Issue 2

Making them payGetting the best deal out of business bankingCreating a tax advantage for your businessCan you point me towards the exit?Light at the end of the tunnel

a lupton fawcett periodical

Finding thebalance with

mediationEveryone wins when nobody

can afford to lose

Contents3. News in brief Product screening and Bribery Act updates

4. Making molehills out of mountains Has your business prepared for the worst?

5. New faces, solid foundations and fresh approaches An interview with Lupton Fawcett’s Managing Director

6. Finding the balance with mediation Everyone wins when nobody can afford to lose

8. Making them pay Controlling your finances at a time when ‘cash is king’

9. Your Will. Your Way The numerous benefits of making a Will

10. Creating a tax advantage for your business Underused tax advantages explained

11. Can you point me towards the exit? Discussing the future of corporate finance

12. Getting the best deal out of business banking Practical advice for business borrowers

13. Light at the end of the tunnel Is anyone threatening your right to natural light?

14. Once tasted loved forever An interview with Seabrook’s Chief Executive and Chairman, Ken Brook-Chrispin

Welcome to the second edition of atticus. Building on the positive response to atticus’s first issue, this edition offers sound business advice and guidance: the kind that keeps you on your toes and ahead of the game in these tough financial times. We hope this advice will give you the law of advantage, helping you to strengthen, support and grow your business.

The main aim of atticus is to inform and entertain,

but we also hope to give you an insight into

Lupton Fawcett, and some of our clients and contacts,

along the way. We don’t intend this to be a technical

publication, but we will keep you up-to-date with any

changes and trends in the law that we think are

interesting or relevant.

Finally, we fully expect to evolve and develop

this journal over time to better reflect the kinds

of articles that you would like to read, so please

don’t hesitate to let us know what you

think and to make any suggestions

for future editions.

E-mail your thoughts to

atticus@luptonfawcett.com

Lupton Fawcett atticus is printed on paper that uses only recycled fibre and wood from sustainably farmed sources as well as being carbon balanced.

Scan this code and it will direct you to the atticus web page, where you can download a PDF of the latest and previous editions or read them online.

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Kevin EmsleyChairman

Lupton Fawcett LLP Yorkshire House East Parade Leeds LS1 5BD

Leeds: T: 0113 280 2000 F: 0113 245 6782

Lupton Fawcett LLP Velocity House 3 Solly Street Sheffield S1 4DE

Sheffield: T: 0114 276 6607 F: 0114 276 6608

www.luptonfawcett.com

Get to grips with the new Bribery Act

News in brief

A Lupton Fawcett Periodical. Issue 2 02/03

Product ScreeningCan you spot the winners?

In light of these changes, Lupton Fawcett offers a compliance package which provides essential training on the direct and indirect obligations imposed on UK businesses by the Act. Critical in the new legislative regime is Risk Assessment. Our compliance package, which is split into Compliance Officer Training, Advanced Training, and Basic Training, provides online, step-by-step training for risk assessment and implementation. There is lots of practical guidance, with numerous examples and explanations of the new law. For employees who require only general awareness of the new law and its potential impact on your business, and on them personally, our Basic Training course provides easily absorbed guidance.The training package provides a straightforward and proportionate way to ensure compliance. This is going to be increasingly important as major

organisations, such as the NHS and associated foundation trusts, have made it clear that being able to demonstrate compliance will be essential for all their contractors and agents.

This service avoids the need for expensive face-to-face training and takes the compliance burden off the shoulders of senior managers and directors. For further information, please contact either Tanya Forret on 0113 280 2195 or via e-mail tanya.forret@luptonfawcett.com or Andrew Davidson on 0113 280 2104 or andrew.davidson@luptonfawcett.com

Once a business has generated new product ideas, product screening is used as a method of spotting and dropping poor ideas as early as possible. As the costs of developing a product increase during each successive stage of development, the earlier a weak idea is identified, the better. Businesses need to perfect their product screening process in order to avoid making the following errors, and find the middle ground.

Drop Error: taking too conservative an approach to product screening and abandoning product ideas that, in hindsight, could have been successful if developed.

Go Error: taking an ambitious yet inexperienced approach to product screening by moving poor product ideas into the development and commercialisation stages.

Businesses will either develop their own screening process or commission another business to screen their product ideas for them, in order to determine which products to develop and bring to market.

Consider the following points when screening any new products:• Can you clearly demonstrate your business is the inventor?• Is the product easy to copy or reproduce?• What certifications and qualifications are needed?• Does it raise any environmental issues, e.g. carbon footprint?• Is there potential to license the product or to start a

joint venture?• Does it fit into your business’s portfolio and meet your overall

business plans and objectives?• How easy or hard will the product be for you to develop and

put to market?

Rating each product against these criteria will at least give you some idea of its suitability to your business. As always, Lupton Fawcett are on hand to offer advice, so please contact John Sykes on 0113 280 2113 or john.sykes@luptonfawcett.com if you would like to discuss this further.

The Act creates four new offences of bribery and represents a significant expansion of the current law.

IN CASE OFEMERGENGY

BREAK GLASS

Facing strong competition from Volkswagen

in the small car market in the late 1970s, Ford

took the decision to shorten the development

stage of its new ‘Pinto’ model and rush it

into production some eighteen months

ahead of schedule. Pre-production, it

was discovered the Pinto’s fuel system

ruptured easily, even in low-speed

rear-end crashes. Despite the discovery,

Ford pressed on with production – and several

hundred deaths and serious injuries were

attributed to Pintos bursting into flames

following low-speed, rear-end collisions.

Ford’s action in continuing to produce the vehicle

(and only taking action to modify its design after eight

years of accidents) was explained by a cost-benefit analysis

leaked into the public domain. Ford had calculated that

the costs of recalling the vehicle, halting production and

modifying the design would be $137m whilst insurance

claims arising from vehicle damage, injuries and fatalities

would amount to $49.5m.

