Courts to sanction directors for corporate collapses

Business Secretary Vince Cable has outlined plans to give courts the power to make financial sanctions against company directors in corporate collapses.

His proposed reforms of the insolvency process also include a register to identify a company’s ultimate owner, banning directors who have already been banned outside the UK from running a UK company and allowing courts to hand out fines to directors when serving a disqualification order.

Furthermore, Mr Cable is also hoping to persuade courts to consider any previous company failures when handing out a sanction and to increase the time limit for bringing disqualification proceedings against directors from two to five years, as well as extending the Insolvency Service’s disqualification powers to the Financial Conduct Authority.

The transparency and trust discussion paper can be downloaded from the GOV.UK website, with interested parties having until 16th September 2013 to respond to the proposals.

The hidden costs of top up fees

According to new research, over a quarter (28 percent) of people in local authority-funded care homes are being forced to pay top up fees.

However, as local authorities fail to monitor and regulate top up fees, and don’t see the contracts negotiated between individuals and care homes, this figure could, in reality, be much higher.

While top up fees are only supposed to be paid if the care home is above and beyond the “standard” level of care provided by the council, this is not always the case.

With local authority baseline fee rates falling ever increasingly further behind the actual costs of residential care, some families are forced to pay top up fees simply because there are no suitable places in the area that will be covered by the standard fees alone.

However, in other cases, local authorities are purposely setting their standard rates too low in order to profit from top up fees by limiting their own expenditure.

For example, in September 2012, Southampton city council was forced to refund the top up fees paid by an elderly woman’s family and compensate them for the time, trouble and distress caused.

Furthermore, while the government has confirmed its commitment to capping care costs, it does mean that the amount they pay within those boundaries will be calculated based on a realistic standard rate – and there is no mechanism included in the current reforms for an independent review of the fairness of the baseline.

Consequently, individuals should seek legal advice on their liability for long-term care fees and reclaiming any top up fees that have been unfairly charged by their local authority.

Confidential pre-termination negotiations come into effect

Under new rules which came into force at the end of July, employers are now able to have certain discussions about the termination of an individual’s employment without them being used in unfair dismissal claims.

The Enterprise and Regulatory Reform Act 2013 added a new section, 111A, to the previous Employment Rights Act 1996, which means that any pre-termination negotiations will be inadmissible in unfair dismissal claims – unless the dismissal was for an automatically unfair reason.

Pre-termination negotiations are defined as “any offer made or discussions held before the termination of the employment in question with a view to it being terminated on terms agreed between the employer and employee”, and now include statements made where no dispute existed.

However, employers need to be aware of the fine line between claims for an automatically unfair reason and ordinary unfair dismissal ones when looking to benefit from this additional protection.

Furthermore, if there is any “improper behaviour” by either party – such as bullying, physical assault, discrimination or undue pressure – the protection provided by 111A can be removed, with evidence allowed if it is considered “just”.