Graeme Fraser appointed to the Family Procedure Rule Committee (FPRC)

OGR Stock Denton LLP is delighted to announce that the Lord Chancellor has appointed Graeme Fraser, Partner and Head of the Family team, as a practitioner member to the Family Procedure Rule Committee (FPRC) from 1st March 2021.

Graeme Fraser commented: “I am delighted to have started a three-year term as a Solicitor member of the Family Procedure Rule Committee.  It is an exciting time to be involved, with considerable changes to family legislation afoot.  I look forward to fully contributing my practitioner experience to this role.” 

What is the Family Procedure Rule Committee?

The FPRC was established under Section 77 of the Courts Act 2003 to make family procedure rules. It aims to develop clear, easily understandable rules to create an accessible, fair, and efficient family justice system.  The Family Procedure Rules were implemented in 2011.  The Rules and supporting Practice Direction continue to be reviewed and updated to ensure they are in line with new legislation and policy initiatives.

Members do not receive remuneration for their work (except for reasonable out-of-pocket expenses).  The selection process is exceptionally rigorous, as Members need to demonstrate not only a solid working knowledge of Court and administrative processes within the family jurisdiction, but they must also be committed to valuing diversity and understand the impact of Family Procedure Rules and Practice Direction amendments.

About Graeme Fraser

Graeme Fraser is a Family Law Solicitor specialising in finance and children cases.  He has experience at High Court and County Court levels of the Family Court.  Graeme is a Resolution accredited specialist in complex financial remedies and cohabitation, the Trusts of Land and Appointment of Trustees Act 1996 and has the Law Society Family Accreditation.  He is also Chair of Resolution’s Cohabitation Committee.

About OGR Stock Denton LLP

Based in North London, OGR Stock Denton LLP is a full-service law firm that has been assisting businesses and people with legal matters for over half a century.

A Two Minute Guide To The Domestic Abuse Bill 2021

One of the unspoken tragedies of the Coronavirus pandemic is the dramatic increase in domestic abuse. According to a House of Common’s Insight,  although there is no official data so far on the impact of lockdown on domestic abuse, the Office for National Statistics (ONS) reported that by mid-May 2020, there was a 12% increase in the number of domestic abuse cases referred to victim support. And between April and June 2020, there was a 65% increase in calls to the National Domestic Abuse Helpline, when compared to the first three months of that year.

For many years, women’s groups, Family Law Solicitors, and law enforcement agencies have asked for tougher legislation to protect victims.  Former Prime Minister, Theresa May took up the cause and in July 2019 introduced the Domestic Violence Bill 2019-21 to the House of Commons. On 29 April 2021, the long-awaited Bill received its Royal Assent.

On the day Royal Assent was received, the Domestic Abuse Commissioner, Nicole Jacobs, said:

“Today marks an historic moment for victims and survivors of domestic abuse when change is needed the most.

The act sets out my legal powers which I will use to support all victims across England and Wales by first tackling the ‘postcode lottery’ of services.

So many campaigners, charities and individuals have worked incredibly hard to make the bill as robust as possible and there is no doubt that the legislation, which now includes non-fatal strangulation as a standalone offence, is much stronger as a result.

Legislation won’t transform things overnight and we know there is more to do, so and I will work with partners to advocate for further changes.”

The Domestic Abuse Act (DAA) 2021 is wide-ranging.  It creates new offences, extends existing law, and amends other legislation.  Its main provisions include:

Domestic abuse and economic abuse have been defined

For the first time, domestic abuse has been defined in legislation.  A definition of economic abuse is also provided:

Definition of “domestic abuse”

(1) This section defines “domestic abuse” for the purposes of this Act.

(2) Behaviour of a person (“A”) towards another person (“B”) is “domestic abuse” if—

          (a) A and B are each aged 16 or over and are personally connected to each other, and

          (b) the behaviour is abusive.

(3) Behaviour is “abusive” if it consists of any of the following—

          (a) physical or sexual abuse;

          (b) violent or threatening behaviour;

          (c) controlling or coercive behaviour;

          (d) economic abuse (see subsection (4));

          (e) psychological, emotional or other abuse;

and it does not matter whether the behaviour consists of a single incident or a course of conduct.

(4) “Economic abuse” means any behaviour that has a substantial adverse effect on B’s ability to—

          (a) acquire, use or maintain money or other property, or

          (b) obtain goods or services.

