A statutory demand is a prescribed form which generally must be personally served. This provides for the recipient, which may be an individual or a company, with 21 days to pay (or compromise) the sum claimed to the satisfaction of the creditor, failing which the creditor will be entitled to issue an insolvency (bankruptcy or winding up) petition.

If the debt is disputed, then either an application needs to be made to the Court to set aside the statutory demand (if served upon an individual) or an injunction application needs to be made to the Court (in the case of a company) to prevent the issue of a petition.

It is not a very high hurdle to overcome in order to successfully resist a statutory demand. However, in view of the importance of the situation, legal advice should be sought as a matter of urgency.

Generally a letter to the creditor or the creditor’s solicitors setting out the legal grounds upon which the debt claimed is disputed is sufficient to secure an agreement that no petition will be presented without giving an agreed period of prior written notice. This will provide an opportunity for further information and evidence to be exchanged between the parties and hopefully which will result in the statutory demand being agreed to be withdrawn.

However if the statutory demand is not withdrawn or no such undertaking is given by the creditor or creditor’s solicitors then an application will need to be made- in the case of an individual to set aside a statutory demand or in the case of a company an injunction will have to be applied for from the Court. The legal test is in essence whether there is an arguable defence/counterclaim to the debt which will reduce the amount claimed to below the insolvency limit of £750.

Responding to statutory demands can be quite difficult. Depending upon the circumstances it is always best to instruct a solicitor with experience in dealing with this type of situation.

Insolvency represents a core area of the work of this firm.

We offer an initial fixed fee interview of half an hour at a cost of £75 plus VAT. We are pleased to undertake this by way of a telephone conference is this should be more convenient.

If you would wish this firm to assist please contact Lawrence Rodkin (partner).

Before any decision is made to terminate the employment of an employee, detailed legal advice should be taken.

The whole area is a minefield and it is very easy to make a mistake and leave yourself vulnerable to an Employment Tribunal Claim.

Not only are such proceedings relatively expensive to defend but they also may result in the award of a serious sum of money being awarded in favour of the dismissed member of staff.

Further, the Employment Tribunal is generally a no costs jurisdiction, and accordingly the legal costs incurred in defending a claim will generally not be recovered, even if the former member of staff is unsuccessful with his/her claim.

In particular it is important that any disciplinary procedures are carried out in a fair and proper way with the offer to the employee of a reasonable internal appeal procedure.

Further it is important to take any grievances raised by an employee seriously. Failure to do so may give rise to fairly expensive constructive unfair dismissal/discrimination claims. A grievance can be raised verbally or informally and in such case the employee should be asked by way of clarification whether they wish to raise a formal grievance to be investigated pursuant to a formal grievance process.

Particular care will need to be taken in relation to employees who are pregnant or who are absent or who have recently returned from maternity leave or who otherwise have childcare responsibilities.

We at Simons Rodkin are able to guide you through the relevant procedures.

We will also discuss with you where appropriate the making of an offer to a member of staff for them to leave upon the basis of a compromise agreement. This can often be the only safe way of resolving such a situation and if undertaken correctly will be materially litigation risk free.

We will also be able to assist you in relation to your employment documentation and we are very willing to enter into an arrangement to provide ad hoc telephone legal advice as and when required via a general file for your business.

You will find that our fees are very reasonable and far less than would be incurred if a Central London firm were to be used. We also have the confidence of the fact that we are a litigation specialist firm with considerable experience in dealing with employment law claims and managing situations which may arise.

Employment represents a core area of the work of this firm.

We offer an initial fixed fee interview of half an hour at a cost of £75 plus VAT. We are pleased to undertake this by way of a telephone conference is this should be more convenient.

If you would wish this firm to assist please contact Lawrence Rodkin (partner).

We would at first note that it is not uncommon for bankruptcy orders to be made against individuals without their knowledge.

Common situations include where the creditor obtains an order for substituted service at an address at which the individual no longer lives – but service at which address becomes legally effective. Further, writing letters to the Court explaining why a person cannot attend a bankruptcy hearing are almost invariably ignored by the Court and bankruptcy orders are often made in such circumstances.

Bankruptcy has an extremely unfortunate consequence of affecting the worldwide assets of a person.

Also the fact that the amount claimed is only modest does not preclude the making of a bankruptcy order (as long as the amount claimed is in excess of the bankruptcy limit currently £750), and the order will affect the whole of the worldwide assets of the individual. Accordingly if the bankruptcy order is only for £1500 council tax and a person’s assets are several million pounds, the bankruptcy will still result in the whole of the individual’s assets vesting initially into the Official Receiver and subsequently into the name of any appointed private Trustee in Bankruptcy.

An application can be made to annul a bankruptcy order. If such order is made, the individual is deemed to never have been bankrupted.

