk/ international Edward Wanambwa and Nisha Patel of our employment team advise businesses on the UK’s increasingly complex immigration rules. They are one of only a few teams rated by legal directory The Legal 500 for business immigration work. Head of the private client team Richard Frimston is a recognised expert in cross-border private law issues, identified as a “leading individual” in Chambers Global. He is a Fellow of the European Law Institute.
Media voices Selecting from many television, radio, online and print media appearances by Russell-Cooke people: Jason Hunter regularly answers questions from the public on property issues on ITV’s This Morning ; Nicola O’Connor featured on BBC Radio Wales, commenting on the government’s decision to allow children and vulnerable witnesses to give evidence by video
rather than in the courtroom; Jonathan Thornton explained equity crowdfunding for the Financial Times; Simon Ewing joined an online panel at The Guardian Small Business Network to advise online retailers on managing their cashflow; and Nisha Patel wrote on business immigration issues for a range of publications including Personnel Today and China Daily online.
Strength in numbers Our overall client satisfaction figures have risen further since our last review. Over the last year over 96% of our clients declared themselves very satisfied or satisfied with our work. We were highly ranked (in the top 10) in the Diversity League table 2013 for the number of female partners, trainees and paralegals in the firm; and for the number of paralegals from ethnic minority backgrounds. The Diversity League table is a Black Solicitors Network initiative produced in association with The Law Society and the Bar Council.
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...we have a barrister on the team?
Russell-Cooke’s specialist teams enjoy excellent relationships with some of the UK’s leading barristers, ensuring that clients benefit from the best available expertise. Since 2012 we’ve also had a barrister of our own on the team – Tom Bradford, who works on complex litigation for business clients and national regulators. What do you do at Russell-Cooke? My expertise is primarily in the public law field, which means I handle disputes between individuals and government bodies or regulators. My work entails challenging official decisions on the basis that they are unlawful, outside the scope of the government’s powers or procedurally flawed in some way. One of the things I enjoy about working at the firm is the ability to join forces with lawyers from other areas in a multi- disciplinary approach. Many disputes are multi-faceted and engage expertise from lawyers in different teams. As well as colleagues from commercial and regulatory litigation, I have worked with our charity and social business, private client and immigration teams. My work typically involves advice on
team on analysis and strategic decision- making. I enjoy working with outside barristers, as often happens in important cases. I can ensure we make best use of their time and expertise in the client’s interests, and myself support Leading Counsel if required. As a barrister, I look at the case from the perspective of persuading a judge. This informs my work when preparing evidence or drafting legal submissions. The mix of expertise and backgrounds of our team means we can offer an unusually tailored and graduated response – often resolving disputes early on with an effective letter or negotiation, without the need for proceedings to be issued. Our emphasis is always on intelligent, practical solutions at proportionate cost.
litigation strategy in relation to appeals, judicial reviews and damages claims. The focus is on managing the process to get the best result for a client in the most cost-effective way. What are the headline cases you’re working on? I have recently successfully defended two judicial reviews for a national regulator and am currently acting for educational institutions challenging decisions in the High Court in relation to their regulatory compliance. Increasingly, the disputes I handle have an international dimension, for example, where they involve foreign governments and multinationals. What’s coming up? Over the next few months, I will be working on an important appeal in which the team is acting for a number of regulators. The cases I handle often turn on the correct interpretation of the law, for example, a Statutory Instrument or European Directive, which sometimes can have important financial and public policy implications. How do clients benefit from having a barrister on the team? Russell-Cooke offers a solutions-based approach to disputes, particularly complex disputes, which ensures that clients can negotiate from a position of strength and meet their objectives without disproportionate legal costs. As a barrister working in-house at Russell-Cooke, I can be involved from the outset of a case, working with the
Tom Bradford qualified at the Bar, undertaking a traditional pupillage and practising as a tenant in
chambers. He has also worked as a government lawyer, acting for public bodies defending appeals and judicial reviews
OUR MIX OF EXPERTISE MEANS WE CAN OFFER A GRADUATED RESPONSE, OFTEN RESOLVING DISPUTES WITH A LETTER OR PHONE CALL
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“Strong in the more contentious aspects of sport” is The Legal 500’s verdict on Russell-Cooke’s sports law team. “Contentious” might be an understatement, as the team’s recent cases have included the fallout from some of the most heated on-field incidents in the football year. That includes at least three allegations of racially-aggravated abuse (the Mark Clattenberg case, the alleged abuse of Anton Ferdinand by John Terry, and complaints about Spurs fans’ reference to themselves as the “Yid Army”). Peter Cadman and Matt Bosworth’s clients include a good few Premier League football clubs – Chelsea, Spurs and Newcastle United among them – ...we’re in the Premier League?
