The ministry of Justice has opened the new East London Family Court. See the press release for more details.
Alarming that it is being reported in the national press (the Telegraph)
that the Prest judgement changed divorce law today. Interesting and elucidating as it was nothing seems to have changed at all. But I finally understand corporate veils – and no, it’s nothing to do with a rainy task on the Apprentice.
As far as I can see all this judgement does is uphold and re-state laws which have been around since 1897. If a company legitimately buys assets it cannot be forced to transfer them to a spouse within divorce proceedings, even in the interests of justice and even if the other spouse is the only shareholder and effectively “is” the business. You cannot pierce the corporate veil just because it will achieve a fair result in the divorce.
To quote Lord Sumption , who gave the leading judgement, “It
follows that the piercing of the corporate veil cannot be justified in this case by reference to any general principle of law. ”
In this particular case however, the husband’s companies had not bought these properties fair and square – or at least couldn’t prove that they had.
The husband owned them to begin with in any event – either before the companies were set up or when they were not properly trading or solvent enough to buy the properties for a reasonable price.
The court found that the purchase monies had originally come from him, although several of the properties had never been in his name at all and one was even owned by the cleaner. Yes, the cleaner.
Therefore he had, under the age old doctrine of trusts, owned them (beneficially) all along and when he transferred the legal title to the companies, he still owned the beneficial interest because he could not prove that the companies actually had the money to buy them off him, or the other legal owner.
This is nothing to do with overturning any law to do with hiding behind a company.
In fact it has shown just how to do that and get away with it.
Make sure the company has the capital to actually buy the properties and it looks as if they can’t be touched.
But don’t get too excited crafty gentlemen (and ladies). Your other half will be entitled to a fair share of the money you get for the properties.
Unless you hide it under the bed. As I say, nothing seems to have changed.
It’s frightening how much rubbish you find on unregulated divorce online sites purporting to be advice (but not “advice” that you would have to be qualified and insured to provide). Advice which is totally wrong – like telling people you can’t have a clean break if you have children or that if you have been married less than five years the court will “issue a financial clean break order”.
They may be cheap but it is now time to stop them overstepping the line before it is too late and they really start to make big mistakes for unsuspecting people who think they are solicitors (and there are plenty who do).
The truth is they’ve less straightforward divorce work than they had before and now they want to do consent orders.
Beware. Don’t use them.
They’re not solicitors, not trained, not regulated and not insured.
If you want a properly drafted consent order use a solicitor. It’s that simple.
And we don’t cost any more than they do either. Take a lookhttp://www.nicolawilliams.co.uk/Products/products-and-services.html
The Co-op has posted its figures for legal services for 2012. It made £26,000 profit on a turnover of £33 million.
The coop says that profit was so low “following continued significant investment for future growth, changes to both the pricing of services and the nature and duration of cases.”
Just how much are they investing to make so little out of £33 million? And what’s the rush?
It does seem that they are everywhere you look – in the media, on the internet etc. However their ambition to become the largest provider of legal services in the UK may not be a good thing for the general public.
If their expansion continues at the rate they seem to be planning it may send hundreds of small and medium sized law firms out of business who simply cannot compete with their marketing power. The government’s plan to introduce competition to legal services could result in just a few large organisations (big firms, big banks ….and a haulage company?) offering a range of services to the public, like representation in crime, divorce or probate work. Is that good for competition? Is it an improvement on the previous system? I don’t think so. Yes there was need for change but not like this.
Are co-op legal services cheaper than the high street solicitor? They don’t seem to be if you check the prices on their website. Once the competition is reduced, how much do you think they will charge then?
Are they more efficient? Well I hear tales of applications being rejected by the court because they are not completed correctly (that happens sometimes to us all) and long delays in responding to correspondence (not unheard of in the legal profession I know). So are they really any better? It’s too early days to tell but I wouldn’t bank on it (boom boom).
Are they safer in this difficult economic climate? Maybe not. According to Moody’s anyway who have today reduced the debt rating of the parent company to “junk” status. What happens to co-op legal services if the co-op bank has big problems? I don’t know. But when I read articles in the Guardian asking if your money is safe in the Co-op bank I wonder whether the SRA is as concerned about this as they are about the 150 other large firms on the at risk list. Just because you are big doesn’t mean you are secure, as we know.
These are tough times and there is no end in sight. But it strikes me that we will regret it as a country if we allow ourselves to be persuaded that big is best. Expansion at the rate planned is unsustainable, like the property market in Spain.
Just think for a moment, if the Co-op succeeds in becoming the largest provider of legal services and then fails to actually make any money at it, where will that leave all its customers? When we’ve all become florists and children’s entertainers, where will they turn to then?
If we want a competitive legal service in this country we have to resist. We have to use our local law firms. And we (the law firms) need to respond – with haste.
Look at what our assets are. We understand the law. We know how to advise. We are already in locations all over the country. We already have our training and our expertise.
Now look at where we are going wrong.