Ford’s apparently cynical approach caused outrage

at the time. The company’s reputation was significantly

threatened. However, today Ford’s reputation remains

strong. Why did the Pinto scandal not signal the end of

consumer confidence in Ford?

Ford was quick to highlight

in public statements and court filings

that the number of injuries and

fatalities caused by rear-end collisions

in their model was far lower than had

been reported. The company cited

National Highway and Traffic Safety

Administration (NHTSA) statistics to

support its position and advertised the

fact that comparably-sized competitors’

models had higher fatality rates. In court

on charges of negligent homicide, Ford’s

lawyers argued that the cost-benefit

analysis that had caused the media

frenzy was not admissible in evidence

against the company. This argument was

upheld and Ford was acquitted. It paid

damages in civil actions but, through a

carefully planned and executed legal and

PR strategy, avoided catastrophic injury

to its brand.

Any business can find itself in

a crisis which, if not correctly managed,

will have crippling, but avoidable,

consequences. The Gulf of Mexico oil spill,

for example, has already cost BP a huge

amount of money. It has also cost CEO

Tony Hayward his job. Referring to the

disaster as ‘relatively tiny’ compared to

the ‘very big ocean’ and taking a sailing

holiday during the crisis are decisions

which perhaps he will not recall with fondness as he looks

back over his time in charge of the company. He may well

reflect that, in this digital, 24-hour news age, it is extremely

easy for reputations to be quickly and severely undermined,

with little time for effective damage control.

Headline-making news reporting, rival companies seeking to

take commercial advantage, disgruntled ex-employees and

unhappy customers can all contribute to the way a business

is represented; whether reportage is fair or not, a relatively

small voice can have a disproportionate impact.

Lupton Fawcett was recently instructed by a

company in connection with defamatory remarks that had

been published about it online by a ‘protest organisation’.

The remarks alleged unfair business practices, and that

they were not true. A search revealed the protestors had

made similar claims about other companies as well. Those

other companies were competitors of our client. Our client’s

instinct was to seek an injunction restraining the protestors

from libelling it. However, following rapid research into the

history and previous behaviour of the protest organisation,

we concluded that adopting a positive PR campaign and

holding back from a legal confrontation, and allowing

the client’s competitors to engage in a very public court

application with the protest organisation, would enable our

client to drop off the protestors’ radar screen. The competitor

was consequently subjected to further adverse publicity,

which our client was able to avoid.

Nevertheless, whilst PR is an important tool in

reputation management, sometimes it is necessary to

resort to legal process, and on those occasions we use it

to its full extent to protect our clients. We were recently

instructed to defend a well-known client’s name and

business following serious allegations relating to his

personal life. The allegations were entirely fabricated and

deliberately targeted to damage his business. In that case,

immediate legal action was taken to prevent the spread

of the damaging comments. Within 48 hours a written

apology and unequivocal retraction was signed, costs

and substantial compensation were paid, and the client’s

reputation was protected.

In crisis situations, businesses and individuals

need their advisors to have the ability to analyse scenarios

quickly and to recommend and implement appropriate

news management and damage limitation strategies.

A key skill is to be able to judge whether to adopt a subtle

approach or to take a hard line. Lupton Fawcett’s team of

specialist Dispute Resolution lawyers is one of the most

experienced in the North of England. Combining the skill

and experience of our litigators with the knowledge of PR

professionals who work alongside us, we are able to offer a

formidable reputation management service to our clients.

Lupton Fawcett’s Jonathan Warner-Reed looks at why businesses large and small should give careful consideration to the steps they take to manage their reputations and considers how poor crisis management can have disastrous effects for any business or brand.

Making molehills out of mountains

Jonathan Warner-Reed

A Lupton Fawcett Periodical. Issue 2 04/05

In the first edition of atticus, I told you of our

intention to become our region’s mid-market law

firm of choice and described our plans to serve you

in even more effective ways. These plans included

developing a proposition that’s equal to the current

mid-market offering, and providing commercial

solutions that reflect a real understanding of your

business and objectives, at a price that delivers

real value.

I am delighted that we have made progress with both

the strength and depth of our services since then, supported

by our ability to maintain value. Let me outline some of the

changes we’ve made.

Fresh facesWe have recently been joined by Russell Davidson, previously

principal of Davidson Large LLP. Russell joins us as a Director

and brings substantial expertise in the hotel and wider leisure

industry, in particular in the property and development arena.

Russell spent the early part of his career in The City

with Linklaters & Paines before returning to Yorkshire to serve

a national client base. He now recognises that he can provide

for this client base even more effectively with support from our

much broader range of services. We are delighted to welcome

Russell and his clients and we’re certain that he’ll add huge

value to our existing hotel and leisure industry sector offering.

Home sweet homeThere has been much debate in recent years, amongst both

clients and lawyers, as to the office space that lawyers and

other professionals might be expected to occupy. In light of

this debate we have further strengthened our cost base going

forward, and so our ability to deliver value, by our choice of

office accommodation for our Leeds premises over the

next decade.

On one hand, most commercially-savvy clients do not

wish to feel they are paying for unnecessarily palatial offices

and the all too ubiquitous cavernous marbled reception. On the

other hand, advisors need to attract high quality staff, and part

of this process involves providing them with an inspiring and

attractive working environment.

This balance is a difficult one to strike and,

unfortunately, many advisors got it badly wrong in the years

leading up to the economic collapse of 2008. Unfortunately,

one major firm was so misguided in their choice of office

accommodation that when times became tough they were

unable to service the cost of their building. Ultimately and

very sadly, this led to the firm’s collapse.