plus national sporting bodies like the British Fencing Association and the British Water-ski Federation. Individual sportsmen and women are also clients; the team represented British super middleweight boxing champion Kenny Anderson in his fight against charges brought by UK Anti-Doping. Sports cases can certainly be demanding, says Matt Bosworth, who represents Newcastle United on a permanent retainer. Big commercial interests are involved and constant media exposure means that urgent advice may be required round the clock, anywhere in the world. Will tomorrow’s sporting giants need to keep their lawyers on speed dial? Yes, thinks Matt Bosworth, for two reasons. One is money: billions of pounds can be at stake at the top reaches of professional sport. The other is regulation. Professional or amateur, sportspeople are subject to ever more complex regulatory frameworks – and sometimes need help negotiating them. Unless that changes, lawyers will continue to be part of the team.
...we’re experts in cross-border succession?
Cross-border succession may sound a bit dry, but for anyone with links with another country or property interests abroad it’s a vital element of life planning. Property or other interests held in a foreign jurisdiction may be subject to that country’s inheritance laws – which may be very different from those here in the UK. Many of our cases are referred to us by other lawyers; it’s a specialist field in which complex issues can arise
even from relatively straightforward matters. Head of the French law team Dawn Alderson gives the example of a widower unable to progress the administration of his French wife’s estate. His wife had assets in France and the UK, but did not have an agreed domicile, and neither English nor French advisers knew how to proceed. The Russell-Cooke team was able to establish which rules of succession should apply. Our dual-qualified, bilingual French law team specialises in French property, business and estate planning issues – see www.frenchpropertylaw.co.uk . Dawn Alderson and Patrick Delas both handle an increasing number of estate planning cases and have been active in discussions on changing tax and inheritance regimes in France. Private client lawyer Richard Frimston (or “cross-border guru”, in the words of one legal directory) is one of London’s leading experts in the complexities of cross-border succession and has been described as “one of the rare UK advisers who has a firm grasp of what’s going on abroad.”
...we’re often called “the lawyers’ lawyers”?
Many lawyers consult us on their personal affairs, and we also have a large number of institutional legal clients including: • The Law Society • the Solicitors Regulation Authority • the Chartered Institute of Legal Executives • over 40 sets of barristers’ chambers • the Bar Standards Board Our work for legal bodies sometimes results in cases of national legal importance, like one of The Lawyer’s 2014 top 20 cases, Godiva Mortgages Ltd v Travelers Insurance Company Ltd and three others , described as “exceptionally high profile” and likely to become case law precedent on various aggregation issues – the rules governing whether separate insurance claims can be treated as part of a single claim and compensated accordingly.
CROSS-BORDER LAW IS A SPECIALIST FIELD IN WHICH COMPLEX ISSUES CAN ARISE FROM APPARENTLY STRAIGHTFORWARD SITUATIONS
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Changing city The state of London property affects everyone living, working or investing in the capital. A stroll over Waterloo Bridge is all it takes to appreciate how dramatically the landscape is changing, from the east (the Shard, the Cheesegrater) to the west (skyline-shaping new developments around Waterloo and Vauxhall). The effects of London’s seemingly unstoppable drive to expand are seen in so much of our work: acting in the sale and purchase of iconic central London buildings, often with overseas investors involved; advising on controversial trends (office-to-residential conversions, basement extensions); acting for big players in the residential and retail property sector; and helping individuals and organisations of all kinds negotiate the challenges of a volatile market.
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The global pull of prime London
Global investors just can’t get enough of London’s iconic buildings – from the Lloyd’s building and London Stock Exchange headquarters to prime properties handled by our commercial property team, including Kensington Roof Gardens and Liberty’s Regent
in the tenant’s home country? And how would you enforce it? There are potential pitfalls too for the UK tenant of an overseas landlord. One is the issue of withholding tax. If you are the tenant of a non-UK-resident landlord, the rental payments you make are subject to withholding tax at the basic rate of income tax (currently 20%). If the landlord has not accounted for its UK tax liability, you are at risk of having HMRC knock at your door and ask for a sum equal to 20% of your rent. All is not lost if this happens, as a responsible landlord can apply to HMRC under the Non-Resident Landlord Scheme for rental income to be paid without deduction of tax. Much better, though, for the tenant to get proper advice and avoid the situation arising in the first place. Withholding tax, as it happens, is fairly typical of the complications in this area. It can create huge difficulties for someone who is unaware or poorly- advised. But with timely advice from a lawyer with plenty of relevant expertise – and we have been handling transactions involving offshore investors for over 30 years – it is relatively straightforward to minimise the risks.