(5) For the purposes of this Act A’s behaviour may be behaviour “towards” B despite the fact that it consists of conduct directed at another person (for example, B’s child).

The police and the Courts are given greater powers

The police and the Courts are at the heart of protecting victims of domestic abuse. Under the DAA 2021, the police can issue Domestic Abuse Protection Notices, providing victims with immediate protection. The Courts can make a Domestic Abuse Protection Order that demands perpetrators take responsibility for their actions and seek mental health support and/or drug and alcohol rehabilitation if required.

Domestic abuse victims to be given housing priority

Local authorities will have to prioritise those who have been made homeless due to abuse. The DAA 2021 also places a duty on local authorities to ensure victims receive therapy, advocacy, and counselling in safe accommodation.

Non-fatal strangulation is now an offence

The DAA 2021 has made non-fatal strangulation an offence and expanded the scope of the offence of ‘revenge porn’. Furthermore, the defence of “rough sex gone wrong” in cases where death or serious injury occurs has been tightened. 

Perpetrators can no longer cross-examine victims in person

Being cross-examined by an abuser in Family Court proceedings is incredibly traumatic for victims. The DAA 2021 amends the Matrimonial and Family Proceedings Act 1984 barring anyone convicted of, given a caution for, or charged with a domestic abuse offence from cross-examining in person a witness who is the victim or alleged victim of the abuse, and vice versa. The Court can provide alternatives to cross-examination or appoint a Solicitor to undertake cross-examination of the witness.

Victims will also be given further protection from intimidation by having access to special measures such as being able to give evidence via video link and protective screens.

Children recognised as victims of domestic abuse

Children who hear, see, or experience the impact of domestic abuse are recognised as victims under the DAA 2021.

Final words

Domestic abuse is a scourge on all societies and does not discriminate against sex, age, race, or sexual preferences. The DAA 2021 has been long anticipated and provides robust measures to further protect victims.

If you or your children are in immediate danger, please call 999 and ask for the police. You can also call the 24-Hour National Domestic Violence Helpline on 0808 2000 247.

Further help and support are available from the below organisations.

National Centre for Domestic Violence (NCDV) – 0800 970 20 70

Refuge – 0808 2000 247 (24 hours)

Women’s Aid 0808 200 0247 (24 hours)

ManKind – 01823 334 244

Galop LGBT Abuse Helpline – 0800 999 5428

To make an appointment with one of our Family Solicitors based in North London please email or phone 020 8349 0321.

Understanding Testamentary Capacity

The number of Wills being challenged over the past decade has risen consistently, and it is easy to see why.  The stakes are much higher given the increase in house prices, meaning that many peoples assets are now worth hundreds of thousands (if not millions) of pounds. Furthermore, the younger generation are struggling to get on the housing ladder, and are increasingly reliant and / or expecting to receive an inheritance to do so. At this point, you may be wondering what Will disputes have to do with testamentary capacity. The the answer is that if a Will is not entered into with full understanding, it may be challenged and be declared invalid. 

What is testamentary capacity, and how is it established?

The word ‘testamentary’, in this case, refers to the act of bequeathing through a Will.  ‘Capacity’ refers to the cognitive ability of the testator (the person making the Will) to enter into the Will in a way that they fully understand.  Hence if a Will is entered into by a person who lacks the mental capacity to comprehend the implications of what is being stated, this would be considered to be a lack of testamentary capacity and will likely render the Will invalid. 

If the last Will is declared invalid the estate will be administered under the terms of the previous Will (if one exists) or under the rules of intestacy. This is a formula sued to distribute an estate if there is no will.  

Solicitors and other legal practitioners specialising in Wills must check that they are satisfied someone has testamentary capacity when taking instructions for a Will for a client. By doing so, its validity is less likely to be challenged following death. 

The risk with online and DIY Wills is that, in addition to the lack of professional legal guidance to ensure the Will is drafted to reflect all of the necessary provisions and life scenarios for your situation, it will lack evidence that checks were undertaken to verify capacity.  A professional Wills Solicitor will go out of their way to secure the proof needed, including requesting contemporaneous medical opinion, asking a medical professional to witness the Will, and attaching any other proof of capacity to the Will.