The profession is seen as out of date and inefficient. That needs to be sorted out and for heaven’s sake that isn’t that hard. There is abundant technology at low cost which can be adapted to legal services. Let’s get together and start using it.
We are seen as unapproachable. I can see why as well. But I guarantee that if you bumped into 90% of solicitors at the gym or at your pub quiz you wouldn’t feel like that. So how do we normalise ourselves? Buy a few goldfish? Put some smiley pictures on your walls (of your children even)? Practice smiling in the mirror?
We’re expensive. Hmm. This is an age old problem and it’s time we got to grips with it. Becoming more efficient will help a lot. Reducing overheads, working together not against each other. It will all help.
I don’t want to be driven out of my profession by the Co-op on a march to monopolise legal services. I predict that the growth of the co-op is too fast and that it would do better to expand with the same dignity its slogan suggests you can divorce.
But in the meantime I am not going to sit around and wait for the inevitable. There are 10,000 law firms in this country employing hundreds of thousands of people.
I want the public to trust us again and like us and do business with us. I don’t want to pause apologetically before I say I am a solicitor and I don’t want to tell young people there is no future in law and they should study something else.
Failure is not an option (or should I start practising some card tricks quick?)
In fact this was the second time. I also made this decision several years ago and then against my better judgement thought I could give it another go on the basis that everyone now had to give mediation a try and the court service would require parents to attend a SPIP anyway – so I was only facilitating that process.
It will be different this time I thought. How wrong I turned out to be.
But the purpose of this article is not to moan about the current court system. It does what it can in very difficult circumstances I suppose. Thank God it isn’t happening to me and my children is all I can say.
The purpose of this article is really just to promote the vast amount of free good quality resources there are out there for parents who are separating, to help them deal with the issues which arise when making arrangements for their children – before those issues spiral out of control.
Take a look at the Resolution website (Solicitors Family Law Association but don’t be put off by that. There are leaflets and resources on there aimed at parents not just lawyers.)
CAFCASS (better known for its involvement at court stage but again don’t let that put you off) also produce leaflets for parents to help them at this difficult stage in their and their children’s lives:
This is a quote from the CAFCASS leaflet “Ten tips for parents about Children and Separation”
“Research shows that engaging in court can do
further and long term damage to your relationship with the
child’s other parent. Take good legal advice, but try to
minimize the need for legal action.”
I could not agree more. Read the rest of the leaflet here http://www.cafcass.gov.uk/media/2903/Ten%20questions%20final%20draft%203rd%20June%20reduced.pdf
I give my clients copies of these leaflets. I am also putting the links to them on my website and to other information and resources whenever I find it appropriate. Court is not the place to deal with the overwhelming majority of disputes over children and it is heartbreaking to see the statistics for how many families end up in that situation year after year. Roughly 120,000 applications for residence and contact per year pass through our court service and this has to change – for the future of our society as much as for the welfare of those individuals and of course for their children.
Bringing up children together isn’t easy in a happy marriage let alone when couples separate. People need help to find common ground and that starts with focusing on the point of separation (or preferably well before it) not once it has all gone horribly wrong and accusations are flying back and forth.
We need wholesale change to the perception of how each parent fits into the life of a child of separated parents. Let’s forget the arguments about what the law says now about “contact ” (horrible word) and “residence” (what’s wrong with “live”?) after the point of separation and how it will or won’t benefit anyone if the proposed Children and Families Bill is enacted as it is. Will it make things better or worse? How on earth could it ever get any worse?
Let’s start looking at how we get information to parents before they separate, perhaps even before they marry and have children, about the responsibility of parenthood, about how to cope with difficult situations so that fewer people separate in the first place. Let’s look at where to make information available for parents and future parents, in schools, in doctors surgeries, through the media.
Let’s take steps to have it well engrained into us from teenage years that when you have a child, you have a responsibility to promote his or her emotional, physical and psychological wellbeing.
When I had my first child in 1991 I went to a clinic every day at first and then every so many days or weeks after that for the first few months. When I had my last children in 2007 (I have a lot of children!) I saw no one from the health service after the first few days, despite my twins being born premature and quite poorly.
I was not a high risk mother and I had plenty of experience with a new baby (as I say I have a lot of children!). But I was surprised as how little input there was from the health service 10 years on from my most recent addition.
Maybe this is not everyone’s experience. I hope not because if so this is an opportunity missed for society. New parents are vulnerable. It is the toughest time for many relationships, no sleep, no energy, no time for yourselves any more as a couple.
This is when things start to go wrong for a lot of couples sadly and yet there could be help available through normal ante-natal and post-natal clinics, preparing parents for this and offering help with strategies for how to share the care and the responsibilities.
It won’t work across the board of course and there will always be relationships which end for many reasons, but if parents have had the right messages given to them all through the journey into parenthood we stand a much better chance of helping them avoid hostility after separation.
In the meantime, please help promote the Resolution and CAFCASS and any other free resources as much as you can. Better late than never.
Author: Nicola Williams Solicitor Mediator