Street building. But overseas buyers and sellers can create significant complications, says Peter Dawson
It is striking how many of the transactions we deal with now have overseas buyers or sellers. In many respects they are no different from those with UK parties. But there are differences – and some important additional rules and obligations of which clients need to be aware. When you are dealing with a UK resident you can make certain assumptions about capacity and how legal documents are executed. This is not necessarily the case with an overseas buyer or tenant. As a landlord or vendor, how can you be sure that a foreign company has the power to enter into a lease or contract and that signature formalities have been adhered to? Opinion letters may help, but unfortunately in many jurisdictions, particularly the United States, it is unusual for lawyers to give them. If you have a non-UK resident tenant, you may worry about what you would do if rent and service charge were not paid. You could get judgment in a UK court – but would that be recognised
Peter Dawson is head of Russell-Cooke’s commercial property team. He’s identified as a leader in the field by legal directory Chambers
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various points. “The property was owned by three separate Singapore- registered companies. Our client bought the shares in the companies, which kept the stamp duty liability to a minimum,” recalls Arnold Isaacson, who led the team. “However the corporate structure meant we had to be satisfied regarding the nature of the three companies – liabilities, employment obligations, accounts, tax residency, tax history and overall ownership – which meant working with lawyers, accountants and tax advisers in the jurisdiction. “There were the usual surprises – for example, we discovered at the last moment that there was an unresolved dispute between the vendor and the vendor’s professional advisers, which needed careful attention before the deal could go ahead.” Then there were missing title deeds, right-to-light issues with adjacent buildings and a healthy dose of press interest (including a mysterious leak to the newspapers) – even rumours of underground tunnels and secret pathways to Kensington Palace. And the flamingos, the charismatic Bill, Ben, Splosh and Pecks? Deemed to be the property of the tenant, apparently…
The address was 99 Kensington High Street – a 319,000 square foot Art Deco block better known as the celebrated Derry & Toms building, constructed for the eponymous department store in 1933. And ownership of the aforementioned birds was just one of the issues to be resolved before the site could be acquired by a long-standing international client. A cherished part of the Kensington scene, the building is home to the famous Grade ll-listed Roof Gardens – one-and-a-half acres of pastoral paradise, now part of a Virgin-owned restaurant and nightclub, that includes over 70 fully grown trees (growing, surprisingly, in just one metre of soil), plus a multitude of fragrant shrubs and a fish-stocked stream. The finer points of horticultural ownership and maintenance were not the only challenging aspect of this time-critical deal, which involved up to 20 Russell-Cooke corporate and commercial property lawyers at you hear often in property deals – but then thiswas no ordinary property Who owns the flamingos? Not a question
Prime expertise Russell-Cooke’s commercial property team has a reputation for handling complex, time-critical and high-value deals while keeping a weather eye on costs. In legal directory Chambers, clients talk of a “fantastic legal firm which provides strong advice with clients’ interests at the core.” Landmark deals handled during the past few years include the purchase of a prime Mayfair asset, Stratton House , for £166 million. This Grade ll-listed building, built in 1929, could hardly be more centrally located, right opposite Green Park and the Ritz Hotel on Piccadilly. With 108,000 square feet of prime mixed-use accommodation over basement, ground and seven upper floors, the building attracted a great deal of interest from the market. A penthouse flat on the eighth floor sold for a record price in 2010. The Russell-Cooke team had just seven working days in which to exchange contracts.
THE FINER POINTS OF HORTICULTURAL OWNERSHIP AND MAINTENANCE WERE NOT THE ONLY CHALLENGING ASPECT OF THIS TIME- CRITICAL DEAL
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Part of the solution to London’s housing crisis?
