We are delighted that our divorce and family department has been recommended by the Legal 500 for the sixth year in succession.

The reference to us reads as follows:

“Lincoln’s Inn firm Ambrose Appelbe delivers ‘professionalism, empathy, knowledge and care’. Lisa Bolgar Smith leads the team, which includes client favourite James Freemantle, whose ‘knowledge of international maintenance matters is first rate’. The group regularly handles money, adoption and co-habitation cases”.

A Legal 500 recommendation is particularly pleasing because it reflects the views of those who know us – barristers, clients, other solicitors and those who come across us in our work. The recommendation of  James Freemantle (pictured) as a “client favourite” means a lot to us, and the four words ‘professionalism, empathy, knowledge and care’ chosen to describe us are exactly how we would like to be thought of by our clients.

Please contact Lisa Bolgar Smith on 020 7242 7000 if you would like to talk about your own situation and find put how we can help you.

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A prominent article in last Sunday’s Guardian 500 children a year are adopted from UK includes the rather chilling phrase that this time of year is “peak abduction season”. This is because children are taken abroad during the summer holidays and not brought back at the beginning of the new school year.

The problem arises on the divorce or separation of parents of different nationalities. A high proportion of these involve Islamic countries, with fathers as the abducting party. Sharia law gives priority to male parents when considering rights as between a father and a mother, which makes it almost impossible for a mother to get her child back through the courts.

A remedy is more likely to be available if the destination country is a signatory to the Hague Convention. Many of the usual destination countries are not signatories. This is not a problem which is getting easier to solve, not least because marriages between UK nationals and non-UK nationals are increasing.

Lisa Bolgar Smith specialises in cases involving children, and specifically in abduction and trans-jurisdictional cases. Contact her on 020 7242 7000 and she will be pleased to try and help.

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ONS, the Office of National Statistics, collated and publishes a wide range of figures indicative of national trends. One of the more interesting facts that the divorce rate in England and Wales is at its lowest level since 1981. In 2007 this equated to 11.9 divorcing people per 1000 married population, down from 12.2 per thousand in 2006. These and other statistics appear on this ONS page (or “nuggets” as they call them).

Anecdotally, it seems probable that the rate has gone down still further since the recession. This is a brute function of economics – falling house prices diminish the divided up values whilst the shortage of mortgage funds has made it even harder to create two households out of one. It seems likely that many people who might have have divorced are instead gritting their teeth and putting up with their situation.

As a counter to that, and again anecdotally, it is suggested that the strains imposed by recession, and in particular actual or anticipated job losses, are proving too much for marriages which might otherwise have survived.

The ONS statistics are inevitably collected and collated in arrears. It will be some time before we get any figures to show what the true position is.

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The deaths in the last few days of First World War veterans Henry Allingham and Harry Patch are extreme reminders that the uncertainties about retirement include its duration.

Allingham, born in 1896, retired in 1960. Harry Patch, born two years later, retired in 1963. It is pretty amazing, really, that either of them lived much beyond their teens. Allingham was at Great Yarmouth and experienced the first aerial raid on Britain when a Zeppelin bombed it by mistake. He was at the Battle of Jutland in 1916 and, as a founder member of the Royal Flying Corps, was on the Western Front. Patch fought at Passchendaele where mere survival was a feat. Both were already in their 40s by the start of the Second World War. Allingham saw W G Grace play cricket.

Retirement used to have a fairly fixed pattern. Men retired at 65, women at 60. Actuarial tables provided a reasonably good indicator of the interval between retirement and death, with women in general outliving men. Relative financial stability meant that pension predictions largely held good. The range of activities which pensioners engaged in was limited – the popular perception was that they dug their gardens, knitted clothes for their grand-children, played Bingo and sat on deck chairs at the seaside wrapped in blankets, drawing their pensions until, after a decent and reasonably predictable interval, death carried them off. It had the same degree of certainty, so it seemed, as Grace scoring runs or the Titanic reaching New York (which it failed to do in the year that Henry Allingham reached 16).