Thinking to the futureThe existing lease of our premises at Yorkshire House in Leeds

expires in 2012, and we have seriously considered the many

alternatives available to us through the plethora of new build

and refurbished office space currently available in Leeds.

Despite a number of landlords offering us extremely attractive

alternative spaces, we have made the decision to remain in

Yorkshire House.

Two main factors contributed to this decision.

Firstly, we recognise that moving operations would entail a

large amount of disruption and distraction, at a time when

we want to focus on the needs of our clients. Secondly,

we negotiated an excellent deal with our landlord that

secures significant improvements to the building and gives

us substantial control over our property costs into the

future, thus enabling us to remain cost effective.

With maintaining value being one of our key objectives

for the coming years, we are confident that we have reached

the right decision for our clients and staff alike.

The Law of AdvantageIf we are to succeed in becoming the region’s mid-market law

firm of choice, we understand that we must deliver a real brand

that lives its values. The Lupton Fawcett brand is all about

The Law of Advantage, which in turn is not just about what

we do, but how we do it. It’s about our commercial approach,

our unrivalled service level, our commitment to understanding

our clients and, of course, quality.

We have recently taken two major steps to improve

our quality, the first of which was a full review leading to

the production of a Quality Plan – a road map for delivering

continual improvement. The second step involves the

implementation of this plan, starting with the introduction

of Quality Circles across our business.

As you may be aware, Quality Circles are a

management technique that was first developed in Japan’s car

industry and subsequently widely adopted. This technique

involves asking staff to engage with ways of improving all

aspects of their work, and for those ideas to be tested, captured

and cascaded through other parts of the organisation. This

technique is not about major change, although of course that

may happen, but about small incremental cumulative change

which delivers substantial and continuing improvement.

We have so far been delighted with the response

from our staff, as we work hard to implement their ideas for

enhanced client delivery wherever appropriate and possible.

I hope that this brief overview demonstrates

that we are serious about our objectives

and that we are making progress. Most

importantly, it shows that we operate in a

commercial environment and face the same

issues as any other business – thus increasing

our understanding of the challenges you face

and our ability to respond to them.

Richard Marshall is Lupton Fawcett’s Managing Director. He explains how Lupton Fawcett intends

to serve their clients even more effectively in the coming years.

New faces, solid foundations

and fresh approaches

Richard Marshall

Mediation, where a third party mediator assists two

or more parties to negotiate their own settlement

in order to resolve a dispute, has been around in the

UK for almost 30 years now, growing in popularity

during the last decade. As financial restrictions

on the Court service begin to bite, it’s clear that

mediation is going to take on an even more central

role in the litigation process, as it provides an

opportunity to settle cases before they get to

Court, thus saving Court resources.

The major benefit of mediation is its ability to

produce positive outcomes from negative situations that

become unachievable once a case has gone to Court.

This is because Courts are looking for a clear winner and loser

in each case; they declare who wins and who loses in a dispute

and decide who pays what to whom. Mediation allows both

parties to settle their disputes in a far more creative way,

often involving an element of give and take.

An example of successful mediationAs always, an example helps. We mediated a dispute between

a tenant who ran a residential caravan park and the Local

Authority that leased him the site. There had been a breach of

the lease and the Local Authority wanted to remove the tenant

and regain possession of the site. Sounds straightforward, but

before the mediation both parties had been unable to discuss

the dispute, and so neither party could see the whole picture.

The Local Authority knew that if it repossessed the

caravan park, it had no infrastructure to deal with the caravan

owners who lived on the site for much of the year.

These subtenants had legally enforceable rights to be there,

and this would be a real problem to the Authority

in the future. However, the Authority needed part of

the site back to allow some significant development

works to be carried out in the local town. The tenant

knew they were in trouble with the lease but wanted to

retain their livelihood, as the leased area was actually

two separate sites, only one of which

was profitable.

Through mediation, it became

apparent that the tenant would happily and

voluntarily surrender the non-profitable

site if they could buy the profitable one,

and so avoid onerous terms under a lease.

As it was the non-profitable site that the

Authority needed for its development, it

liked this idea; it got the land it needed

whilst removing the risk of a defaulting

tenant along with all of the issues it wasn’t

equipped to deal with.

So a simple land repossession

case, where one party would have lost

and the other won, turned into a property

transaction worth £1.2m. It was agreed in

principle on the day and put into effect

over the following two weeks.

The many benefits of mediationThe mediation process encourages early

settlement, the benefits of which shouldn’t

be taken lightly. This is particularly handy

in cases where you’re likely to lose or the

prospects of success are poor, as it will

help you save on solicitors’ bills. Going to

mediation and settling early in a case that

you are likely to win (albeit at a discount)

removes any risk early on; no case is risk-

free in litigation and you also save your own

legal costs and so derive a cash flow benefit.

As the figures show that more than 80% of

mediations result in settlement, the sooner

the process is conducted, the greater the

financial benefits.

Most importantly, and usually

ignored or forgotten in the heat of battle,

mediation allows you to save all of the

management time and effort that goes

into running a piece of litigation.

Your efforts are always better spent

doing what you do well, which is running and growing your

business, or getting on with your job and private life; not

fighting over something that happened perhaps two or three

years earlier and in which all of the major decisions are taken

by lawyers, not you. If you choose litigation, remember that

a lawyer can only make a really good job of your case if you

put in the hard work of providing documents, comments on

pleadings and witness statements, being available to take

decisions over the phone at short notice and by feeding him

or her the ammunition necessary to present the case at its

best in Court.

Objective or subjective?As a mediator, and a litigator for over 25 years, I think the

major advantage to mediation is that the mediation day

gives all parties the opportunity to spend time focusing

solely on the dispute and the risks and benefits to them as

individuals or businesses. There is also an opportunity to try

and obtain information both from the other side and from

your own legal team. This allows for a thorough risk analysis

to take place.

