Are all Fraud Allegations Genuine?

By Vanisha Karia– Personal Injury Solicitor at FPG Solicitors

Fraud. Not a word most Claimant personal injury lawyers like using.

Fraudulent personal injury claims have been said to be on the rise and recently third party insurers are very quick to raise fraud allegations. It has been highlighted by the media, government and major insurance companies that fraudulent road traffic claims are being made more frequently.

Is this because there are more induced accidents at this time?  Or is it because third party insurers are alleging fraud for no real reason in order to prevent genuine Claimants receiving compensation for accidents they have had the misfortune of being involved in?

There have been comments from major insurance companies that we are now living in a ‘compensation culture’ and fraudulent road traffic accident claims are being made far too often which is wasting their resources.

The Law Gazette reported in April 2014 that Aviva settled over 910,000 claims worth £2.65bn. Fraud was identified on less than 1.9% of claims they received.

Motorist’s insurance policy costs have been inflated to cover the cost of fraudulent claims, however if the above is correct and fraud is being identified on a very minute number of claims, where is the justification of insurance companies raising the cost of insurance policies?

As a personal injury solicitor, I frequently come across fraud allegations made by third party insurers. Even if on the face of it the Claimant and the accident circumstances seem genuine, insurers are still pushing for cases to be taken to Court due to fraud. This not only results in wasted costs for the Claimants and Defendants, it also adds to the traumatic experience the Claimant has already suffered.

Insurance companies would like to have the industry believe that they are victims of a ‘compensation culture’ and this is to blame for their wasted costs and resources. Conversely, is their recent stance of raising fraud allegations early on in a claim simply a way to show to the industry that fraudulent claims are on the rise and Claimant’s should be restricted on claims that they make?

The Importance of Seeking Advice following your Banks Determination on IRHP & My Disgruntlement at the Banks Refusal to Pay Customers Incurred Legal Fees .

By Nicola Paton, Senior Solicitor – Regulatory & Litigation Department​

“The FCA has confirmed that the Review process is intended to deliver fair and reasonable redress for customer without the need for assistance from legal advisors, after the customer has been invited in to the Review, and claims management companies after the date of the announcement of the Review.  Therefore such costs incurred after these points in time are generally considered unlikely to be recoverable”.  – Extract from Lloyds Bank ‘Consequential Loss – Guide for Customers’.

I am pleased to say we, at FPG, have achieved great success for those we have represented under the Interest Rate Hedging Product (IRHP) Review Scheme which has been running for over 18 months.  I do however have great concern at the banks continual refusal to meet the legal expenses incurred by their customers through the IRHP review scheme.

Since the commencement of the Review the banks have voiced their concern at the use of lawyers to assist their customers in the Review process.   I have had clients comment that that those employed by the banks have consistently discouraged them from seeking legal assistance.  Quotes such as “The Review process has been set up and approved by the FCA to deliver fair and reasonable redress to customers, where appropriate, without the need for independent advisors to be engaged” or similar text, appears throughout standardised letters issued by the banks to their customers invited on to the IRHP Review.

In the past month alone, I have had three final determination letters that have produced fantastic results for our clients, yet the background to each of these matters has caused me great alarm and immense annoyance. The banks undertook the review of the sale of the each of their customers IRHP.  In each case, which was agreed and approved by the ‘independent reviewer’, the banks offered our client some form of redress.  One client was offered £345.

FPG undertook a review of the sale and subsequently submitted written testimonies for each client which included a review of the ‘sale’ process adopted by the Bank and the Treasury representatives at the time of the IRHP sale.  We further prepared a detailed analysis of the Banks regulatory failings.  Following consideration of our written submissions each of these clients have now received substantially revised offers.    The offer referred to above, where by the Bank (and Independent Reviewer) felt it appropriate to award £345 in Redress, now accept our client should not have been sold the IRHP and they have now been offered over £200,000.

This is not an isolated case. By way of example, an offer of £67,000 was made to our client in December last year. Then, following the consideration of our firm’s written submission, this offer has this week been increased to over £349,000.  Again, this week the same bank has revised an offer of £43,000 to over £500,000 following consideration of our written submissions.

Customers which were sold IRHPs have trusted their Bank and followed their Bank’s guidance not to incur legal costs through the Review process.  I am increasingly being contacted by customers of the banks who have gone through the Review process unrepresented by lawyers.  In my opinion, unless those customers are offered full redress and the cancellation of the existing IRHP; all customers need to get advice on the determination offer issued by their Bank.

The banks need to take heed that the review process in many instances is failing their customers.  Without legal assistance those client matters referred to above may have each lost out on £100,000’s owed by the bank simply because they trusted the review to “deliver fair and reasonable redress to customers” and accepted an offer made by the Bank. 

