The fact is that personal injury lawyers know their market and their clients and they provide a genuine win-win solution for thousands of individuals each year who have suffered an injury through no fault of their own. Despite lingering suspicions from some quarters, and let’s face it, for whatever reason, clients are suspicious of lawyers, the vast majority of injury lawyers now offer a completely free service which, as things currently stand, also means that a claimant client keeps every penny of any damages received. No other area of law offers anything like this to a client, and no wonder the injury law practices are successful.

What also tends to separate the personal injury firms from many other small law firms, is that the injury lawyers understand marketing and that service levels and client perceptions are important. The vast majority of personal injury websites make it very easy and quick to find out if you are able to make a personal injury compensation claim.

There is a lot that other law firms can learn from personal injury lawyers, and like it or not, the model they offer undoubtedly has a place in the market and it isn’t going to go away.

 In essence the value of a business is how much someone is willing to pay for it. Different valuations from valuers are very rarely going to come up with a consistent price, however they will be able to inform you of a ballpark as to which you should aim for.

Most valuers when valuing a business will look at:

•  Past Results – a key indicator of possible future performance.
•  Profit Growth -consistent growth will be particularly attractive for a buyer. A business which has performed erratically will pose more of a gamble for a buyer which they may reflect in their valuation.
• Discounted cash flow analysis techniques
• Net asset valuation
• Return on investment
• An earnings multiple valuation

Although these may be the most common indicators, this is by no means an exhaustive list. The way in which a business is valued may also impact on the way in which a deal is negotiated to structure payments. A buyer may seek to defer part of the agreed price whereas the seller will commonly want most if not all the money paid on completion.

Deal Structure

The structure of a deal will often have key implications especially in relation tax and it is imperative that this is taken into account at an early stage by legal advisors and accountants. It is not ideal to change the structure of a deal at a late stage of the transaction as this can be both expensive and time consuming.

When and how are payments made ?

 Deferred Payments

In any transaction the seller will generally want to receive as much of the full consideration as possible at completion. Conversely, a buyer will normally want to keep as much of the full consideration as possible on the table through deferred payments, which ensure that the seller abides by any warranties given in the transaction.

Earn-out

In the situation where a seller is being kept on by the buyer to help run the business, an earn-out may become the best option for both parties. An earn-out is where the seller receives part payment or an additional amount from the buyer for the performance of the business after completion of the sale. If the company performs better than expected whilst the seller is still in charge after completion they may receive more consideration than previously expected. This is also beneficial to the buyer as the sale will not affect the ongoing business of the company.

Earn-out deals continue to motivate the seller after the completion. The buyer, however, may have to relinquish day to day control to the seller.

One thing which is key in relation to an earn-out is that the formula to be used and timescale in which this is to be achieved has been documented and agreed prior to completion.

 Loan Notes

One way in which a buyer may wish to offer payment is by issuing shares in his own company, or loan notes, which are written promises that the company will pay the consideration owed to the seller by a particular date. These can be attractive to sellers as they offer certain tax advantages.

Where Is The Money Coming From ?

It is crucial that the seller gains an understanding from the buyer as to where the funds to complete the purchase are coming from. The seller should also be satisfied by the buyer as to when the funds will become available.

Venture Capital

One way in which buyers fund certain transactions is to appeal to venture capitalists who in return for advancing monies to fund the transaction will take an equity stake in the target company. When doing so, the venture capitalists will usually aim to exert some control over the management of the Company. A venture capitalist will generally be looking for a 30-40% return on their investment per annum and this will put a lot of pressure on the buyer to deliver. It encourages the buyer to make decisions which will benefit the Company in the short term but not necessarily the long term.

Subscription Agreement

Much like any shareholder, a venture capitalist will require a “Subscription Agreement” to be drawn up which will outline how much they are investing, what control they may have over the Company and any restrictions as to when they can sell their stake.

What is the purpose of Heads of Agreement ?

The Heads of Agreement is a document negotiated between the buyer and the seller and which will set out the main points of the deal. It is drafted at the beginning of the negotiations between the parties and should be marked as “subject to contract”. This document will not be binding save that it may contain clauses which are expressed as binding such as one party paying the others fees if they fail to proceed or for other eventualities. Heads of Agreement create a framework to work with and encourage certain critical points to be thrashed out early, before buyer and seller start incurring even more legal and other costs. It is advisable for the buyer to avoid entering into binding documents until the due diligence has been thoroughly carried out on the other party.