What’s more, mediation allows decisions to be made

objectively, removing the heat and drama of the courtroom.

The question must be considered: do you achieve more by

fighting than settling, and at what level should you settle?

This opportunity did not exist before mediation arrived.

Lawyers ran cases and occasionally the client received a

phone call to say that some form of settlement was being

offered or should be offered, and some discussion took place as

to whether it was a good or bad one. The problem was that this

usually happened well into the litigation process, after most

of the costs had been incurred. Also, it didn’t really involve

the client. Mediation changes that completely by making the

process of deciding whether or not to settle one that the client

controls – after detailed advice from their legal team – and

with serious consideration of the commercial and personal

drivers, which are present in all cases.

Finding the balance with mediation

Recent case law stipulates that a failure to mediate can lead to parties not being awarded costs, even if they are later successful at trial. Our Dispute Management expert, Paul Houghton, explains why mediation should be seen as a win-win process for all involved.

PaulHoughton

A Lupton Fawcett Periodical. Issue 2 06/07

Being honest, with yourselfAnother example helps illustrate this. We try to persuade

individuals involved in disputes that mediation offers an

opportunity to discuss the things that really matter to them,

not just whether they are going to win or lose. We were involved

in the litigation of an inheritance dispute that ran all day,

and concentrated mostly on the legal merits and

got quite heated. After it settled, the claimant

was very relieved; when asked why, he said it was

because his son was about to go to university

and he wouldn’t have been able to afford both the

lawyers’ legal fees and his son’s university fees.

That was the single most important thing to the

claimant and if he had expressed it at the outset,

we would have made much quicker progress and

saved still more fees.

The process is also confidential and

without prejudice. You can talk freely to the

mediator, making sure he or she knows what is

confidential and what isn’t. Knowing these things allows the

mediator to tailor the process to allow the real drivers in a

dispute to be dealt with, so that the end result can be achieved

more quickly and effectively.

Finally, mediation really can be a positive process;

but even if the outcome is not completely ideal for both

parties because of the necessity to compromise, it is a shared

experience, and that is what achieves the result.

Mediation has the ability to produce positive, win-win outcomes from negative situations that become unachievable once a case has gone to Court.

The phrase ‘cash is king’ has never been

more relevant than in these times of

austerity. Working capital lock-up – the costs of

labour and/or materials that are paid for by the

supplier, before they receive any payment from

the customer – is one of the greatest challenges

to running a business profitably.

In many businesses, customers expect the work

to be finished before they have to pay for your services.

From the day you start working, you are incurring costs

and therefore, for all intents and purposes, lending

money to the client. It’s the business equivalent of being

introduced to a stranger at a party who immediately asks

you to lend them £1,000 without any ties.

Even when the job has been completed and

the invoice sent for payment, there will often be delays

because everybody is trying to hang on to their cash for

as long as possible. Ensuring that you receive your share

without delay becomes paramount to business success.

Of course for many businesses, from shops,

restaurants and petrol stations to telephone companies,

local authorities and gas and electricity suppliers,

‘working capital lock-up’ simply isn’t an issue.

So what can you learn from these suppliers?

How can you improve your cash flow? Here are

five tips that we hope you will find helpful.

1. Clear instructionThe first and most

important thing is to make

it clearly understood, right at the beginning of the job,

what you are expecting to do for the customer, how much

you expect to be paid, and when you expect to be paid.

So before a pen is lifted or a ‘sod turned’, the customer has

agreed to these three basic things. Make sure the customer

knows what is included in the price and, importantly, what

is excluded.

2. Maintain channels of communicationCommunicating with your customer throughout the period

of work is essential, and so it’s the next most important

thing on my list. You must explain straightaway if there

are any deviations from the original scope of the work to

be done for which you expect to be paid. It’s no good telling

the customer that it didn’t work out as you had expected

and that the invoice has gone up after you’ve finished

the job. If this is a complete surprise, it will be the cause

of potential dispute, which inevitably means delay.

Give them a revised quote for the additional fees as soon as

you possibly can, making them fully aware of the changes.

3. Explore payment routinesThere is no reason why customers should not pay the

whole or part of the costs,

either up front or during the

delivery of the service.

To some extent this

depends on how long the

job is. If it is the sale of a

product, take an initial

deposit before delivery.

If you have to outlay

expenses for the customer,

such as procuring the

services of a third party,

then you should always

ensure that payments

for these services are

received before or

immediately after delivery.

If you are delivering and

commissioning a product

then split the payment

into three phases; a deposit

up front, a payment on delivery and the final payment

when the equipment is fully commissioned. If it’s a service

contract that will last for a period of time, then weekly or

monthly payments will help cash flow. One big advantage

of seeking payment before or during a job is that you

will establish a payment history with the customer.

If they don’t pay on time then putting them on stop is

an extremely effective tool to ensure prompt payment.

This tactic becomes unavailable once the job is

over, however.

4. Prompt invoice = prompt paymentMake sure that you send detailed accounts to the right

address with a clear explanation of what it is for. Any errors

or uncertainties are bound to delay the repayment of your

customer’s “loan”. It’s important to make sure that the final

account is submitted as soon as possible after completion

of the job; if you have done a good job for the customer,

then at that point they will be the happiest they are ever

going to be about paying your account. Particularly in the

case of work for consumers, it is sensible, if you are able, to

have the invoice with you as you finish so you can hand it

over there and then. If you lurk around a little you might

even have the pleasure of going home with the payment.