All these apparent certainties have gone. The years of prosperity saw people retiring in their 50s, confident that their pensions would see them through a retirement which, as medical science increased longevity, could be as long as their working lives had been. Recession has seen the reverse – people compelled to stay at work because their pensions are inadequate. Pension values have been slashed by a combination of market conditions, poor management, bad investment decisions and the deliberate acts of Gordon Brown who, as Chancellor of the Exchequer, promised to protect pensioners (a considerable voting force) whilst simultaneously raiding pension funds by the abolition of Advanced Corporation Tax relief in 1997. From 2010, the state pensionable age for women rises to 65, the same as that for men, in line with EU equality requirements.

Pensioners’ activities have moved well away from the former stereotypes. They go on activity holidays, use computers, work for charity, and take up a range of activities far removed from the garden and knitting. Politicians court the grey vote, businesses devote marketing resources to the silver pound and the Internet is awash with silver surfers. Sexual health clinics have a new generation of customers, with diseases once thought more appropriate to their grand-daughters.

Planning for a retirement of uncertain length, fluctuating income and so many more opportunities, is increasingly difficult, particularly when you factor in the overlapping (and potentially competing) objectives of funding long-term health care, supporting children and grandchildren and minimising the Inheritance Tax which will arise on death. Recent newspaper articles suggest that the government’s plans for pensions flexibility, which took effect on “A Day”, 6 April 2006, are being undermined by the stratagems of pensions providers who penalise those who seek to exercise their right to transfer their funds to other companies. Inheritance Tax became a pawn in the cynical games played by politicians when, in October 2007, the Shadow Chancellor proposed a hike in the IHT ceiling which was immediately countered by Labour with a smaller and (typically) more complex scheme more aimed at attracting headlines than actually benefiting significant numbers of people. The Conservatives have since sent out contradictory messages about their plans for IHT which leave us in doubt as to what, if any, policy they have for it.

Henry Allingham was 39 when Ambrose Appelbe founded the firm which bears his name in 1935. As well as our work in specialist areas such as divorce, tax and property, we have long experience of giving general financial advice, in particular to those in or facing retirement. Felix Appelbe, Helen Freely and Lucie Sleeman have passed the examination set by the national association Solicitors for the Elderly. We advise on wills, Lasting Powers of Attorney and other matters which, although relevant at any age, become more pressing as you get older. Feel free to contact any of the people named above on 020 7242 7000.

There are not many outright exemptions from Inheritance Tax but one arises where the deceased dies as a result of injuries received on active service. It seems unlikely that the severe injuries which Harry Patch received in the Great War played any part in his death over 90 years later. The estates of people wounded in more recent wars, however, may well be able to claim the benefit of the exemption if medical evidence shows that the injuries were the cause of death.

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There is increasing concern about the use of Damages Based Agreements, particularly in Employment Tribunals. Under a typical DBA, claimants are represented at Employment Tribunals by a person (who may or may not be legally qualified) whose reward for conducting the claim is a percentage of the damages or award.

The concern is not so much with the principle as with failures to tell claimants of other ways of conducting their claims and with terms which are unclear about the fee arrangements and other conditions.

The Government proposes to legislate to control DBAs, aiming to introduce regulations as to:

• the provision of clear and transparent information on costs and expenses and on alternative methods of funding
• the maximum percentage of awards which can be taken as fees
• the use of unfair terms and conditions such as penalty and exit terms and settlement clauses.

There is a consultation paper and a list of question for response on the Ministry of Justice web site. The consultation closes on 25 September 2009.

Ambrose Appelbe represents both employers and employers at Employment Tribunals or, preferably, in discussions and mediations which avoid the need to go to a Tribunal at all. Contact Andrew Penfold or Felix Appelbe on 020 7242 7000 to find out how we might help you.