Intellectual Property Explained: Copyrights, Trademarks and Patents.

By Benjamin Posener– Managing Partner

Whether you’re planning on being the next Zuckerburg or whether you are taking an existing idea and going out on your own, intellectual property and protecting your own business ideas should be a matter which you consider at the earliest stage. The simple fact is that you will start to create ideas as soon as you start your business and others may well look to adapt and adopt your ideas as soon as you put them out in the market place.

Your logo design will form part of the identity that will set your business out from the competition. Whilst it is unlikely that another business will directly copy your logo, another business may choose a similar logo and name and may choose to offer a similar service or create a similar product to yours. How does a business owner deal with such situations and protect his business from “unfair competition”? How does one ensure that their work product is not going to be taken by a bigger competitor or a new start-up?

The law in this regard is set out in the Copyright Designs and Patents Act 1988 and the huge volume of case law which has emanated from the Act. However, Acts of Parliament and case law do not in practice help the small businessman protect their work product and ideas due to the fact that navigation and understanding of the law is difficult.

This article does not offer legal advice and none of the comments in the article should be taken as doing so. However, the article does seek to offer tips to business owners as to what precautions should be taken to protect themselves and their business to the greatest extent possible.

If you create something that is new and unique you should at the earliest opportunity record the fact that you have done so. However, this may only help for material that can attract copyright (such as this article). For example, I can prove that I have copyright in this article as my computer will have a date stamp as to when I first drafted the article and when it was finally completed. I will also be able to create a PDF version of the completed article and save it for my records. Trademarks and Patents (inventions) are a different animal and for full protection you will need to register them.

Good examples of Trademarks are the Coca Cola or Facebook logos. Any business can register its logo (or brand) and an application should be made to the Intellectual Property Office. However, consideration should be given as to whether yours is a logo/brand which requires registration- Is your business, and therefore your logo/brand, one which others may wish to copy?  For example if you have created a new technology, protecting your brand will be of the utmost importance. However, if you are a new solicitors practice, it is highly unlikely that another firm will attempt to pass themselves off as your firm, and therefore registration of the brand would be an unnecessary expense.

Patents are the most difficult areas of intellectual property to deal with given that they seek to protect inventions. An invention could be new computer software or hardware or a new vacuum cleaner (such as Dyson). The creation of a new computer/smart phone application will give rise to a potential patent as will the creation of a more efficient washing machine. Whether or not your invention/idea is capable of being patented is much more difficult to determine. The simple fact is that if you have an idea and have created something new, to ensure you are fully protected you will need to seek legal advice on applying for a patent. Until you have the patent, your product will be at risk.

The majority of small and start-up businesses in this country will not have intellectual property issues such as to cause huge concern to the business owners. However, there are other factors which businesses may wish to consider in relation to intellectual property. For example, if one of my members of staff write an article for the FPG Solicitors blog or to appear in a magazine publication, who owns the copyright? The answer to that question rests on what is in the employment contract. The consideration that a business owner has to have in mind is will my employees be undertaking work for the business which may create intellectual property? If so, business owners must act at the outset to ensure that anything done within the remit an employees work and the businesses work and services must be the work product of the business and therefore owned by the business and not the employee.

Intellectual property is one of many areas that business owners should be conscious of when starting a business and throughout. The simple fact is that the number of potential legal issues which business owners need to be aware of are vast. Whilst prevention is always better than the cure it is a minefield out there and business owners must be aware of all the potential issues and pitfalls.

Terms & Conditions of Business: The Importance to Your Business of Having Such a Document….

By Benjamin Posener– Managing Partner

Standard Terms & Conditions (T&C’s) are the legal basis on which you deal with your customers and clients. It is therefore of the utmost importance that businesses consider drafting such a document prior to the inception. T&C’s will set out what the business does, the services it provides to its customers and also for professional services, what is expected in return from clients and customers. T&C’s will also include clauses which seek to restrict the liability of the business should certain events happen. A business should seek to send out to its customers on each occasion a copy of its T&C’s so that each customer or client is aware of the terms under which the service is being provided and also what the business will or will not be held liable for.

T&C’s will not necessarily mean that other contracts will not be required. For example a printing company may have standard T&C’s which cover the generic work it does for its customers, but if the practice was asked to undertake a specific task, such as printing 10,000 t-shirts for an event, it may want the customer to enter into a specific contract due to the unusual nature of the request. T&C’s are there to create certainty in the generic business which you undertake for customers or clients. They are also created to ensure that you are legally covered in relation to intellectual property and disclaimers of liability which therefore creates legal certainties for the business to allow it to conduct its business in the knowledge that it can either claim for breaches made against it or defend a claim based on the disclaimers set out in the T&C’s.