fact that many people who rent privately would rather not have to. But why should renting be seen as the low-status, low- quality option? Grainger’s ambition is to see private rental become a mainstream housing choice, as it is on the continent. “Here renting has always been seen more at a very transactional level,” he says. “The tenant pays the rent and in return is provided with somewhere to live. We want to move to a situation where we build a home around the way you live and create a community and experience you want to be part of. “The challenge is to get people to see renting as a lifestyle choice over the longer term. Something that gives extra flexibility if you need to move jobs or move out of the area and at the same time, reassurance the building will be professionally serviced and managed. “We would like to see more large- scale landlords like ourselves, offering a build-to-rent product which is specifically designed and marketed for the rental population, with a management approach based upon providing an improved customer service and experience. “In the past, properties were built to sell on, and then rented out. That’s not build-to-rent: it’s build-to-sell that you can’t in fact sell. “Making build-to-rent work is partly about scale – but most certainly about the design, and how residents will occupy and use the buildings. “Integrating management into the
In 2012 the full extent of a remarkable turnaround in UK housing became clear: privately-rented homes outnumbered social rented homes for the first time in half a century. The rapid expansion of the private rental sector after decades of decline has sparked a bout of national agonising about the millions unable to get a foot on the property ladder. And it has highlighted the role of the UK’s institutional landlords – of which Grainger plc, a Russell-Cooke client, is the largest. Companies like Grainger have an important contribution to make to the housing debate – not only as long-established providers of rented accommodation, but also as drivers of innovation and best practice. Many policymakers see institutional investment as a way of raising standards in the sector, a view shared by the government-sponsored Montague Review. Grainger’s director of property and asset management Anish Thobhani has seen a “phenomenal” growth in renting, largely driven by what he calls “generation rent” – people who don’t qualify for social housing but can’t get a mortgage. At the moment there’s no escaping the
design is key in delivering a build-to-rent community. We are learning from the multi-family housing model in the States, where large-scale build-to-rent providers and managers focus on the design and offer a service that supports their brand. People there buy into a brand and see renting as a viable lifestyle choice. “We’ve got a scheme right now in Barking where we know there are going to be more sharers, so we’ve designed the accommodation to meet the demands of the target customers – for example, two equal sized bedrooms with en suites on either side of a central living area.” Designing a better experience can also mean new services and amenities – a concierge, on-site facilities, a residents’ lounge, maybe even a cinema room. In this more professional environment the role of the property manager is vital, both in creating a great customer experience to support the brand and in adding value for investors. “As property managers, we are an essential part of the whole investment process. We encourage our managers to think of the individual property as a financial asset and work out how we can add value. “That means knowing our properties and the market they’re part of. Understanding and having a relationship with each customer to deliver improved performance, with technology-driven efficiencies built in – so people can sign tenancy agreements and report
WE WANT TO MOVE TO A SITUATION WHERE WE BUILD A HOME AROUND THE WAY YOU LIVE AND CREATE A COMMUNITY AND EXPERIENCE YOU WANT TO BE PART OF
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Maximising value, keeping the lid on fees Property litigation head Jason Hunter explains how the team’s relationship withGrainger has evolved
Anish Thobhani is director of property and asset management at Grainger plc, heading up their property management services for Grainger and its external clients. He has over twenty years of residential investment and property management experience. Established in 1912, Grainger plc is the UK’s largest listed residential property owner, manager and developer, with around £3 billion of residential assets under management across the UK and Germany. It won the UK’s Residential Asset Manager of the Year at the RESI Awards in 2012 and 2013. Grainger is a constituent of the FTSE 250 on the London Stock Exchange and the FTSE4Good index. problems online, for example. Smart stuff that should make renting more a part of contemporary life.” Intelligent asset management need not stop there. Creating a community feel can benefit both resident and landlord. “We’ve done some research which shows that someone with one friend living in the same block is more than 60% likely to renew their tenancy. With two friends living there, that figure jumps to 80%.” Landlords as place creators, community builders, friendship group facilitators? That would be another giant step towards a radically transformed UK rental sector. But given the pace of change so far, don’t rule it out.
When they took on a large portfolio a few years ago that included live/work units (which involves an understanding of business tenancy law), we helped them understand this new area of law and develop appropriate procedures, and, of course, provided suitable training. I think what we have is a mutually beneficial and collaborative relationship. Naturally, we will work hard to ensure it continues. We are never complacent, and frequently look for ways we can help improve things whether within the team or in Grainger. We know that everyone wants to keep legal spend down; the trick is to maximise the value offered. Working with a commercially-minded client like Grainger, we think we achieve that.
We initially pitched for Grainger’s work with an underlying hourly rate a little higher than one of our competitors. But we offered fixed fees for a range of litigation steps. We could do this because we knew there would be a large number of regular and similar instructions. We know they want to keep fees to a minimum, and, perhaps more importantly, focus on their primary objective of minimum rental voids, with tenants complying with their tenancies paying a decent rent. So we have developed some KPIs with them, and we help them do as much for themselves as they can. That can mean training their own staff in certain areas of law or procedure. While it seems an obvious thing to do, we have helped them instruct us properly and fully, so that, when they do need our help, we have everything we need to do the work as quickly and cheaply as possible.