Negotiations

A well drafted Heads of Agreement document will avoid some of the disagreements later on in the negotiation process and will prove invaluable for the professional advisers involved in the deal. Below is a list of some of the matters which may be included:

• The purchase price (or the method by which the price will be calculated)

• Premises – are these freehold or leased?

• Service contracts/consultancy agreements

• The timing and the form of the payment

• Timetable to completion

• Removal of directors’ personal guarantees to the bank

• What is included/excluded from the sale

• Exclusivity

• Employees

• Whether the transaction is to be a sale of shares or assets

• Purchase of personal assets by directors of the selling company

• Earn-out period and how the formula works

• Transfer of pension fund

• Intellectual property rights

• The future involvement of the seller in the business (if any) and restrictions on competing

• Warranties and indemnities

• Sellers protections

Confidentiality

It is imperative to ensure that the proposed sale is kept quiet from competitors, suppliers and customers. A Confidentiality clause should be included in the Heads of Agreement.

Exclusivity

Sometimes an exclusivity period is negotiated where the seller will not be allowed to offer the Company to any other party. This can be key for the buyer as he will not be competing with any other bidders.

The above tips are kindly provided by the commercial law department of Darlingtons solicitors. We recommend you get in touch with them to discuss any business sale or purchase.

]]> http://www.law-services.org.uk/uncategorized/valuing-a-business-on-sale.html/feed 0 http://www.law-services.org.uk/employment-rights/employment-tribunal-claim-tips.html http://www.law-services.org.uk/employment-rights/employment-tribunal-claim-tips.html#comments Fri, 09 Sep 2011 07:52:11 +0000 admin http://www.law-services.org.uk/?p=90 Continue reading →]]> Tips for employees on employment tribunal claims

Evidence: Kept an accurate record of all emails, conversations and minutes of meetings. Produce a time diary of events with as much detail as possible.

Mitigation: If you leave your employment you are under a duty to mitigate your losses. Keep a record of all efforts made to seek new employment including, job applications and interviews.

Witnesses: A case will ultimately turn on the evidence presented to the Tribunal. If witnesses can be obtained to support any part of your case then you should speak to them at an early stage.

Clarity: Be as clear and concise as possible in relation to events. An employment tribunal will make a decision based on the evidence presented to them. Avoid waffle and unnecessary information. The key is to show that you have a clear recollection of events and that your case is supported by the evidence.

Time Limits: Generally speaking you have 3 months from the date of the incident or in the case of dismissal 3 months from the dismissal to lodge a claim with the employment tribunal. Failure to do so may leave you without recourse.

Diligence: Your representative will require as much information from you as possible throughout the claim. They are reliant on your input in relation to the facts. You must be as thorough as possible and provide detailed comments in relation to all of the evidence provided by the other side.

Advice: Seek advice at an early stage. The ET1 form that you will submit for your claim will set the basis of your claim. It needs to include all heads of claim and potential actions. It is important that you have a firm grip on the issues involved from the outset as this will ultimately determine the manner in which your case runs and outcome.

Costs: Consider at an early stage how you will fund your case to hearing. It is likely that you will need legal representation from the outset and a barrister to represent you at the hearing. That will not be cheap. You should check if you have any valid insurance policies covering legal expenses, such as home insurance. Failing which you should consider alternate means to fund your case and ensure that funds are available up until the hearing. It is unlikely that you will obtain legal aid for an employment case.

Introduction

Disciplinary actions are those which are taken by the employer against the employee on occasions where there has been a failure to comply with disciplinary rules within the working environment. To ensure a business remains well-run, it is vital to establish rules and procedures for the employees to abide by, which in turn would maintain their attendance, performance, treatment of other staff, etc. If an employer feels there has been a violation of the set out rules, a disciplinary hearing will be conducted whereby the employee may either be warned or dismissed if they are at fault.

Nonetheless, it is the employer’s duty to have these disciplinary principles set out in writing and furthermore, it is the employer’s utmost responsibility to carry out thorough investigations before a disciplinary hearing whereby the employee needs to have been made aware of the rules and the consequences of breaching them beforehand. Where an employee’s conduct is doubtful, the employer should first instigate an informal disciplinary action whereby a verbal warning may be given to the employee with a probation period to improve. Once this opportunity passes with no development on the employee’s behalf, a formal disciplinary hearing would be in order.