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(even if you aren’t Michael Jackson and £300 million in Debt)

At first glance, Michael Jackson’s three and a half page Will looks too simple to make sure his estate and assets are distributed according to his wishes.  Jackson’s Will serves as a “pourover” Will, in which in Jackson’s individual name will “pour over” into the Michael Jackson Family Trust.  The Will names John Branco, his lawyer, and John McClain, music representative for Interscope records, as co-executors of the estate.  Barry Siegal was the third executor named, but he resigned as co-executor before Jackson died.  The executors have full power and authority of the estate and are to deal with any property outside of the state of California.

Jackson’s mother, Katherine Jackson, was appointed the guardian of Jackson’s sons Michael Joseph Jackson Jr (also known as Prince) and Prince Michael Jackson II (also known as Blanket) and daughter Paris-Michael Katherine Jackson.  Jackson stated in the Will that, unless he provided for in the Will or in the Trust, he intentionally omitted to provide for his heirs and his ex-wife, Deborah Jean Rowe Jackson.  However, the trust still provides for his children.

The Michael Jackson Family Trust seems to have protected Jackson’s wealthy estate.  The Michael Jackson Family Trust is a revocable living trust meant to benefit his mother, children and a few charities.  His mother is to receive 40%, the children are to receive 40% split between the three of them and the rest is to be given to charities.  The trust is set up in a way where Jackson used the trust while living, withdrawing when he would like to, and when he died, the trust would pay off any debts and bills and the rest would be distributed at the trustees’ discretion.  This trust avoids probate costs because, during the trust-maker’s lifetime, the trustee of the trust owns all of the assets, not the trust-maker or beneficiary.  Despite the high costs and efforts to make a revocable trust and to ensure that it is funded, the assets of the trust-maker are further protected.

The Will also includes a few requests including his Death Taxes which are to be paid by the trustees of the Michael Jackson Family Trust, and Death Taxes attributable to property outside the Will are to be charged against the taker of the property. For example, if Jackson owned property with another person as a tenant in common, the property would go to the surviving tenants who would be responsible for the taxes.

Michael Jackson’s situation is unsurprisingly unique.  The star is estimated to have over USD $500 million in debt (about £300 million).  Despite the excessive debt, it is estimated that the continuous growth of record sales, royalty income, and unreleased music income going into the trust will help draw in enough money to wipe out the debt and have more than enough left over for the trustees to distribute.

At Ambrose Appelbe, no matter the size of your estate, we can help you plan and protect it for you and your chosen beneficiaries.  Feel free to contact Felix Appelbe or Helen Freely on 020 7242 7000 or use the Contact Request Form.

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It is not often that one can see a major developments of divorce law happening before one’s eyes. The decision of the Court of Appeal upholding a pre-nuptial agreement in Radmacher (formerly Granatino) v Granatino [2009] EWCA Civ 649; [2009] WLR (D) 227 will no doubt be distinguishable from others on the facts. Their Lordships’ careful analysis of the development of the law will, however, be persuasive in favour of enforcing (or, at least, giving serious weight to) ante-nuptial agreements for a wider range of future cases.

The case involved a marriage between German and French nationals. The wide, who was from a wealthy family, argued that an ante-nuptial agreement prevented the husband from claiming against her fortune. The judge had appeared to consider the pre-nuptial agreement as a factor but had given it insufficient weight, and the resulting exercise of her discretion under s25 of the Matrimonial Causes Act 1973 was wrong as a result.

Perhaps the most interesting aspect of the judgment of Lord Justice Thorpe is the way in which he charts the development of the law through his own judgments over the past decade.

Another aspect of interest is the weight given to the fact that the UK is out of step with other EU jurisdictions, emphasised by the fact that both parties came from places where ante-nuptial agreements are enforceable. Lord Justice Thorpe said (in paragraph 53):

“in future cases broadly in line with the present case on the facts, the judge should give due weight to the marital property regime into which the parties freely entered. This is not to apply foreign law, nor is it to give effect to a contract foreign to English tradition. It is, in my judgment, a legitimate exercise of the very wide discretion that is conferred on the judges to achieve fairness between the parties to the ancillary relief proceedings. “

The judgment can be found on the Family Law Week web site. Another passage worth referring you to concerns two other aspects – the government’s brief interest in reform and the attitude of those who, like us, advise in this area. The passage begins at paragraph 18:

18. The government however, retreated without further explanation from its earlier stated intention and experts were left to contemplate a future without legislative reform.