There are two main tests used by the Courts to prove testamentary capacity:

Banks v Goodfellow Test (Case law test)

 This common law test relates to the case of Banks v Goodfellow (1870), which used the following criteria to test for the existence of testamentary capacity:

  • The testator must understand the nature of making a will and its effects.
  • The testator must understand the extent of the property of which they are disposing.
  • The testator must be able to understand and appreciate the claims to which they ought to give effect (i.e. who can bring a claim against the Will).
  • The testator must have no disorder of the mind that perverts their sense of right or prevents the exercise of their natural faculties in disposing of his property by Will.

Despite being over 150 years old, the Banks v Goodfellow test has stood the test of time due to its clarity, the fact it is based on case law principles going back three centuries, and because it covers the elements necessary to establish an all-round understanding of what is being entered into.

The Mental Capacity Act 2005 (MCA 2005)

 The MCA statutory test uses five core principles to establish mental capacity, as follows:

  1. A presumption of capacity – everyone has the right to make his or her own decisions and must be assumed to have capacity unless proved otherwise
  2. The right for individuals to be supported to make their own decisions – people should be given the necessary assistance before it can be concluded they are unable to make their own decisions
  3. Individuals have the right to make what might be seen as eccentric or unwise decisions
  4. Best interests – anything done for or on behalf of people without capacity must be in their best interests; and
  5. Least restrictive intervention – anything done for or on behalf of people without capacity should be the least restrictive of their basic rights and freedoms.

The MCA 2005 test for capacity was not intended to replace the Banks v Goodfellow test; rather the intention was to allow judges to make their own decision as to which would be most applicable.  However, the High Court case of James v James and others [2018], confirmed that the Banks v Goodfellow test should be applied when assessing mental capacity in relation to making a Will.

Ensuring testamentary capacity for your Will

Establishing testamentary capacity at the time of Will creation will mitigate the potential for it to later challenged.  For solicitors, ensuring their client understands what they are entering into and providing supporting evidence where necessary is a paramount consideration.  By failing to undertake this key step, a well-drafted Will, with all elements considered, witnessed, and signed correctly, could be rendered useless via a challenge.  Don’t cut corners and allow your Will to be judged invalid due to concerns over capacity – your loved ones deserve certainty that your wishes were made with sound mind and judgment.

If you would like to discuss any of the above issues, please contact Ian Pearl, on 020 8349 5506 or by email

Please note that this blog is intended for information purposes only and does not constitute legal advice. 

Resolution Podcast – Cohabitation Law Reform (Episode 2)

Partner and Head of the family department, Graeme Fraser appears as a guest speaker on the Resolution podcast on Cohabitation Law Reform (episode 2), hosted by Anita Mehta and Simon Blain.

The podcast looks at the case for cohabitation law reform in the light of experiences north and south of the border.

The podcast has now been been published on the Resolution website. Listen to the full recording here.

New 95% Mortgage Scheme Launches

The new government-backed 95% mortgage scheme launched on 19 April 2021.  High street lenders including Lloyds, Santander, Barclays, HSBC, and NatWest have all signed up to the scheme.  OGR Stock Denton’s residential conveyancing team are highly respected panel members on all four aforementioned lenders.

With studies showing that 80% of renters are now actively saving for a deposit, the ability to borrow up to 95% of the value on a property will ensure more people realise their dream of owning their own home.

How does the 95% mortgage scheme work?

With rents rising every year, the challenge to getting a foot on the property ladder is saving the necessary deposit.  During the Coronavirus pandemic, 95% mortgages virtually disappeared, putting a further barrier between Generation Rent and their desire for homeownership.  At the most recent Conservative Party Conference Boris Johnson made a promise to tackle inequality in the housing market.  By providing a government-backed low deposit scheme for properties purchased for £600,000 or less, thousands more will be collecting keys from an estate agent between April and when the scheme closes in December 2021.

Susan Allen, CEO of Retail and Business Banking at Santander gave her backing to the scheme, stating:

“We know that raising a large deposit can often be challenging for potential home buyers, so we’re pleased to be part of the government’s Mortgage Guarantee Scheme offering a range of 95% mortgages to help both first-time buyers and home movers.

As one of the UK’s largest mortgage lenders we see how important homeownership is to our customers and we use our wide experience and expertise to support them throughout the home buying process.”

How OGR Stock Denton’s Conveyancing Lawyers can help you with the 95% government-backed mortgage scheme

 With years of experience in the residential property market, our Residential Conveyancing Solicitors will ensure your 95% mortgage application and property purchase transaction goes through smoothly.  You can be confident that we will apply for all the necessary property searches and carefully examine the title and explain any issues that may affect your future enjoyment of the property.  As a full-service law firm, we can also assist you with other legal issues relating to your new home, for example drafting a Will or a Pre or Post-Nuptial Agreement.