Forms of Misconduct

There are two forms of misconduct that could arise; minor acts of misconduct or gross misconduct, for which disciplinary procedures must be followed. A minor act of misconduct may consist of actions such as but not limited to:

• Bad time-keeping
• Poor attendance
• Damage to employer’s property
• Use of offensive language
• Smoking in non-permitted areas

The employer, in such a case, would reserve the right to serve an oral warning on first instance, followed by a first and final written warning and ultimately, a dismissal.

The second category of gross misconduct consisting of examples of physical assault, fraud, sexual or racial harassment, etc. calls for a more serious disciplinary action of possibly an immediate dismissal without notice or payment.

In both the above cases, it would be advisable for the employer to have prepared a non-exhaustive list of the possible offences to ensure that their employees are fully aware of such areas of misconduct, attentively to avoid any subsequent dispute.

Holding a Formal Disciplinary Hearing

When holding a formal disciplinary hearing, the below needs to be complied with.

1. The reasons for the hearing on the agenda and methods of conducting the hearing will be explained.
2. The nature of the complaint will be stated along with presentation of any evidence. Unfair dismissal of an employee is not legally permitted, therefore when holding a disciplinary hearing, any and all evidence against a particular employee must be presented to them at this stage with the opportunity to allow them to justify themselves against the allegations.
3. Any special circumstances which arise will be recorded.
4. The discussion will be summarized to conclude the hearing along with placing emphasis on areas that would require any further investigation.

In order to ensure there is a fair hearing the employee should be provided with a written notice of the complaint in advance thus giving the employee sufficient time to prepare and present their case on the day of the hearing. An employee is rightfully allowed to be accompanied by an appointed fellow employee or a union representative at the formal hearing. During the process of the hearing, if the employee presents a reasonable defence for their conduct, the hearing will be discontinued with no further action. The hearing would also be adjourned if the employee is found in a distressful state or if further investigations would need to be carried out to present a just case.

Outcomes of a Disciplinary Hearing

The overall outcomes of a disciplinary hearing could be as follows:

• Dropping the mater
• Deliver another written warning – first or final
• Settle to provision of counselling or further training
• Apply a disciplinary penalty of dismissal

The task of being a director of a company is of utmost importance.

Directors have a responsibility to ensure the best deal possible for the shareholders and other stakeholders of the company as well as ensuring that the company complies with all relevant laws and regulations. It is therefore a serious matter if a director is underperforming in their role or if their vision or direction of the company is at odds with the rest of the management structure.

Most companies will have a contingency for the removal of directors enshrined in their Articles of Association, when this is the case the procedure is normally for the board of directors or majority shareholder to serve a written notice to the director in question. For companies which do not have any provisions enshrined in their Articles of Association there is a statutory procedure to be followed in order to remove a director through an ordinary resolution at a general meeting.

The statutory provisions to remove a director are found in sections 168 and 169 of the Companies Act 2005. Similar provisions exist within the 1985 Act which predeceased the 2006 Act.

The first step to remove a director under the statutory provisions is for a shareholder to make the company aware of its intention to propose a resolution. This is done by the shareholder submitted what is called ‘Special Notice’ to the Board of Directors. Once this notice is received by the board of directors they must call a general meeting of the company to consider the proposed resolution, this must not take place earlier than 28 days from the date the company received the special notice from the shareholder.

Notice of the general meeting is to be sent to all the shareholders of the company. At this point the director who is subject to the removal procedure, may make written representations which if practicable have to be distributed by the company to all shareholders prior to the resolution taking place.

It is relatively common for Articles of Associations to provide for weighted voting rights in relation to removal of directors resolutions. This may provide a large investor of the director in question extra votes to be counted in the resolution. This is called a Bushell v Faith clause.

There are other areas of concern for a stakeholder wishing to remove a director such as their employment status within the Company. Although it will not halt or delay any of the procedure in removing the director from their position, a court may find that a director who had a service contract and was removed as a director may have a case for constructive dismissal, thus opening a door for wrongful or unfair dismissal.