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Shape-shifting London Offices converted into flats, basementsmorphing into grown-up playzones: relaxed planning rules and a febrilemarket meanmore planning disputes
lorries carrying away mountains of soil, the risk of subsidence or structural damage to nearby properties. The way forward often seems to be mitigation: getting expert assessment of impacts (for example, on the water table), working out ways to address them and drawing up Section106 agreements covering issues like traffic and noise. “If I’m acting for a developer I tell them to think of all the possible impacts and get an assessment and draw up a plan to mitigate. Acting for an objector, it is often a case of helping the council evolve their understanding of what’s involved and come up with appropriate controls.” Even the most watertight agreement can’t entirely eliminate the risk of the unexpected. Walls can subside, cracks can appear in neighbouring houses – and if you happen to be the neighbour concerned, the planning system will not come to your aid. If you are the one embarking on the super-duper basement conversion, pray that the builders don’t come across human remains – as they did in a city centre development project Alex advised on years ago. Bones basically mean trouble, even (especially?) if they’re centuries old. “It turned out there were the remains of several hundred people dating from the medieval period. A find like that can cause huge delays. You need to get licences for removal and there is health and safety to consider – you could be talking about plague pits, after all. Absolute nightmare!”
approval (something like a mini planning application) that is sometimes required under permitted development rules. Some councils have made what are known as Article 4 directions, which in effect withdraw these permitted development rights from tightly-drawn areas. The Secretary of State can cancel or modify these directions at any point. And it would be surprising if he allowed many of them, having refused exemptions for much the same areas. Developers in their turn can use the option of proceeding under permitted development rules as a bargaining chip when haggling over the requirement to provide affordable housing. The planning situation will return to normal in 2016 (unless the government decides to extend the relaxation of permitted development rules), so it’s uncertain whether all this will have a lasting impact on the London scene. The same can’t be said of basement conversions – already very much part of prime Central London residential and now, says Alex Ground, moving steadily outwards into areas like Wimbledon and Richmond. After a number of controversial high- profile projects (regularly featured in the Evening Standard and the Daily Telegraph ), Kensington and Chelsea are “pretty clued up” on this area and have imposed restrictions on how deep or far out basement extensions can go. But other councils are feeling their way, says Alex. She has advised both objectors and extension-bent homeowners (obviously not on the same project). In general it’s not the finished project that causes the controversy – it’s hidden from view, after all – but the building process: months of noise and mess,
Planning conflicts will always be a fact of life in crowded London and the south-east, if only because we will never all agree on matters of taste – your visionary architectural tour de force is quite likely to be your neighbour’s hideous eyesore. The government’s relaxation of permitted development rules is designed to give the building industry a much- needed boost. It has certainly added fizz to the cocktail created by soaring residential property values, an influx of global investors and a crisis in traditional retail. One result has been a rise in the number of proposed office-to-residential conversions – an area Russell-Cooke’s specialist planning lawyer Alex Ground (a Super Lawyers “rising star”) has been busy advising on since the government changed the rules in 2012. Typically the proposed conversion relates to the offices above a row of shops, as the external changes which may require separate planning permission are not required. (With some high-profile cases of larger proposed conversions, a separate application for external changes is planned in due course if the conversion goes ahead.) London councils, anxious to preserve business and employment, are not that keen. Seventeen local authorities have demonstrated “unique local circumstances” for at least part of their area and have won exemption from the new rules for those parts; they include the City of London and Kensington and Chelsea. Other councils are exploiting complex procedures to make the process more difficult for developers – for example, finding reasons not to give the prior
Alex Ground is a planning specialist and senior associate in the commercial property group. She’s advised on a wide range of planning issues including major urban regeneration schemes
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Blockbuster, Game, HMV, Habitat, Dwell: every retail casualty creates a problem for a landlord. And for many, it’s not been just a case of looking for a new tenant. The courts piled on the agony with two notably unhelpful decisions – Goldacre v Nortel Networks (2009) and Leisure v Luminar (2012). In effect these allowed administrators to keep stores trading but avoid paying a quarter’s rent, by carefully timing when a company entered administration (just after the quarter day was best). To make matters worse, some high-profile administrations turned out to be less one- off events than protracted sagas leaving landlords in uncertainty for months or years, says Lee Ranford, who leads Russell- Cooke’s insolvency team. One of his clients was just about to grant a new lease to Blockbuster’s successor company when that company too went into administration. Into this gloomy picture has come a welcome ray of light: the decision of the Supreme Court in the case of Jervis v Pillar Denton; re Games Station . It overrules the earlier two cases and establishes the principle that where an administrator (or liquidator) uses leasehold property MY TENANT’S HELP... GONE BUST!
for the purpose of the administration (or liquidation) then he must continue to pay rent as an expense of the administration, whenever that rent becomes due and irrespective of whether rent is payable in arrears or in advance. That rent will be payable on a day-to-day basis, effectively creating a “pay as you trade” arrangement. The decision can be applied retrospectively, so Lee expects a flood of claims from landlords who fell foul of the earlier rulings. Landlords tend to be fatalistic about tenant insolvencies, he says. And it is true that as a landlord your short-term options are limited, beyond keeping a watchful eye on your tenant’s financial health, and possibly opening a dialogue if clouds seem to be gathering. You can’t stop a company from going into administration. But once administration has happened it’s important to engage with the process, because there’s plenty that can be done to help maximise the ability to recover rent payable. Tenants may continue to fall victim to the retail shake-out, but good advice will help ensure they don’t take their landlords down with them.