Reacting to the news that the 95% mortgage lending scheme has been launched, Michael Stock, who heads up our Property Department comments:

“The Government’s Mortgage Guarantee Scheme will provide the boost many prospective home-buyers need to get on the property ladder.  However, no property acquisition is without risk.  It is essential to have an experienced Conveyancing Solicitor examine the mortgage offer and the details of the property to ensure the risk of falling into negative equity is mitigated.  Most of our clients and their families remain with us long-term because they appreciate that we take the time to get to know them and trust that they will be swiftly notified regarding any concerns around their property purchases.”

Whether you are buying a pre-existing home or a new build, our North London based Property Lawyers will provide expert advice and ensure your interests are fully protected.

To make an appointment to discuss any aspect of residential property law please email or phone 020 8349 0321.

 

OGR Stock Denton successful in Road Traffic Accident (RTA) compensation claim for client

OGR Stock Denton has once again successfully acted for a Claimant in a Road Traffic Accident (RTA) compensation claim against a Highway Authority. The firm’s Personal Injury solicitors represented a motorcyclist whose vehicle slipped on a manhole cover. The accident resulted in the client suffering a broken knee and wrist. Sitting in the Central London County Court, Mr Recorder Stephen Jourdan QC complimented counsel on the “clarity and cogency” with which the case was presented and awarded the Claimant £66,000 plus interest and costs.

Lead Partner Stephen Silverman, who has over 30 years’ experience in personal injury and dispute resolution law, was disappointed that the local authority did not make an early admission of liability to allow the team to arrange interim payments to cover the cost of the client’s rehabilitation. 

Stephen commented:

“As we often deal with highly complex personal injury cases, not only do we focus on getting significant compensation, but aim to secure an early admission of liability so the client can undertake a rehabilitation programme as soon as possible. Our clients’ health and wellbeing are incredibly important to us. Our solicitors are well known, not only for actively pursuing compensation but also for caring deeply for clients and their families at a time when their lives have often been turned upside down.”

Regarding his most recent success, Stephen went on to say:

“The importance of this case is that it recognises the obligation of Highway Authorities to maintain all aspects of a highway, including manhole covers. In this case, despite regular inspections, Transport for London failed to identify that the manhole cover was worn and polished so as to present a reasonably foreseeable and real danger to road users.

As a result of our successful arguments and expert evidence at trial, our client was able to recover damages for his pain and suffering, as well as for financial loss, including cost of repairs to his motorcycle  and loss of earnings, enabling him to move on from this traumatic incident.”

Working with Stephen and his team was Barrister, Tom Bourne-Arton, who is stated in Chambers and Partners as being:

“….efficient and sensible.” “He is quick to grasp issues and very efficient in turning work around.”

Thanks to the formidable reputation of its Personal Injury Lawyers, OGR Stock Denton can instruct highly experienced and respected Counsel such as Mr Bourne-Arton as well as top medical and Road Traffic Accident experts. This ensures our Personal Injury team, who are also members of APIL, can build robust cases and do their best to establish liability and secure the highest compensation available for their clients.

To make an appointment to discuss any aspect of Personal Injury or Road Traffic Accident claims please send us an email or phone 020 8349 0321.

Webinar – Divorce and financial planning

OGR Stock Denton LLP would like to invite you to join our live webinar – Divorce and financial planning

12.30pm, Friday 23rd 2021

Zoom webinars

Join our live webinar on divorce and financial planning, where our family law experts look at the practical evaluation and structuring of financial settlements on divorce. By reference to case scenarios, provision for meeting needs during middle life and retirement is explored through mortgage capacity evaluation; funding options; pension sharing; and cash flow modelling.

Hosted by Graeme Fraser, Head of Family OGR Stock Denton LLP, with guest speakers Claire Heppenstall, Barrister at 1 GC Family Chambers, and Helen Howcroft, Chartered Financial Planner at Equanimity IFA.

If you would like to join this webinar, please register here.

What To Consider When Looking For The Best Inheritance Tax Solicitors

For some people, it is hard to think about what will happen to their assets after they die. Others want to ensure that their legacy is passed on in the most efficient way so their heirs can benefit from what they have worked hard to accumulate during their lifetimes. Whichever camp you fall into, pertinent, up-to-date advice from an inheritance tax solicitor can be invaluable. Everyone needs to consider making a will to ensure their estate is dealt with smoothly and in accordance with their wishes after their demise. But if your estate looks set to be valued at over £325,000, you will especially benefit from guidance from inheritance solicitors.