5. Less is more than noneFinally, when dealing with complaints or queries over the

invoice or the service levels, if there is any genuine merit

to the complaint, and remember that you may not be the

best person to judge this, then it can save a lot of trouble,

delay and hidden management cost to quickly agree

a compromise. However, one tip here is to ensure that

the reciprocation for any discount offered is immediate

payment by the customer. This will help bring things to

an end rather than let any wounds fester.

And that wraps up our five simple tips; some of these

may seem common sense but it always pays to have

a plan to follow. We hope that you find them both

interesting and helpful.

Lupton Fawcett Chairman and Director of Corporate Finance, Kevin Emsley, shares his five golden steps to help you avoid working capital lock-up, or as he likes to call it, “interest free, unsecured loans to strangers”.

Making them pay

From the day you start working, you are incurring costs and lending money to the client. Kevin

Emsley

A Lupton Fawcett Periodical. Issue 2 08/09

We all have those niggling lists of things that we

know we simply must get round to doing, from

contacting old school friends to clearing out the

garage. And then of course, always right at the

bottom of the list, there’s making a Will.

Worryingly, only 30-40% of adults in the UK

have a Will, and that’s not taking into account

Wills that are well past their sell-by-date: those

that don’t reflect changes in circumstances such

as a divorce or remarriage, new grandchildren or

that unexpected inheritance.

To help them get off the bottom of life’s to-do pile,

here’s why they are so important.

I don’t need a Will, do I?There are some standard assumptions about not having a Will.

By far the most common is that if you are married, everything

will automatically go to your surviving spouse. Well, it might,

but then again it might not. You are leaving matters to chance

rather than taking control of the situation and providing for

your loved ones. For unmarried couples the position is even

worse, when a very real possibility is that the surviving partner

will get nothing.

Another common excuse is, “I don’t really have

anything to leave”. Sound familiar? Well, anyone with a home,

even if it’s mortgaged, has a significant asset. Without a Will,

the family’s future security is at risk.

In answer to both of these objections, a Will should

be viewed as a structure around which other planning for the

family can be built. It should seek to ensure that additional

inheritance tax savings and long-term asset protection,

including care issues, can be facilitated. It’s all about families

planning together in a more joined-up way.

Professional advice? Costs too much!Another issue that is often raised about getting a Will is that

it is too expensive. People are either put off altogether by how

much they think it will cost, or are lured into buying something

cheap and cheerful from the internet or a high street store.

Although it may be hard to believe, after a house

purchase and mortgage, a Will is probably the most valuable

document most people put in place in terms of the value of the

assets that it deals with.

If the 1950s nuclear family was still society’s norm,

people without a Will would probably get by under the

statutory rules. Now, however, with co-habitation, second

marriages, greater wealth and property ownership,

the importance of a properly-thought-out Will is much more

relevant. We’re all living longer, which raises issues of people’s

capacity to make decisions. This can become critical and

makes challenges to estates far more likely, which is why a

£10.99 one-dimensional internet Will is unlikely to be robust

or sophisticated enough.

Not having a Will means running the risk

of a family dispute following a death, and being

vulnerable to all the upset and expense that

goes with it. If a dispute does arise, the family

could end up spending very considerable fees

on legal advice that can easily amount to at

least thirty to fifty times more than the cost

of preparing a Will.

A small insurance policy, the Will,

saves cost, time and possible family

break up.

I’m a busy person – I don’t have timeSadly, the increasingly electronic age we live

in doesn’t appear to have provided us with

more leisure time. Many of us find it a constant

struggle to balance the pressures of work,

home and family. It is understandable in this

context that something like a Will, along with

most of our financial affairs, gets kicked into

the long grass. Add to this the fact that

most of us expect, or at least hope, the

need for a Will to be a long way off and finding even a

few moments to sort it out seems impossible.

So what to do?To address the issues of cost and access we came up

with “Your Will. Your Way”, which offers a professional and

robust Will writing at your place of work. On-site meetings are

held with employees over the course of a morning, usually

taking about 20 minutes each. The Wills are produced on-site

and arrangements made for these to be signed and completed

in the afternoon. Each Will costs £100 including VAT, and in

some cases employers recognise this as an opportunity to

provide added-value employee benefit: by covering the

cost themselves.

The service requires us to see between 10-15 people

in any one day and we’ve found that businesses employing

about 40 people should have a sufficient take-up. It is not

just workplaces that can benefit from this service – other

associations of people, such as sports clubs, societies, and

churches can also offer their members valuable “added-value”

by participating in our programme.

Bringing Wills into the workplace has proved an

important way of ensuring people don’t end up in the

two-thirds of the population whose affairs on death are

substantially at risk of dispute.

Duncan Milwain, Head of the Trusts, Wills and Estates Department, discusses the numerous benefits of making a Will.

Your Will Your Way

DuncanMilwain

Claire Boyce, solicitor in our tax department, provides helpful advice on some frequently underused tax advantages that your business could benefit from.

Creating a tax advantage for your business

Entrepreneurs’ Relief – advance planning can lead to significant savingsEntrepreneurs’ Relief allows individuals and some trustees to

claim relief on qualifying gains, made on the disposal of any

of the following:

• All or part of a business

• The assets of a business after it has

stopped trading

• Shares in a company

The relief is available for you as an individual if you are in

business, for example as a sole trader or a partner in a trading

business, or if you hold shares in your personal trading

company. The relief is also available for some trustees,

but not available for companies.

It is very important that you get tax advice for

Entrepreneurs’ Relief at an early stage, as advanced

planning could save you up to £3.6 million.

Such planning should include:

• Properly detailing reasons for holding cash

in a company

• Using alternative structures to ensure the

5% condition is satisfied

• Transferring shareholdings to family members who are

officers or employees of the company at least 12 months

before the sale of a business.