Cool heads in a crisis
Russell-Cooke’s specialist insolvency team acts both for insolvency practitioners and for companies and individuals who are either in financial difficulties and considering insolvency, or themselves the creditors of insolvent companies.
Lee Ranford heads the insolvency team; he’s a qualified insolvency practitioner who has advised on many high- profile insolvencies, and the author of the Financial Difficulties and Winding Up chapter for The Russell-Cooke Voluntary Sector Legal Handbook.
Crispin Jones is an insolvency specialist and commercial litigator whose experience includes acting for the joint administrators and liquidators appointed to one of the UK’s largest retail concerns.
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Managing risk Our society is often described as risk-averse; we’re certainly more aware of risks of all kinds than we were, more inclined to set boundaries and define responsibilities – and to debate where the line between risk and regulation should be drawn. Much of our work entails helping clients negotiate complex situations with many different aspects to them and no easy answers – from difficult moments in their personal lives to the practical challenges that face organisations and professions that care for the vulnerable and elderly.
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When disaster strikes, it doesn’t have tomean curtains for your business
Succession planning is the elephant in the room for many businesses, often mentally filed away under “too difficult”. Then bad luck strikes, and suddenly partners, family and staff are struggling to cope with the practical and financial fallout – at a time when they are already reeling from the impact of illness, accident or loss of someone they’re close to. The consequences can be truly horrendous, both on a personal and professional level. For example – being left in business with a complete stranger with no relevant skills, aptitude or experience, just because that person happened to inherit the shares of a major shareholder. Or a family left without any day-to-day income, because a husband or wife has died or lost mental capacity, and no-one else is legally entitled to sign cheques or make decisions. For many business owners, the decision to make a will is the trigger for thinking about succession planning for the business. This is the point at which to talk things through with a specialist private client solicitor – ideally working in conjunction with colleagues from a corporate law background. Even if the actual issues are relatively straightforward, these conversations are not always easy. “It can be a tough process to go through”, says Rebecca Fisher, a partner in Russell-Cooke’s private client team. “That’s because it entails thinking about what’s going to happen when you’re not around. “But people generally walk away with real peace of mind, and that actually makes it a very positive experience.”
Rebecca Fisher is a partner in the private
client team. She appears in Private Client Practitioner’ s ‘Top 35 Under 35’, designed to recognise the rising stars of private client law
FOR MANY BUSINESS OWNERS, THE DECISION TO MAKE A WILL IS THE TRIGGER FOR THINKING ABOUT SUCCESSION PLANNING FOR THE BUSINESS
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Four common-sense steps to keep succession planning on track
Ensure your plans Rebecca Fisher’s guide for the prudent entrepreneur 1 2 3 4
Decide what you want to happen to your share of the business You and your fellow shareholders or partners, if applicable, need to decide what would happen to an individual’s share of the business in the event of his or her death. Your plans should be set out in the governing documents of the business – the partnership agreement or shareholder agreement. That may involve reviewing the documents that were drawn up when the business was established to make sure they are fit for purpose. It may also be worth considering a shareholder option agreement. In the case of such an arrangement, term insurance cover would be arranged on the shareholder’s life, written in trust for the other shareholders. The shareholder would then grant an option to the other shareholders to purchase the shares on death using the policy proceeds under the trust. It is possible for all the shareholders in the company to enter into reciprocal arrangements, known as ‘cross-option agreements’.
Take out a lasting power of attorney, in case you lose capacity This is a big issue for small or medium-sized businesses (and certainly for sole traders). Take the tragic case of a young man left in a coma after a cycling accident, leaving the business unable to function because its only decision-maker had lost the ability to sign documents. It took a lengthy and expensive application to the Court of Protection to sort things out. The loss of capacity of a business owner can have significant and costly consequences, particularly if the company is in the process of being sold or there are major financial decisions to be made. It is advisable for business owners to put in place a Lasting Power of Attorney for their property and financial affairs. It may be difficult to decide who is best suited to exercise that role, and it is important to discuss this with your business partners and family members.