Inheritance tax (commonly abbreviated to IHT) is the tax that’s payable after the death of an individual on the money, property, and possessions they leave behind – their estate. It’s based on the value of the estate at the time of death, but can also include gifts given by the individual in the seven years preceding their demise. The value of the estate is calculated after any outstanding debts and funeral expenses have been deducted.

At present, the IHT threshold is £325,000, though changes to the whole framework are imminent. Currently, there’s no tax payable on the first £325,000 – this is known as the nil-rate band or NRB. If you have a spouse or civil partner, then you can pass the entirety of your estate to them tax-free, and they then benefit from an increased IHT allowance of up to double (i.e., £650,000) on their own death.

But otherwise, any value of the estate over £325,000 is taxed at a rate of 40%. This is usually settled by the executor of your will, if you have one, or administrator of the estate if there’s no will in place.

Other considerations are many, but include the recent Transferable Main Residence Allowance (TMRA), which came into force in April 2017. This allows the deceased to pass on a property in which they have been living to descendants, raising the tax-free allowance to £500,000 in total (£1 million for those who are married or have civil partners).

Reducing Liabilities Through Inheritance Tax Planning

what services do inheritance tax solicitors offerOf course, no-one likes paying more tax than they have to, and this is often where consulting inheritance tax specialists in the UK can be beneficial. It’s important that you do this at an early stage if you think your estate will be liable for IHT.

The above description of IHT and associated matters is the briefest of summaries and only scratches the surface of the complex framework surrounding inheritance tax. The landscape is likely to change in the near future too, so it’s vital that you seek legal advice from qualified and experienced experts before taking any action yourself. HMRC imposes severe penalties on breaches of tax legislation and you or your heirs could end up in trouble if you inadvertently break the rules.

Inheritance tax planning solicitors will first gain an overview and more detailed information about your specific circumstances. They will then detail options for ways in which you can manage your affairs now and at the time of your death to limit tax liabilities and benefit your heirs as much as possible.

Among these will be consideration of making a will; of giving tax-free gifts; of making charitable donations; establishing a family trust; making specialist investments; taking out insurance to cover the costs of IHT; gifting property to children or a loved one, and more, all of which can be tailored to your own unique circumstances.

Expert Legal Advice From Specialists

As noted above, IHT can be a minefield and the costs of getting your affairs wrong can be huge in financial terms, not to mention costly in terms of the emotional distress on your heirs that can result from dealing with HMRC at an already difficult time.

However, the cost of an investment in sound legal advice at an early stage can be more than offset by the savings you’ll make in tax liabilities in the future.

Come to OGR Stock Denton, where we have been advising on legal matters for personal and business clients for over 50 years. Our consultants will assess your situation and offer the best legal advice for your circumstances, explaining everything simply and clearly without blinding you with legal jargon.

Remember, while a difficult subject to contemplate, the sooner you start putting your affairs in order, the easier it will be for your loved ones after your demise. Call 020 8349 0321 today to make an appointment to speak to one of our experienced inheritance solicitors.

FREQUENTLY ASKED QUESTIONS

Can solicitor’s fees be offset against inheritance tax?

which inheritance tax solicitors to hireLiabilities and debts incurred prior to the deceased’s demise, such as mortgages, credit card, and household bills, can be deducted from the chargeable estate, as can funeral expenses. However, other costs that have been incurred after death, like probate and fees for solicitors or death tax lawyer services cannot reduce the value of the estate for Inheritance Tax (IHT) purposes.

How much do solicitors charge for being executors of a will?

When sourcing a lawyer to act as executor of an estate, ask how they will charge for carrying out the service. Some charge an hourly rate, while others will base their fee on a percentage of the value of the estate, usually between 1% and 5%, plus VAT.

How do you calculate inheritance tax?

The threshold for IHT is £325,000. If your estate is worth less, it’s classed as being in the Nil Rate Band (NRB). You’ll typically pay 40% tax on any amount above £325,000, unless the entirety is left to a spouse or civil partner, or an exempt beneficiary like a registered charity. Inheritance tax solicitors can advise further.

What is the UK inheritance tax threshold?