Using EMI options as tax-efficient staff incentivesAn EMI (Enterprise Management Incentive) scheme lets you

grant tax advantaged share options to employees to help

recruit and retain them within your company. EMI options

are designed for smaller companies, combining flexibility

with high tax efficiency, so we recommend that you consider

this option if you think that your company might qualify.

An EMI option scheme could benefit your company

by providing key employees with a financial reward that’s

determined by business success, and may also be taxed at a

much lower rate than a conventional

bonus. Shared ownership can also be a

powerful tool, as your staff can

better understand how well the

company is performing, and key

people can be encouraged to stay

with the company by way of

committing to the scheme.

As long as the relevant

conditions are met, the grant of the

EMI options are generally tax-free and

there will be no income tax or national

insurance contributions for you or

your employee when the option is

exercised. Capital gains tax is payable

on any uplift in value.

The rates of capital gains tax are lower

than income tax rates and employees

will be able to take advantage of their

annual exemption, making the first £10,600 tax-free.

EMI schemes can be structured in a number of

different ways depending on the needs of your company,

and can be either stand-alone schemes or can be put in place

in conjunction with performance conditions or an employee

benefit trust.

Be green and save taxThe Enhanced Capital Allowance (ECA) scheme is an

important part of the Government’s programme to manage

climate change. It provides businesses with enhanced tax

relief in return for investment in equipment that meets

published energy-saving criteria.

You can benefit from enhanced capital allowances

of 100% if your business purchases energy-saving plant,

machinery, and technology, and if it uses low emission cars.

If it is loss-making, these can be surrendered for a tax credit

of 19%, providing your company with a much-needed cash

flow advantage.

Consider applying for EIS status to attract more investment in your company

EIS (Enterprise Investment Scheme) relief was introduced to

encourage individuals to invest in small, higher-risk trading

companies. Those who invest in qualifying companies can

benefit from a range of attractive tax benefits such as:

• 30% relief against income tax payable up to the annual

investment limit of £500,000 (£1 million from April 2012)

• Unlimited deferral of CGT (capital gains tax) liabilities

incurred up to three years prior to and one year after the

date of subscription for shares

• Inheritance tax benefits after being held for two years

• Capital losses can be relieved against income tax or

capital gains

• Capital profits on the sale of EIS shares are free from CGT

if they are held for at least three years

Should you wish to apply for EIS status, we will be able to

fully inform you before you make these important decisions.

Transferring investment properties to an LLP to reduce tax on chargeable gainsIf your company holds an investment property, it may be

possible to release any growth in value into personal hands.

This will allow your company to avoid the deferred/double

tax on chargeable gains, and any capital growth in the

property can then be taxed to an individual’s CGT at 18%

or 28%, rather than an effective rate of up to 53%.

Take advantage of the increased annual investment allowanceThe annual investment allowance for capital purchases is

currently £100,000 per year, but this will reduce drastically

from April 2012 to just £25,000. By bringing any spending on

capital items forward, you can make the most of the current

allowance before it vanishes.

R&D (Research and Development) ReliefFollowing an increase in the rate to 200% of expenditure,

which is set to increase again to 225% from April 2012,

R&D is now a very attractive tax relief for SMEs.

Furthermore, if your company is loss-making, R&D Relief

can be surrendered for a tax credit of 14% giving you a much

needed cash flow advantage. R&D is not just applicable to

pure research-based enterprises and you may be surprised

to learn that your company can claim R&D Relief.

Make use of HMRC’s national insurance ‘holiday’New businesses in certain areas that start up during the

period from 22 June 2010 to 5 September 2013 may qualify

for a deduction of up to £50,000 from the employer NICs that

would normally be due.

Make tax work to your advantage by getting the best possible adviceTax law is complicated and business tax law doubly so.

It is as simple as that. Reliefs and exemptions are built in to

encourage businesses to thrive and grow. Talking to our tax

lawyers will save you and your business money. We can help

you plan future strategies – the timing could make a huge

difference to the benefits you can derive from having expert

tax advice on hand.

ClaireBoyce

A Lupton Fawcett Periodical. Issue 2 10/11

The private equity and M & A markets seem to

be showing signs of life. There is still a tension

between investor confidence and uncertainty, but

there are plenty of opportunities, and opportunity

is what makes the private equity market thrive.

The University of Nottingham Centre for Management

Buy-Out Research recently reported that UK-led private equity

buy-outs in the first half of 2011 amounted to £5.7 billion.

That’s a big number in anyone’s book. And a lot of this activity

has been played out in Yorkshire and Humberside, where

Lupton Fawcett’s corporate team is very active.

We have just been instructed on the creation of a

new private equity fund in Leeds, which is being backed

by a number of prominent business people, each with an

impressive track record. Elsewhere in the corporate team,

we are talking to other venture capitalists who are coming

out of hibernation and raising finance. This gives opportunities

for existing business owners wishing to make an exit.

As always, there is still a gap between vendor

expectations and purchaser valuations. It can be a difficult

tightrope to walk, bringing the competing demands of these

parties together. But if deals are to happen, everyone has to be

happy. When sellers want to sell, they have to be flexible and

imaginative. But so do buyers. And the lawyers

have to be creative, as well as understanding

the law.

VCs and private equity teams are spreading

their wings by acting as bankers as well as

investors. Indeed, they have to, as many banks

seem to have less of an appetite to fulfil their

traditional roles than was previously the case.

How will the VC and private equity markets

develop over the coming months? As ever,

crystal ball gazing is an art rather than a

science. And a very inexact one at that.

The outlook remains uncertain, but that

doesn’t mean parties won’t come to agreements

and deals won’t happen. They will. Indeed,

a good many equity investors will tell you

they make more money during a disruptive,

uncertain period than at any other time.

Whatever the future holds for corporate

finance activity, it’s essential that the lawyers

supporting these transactions know what they

are doing, and can complete deals on time,

within budget and with skill and expertise.