There are two grounds to annul a bankruptcy order.

The first ground is that the bankruptcy order ought not to be made. This is a fairly difficult ground to satisfy.

It is not uncommon for bankruptcy to be pursued following a judgment entered in default in the County Court. The Bankruptcy Judge will not normally go behind such judgment. In such case if it wished to contest the bankruptcy, it will be also necessary to apply to set aside the judgment in the County Court.

The second most common ground to secure a bankruptcy annulment order is upon the basis of payment in full of bankruptcy debts and expenses in full.

If a private trustee has been appointed then this will be considerably increase the amount of the bankruptcy expenses. The fees of the Official Receiver, who is initially appointed, will usually be relatively modest by comparison.

As a person has been adjudicated bankrupt, they are not able to raise money upon their assets (which will following the making of the bankruptcy order be vested in the Official Receiver).

Accordingly if this ground is to be relied upon money will need to be raised from family, third parties or by way of bankruptcy annulment funding. This is a specialist form of funding- in essence in the form of bridging finance.

Once an application has been submitted to the Court for the annulment of the bankruptcy order it is generally the case that the Official Receiver does not take steps for the appointment of a private trustee in bankruptcy and therefore this will give rise to significant saving in bankruptcy expenses.

Bankruptcy represents a core area of the work of this firm.

We offer an initial fixed fee interview of half an hour at a cost of £75 plus VAT. We are pleased to undertake this by way of a telephone conference is this should be more convenient.

If you would wish this firm to assist please contact Lawrence Rodkin (partner).

Compromise agreements are a relatively common way of ending an employment relationship.  Under the terms of the Agreement the employee receives a lump sum payment and the agrees to accept the money in settlement of all claims past, present or future which the employee has or may possess as against the employer, any group company or any officer or staff member.

For an employee, it is important to obtain best advice if such agreement is presented to yourself to sign from your employer.

The role of the legal adviser is not just to witness your signature, but to provide detailed advice to an employee as to their legal position, and indeed whether the employee should accept the monetary offer made by the employer under the terms of the Agreement and to discuss other options available.

The legal adviser will also consider amendments which should be made to the wording of draft agreement. These agreements are usually drafted very favourably towards the employer, and need to be amended to redress the balance, and to protect the employee’s interests.

It is not uncommon for the employer to offer a contribution towards the employee’s legal costs under the terms of the Agreement.

In our experience such costs contribution is negotiable, and the amount will usually be required to be increased. This is primarily because the amount of costs offered usually only provide for the signing off the agreement without any amendment. This is of course deliberate on the part of employers, since they do not wish their draft agreements to be amended.

Some of the terms of draft agreements are very onerous, such as an obligation upon the employee to repay the whole of the compromise money if they breach (however minor) their obligations under the Agreement. Such obligations usually include warranties that the employee has never been in breach of their employment agreement (which would include arriving for work late), or will not disclose the terms or even the existence of the compromise agreement to any third parties.

It can therefore be appreciated why amendments are usually recommended.

Employees should be wary about legal advisers who do not suggest any amendments or any serious amendments to the terms of the draft agreement and who are prepared to rely entirely upon the costs contribution to be paid by the employer.

Sometimes we advise clients not to accept the monetary offer on the table.

It is in fact not uncommon for the amounts offered by employers under compromise agreements to be inadequate.

One notable example comes from a client of ours who was offered £8,000 from an employer under a compromise agreement.  We could not recommend the client to sign off the agreement and following the making of a Tribunal claim, settlement with the Employer was agreed in the sum of £25,000.

It is also not uncommon for employees to have the benefit of legal expense insurance cover in order to bring Tribunal claims. This is a common add-on to home contents insurance policies.  Alternatively, where there is no legal expenses cover, in the case of a reasonably strong claim then we would be prepared in conjunction with a barrister to enter into no-win, no-fee agreement.

However, upon the basis that the employee is willing to accept the money on the table then it is necessary to run through with the employee each of the paragraphs of the compromise agreement making amendments where necessary or instructed to do so.

Compromise agreements are generally extremely onerous and in a perfect world we will normally only recommend the employee to sign after implementing reasonable changes.

Legal costs will depend upon the amount of work involved and whether the employee feels that they can live with the Agreement in its amended state or whether we should push to secure further amendments.

Compromise Agreements represent a core area of the work of this firm.

We offer an initial fixed fee interview of half an hour at a cost of £75 plus VAT.  We are pleased to undertake this by way of a telephone conference is this should be more convenient.

If you would wish this firm to assist please contact Lawrence Rodkin (partner).

Please see our Landlord and Tenant Page by accessing the link below.  

http://www.sr-law.co.uk/landlord-tenant

Please contact us for details.