At present, the inheritance tax (IHT) threshold is £325,000 per individual, but the government is planning some changes in 2021. Currently, if you have a spouse or civil partner, any unused NRB on the death of the first person can be transferred to the survivor, increasing the amount of NRB available to up to £650,000.

Will my children have to pay inheritance tax?

Your children pay inheritance tax at 40% on any amount you have left them above the £325,000 personal inheritance tax-free allowance. You can establish a trust before death to reduce the percentage paid to 20%, but if you die within seven years, an additional 20% is charged. The law is complex, so seek advice from a family tax planning attorney.

how can inheritance tax solicitors help youA Guide To Inheritance Tax

Inheritance tax is a highly complex area. Broadly speaking, only a small percentage of estates are large enough to attract IHT – those with a value of over £325,000. Assets that count towards this sum include money in a bank, property and land, jewellery, cars, shares, pay-outs from insurance policies, and jointly owned assets. If your estate falls below the £325,000 threshold; you leave everything above the threshold to your spouse or civil partner; or you leave everything above the threshold to a charity or other exempt beneficiary, then there is normally no tax to be paid.

The recently-introduced Residence Nil Rate Band, aka home allowance, may also apply. If your main home or a share of it is passed to children or grandchildren, that can increase the amount that can be passed down tax-free. Planning ahead with the help of inheritance tax solicitors in London can mitigate tax paid.

Overview Of Inheritance Tax

The deceased’s estate usually pays 40% inheritance tax on any amount held over £325,000. If you’re a beneficiary, you don’t generally have to pay tax on an inheritance unless the estate hasn’t or can’t do so. If you inherit assets, you may have to pay income tax in future years – on dividends from shares or on rental income from an inherited property, for instance.

If you later sell inherited assets like shares or property, you may have to pay Capital Gains Tax. Assets. And if the deceased gifted you money, property, or possessions within seven years of their death, you may have to pay IHT on that.

What An Inheritance Tax Solicitor Can Do For You

An IHT attorney can help ensure:

  • There’s no conflict between your heirs after your death.
  • Your will is legally valid before your death.
  • You have a chance to organise your affairs with the help and advice of a qualified solicitor, to ensure your beneficiaries gain most value from your life’s work and their inheritance.

Inheritance Tax is a highly complicated area and is constantly changing. It’s easy to fall foul of the complexities of the law and that can mean your heirs and dependants receive less than they might otherwise have done. Make an appointment with our team at OGR Stock Denton LLP for help, advice and assistance in planning what will happen to your assets after your death.

Uber loses in the Supreme Court – Uber BV v Aslam & Ors

Earlier this month, Uber, the largest player in the gig economy ran out of appeals in its long battle to retain the right to classify its drivers as self-employed rather than workers.  The Supreme Court dismissed Uber’s appeal, meaning thousands of drivers became entitled to minimum wage and holiday pay.

For employers, the decision has far-reaching consequences in cases where the relationship between the organisation and self-employed people may blur into the realms of ‘worker’.  To help you understand what the decision means for you, our Employment Law Solicitors in London have answered some of the most frequently asked questions related to the Supreme Court’s ruling.

What was the background to the decision?

In 2016, two former Uber drivers took the ride-hailing company to the Employment Tribunal arguing that they were workers and were therefore entitled to be paid the minimum wage and holiday pay.  Uber argued that all its drivers were self-employed.

The Employment Tribunal found in favour of the drivers.  Uber appealed to the Employment Appeal Tribunal and the Court of Appeal, both of whom upheld the decision in the first instance.

Why did the Supreme Court rule that Uber drivers were not self-employed?

The Supreme Court upheld the employment tribunal’s decision in Uber BV v Aslam & Ors, that Uber drivers are “workers” for the purposes of the rights mentioned above. It held that worker status was a question of statutory interpretation rather than contractual interpretation and therefore the written documentation between Uber and its drivers was not the correct starting point.  Instead, it was necessary to consider the purpose of the relevant legislation, which was to protect vulnerable individuals in a position of subordination and dependence in relation to another person who controls their work.  The greater the degree of control, the more likely the individual is a worker.

Delivering the unanimous decision, Lord Leggatt emphasised five aspects of the findings made by the Employment Tribunal which justified the Supreme Court’s conclusion that the drivers were working for and under contracts with Uber.

