Woolley & Co E-Zine August 2005

Tips and ideas for keeping your business on the right side of the law

Welcome to our August ezine. This month commercial dispute specialist Gary Cousins comments on the growth in the use of mediation in business disputes and there’s advice on two new Companies House tools you can use to protect your business from ID theft.

We welcome your feedback - if there is any particular legal issue you'd like to see covered send the details through to marketing@business-lawfirm.co.uk or if you have a question for one of our lawyers you can Ask A Lawyer on our website.

Andrew Woolley
Andrew Woolley, Senior Partner, Woolley & Co

Companies House Clamp Down on Corporate ID Theft

In the wake of anti-terrorism and money laundering initiatives and in response to the growth of cyber crime Companies House is attempting to help company directors bolster their protective armoury.

Two initiatives should be of interest to any company that wishes to protect itself against company hijacking whereby control is wrested away from the rightful directors to third parties illegally.

If you register for Companies House Direct you can, by using the Monitor Service, receive updates on when key company information has been changed and thus can receive news of legal and illegal changes to the existing information deposited. The system is flexible and inexpensive putting you in control of monitoring your official company records.

A more proactive approach is found by the new Anti-Hijacking Service.

This service has been introduced to prevent fraudsters from changing details of the company’s directors and registered office and from then using the company to order goods or services on credit, which they sell, but never pay for with the company left to sort out the aftermath, including correcting its public record.

The limits of Companies House’s powers are made clear as it admits that as a department of the DTI it cannot prevent hijacking. It does not have the power to investigate the contents and accuracy of forms sent to them for filing-which often occurs when one set of disgruntled employees or trustees tries to “sack” the board-illegally.

Corporate ID theft is an extreme form of intellectual property violation. For advice on protecting your intellectual property and your business contact Andrew Woolley on 01789 267377.

Protecting your business with a pre-nuptial agreement

Most of us have heard about ‘pre-nups’ from American movies, but until fairly recently such agreements were not recognised by the English courts.

If you are thinking about getting married, own a business and/or have substantial assets then you might be well advised to think about a pre-nuptial agreement. The law is changing gradually, in favour of such agreements, and you can’t sign one after the ‘big day’.

The courts will normally uphold a pre-nuptial agreement provided that these criteria are met:

There must have been full and frank disclosure of assets by both parties
Both parties must have taken independent legal advice on the contents, nature and effect of the proposed agreement
There must be a ‘cooling off’ period before the actual wedding of at least 21 days, but the longer the better
Any children must be financially protected

Even if all of these criteria are met, the courts still have an absolute discretion to deal with the matrimonial assets if they think the agreement is unfair to the financially weaker party.

Current case-law suggests that the main factor courts are taking into account when making a decision about an agreement is the length of the marriage. The court is much more likely to uphold an agreement where the parties have only been married for three or four years, but much less likely to uphold it after twenty years.

The specialist divorce lawyers at Woolley & Co draft fixed fee pre-nuptial agreements – contact us via our divorce advice website or call us on 01789 267377.

To find out more about these and other legal issues visit the Woolley & Co website at www.business-lawfirm.co.uk. The site also contains articles and back copies of our E-zine – which might be a useful place to start if you have a legal problem you need help with.

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Mediate To Settle Commercial Rows

Regardless of how organised and cautious you are in your business you could at any point face problems with a supplier or customer perhaps refusing to pay or failing to deliver what you have ordered.
Settling these types of disputes through the courts can be a time consuming and expensive affair – but there seems to be another way emerging. More and more companies are turning to mediation rather than, or in addition to, the courts to settle commercial disputes.
Gary Cousins, who heads the dispute resolution team at Woolley & Co, observes that there has been a steady rise in the number of companies using mediation, as they can save time and money while maintaining future working relationships.
Mediation works by bringing together the parties involved with an independent

mediator to broker a compromise. The main advantage is that having negotiated a settlement both parties agree with they come out with something they are both happy with, as opposed to something that the court has imposed.
Mediation is far cheaper and quicker than going through the trial process and has a major advantage in the commercial world where the parties concerned may want to work together again in the future, having resolved their differences.
The courts do of course have their place. In many cases it is beneficial to use the court’s powers to bring out the evidence and then use mediation to resolve the issues rather than the court. There does appear to be a gradual move towards the use of mediation. Some judges are even putting pressure on litigants to go to mediation, although thankfully they can’t make them.
If you are facing problems with a customer or supplier and feel you need professional advice and support contact Gary Cousins on 0121 778 3212.