Another potential area for concern is if the director who is to be removed is also a shareholder of the Company. Section 994 of the Companies Act 2006 states that a shareholder can petition to Court on the grounds that the affairs of the Company are being managed in a way which is unfairly prejudicial to its members. This particular kind of claim can be extremely relevant if the Company was set up as a quasi-partnership. In a quasi-partnership, the Company was expected to be run as a partnership by the members who set it up and therefore it is reasonable for that member to reasonably believe they would remain involved in the management of the Company. If a Court finds that a Company is a quasi-partnership they can order an array of sanctions such as the director being re-instated to the Company or for the remaining shareholders to purchase the outgoing members shares at market value.

In conclusion, the procedure laid out in the Companies Act 2006, can be an important tool in enabling the removal of a Director who is unfit or uncooperative, however, if the procedure is not followed strictly there are various pitfalls to which Companies and individuals can fall into.

A survey by EFF suggests that the introduction of the “fit note” into employment alw is having little discernible effect or benefit in getting employees back to work more speedily.

The EEF research also suggests that :-

• 46% employees took no sick days in the last year
• There is a decline in sickness absence, with workers off on average 5 days a year in 2010 compared with 5.6 in the years before. The average was 6.8 days in 2007.
• Generous sick pay policies do result in more absence, though not a huge difference. Companies with generous policies tended to see employees take 1 more day off for sickness absence per year
• Back pain is the biggest ailment creating long-term sickness absence.
• Over 40%  of businesses said the fit note had not resulted in workers returning from sickness absence faster, 35% thought the system had made no difference and  24%  said the fit note had helped return people to work quicker
• The EEF warned that many doctors were unclear over how they should deal with the new system, creating more forms for them to  fill out during a typically short consultation
• The suggestion going forward to improve the new system is to create electronic forms  with drop-down options for doctors to suggest tasks an employee might do instead of the tasks causing or contributing to the underlying absence, such as reduced hours or non-manual work.

Legal marketing company contact law has carried out an interesting survey into solicitors attitudes to the opening up of the legal services market in October of this year. We report the findings below, and our own view is that any legal services which are commoditised, such as conveyancing, wills and other documents will involve a threat to solicitors from other service providers. Solicitors are generally very slow to see threats to their own business and are poor at marketing generally. Take for example the exponential growth of claim farmers and other legal brokers, including contact law and others. These businesses have effectively taken a chunk of the legal market by marketing and are selling clients back to lawyers. However, maybe lawyers do have a point in believing that the threat is overstated in the sense that most clients believe that all lawyers earn big money and that, for example, if a solicitor practice charges £750.00 plus VAT for a house purchase, that the profit margin on this is high and little work is involved. Nothing could be further from the truth. So, many lawyers may be thinking that, as with past sorties into the legal market, those that do decide to enter will soon retreat, finding that a commoditised approach is not what the public want and/or does not make money. We shall see who proves to be correct…

Here are some of the findings of the survey :-

• 78% of solicitors in the study said they were confident of survival as a traditional law firm without any financial or marketing connections to non-legal partners
• 65% said they would consider working with a non-legal brand
• 46% consider that alternative business structures, allowed from October 2011 would enable progress through investment or takeover
• 65% said they would be comfortable securing external investment from a non-legal investor
• 61% may be prepared to share their business with a non-legal investor
• 30% had had some discussions with non-legal businesses about investment opportunities and/or collaboration.

Foreword – thanks to Ben Jones of Darlingtons Solicitors for this helpful article. Ben specialises in employment law, including compromise agreements, restrictive covenant and restraint of trade issues, redundancy and employment tribunal claims for both employers and employees.

On an asset acquisition, the parties to the transaction must consider the impact of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (‘TUPE regulations’).

The TUPE  regulations came into force for transfers taking place on or after 6 April 2006 replacing the 1981 regulations of the same name.

At common law the transfer of an undertaking from one employer to another automatically terminates the contracts of employment, which cannot be assigned as they are personal to the employer and employee. There is therefore a dismissal of the employees, and the seller of the undertaking may consequently be liable to the employees for contractual or statutory claims arising from that termination.

In this situation, the reason for the dismissals would generally be redundancy. However, the dismissed employees may have claims for wrongful dismissal (if incorrect notice given) or unfair dismissal by reason of redundancy.

The position of employees is different where there is a ‘relevant transfer’ under the TUPE regulations. If there has been a ‘relevant transfer’, the employee’s contract will automatically transfer with the undertaking and continue as if originally made between the employees and the buyer. The transfer does not terminate the employees’ contracts of employment and does not therefore, operate as a dismissal. The TUPE regulations also give a safeguard for employees that are dismissed, actually or constructively, before or after the transfer, if the dismissal is by reason of the transfer or a reason connected to it.