Keep on reviewing
are tax-efficient The most effective succession planning means structuring your business and personal affairs to get the maximum tax relief available on your
your arrangements A will should be reviewed at least every five years, and so should your business succession arrangements. If anything major happens in the business that might affect your plans, we’re always at the end of the phone. Usually we are able to say, “don’t worry, that isn’t a problem.” The key is to stay in touch.
death. This may include restructuring your will or creating a lifetime trust. In a trading business,
Business Property Relief for inheritance tax of up to 100% of the value of the holding may be available. However, matters are not always completely straightforward. Take the example of a trading business with one quarter of the value of the business comprising £1 million in cash and investment properties. HMRC would be unlikely to accept the properties and much of the cash as qualifying for business property relief, so some restructuring would be advisable.
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Ihaveadream... Ducks bobbing past the window, the gentle lapping of water against the bow – life on a houseboat sounds just ...of buying a houseboat have a Boat Safety Certificate, similar to a car MOT.
Static houseboats need two kinds of insurance cover, for land-based liability and marine liability. Marine liability insurance is needed in case your vessel breaks free of its moorings and causes damage or injury, or even sinks – a nightmare (but not inconceivable) scenario that would require the salvage or recovery of the houseboat in order to prevent a danger to other craft. houseboat owners which apparently includes Nick Cave, Dave Gilmore, Imogen Stubbs and Bear Grylls, so maybe a little preliminary hassle will be worth it. On the plus side you’ll join a fascinating little community of
the ticket for a jaded London soul. But houseboats are not cheap, as Paul Reed points out – and he should know, having handled transactions ranging in value from a few hundred thousand pounds to £1.3 million. He warns that purchasers (and lawyers) need to be as careful when buying and selling houseboats as they would be with any property deal on dry land. Issues that need careful thought include the requirement for a mooring licence from the owner of the river bank, boat yard or marina where you plan to moor your houseboat. In a premium marina these documents can be extremely complex and lengthy – particularly where there are shared facilities with residential leasehold owners of apartments or houses within the same complex. You also need to arrange for a marine survey; some insurers will insist upon a full pre-purchase survey before providing cover. Where possible, the boat should be lifted during inspection and the hull tested for strength. There is a legal requirement for all boats to
Paul Reed is a senior associate in the commercial property group. His article for Prime Resi on houseboat purchases is on the Russell-Cooke website www.russell-cooke.co.uk/ how-to-buy-a-houseboat
...of having a sea view
Although buying a coastal property is generally no different from buying a property anywhere, says Rachael Beaumont, there are some potential problems that may not show up in searches. Most people would rather not have their view of the briny affected by an offshore oil rig or wind farm, but how do you find out about any plans? The answer is to carry out an energy search specifically geared to identifying this kind of proposed development. Another issue is coastal erosion, believed to affect nearly a third of the UK coastline with hundreds of properties currently at risk. In some of these areas the Environment Agency has a policy of “no active intervention”, letting nature take its course whatever the impact on people’s homes. Worryingly for the prospective buyer, the usual environmental search will not identify a risk of coastal erosion. If there is any suggestion that it may be present, the best policy may be to consult a specialist who can assess the risk. Sea levels around the UK are rising by 3mm a year, so this is an issue that will affect more and more people.
Rachael Beaumont is a senior associate in the commercial property group. Her article for Prime Resi is
on the Russell-Cooke website www.russell-cooke.co.uk/ buying-a-coastal-property
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...of investing in the next big thing Non-traditional lending has become more popular as interest rates stay low and awareness of entrepreneurial opportunities grows.
invested on behalf of individual investors by a single company run and managed by the crowdfunding business. That company holds the shares in its name on trust for the individuals. As an investor you are protected by the trust and can ultimately control the management of the trust company if you club together with other investors. If the owner decides to sell the business, this model allows it to deal with the crowdfunders as one shareholder. The second model involves handing over money and in return receiving shares which are registered in your name. You may be one of a large number of shareholders with a small stake each. This can pose problems for a business which may have to adapt from being a relatively small owner-run operation to a bigger company with a large number of small shareholders. In all cases, though, your investment is both illiquid and high-risk. Although the shares you hold will probably, in theory, be transferable, in practice there is no market for part-stakes in private companies. And you are unlikely to have any real authority or power as a shareholder. Many crowdfunded shareholders do not have a vote, for example. And according to the Financial Conduct Authority (FCA), 50-70% of start-up businesses fail. All in all, crowdfunding is not for the faint-hearted – and is probably best undertaken as one element of a balanced investment portfolio. There is a third model of crowdfunding: donation or reward-based funding. Under the donation-based model you donate money to an organisation, cause or enterprise you believe in. The money is a gift, so you won’t get your capital back or earn any financial return.
In the reward-based model you “invest” money in a project and get something back, but the reward may not be guaranteed or may be disproportionate to the contribution you make. For example, you might fund your favourite band to make a recording in return for your own signed copy. What about regulation? Both loan and equity crowdfunding are regulated by the FCA, which is currently limbering up to strengthen the protection offered to consumers (for example, by providing for a cooling-off period).