19. The existence of an ante-nuptial contract in any case required the judge to consider what weight it should be given as one of the circumstances affecting the exercise of the Section 25 discretion. Over the following decade there is a clear trend in the reported cases: greater weight was being given to properly negotiated ante-nuptial contracts not vitiated by any abuse or manifest unfairness. What I said in Crossley v Crossley [2007] EWCA Civ 1491 contrasts well with what I had said in F v F more than a decade earlier. This trend is carefully reviewed by Baron J in paragraphs 111-129 of the judgment below.

20. Less well recorded is the impression that specialist practitioners were, with increasing frequency, instructed by affluent clients to draft ante-nuptial contracts. This trend no doubt influenced the report published by Resolution in 2005 entitled “A More Certain Future – Recognition of Pre-marital Agreements in England and Wales.” In its conclusion this carefully researched report urged that pre-marital agreements should become legally binding and enforceable subject to a single overriding safeguard of significant injustice.

Subsequent paragraphs draw attention to the possibility that uncertainty in this area may be a deterrent for those considering marriage, particularly those who have been divorced before, including those who “wish to regulate the future enjoyment of their assets and perhaps to protect the interests of the children of the earlier marriages upon dissolution of a second marriage”.

Where does this leave those who want to make their own decisions? It is clear that pre-nuptial agreements will no longer be ignored or struck down as a matter of principle. It is equally clear that the court’s discretion under S25 will not be elbowed aside by the parties’ own decisions. In this case, the husband had taken no advice, but he had had ample opportunity to do so, and the court was persuaded that he understood clearly what had been agreed and what the implications were of that agreement.

We have been advising clients for a long time to make pre-nuptial agreements notwithstanding the doubts about their applicability in UK courts. This case removes much of the uncertainty. Like any agreements affecting property, however, the details, both of thw wording and of the circumstances, must be right.

Contact Lisa Bolgar Smith or Felix Appelbe on 020 7242 7000 for advice on this or any other aspect of actual or prospective divorce.

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Lump sum and maintenance payments after divorce take account of a variety of factors, many of them, obviously, related to the means and the needs of the respective parties. The best valuations and predictions made at the time may prove wrong, and the credit-crunch and ensuing recession have increased the number of settlements whose premises have been subverted by events.

The most obvious examples – obvious in the sense that they were predictable once the downturn got under way – arise either through the loss of the employment which supported the payments or through changes in the valuations of property or shares which underlay the division of assets on the divorce. The landmark case of this kind was that of Myerson v Myerson where the husband, wealthy city trader Brian Myerson, failed to persuade the Court of Appeal to reopen his former wife’s divorce settlement after the value of his company’s shares collapsed.

A more recent case, Walkden v Walkden, sees the reverse. Mr and Mrs Walkden made an agreement in January 2007 by which future maintenance payment were converted into a capital sum which reflected, amongst other things, the best estimates of the value of Mr Walkden’s shareholding in a timber company called Triesse. Triesse was valued at the time of the divorce at £800,000. In August 2007, however, Triesse was sold for more than £3.7 million. Mr Walkden was the majority shareholder, and the result of the sale was that 82 per cent of the couple’s assets, as they then appeared, stayed with him.

Mrs Walkden applied to vary the settlement. Mr Walkden argued that his position was the same as that of Brian Myerson. If Myerson had been made to stick to his bargain, Mr Walkden argued, then so should he. The Court of Appeal agreed, Lord Justice Thorpe referring to the “highly speculative value of the shareholding” which, he said “was duly reflected in the compromise agreement”.