The TUPE regulations define a ‘relevant transfer’ in regulation 3 as “a transfer of an undertaking, business or part of an undertaking or business situated immediately before the transfer in the United Kingdom to another person where there is a transfer of an economic entity which retains its identity”. The TUPE regulations further define an economic entity as “an organised grouping of resources which has the objective of pursuing an economic activity, whether or not that activity is central or ancillary”.

In ascertaining whether there has been a relevant transfer, it is necessary to determine whether what has been transferred is an economic entity which is still in existence, and this will be apparent from the fact that its operation, with the same economic or similar activities, is being continued or has been taken over by the new employer.

The parties cannot agree to exclude the operation of the TUPE regulations. Whether a transfer is a ‘relevant transfer’ is a matter of fact, therefore, the court of tribunal will look behind the label which the parties put on the transfer and will instead examine the substance of the agreement.

Regulation 7 of the TUPE regulations states that a dismissal is automatically unfair where the dismissal was by reason of the transfer or for a reason connected with the transfer, unless the employer can show that the dismissal was for an economic. Technical or organisational reason, commonly called an ETO reason.

The transfer of an employee will not occur if the employee informs the transferor or the transferee that he objects to becoming employed by the transferee. In this instance the employee will not be regarded as being dismissed by the transferor and will be regarded as having resigned. However, an employee whose contract of employment is or would have been transferred may treat his contract as terminated and still be treated as having been dismissed by the employer, where the relevant transfer involves or would involve a substantial change in working conditions to his material detriment. This preserves the common law right of an employee to resign and claim constructive dismissal for a fundamental breach of contract by the employer.

Neither the general application of the automatic transfer principle, nor the existence of the employee’s right to object is subject to a precondition that employees have knowledge of the fact of a transfer and / or the identity of the transferee. In addition, if the identity of the transferee is not known to the employee, he can object after a transfer, provided he does so promptly.

The transferee inherits those employees employed by the transferor immediately before the transfer on their existing terms and conditions, assuming they do not object. Changes to the employee’s terms and conditions are possible only in limited circumstances and the transferred employee has no right to insist that he be given the benefit of any superior terms enjoyed by the transferee’s existing staff.

The transferee inherits all accrued rights and liabilities connected with the contract of employment of the transferred employee, except for criminal liabilities and some benefits under an occupational pension scheme. The transferee will also inherit all the statutory rights and liabilities which are connected with the individual contract of employment, e.g. claims for unfair dismissal, redundancy and discrimination.

Under the TUPE regulations, any collective agreements made with a trade union by the transferor are deemed to have been made by the transferee. Further, the transferee is deemed to recognise the trade union to the same extent as did the transferor.

The regulations do not have the effect of assigning:

1)         criminal liabilities; or

2)         rights and liabilities relating to provisions of occupational pension schemes which relate to benefits for old age, invalidity or survivors.

Where an employee is dismissed, if the sole or practical reason for the dismissal is either the transfer or a reason connected with it that is not an ETO reason entailing a change in the workforce, the dismissal will automatically be unfair.

It is a question of fact whether a dismissal is for a reason connected with the transfer. Although dismissals which occur shortly before or after the transfer are likely to be found to be connected with it, if not necessarily by reason of it, an employee may have difficulty convincing a tribunal that a dismissal which took place weeks or even months before the transfer was by reason of the transfer or for a reason connected with the transfer. If the dismissal was for an ETO reason then liability for a pre-transfer dismissal will lie with the transferor.

If an ETO reason can be established, the dismissal will be deemed to be either for redundancy or for ‘some other substantial reason’ under the Employment Rights Act 1996. The employer must show an ETO reason entailing a change in the workforce, otherwise the dismissal will be unfair.

During the divorce process, the resolution of  divorce finances is usually one of the most time consuming aspects of the case.  In order to apply to the court for finances to be resolved, it is necessary to apply for a “financial order”.  Prior to the new Family Procedure Rules (“the new rules”) which came into effect on 6 April 2011, this was known as making an application for “ancillary relief”.  The person who makes the application is referred to as “the Applicant”, the other party is referred to as “the Respondent”.  The relevant procedures are summarised below.