  1. Uber set the fare and drivers were not permitted to charge more, meaning that Uber dictated how much the drivers were paid.
  2. All drivers had to sign a contract and were not permitted to negotiate the terms.
  3. Once a driver had logged onto the Uber app, their right to turn down requests for rides was constrained by Uber.
  4. Uber exercised considerable control over how the drivers did their work; for example, passengers were encouraged to rate drivers on a scale of 1 to 5 and warnings were given for low scores. If the driver’s average score did not improve, Uber would end its relationship with them.
  5. Uber took active steps to prevent passengers from developing a relationship with its drivers beyond a particular ride.

Taking these factors together, it was clear that the services provided by the drivers were very tightly defined and controlled by Uber and that, accordingly, they were workers.

In addition, the Court held that the drivers’ working time under the Working Time Regulations was not limited to the time spent driving passengers to their destinations but started from the moment they logged in to the Uber app, within the territory in which they were licenced to operate, and were ready and willing to accept rides. 

Lord Leggatt concluded:

“Taking these factors together, it can be seen that the transportation service performed by drivers and offered to passengers through the Uber app is very tightly defined and controlled by Uber. Furthermore, it is designed and organised in such a way as to provide a standardised service to passengers in which drivers are perceived as substantially interchangeable and from which Uber, rather than individual drivers, obtains the benefit of customer loyalty and goodwill. From the drivers’ point of view, the same factors – in particular, the inability to offer a distinctive service or to set their own prices and Uber’s control over all aspects of their interaction with passengers – mean that they have little or no ability to improve their economic position through professional or entrepreneurial skill. In practice the only way in which they can increase their earnings is by working longer hours while constantly meeting Uber’s measures of performance.”

What is the difference between a worker, employee, and self-employed person?

The Supreme Court upheld that Uber drivers were ‘workers’ as opposed to ‘employees’.  A worker includes an individual who works under a contract, whether written or oral, whereby the individual undertakes to perform personally work for the other party to the contract, provided that the other party is not, in reality a client or customer of the individual.

An employee is defined under section 230(1) of the Employment Rights Act 1996, as a person who has entered into or works under a contract of employment.  The contract can be in writing or implied by the structure of the working relationship.

A self-employed person is someone who runs their own business and takes responsibility for its success.  An employer has no responsibility in terms of employment rights and, subject to any commercial contract which is negotiated by both parties, a self-employed person is in charge of how and when their work is undertaken.

In determining whether an individual is self-employed or a worker, the courts will look at the reality of the working relationship rather than the label that the parties may have stated in the contract between them.

What advice do employment lawyers say to take in light of the Uber decision?

This decision leaves Uber vulnerable to claims from its workers for up to two years’ back pay or £25,000 (whichever is larger) in an employment tribunal, or up to six years’ back pay in the county court. They will also be able to claim 5.6 weeks’ annual leave each year.  However, they will not have employee rights, such as a right to a statutory redundancy payment or protection from unfair dismissal.

Many linked cases have been stayed pending the outcome of this case in the Supreme Court and the floodgate may open for many more.  That said, the Court’s finding that the Uber drivers were workers was fact specific and it may be that a different decision could be reached on a different set of facts.

If you are unsure as to whether certain members of your team are employees, workers, or self-employed, speak to one of our Employment Law Solicitors in London who can quickly advise you.

To make an appointment to discuss employment law matters please email us or phone 020 8349 0321.

Webinar – Cohabitation TOLATA property disputes and the Dispute Resolution Toolkit

OGR Stock Denton LLP would like to invite you to join our live webinar – Cohabitation TOLATA property disputes and the Dispute Resolution Toolkit

4.30pm, Thursday 8th April 2021

Zoom webinars

Join our live webinar, where our family law experts use case studies to analyse the benefits and drawbacks for our clients of Dispute Resolution in solving problems of Cohabitation TOLATA property disputes.

TOLATA litigation in the context of cohabitation claims can be risky, uncertain and expensive both financially and emotionally.  The COVID19 pandemic has encouraged professionals to move towards Dispute Resolution, including mediation, early neutral evaluation, private FDRs and arbitration, as an alternative method to litigation. This webinar will explore how these methods can be utilised in Cohabitation TOLATA property disputes.

Hosted by Graeme Fraser, Partner and Head of Family team at OGR Stock Denton LLP, and guest speaker Elizabeth Darlington, Barrister at 1GC | Family Law

If you would like to join this webinar, please email Ali Kabani:

akabani@ogrstockdenton.com

 020 8349 5514