Fortunately, that’s where Lupton Fawcett is

very strong.

Andrew Lindsay, Director in the Corporate Finance Department of Lupton Fawcett and a Director of the Leeds, York & North Yorkshire Chamber of Commerce, discusses the future of corporate finance activity in today’s uncertain market.

Can you point me towards the exit?

AndrewLindsay

Although some bankers are taking advantage of

the current market to maximise income, more

and more banks are returning to active business

lending, giving greater choice to prospective

borrowers and allowing them to start voting

with their feet. Bankers need to remember the

old adage that win-win negotiations make for

long and happy relationships, or suffer the

consequences further down the line.

When negotiating with your business banker,

you need to remember that you’re not negotiating with

the individual, you’re negotiating with the bank and its

pricing policies. Entering the negotiations with a clear

understanding of what is important to the bank, and of the

parameters the individual banker is working to, will help

you get a better deal.

Interest rate marginSME business lending is dictated by your security value

and credit rating as it is viewed by the bank at that

particular moment in time. This is calculated by banks

using constantly shifting parameters that are difficult to

predict, as they vary bank by bank. This system allows

banks to strategically price their lending according to risk.

So, the higher the risk, the higher the pricing.

In this environment, lending rates become a

moving feast for the banks, which is why they are so keen

to renegotiate margins on lending when they come up for

review; not surprisingly, the new rates are usually higher to

coincide with deteriorating finances. This also means that

bankers usually have little power to vary the applicable

rate, so it’s usually wiser to focus your negotiations onto

the reduction of charges and ancillary fees.

Links, fees and chargesWhen banks borrow from the markets to fund their

business lending, they borrow at rates linked to LIBOR

(London Interbank Borrowed Rate). If banks lend these

funds out to clients linked to the Base Rate, they run the

risk of the two becoming disparate, as was the case in

2007 and 2008. Linking your deal to LIBOR rather than

the Base Rate might make it look as though your bank

is attempting to make more money, when it is actually

responsibly managing one of its risks.

Fees are charges for work done, so there is no sense

in a ‘standard’ 1% or 2% fee being levied – is there 10

times as much work for a banker in a £10m deal as there

is for £1m? You should always ask your bank to provide

clear justification for all fees, and ask for a clear picture of

any potential discounts if fees are paid upon acceptance

rather than drawdown. Alternatively, the banker may be

quite happy to divert the up-front fee into a “success” or

redemption fee.

Other fees are usually the easiest ones to negotiate

down, or even away, as they are often not subject to

internal standard bank tariffs. These include security fees,

early redemption penalties, success fees, covenant breach

fees, and management, monitoring and site visit fees.

Finally, any facility letters issued by the bank

must be overviewed by your professional advisor, solicitor

or accountant to ensure that any lending conditions, and

there will be some, are fully understood before the facility

letter is signed.

Get the best deal out of business bankingThese days, getting financial support from your bank can be far more important than the structure or pricing of the deal offered. Begbies Traynor Director, Mark Whitaker, takes a break from coordinating Begbies’ business development activity to provide some insight into the negotiation process.

Top tips for business borrowersEverything is negotiable – any aspect of deal structure

can be linked into pricing

Don’t haggle over 0.25 % of margin – unless the debt

is significant, it’s not worth your time and effort

Offer tangible security – if you believe in your business,

then put your money where your mouth is and benefit from a

reasonable improvement in margin

Check for other charges – and seek reductions in these

Talk about timings of fees – arrange these to suit your

business cash flow

Be reasonable – your banker wants the deal as much

as you do

Most importantly, remember that pricing isn’t

everything – deal structure, covenants and conditions can

be far more important.

A Lupton Fawcett Periodical. Issue 2 12/13

There are few things that will make

two neighbours behave quite as

unreasonably as when one impinges

on the other’s right of receiving natural

light to their property. Developers may

develop away with little thought for

others, whilst those with the benefits

of the right may seek to extort money

without any thought for the benefit of

the amenity proposed.

This issue, which has recently played

out dramatically on our doorstep, has been

thrown into stark relief by the judgement in

‘Toronto Square versus Aspire’, where the judge

ruled that part of a Leeds city centre office

block should be pulled down after another

property owner claimed it blocked out his light.

This underlines the fact that the legal system

can and will make an order to demolish the

offending part of the building, or indeed the

whole building, which blocks an established

right to light. More importantly this will still be

the case even if the complainant could and

possibly should have acted earlier.

The courts have made it clear that the

risk remains with the developer. This risk has

normally been one that the developer has been

willing to take on board, even costing for sums

that they may have to pay to resolve rights of

light issues into their development programme.

The problems associated with reinstating the

building far exceed the burden of simply paying

damages, and indeed are far more costly. This was the threat

in Toronto Square, where the new storeys would have had to

be removed to satisfy the neighbours.

The judgement in this case also made it clear that there

is no pressure on any claimant to make early protest in order

to bring the matter to the attention of the developer or the

courts. This further heightens the likelihood that even if the

developer believes that the claimant’s case is weak, it will settle

the dispute by paying the claimant

a substantial sum to be rid of the

problem. Any alteration of plans,

both physically or on paper, will

inevitably be both expensive and

the cause of delay.

There is planning

legislation guidance included

in BS8206-2 2008 (Lighting for

Buildings – Code of Practice).

However the planning community

do not, in practice, consider their

role to be one of protecting private

property, and as such remain

happy to leave it to the individuals

and the courts to resolve the position. This leaves any

developer at risk. In the past, developers were able to get a clear

view of those who were serious about enforcing their rights by

waiting to see who would have the courage to seek an interim

injunction which, should it prove ineffectual, would expose the

claimant to costs and, potentially, damages. As the law now

does not insist on the claimant to a right to light acting with

any haste, this financial protection is largely nullified – as any

claimant will now find themselves in the happy position of

threatening without actually showing their hand or taking any

irreversible or costly action.