Mediation

One consequence of the new rules is that, save in particular circumstances, an applicant for a financial order will be expected to have attended a “mediation information and assessment meeting” with a mediator.  There are specific circumstances set out in the rules where such a meeting is not necessary.  These include particular cases of domestic violence, or where three local mediators are unable to accommodate a meeting within fifteen days.  While it will still be possible for the Applicant to commence proceedings without attending a mediation assessment meeting, a specific reason must be given, the adequacy of which will be considered by the court during the court process.

The process of mediation in divorce and family law cases is described is not the subject of this article.

Starting the Proceedings

An application for a financial order is issued by lodging at court a document called a Form A, and the court fee.  The Form A is a simple “tick box” form, which sets out the types of financial order that the Applicant seeks.

Upon receiving the Form A, the court will fix a time table for the case, to include an initial hearing, “the First Appointment”.  This will take place 3-4 months following the issuing of the Form A.  The court will post a copy of the Form A and accompanying papers to the Respondent.

The mortgagees of any properties and the trustees of any pension schemes against which the Applicant seeks orders must be served with a copy of the Form A.

Documents required by the court

At least five weeks before the First Appointment, both parties must exchange Forms E.  A Form E is a detailed document containing full information about each party’s financial circumstances. Various documents need to be attached to the Form E, such as one year’s bank statements of all bank accounts held.

At least two weeks prior to the First Appointment, both parties must file at court and send to the other party the following documents:

(A)   A statement summarising the issues in the case.

(B)   A document indicating whether or not that party considers it suitable for the First Appointment to be utilised as a Financial Dispute Resolution hearing (which is described below).

(C)   A chronology setting out relevant dates in relation to the case.

(D)  A questionnaire seeking any further information or documentation required from the other party.

The First Appointment

At the First Appointment, the court will consider what further steps are needed for the preparation of the case.  For example, deadlines will be set for each party to reply to the other party’s questionnaire, and orders for the valuation of properties may be made. The court will also fix a date for the next hearing, the Financial Dispute Resolution hearing (FDR), which usually takes place between 2-4 months after the First Appointment.  The First Appointment is a procedural hearing only, so the court will not make any substantive financial orders unless the parties agree.

The FDR

The purpose of an FDR is to facilitate negotiations. The parties must attend court at least one hour before the hearing is due to start, to allow negotiations to commence.  Each party and their lawyers will be in separate waiting rooms.  The party’s legal representatives will then negotiate in another room, and then report back to their respective clients and obtain further instructions to allow the negotiations to continue.

At the FDR hearing itself, the lawyers will each make a short presentation to the court in support of their case.  The Judge will then give their own view as to the appropriate outcome, in the hope that this will encourage the parties to reach agreement.

If an agreement is reached, a final financial order will be made.  If not, the case will be listed for final hearing.  The FDR Judge will have no further involvement in the case.

Most cases settle at or shortly after the FDR stage.

Using the First Appointment as an FDR

In a minority of cases, the First Appointment is also used as an FDR hearing.  In appropriate cases this saves time and cost.  This is usually only possible in relatively simple cases where both parties have agreed to reply to each other Questionnaires before the First Appointment.

Duration of the Process

The time from the issuing of Form A until the Final Hearing is usually between 9-12 months.  However, this can vary depending upon how busy the courts are and how complex the case is.

The parties are free to negotiate a settlement at any stage of the process with a view to bringing the proceedings to an end.

The legal ombudsman has flagged up that when non-lawyer entrants are allowed into the legal services market in October 2011, consumers should be careful to check who they are dealing with, what qualifications and experience the seller has and what redress will be available if important legal matters are dealt with incorrectly.

Of complaints received by the Legal Ombudsman to date, it appears that many have had to be rejected because the Ombudsman does not have jurisdiction where consumers have unknowingly bought services from people who are not qualified solicitors.

A number of legal services, including conveyancing, wills, employment tribunal claims and divorce, are already offered by non-lawyers. The attraction is often that the price is cheaper, but cheap can cost dear, as a client has no redress in terms of complaining, no security on monies paid and non-solicitors may well not have adequate or any professional indemnity insurance.

As things stand, the Chief Legal Ombudsman, Adam Sampson, believes that confusion for consumers will probably increase when market entrants such as banks and supermarkets start offering legal services later this year.

Since it started, 6 months ago the legal ombudsman has received in the region of 40,000 phone calls, letters and emails, but has only dealt with around 4,000 complaints.