These two decisions do not mean that the court will never reopen divorce settlements. They are a product of the times in the sense that such volatility in valuations is a feature both of recession and its hoped-for aftermath of rising values. They are founded on an assumption that a former husband and wife must share the risks in divorce which they shared when married. One of those risks is that the market will utterly subvert what appeared as a certainty. That can affect the timing as well as the substance of any settlement in these uncertain times.

At Ambrose Appelbe we are well used to weighing the commercial and practical as well as the human aspects of divorce, whether it is a so-called “big-money” divorce or the more usual division of assets between people of more typical means. Contact Lisa Bolgar Smith or Felix Appelbe on 020 7242 7000 if you are contemplating divorce or wondering if your existing divorce settlement might be re-opened.

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Ever since a case called Cyprus Airways v Lambrou in 2007, it has been assumed that the grievances about which the employee complained must be the same as the ones those on which he bases a claim for constructive dismissal. The employee must have complied with the requirements of the statutory grievance procedure in respect of the matters on which he relies as entitling him to terminate the contract before the Tribunal has jurisdiction to hear the claim under S32(2) of the Employment Act 2002. The point at issue was whether one can sever one or more items from a list of grievances.

The point has come up again in Parsons v Burworth Estates where  the Tribunal had found that the complaints relied on by the Claimant had not been the subject of a prior grievance. The Cyprus Airways case had been considered by the Tribunal.

The Employment Appeal Tribunal traced the sequence of events and the relationships between the subjects of the employee’s grievances and the complaints actually relied on as founding the claim for constructive dismissal.The EAT found in the employee’s favour, saying:

In our view, Cyprus Airways does not enunciate any general principle about “severance”.  In a case where the claimant relies for the purpose of his constructive dismissal claim on a series of quite discrete breaches, but has failed to lodge a grievance in respect of some of them, we can see no reason in principle why he should not pursue his claim insofar as it is based on the remainder.

The case was remitted to the Employment Tribunal for a substantive hearing on the basis of the whole of the Claimant’s case as pleaded.

If you need help or advice with a potential claim relating to your employment or are an employer facing such a claim, we would be pleased to help. Please get in touch with Andrew Penfold or Felix Appelbe on 020 7242 7000.

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The Employment Act 2008 came into force on 6 April 2009. At the same time, a new ACAS Statutory Code of Practice on Disciplinary and Grievance Procedures came into force. The aim is to encourage earlier dispute resolution, to reduce the emphasis on the mechanics of managing disciplinary issues, grievances and dismissals, and to increase the flexibility with which problems  can addressed.

The new ACAS Code of Practice on disciplinary and grievance procedures which aims to define, or at least describe, what is “fair and reasonable”. Another change is that the former statutory duty to provide conciliation has been replaced by a discretionary power. The aim is to promote real discussion without compromising subsequent proceedings if they ensure despite the involvement of ACAS. ACAS can now be involved right through to judgment.

The new service covers only unfair dismissal and discrimination matters to begin with but will extend further in due course.

The web site of the Department for Business Enterprise & Regulatory Reform (BERR) has a page called Guidance on which legal provisions will apply which explains at some length how to decide whether a claim falls under the old regime or the new one. It is a matter of deciding what the “trigger” event was and when it occurred. ACAS has a page headed New workplace problem-solving process which describes the role given to ACAS under the new regime.

New Labour legislation does not have good form when you get away from the headlines and down to the details. In particular, anything which purports to simplify things tends to have the opposite effect – Home Information Packs and what was billed last year as a “relaxation” of planning requirements have both resulted in more bureaucracy and more expense with no obvious benefits for anyone except those paid to administer the results.

We are more optimistic about the Employment Act 2008 and the extended role for ACAS. It remains to be seen what will result.

If you need advice on employment matters, whether as an employee or employer, we will be pleased to help. We have a good track record of achieving compromsie agreements whether formally through mediation or otherwise. Contact Andrew Penfold or Felix Appelbe on 020 7242 7000 if you would like to talk through a problem or potential problem.

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