T&C’s create certainty for the business and also certainty for the customers. Whilst it is probably correct that most customers ignore T&C’s, the fact that customers know that such a document exists ensures that they know that the business is fully protected and that they have to deal with you on your terms. The certainty created for the business is the knowledge that you are fully protected by the document and that for each new transaction you do not have to remember which terms need to be included. Standard T&C’s ensure that all terms are included. It also creates further certainty when you have staff, as you can ensure that all staff are aware about what is contained within the document and further that they make sure that the document is sent or given to all new customers. As a business owner, you will therefore have some comfort that all your staff need to is remember to provide the document to the customer.

Standard T&C’s create legal certainty and also help with compliance with regulatory regimes. Businesses are increasingly concerned with being sued for breach of contract or negligence. T&C’s can never ensure that you do not receive legal claims. However, they can help restrict claims being made against the business and also put the business in a better position to defend any claims made against it. Most businesses now have regulatory regimes that they have to be compliant with. Health & Safety, Data Protection and the Provision of Services Regulations are but a few of these regimes. T&C’s can help ensure that businesses are compliant with these and other regulatory regimes and help to ensure that regulatory fines to not arise.

There are a number of online services which produce T&C’s for different businesses. These tend to be generic and are certainly not tailored to particular businesses or the needs of particular businesses. A decision needs to be taken early on as to whether a bespoke document will be better and more suitable for the business and if so a specialist solicitor should be instructed to ensure that all your needs and requirements are met.

All business owners must remember, whether the T&C’s and generic or bespoke, that the reason for having such a document is that “Prevention is better than the cure”.

Swaps Redress Not What You Expected?

By Benjamin Posener– Managing Partner 

Thousands of businesses have now received their formal offers of redress from the banks in relation to the mis-selling of interest rate hedging agreements. However, a large amount are receiving initial redress offers which are unexpectedly low, in that the bank has decided to replace a product rather than cancel it in full. In some cases no offer of redress has been made at all.

There is no appeals process if you are not happy with the redress offer. However, you are entitled to submit further documentation and representations to the bank so that the initial review decision can be reconsidered by the bank and the independent reviewer. If you did not take the opportunity to use a lawyer to submit your initial claim, such a tactic will most likely be beneficial. However, if your claim was initially submitted by a lawyer, unless there appears to be a glaring error in the decision, one has to question what further information and submissions could be made to affect a change in the bank’s decision making process.

There are cases where glaring errors seem to have been made. An example of this is where the bank have accepted that the client did not understand the swap, that it was not sold in compliance with the regulations but that the bank’s evidence shows that the client wanted to fix, the bank have not offered any redress. The decision was based on the fact that the client wanted to fix. This decision was in my opinion flawed as it did not take into account the fact that as a result of the bank’s breaches of the regulations, that the client did not know that there were other options other than fixing. Such as case in my opinion should be “appealed” and further information should be provided to the bank to allow it the opportunity to alter the decision and make an more appropriate offer.

Following the submission of further information, the bank and the independent reviewer will consider the new information and then release a further redress decision. This decision will be the final decision.

Should one still be unhappy with the final redress decision, the only route to challenging it is via the Financial Ombudsman Service (FOS) or through issuing legal proceedings at court. The FOS will not be available to all businesses and is in fact only available to those businesses which are considered to be small. Historically, the FOS was not very forthcoming in relation to claims surrounding the mis-selling of interest rate hedging products and very few determinations were positive. There is some thought that the FOS will be reluctant to go against the redress determination provided by the bank. However, until claims are submitted and determined we will not know the generality of outcomes.

Litigation remains difficult for those with relatively small claims (under £1m in general damages) due to the cost of litigation. Whilst solicitors may look to accept some cases on a “no win no fee” basis, it is unlikely that this will happen until an amount of paid work has been undertaken so that a full assessment of each case can take place. Clients will need to be aware that if they want to pursue a case against the bank, that they will have to lay out some of their own funds.

A negative redress offer is not the end of the process. However, bank customers must seriously consider what they want to do and how far they are willing to go to get back what they deserve. Customers must also consider, if they had previously gone out on their own, whether now is the time to seek professional assistance.

The Business Show 2014 at London Excel

A successful day at The Business 2014 at London Excel. Thank you to everyone who stopped by our stand and the event organisers for hosting such a great event!

Q: I’m a sole trader but want to take on more staff. How can I do this whilst minimizing legal costs?