It will be interesting to see what action the relevant

local authority takes in relation to the new proposed

development by Great Portland Estates at New Fetter Lane

in The City. To add interest, the objector to the development

is Michael O’Leary, better known as Chief Executive of

Ryanair. There is some thought that, in this case, the relevant

planning authority may use its powers under the Town &

Country Planning Act to establish to developers that there is

still a desire to have new development in the City of London –

where space is at a premium and consequently rights of light

are an ongoing issue. It seems clear with the ‘Toronto Square

versus Aspire’ case that the balance of power has swung in the

direction of the offended party who holds the right.

The lesson here is that if you are a developer,

you should consult with your legal advisors at

the earliest opportunity to see where right to light

objections are likely to come from, and begin early

negotiation – potentially saving you time, money

and large amounts of stress in the process.

DavidBowden

Light at the end of the tunnelLupton Fawcett’s Director of Commercial Property, David Bowden, discusses recent developments brought about by court rulings around infringements on the right of natural light, and their implications for both developers and businesses looking to expand.

The legal system can and will make an order to demolish the offending part of the building, or indeed the whole building, which blocks an established right to light.

You’ve been working with Lupton Fawcett for almost four years now. What was the original problem or challenge that you engaged them with and what business areas do they support you in today?Before we started working with Lupton Fawcett, our incumbent

legal advisors had not treated Seabrook very well, and

consequently we were seeking

new advice. We were aware

that Lupton Fawcett had

acquired Fox Hayes and

of the firm’s strong reputation

for providing sound,

professional legal guidance.

Fortuitously I had a personal

contact there, Kevin Emsley,

who put me in touch with an

expert team to provide us with

legal assistance.

Initially we were looking

for advice on patents, so we

were working with John

Sykes, a Director at Lupton

Fawcett and a specialist in

Intellectual Property and

Competition Law.

John and his team

were extremely helpful,

their advice was second to

none, and they fixed us up

with a local firm of patent

agents who were able to support us with everything we needed.

Because our initial engagement with Lupton Fawcett

was such a positive experience, when we had some HR issues

a few months later we turned to them for assistance. In this

incidence we were assigned to Louise Connacher and the firm’s

team of Employment Law specialists who provided us with

equally sound advice. As a result, Seabrook have been working

with Lupton Fawcett ever since.

Can you identify what impresses you most about Lupton Fawcett’s approach, and the main benefits of working with them?Although the real, tangible benefit is the solid advice we

receive, perhaps more importantly we never felt that time

was an issue. Sometimes when you visit a legal advisor it

genuinely feels like you’re on a stopwatch – being charged for

every single second and every piece of guidance. With Lupton

Fawcett it doesn’t feel that way. It really helps to know that

there is always someone available at the end of the line to

speak to when you have a query or want some quick advice.

Building on this, I was particularly impressed by their

straight talking, no nonsense, and more importantly, honest

approach. For example, if they think you have a chance of

winning a case then they equip you with all the knowledge

Once tasted loved foreverKen Brook-Chrispin, Chief Executive and Chairman of Seabrook Crisps, discusses how and why he works with Lupton Fawcett.

A Lupton Fawcett Periodical. Issue 2 14/15

For me, to go into any situation forewarned

and forearmed is ‘The Law of Advantage’ –

when you’ve got the law on your side, and you

know exactly where you stand. I believe that

Lupton Fawcett can give you that advantage.

and advice you need, but equally if they don’t think you have

a strong case then they tell you straight. Of course, this has

benefits from both a financial and a timesaving perspective.

What else differentiates Lupton Fawcett from their competitors? There’s an old saying that a company is only as good as the

last piece of advice they’ve given you. I have to say, all the

advice that we’ve received so far from Lupton Fawcett has

consistently been spot on. The main thing that differentiates

the firm is their professional yet personal approach; you

have people to talk to and rely on for the best possible

legal guidance.

Kevin in particular is a great mentor, and in fact

everyone we’ve dealt with at Lupton Fawcett has proved to

be worth his or her weight in gold. If this is the standard

practice across the whole firm then it certainly gives them

the competitive advantage. Based on my personal experience

with the firm, I’d be happy to recommend them for

commercial guidance.

Here in the UK, we tend to seek legal advice when we have business or legal problems, rather than avoiding problems in the first place. What’s your opinion of this approach, and have you benefited from ‘The Law of Advantage’ that Lupton Fawcett claim to put on your side? I’m a big believer that knowledge is power. If you don’t

know your limitations before you enter into competition then

you’re going to fail. I think it’s essential to equip yourself with

the right tools for the job, because if you don’t have the correct

knowledge then you’ve lost before you’ve even started.

What’s more, you lose respect.

It’s also my firm belief that going into any negotiation

cold is committing corporate suicide. For me, to go into any

situation forewarned and forearmed is ‘The Law of Advantage’

– when you’ve got the law on your side, and you know exactly

where you stand. I believe that Lupton Fawcett can give you

that advantage.

Finally, why do you continue to use Lupton Fawcett? In summary, I value their straight talking approach,

their business culture and their sound advice. And until any of

that changes, they are the best people for me!

To some it’s aboutthe companythey attractTo us it’s about thecompany we keep

Business is never as usual at Lupton Fawcett

– it’s the result of our unique approach to

client relationships. We are prepared to think in

an untraditional way, and advise you as though we

were advising our own business. It’s a culture that’s

helped us form solid partnerships with businesses

all over the country. We call it The Law of Advantage.

Leeds: 0113 280 2000

Sheffield: 0114 276 6607

www.luptonfawcett.com