Peer-to-peer lending is perhaps the most successful of all crowdfunding initiatives, says corporate and commercial partner Jonathan Thornton. Essentially you are lending money to a business. It’s not a complete gamble – the loan must be repaid and, if the company goes bust, you rank ahead of shareholders/owners/partners’ capital in the queue for cash. Peer-to-peer lenders generally appoint a third party who can enforce loans on behalf of lenders. The flip-side is that you don’t own part of the business, so you don’t have any of the rights that an owner might have. And, of course, you won’t benefit from any gains if and when the business makes it big. The main alternative is to invest in the equity of a business (shares), also using crowdfunding. The upside is greater, but so are the risks. There are essentially two models of equity crowdfunding. One involves a trust structure in which money is
Jonathan Thornton leads Russell-Cooke’s corporate and commercial team, specialising in higher value or complex share and business sales and joint ventures
ALL IN ALL, CROWDFUNDING IS NOT FOR THE FAINT- HEARTED: PROBABLY BEST AS ONE ELEMENT OF A BALANCED INVESTMENT PORTFOLIO
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ERRORS THAT END LIVES At a residential care home, a resident with disabilities takes his medicine as usual. But a mistake has been made with his medication (the blood- thinning drug Warfarin) and, unknown to anyone at the care home, he’s taking the medicine at five times its usual strength. He begins to experience unusual bleeding; tests show the high dose of Warfarin is the cause. He’s admitted to hospital, but shortly afterwards suffers a brain haemorrhage and dies. At the inquest the finger of blame points at the local pharmacist, who failed to follow correct procedures when the drug was dispensed. Not the care home’s fault, then; but not exactly the end of the story. How far is a care home legally responsible for mistakes made by others? Should someone at the home have double-checked the medication, and what precautions should it take to
result of murder or suicide. Dominic is a member of the INQUEST Lawyers Group, which promotes expertise and campaigns for law reform in this area. The Russell-Cooke website includes a downloadable factsheet explaining in straightforward terms how inquests work and outlines the options available to relatives (www.russell-cooke.co.uk/ inquests). Our website also gives details of cases involving inquests handled by members of the team, some of which attracted national media attention. inquest, and she is getting more and more requests for representation – both from providers and consumers. “There is an acknowledgement now that the bereaved have a right to be at the heart of the inquest process. We are getting far more people coming to us saying ‘look, I’ve got this inquest, I really want to get some questions answered but I don’t think I’m going to be able to do it by myself’. “That’s something we can help with, with a variety of different funding arrangements – or even sometimes acting pro bono if we think the circumstances justify it.” “My own area, of course, is the potential for negligence claims resulting from injury or death, as well as inquests relating to the latter. I often work with our in-house counsel (barrister) Tom Bradford, who has a background in public and regulatory law. And if there’s any question of a potential breach of the criminal law, we would also get our criminal litigation team involved.” The area of residential care is becoming more legally contentious as the population ages and people become more aware of things that can go wrong. Lucy Wilton says that in general people who seek advice are motivated less by a desire for compensation than the need to find out what happened and get a formal acknowledgement of sub-standard care. That process can start with an
When mistakes or accidents result in a death, people rely on an inquest to establish exactly what has happened and whether there are risks of similar events occurring in the future. Russell-Cooke has a growing reputation in the field of representation at inquests. Dominic Fairclough, a partner in the clinical negligence team, has represented bereaved families at over 100 inquests, including those relating to deaths that took place in hospital, in the workplace or were the from a review of documents and procedures to a full site inspection. This is something Lucy’s team is set up to provide. “On the clinical side, we work with independent experts in the nursing care field who can advise on clinical matters and identify gaps in provision.” reduce the risk of a similar accident? Cases like this are an everyday part of clinical negligence specialist Lucy Wilton’s work. In this one she acted not for a relative of the deceased but the care home itself – run by a charity that was also a client of the charity and social business team. Her first task was to make sure the care home’s account of events emerged clearly at the inquest. Afterwards the home, although exonerated from blame, sensibly wanted to learn from what had happened and look at how its own procedures could be tightened up. (Medication procedures were changed shortly after the incident to ensure that staff checked both the pharmacy’s and the drug manufacturer’s labels to make sure they matched.) How do providers anticipate and minimise the risk of “never events”? Caring organisations need to be aware of their legal responsibilities, says Lucy Wilton, but they also need practical help to make sure safe systems of care are in place – looking at legal, clinical and regulatory aspects together. That could involve anything
Lucy WIlton is a senior associate in
Russell-Cooke’s clinical negligence and personal injury team, highly regarded for its handling of complex injury work