Your round-up of the stories that you should discuss at interview this week.
- Finance Law
Reported by Megan Kearns
High Court to begin ruling over Lloyds shareholders’ HBOS plc takeover
Five former directors of Lloyds Banking Group are expected to be questioned on the circumstances which led to Lloyds rescuing HBOS during the 2008 financial crisis. Lloyds shareholders have taken Lloyds Banking Group to court claiming that they would have not voted in favour of the HBOS takeover if they had been given a true picture of the company’s finances.
The case, which is said to cost £600m and will likely run into early 2018, names former chairman Sir Victor Blank, former chief executive Eric Daniels, former finance director Tim Tookey, former head of retail Helen Weir, former head of wholesale banking Truett Tate and the bank itself as defendants. The claimants, Lloyds shareholder action group, are arguing that information regarding the Bank of England and Federal Reserve offering help to HBOS was not disclosed when they were asked to vote on the transaction. Thus, “If they’d been given the right information they wouldn’t have voted for it on those terms”.
The action brought against Lloyds consists of around 5,700 private investors and 300 corporate entities. A spokesperson for the shareholder action group commented that “It was a deal so bad that directors should never have recommended it”. Contrastingly, a Lloyds spokesperson said, “The group’s position remains that we do not believe there to be any merit to these claims and we will robustly contest this legal action”.
Read more here.
- Employment Law
Reported by Radhika Morally
Asda’s equal pay case: Further developments
The decision of an employment tribunal last year said that women, who for the most part work at the checkouts or on the shop floor, can compare themselves to higher paid men who work in the warehouses. The latest hearing took place last Wednesday, in Manchester.
The lawyers representing the claimants highlighted that the difference in hourly rate between the predominantly female staffed shop floors and the majority of male employees in distribution centres was up £3. This is despite their roles being of equal value to the company.
A major step was made in October 2016 in the equal pay battle, with the tribunal deciding in favour of the claimants on the preliminary issue of whether jobs in different parts of the business could be compared. The employment tribunal found that ASDA could have made sure that there was equal pay between men and women if they wanted to, but had chosen to do otherwise.
The achievement was described by Lauren Lougheed, a lawyer in the employment team at Leigh Day, as a ‘dramatic victory’ for the workers; successful claims could mean workers recovering more than £100m in back pay, going back to 2002.
However, ASDA expressed that ‘we continue to strongly dispute the claims being made against us. We believe that the demands of the jobs are very different…’.
ASDA has since unsuccessfully appealed the ruling made in the October 2016 hearing, and is now doing so again, hence the two-day hearing.
Linda Wong, a lawyer in the employment team at Leigh Day who is representing the ASDA workers, has said that this case could be a ‘potential game-changer for gender pay disputes.’
She also highlights that ‘there is pervasive gender stereotyping across the retail sector and still a huge amount of ignorance on the matter.’
Arguably, the legislation introduced in April, which makes companies with at least 250 staff a year publish comparative pay rates for male and female employees, was an attempt to alleviate this ignorance. However, with only six months to the deadline, only 1.2% of companies have divulged the necessary information, according to the Chartered Management Institute.
We shall await further information on the most recent hearings.
- Insurance Law
Reported by Sarah Mullane
Calls for fixed fees in response to a surge in fraudulent holiday sickness claims
A surge in holiday sickness claims has prompted a call for fixed fees to be brought in to tackle the issue. The Ministry of Justice is set to impose these fees by early next year as a response to an ‘epidemic’ of false insurance claims brought by British Holidaymakers for illnesses such as food poisoning. According to the travel industry, the surge in claims is suggested to be as high as 500% since 2013.
This summer, Thomas Cook has taken action to crack down on the “out of control” claims by writing to law firms warning them of fraud. Their correspondence has reportedly stopped 3,000 fake claims by asking firms handling them to review their files amid the rise in false or exaggerated claims. As a result of these recent actions, the operator claims that the number of claims this year, as compared to last year, has dropped. Thomas Cook has now made the decision to double the size of its legal team in order to challenge future claims in court. This follows a recent victory in which they successfully defended a bogus claim against a family trying to win £10,000 in damages for fake food poisoning suffered whilst in the Canary Islands.
More incredibly, and in the first case of its kind for sickness fraud, Thomas Cook also launched a private criminal prosecution of a couple who fraudulently claimed almost £20,000 from the operator this year. The couple had claimed they suffered from “severe gastric illness” on two successive trips to Spain, despite having posted on social media that they had gotten home safe after “two weeks of sun, laughter and fun.” The couple have since been given jail sentences of 15 months and 9 months respectively.
However, the government says that even more will need to be done to tackle this issue, as it is a problem “damaging Britain’s reputation overseas and pushing up holiday costs.” This issue is further abetted by the increase in touts operating abroad, who falsely claim that there is a port of money for people to access in these cases. The operation of these claims management companies has allegedly led to a 50-fold increase in the number of cases being brought forward. This increase has kick-started campaigns such as ‘Fight Fake Claims’ by Travel Weekly and ‘Stop Sickness Scams’ by Abta, which aim to get people involved in urging governments to crack down on the fraudulent behaviour.
- Family Law
Reported by Jutha Cheewat
Family in dispute over brain damaged patient’s right to die
Mrs P, following a fall last year, has been in a minimally conscious state. She is dependent on clinically assisted nutrition and hydration.
Her daughters and her partner appealed to the court, pleading that it would be in the patient’s best interests to begin palliative care. However, her sisters disagreed, wanting to continue with the clinically assisted care.
A Court of Protection judge is being asked to decide on the issue. One piece of evidence used in the court was an email written by Mrs P to her daughters three and a half years before her fall.
It stated, “You know I miss Mum every day and still talk to her but it is a comfort that she went quickly and I’m still haunted by how she ended up … Get the pillow ready If I get that way?”
However, her sisters insisted that the patient would want to be given some time to get better. They added that removing the care is a form of “legalised killing”.
The NHS trust was involved and had applied to the court to continue providing clinical treatment.
This case concerns a controversial question, with Joseph O’Brien from the NHS saying: “There is a strong presumption about the preservation of life”. Medical experts have had different opinions in regard to the patient’s improvement and whether her condition would improve enough to have a minimum social engagement and quality of life. The three day hearing continues this week.
Read more here.
- Real Estate Law
Reported by Anna Flaherty
More bad news for would-be home buyers
Official government figures have said that house prices rose by 5% in August. This is further bad news for aspiring house-buyers. Even buy-to-let promoters, who generally approve of high house prices, have said that the current rate of inflation was excluding the younger generation.
The north-west saw a 6.5% rise, with the east of England, east Midlands and south-west seeing a 6.4% increase. John Goodall, from Landbay, pointed out the necessity for the government to stand by its promise to address the housing crisis and to build thousands of new, affordable properties.
Meanwhile, London only saw a 2.6% increase, following a large fall in prices over the year. The main contributing factor to this crawling increase is believed to be Brexit’s impact on the capital, and the fact that there are many more international businesses situated in that area of the UK.
ONS figures are showing massive contrast in house prices in different areas of the country. There is a particular divide between the north and the south. Only 1 in 5 of UK households are able to afford the cost of the average property in the south-east of England. If the government fails to deliver upon its promises, the UK could face an increasing class divide between the north and south of the UK.