By Benjanmin Posener, Managing Partner

A: The cost element of taking on new staff is not just in the salaries that these people will charge to the business but also in extra costs such as HR and Legal. To assist in minimising the cost and the impact of new staff it is important that up-to-date HR procedures are put into place and also an up-to-date Staff Handbook. The HR procedures will ensure that the business remains cost effective in dealing with day-to-day staff issues and also with more serious disciplinary issues. A Staff Handbook will ensure that all current and new members of staff are fully aware of the business policies in relation to staff, what is acceptable and what is not acceptable when they are representing the business inside and outside the premises. Finally, it is important that you have a properly drafted employee contract which can be used across a number of different roles. Such a contract will save costs as it can be amended for all new staff and will mean that you will not require a new contract for each new role.

Q: I’m just starting up a company. How can I make sure I follow all regulatory regimes?

By Benjamin Posener– Managing Partner 

A: There are a number of regulatory regimes that will apply to nearly all businesses, including health & safety and equality & diversity. There are a number of other matters which most businesses will need to take into account in relation to rules governing the treatment of its staff and also data protection. Some businesses will have specific regulatory regimes and rules which will need to be taken account of. To ensure any new business is compliant and following all relevant regulatory regimes a new business owner should take the time to consider which regimes are relevant. As stated above, all businesses will be subject to health & safety and equality & diversity and the majority of businesses will need to have a data protection policy. However, it is important that all possible regulatory regimes are covered, as breaches may at the least cause the business to suffer time costs to come in line with the regulations or at worst cause the business to no longer trade. The best way that a new business can ensure that it is compliant with all relevant regulatory regimes is to employ the services of a professional to prepare, a staff handbook and procedures, an office procedures manual and if necessary a compliance manual. Such manuals can be purchased in template fashion which the business can then tailor to its own needs and requirements or as bespoke manuals following client meetings. To absolutely make sure that a new business is compliant with all relevant regulatory regimes, time and effort must be made to identify which regulatory regimes are relevant to the business and then create policies to make sure that all business owners, managers and employees are aware of their duties and responsibilities to ensure  compliance with all those regimes.

The Bank Led Review of Mis-Sold Interest Rate Swaps – Winners and Losers…

By Benjamin Posener – Managing Partner 

The FCA have recently provided information confirming that approximately £300 million has been paid out to approximately 1000 unsophisticated businesses who were mis-sold interest rate swaps. This means that on average each business has received £300,000 in redress. These figures seem to be positive. However, a large number of businesses are being refused redress and some cases are being reviewed by the banks with no input from the business which was mis-sold, as the banks are keen to meet the timetable set down by the FCA for the completion of the review.

Regardless of the current figures, we must not forget that the bank which mis-sold the product and breached the professional regulations set down by what was then the FSA, are effectively the Judge as to whether they mis-sold the product and the value of the redress. The biggest issue of this is apparent in cases where customers have been reviewed and received a letter from the bank agreeing that the bank breached regulations when selling the product but were offering no redress as it was the bank’s opinion that the customer would have purchased the product if it had been sold in line with the regulatory regime. Further, some customers, particularly with Lloyds have been informed that they were mis-sold a Callable Swap but as this produced a lower interest rate the customer in effect owed the bank money.

The effect of the review is that there are some very happy businesses which have received large amounts of money. However, even these businesses are struggling when it comes to the prickly issue of consequential loss. To date, not one business has received a penny in consequential loss payments and months have gone by since the consequential loss claims were submitted. There are also some very unhappy business owners who have received nothing as a result of being assessed as sophisticated or as a result of being informed that the bank does not consider it should offer any redress. It is clear that there are winners and losers as a result of the FCA Swap Review. However, what is not yet clear is whether there will be more winners or more losers.

There are four categories of potential claimants:

1. Unsophisticated businesses which are yet to make a claim or been contacted by the bank.
2. Unsophisticated businesses which have been refused redress.
3. Unsophisticated businesses which are unhappy or unsure about the offer of redress made by the bank.
4. Sophisticated businesses which have only the option of litigation.

Regardless of which category your business may fall into. The assistance of a solicitor in assessing and producing your claim is in my opinion necessary and will likely produce a better result than representing yourself or your business against “the defendant and judge”. Further, legal representation is of the utmost importance in protecting your litigation position. Cases which are brought under the heads of Contract of Negligence have a 6 year limitation period. A competent solicitor will either be able to negotiate a Standstill Agreement or issue protective proceedings. Businesses must protect themselves now as if they do not and they have no result via the review, they will end up being the biggest losers. We must not forget that the banks have time on their side and will be happy for all cases to lapse in relation to limitation.

The banks have put aside billions of pounds in relation to Swap Redress. However, businesses must understand that the chances of these amounts being paid out to mis-sold customers will reduce as time goes on if businesses do not have legal representation.