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Sarah Burns

Under the Bonnet – What is the Political Declaration?

By | Food for thought

So… what is the Political Declaration?

The declaration is part of the EU withdrawal treaty negotiated by the government – an agreement between the UK and the EU which sets out their understanding of the framework for the future relationship between the two.

What does it say?

It acknowledges that the UK and the EU share the same core values and will remain committed to The European Convention on Human Rights (signed by the UK in 1951 – the convention arose from the horrors and injustices of the Second World War).

Both the UK and the EU are committed to high levels of personal data protection to facilitate data flows between the two.

The parties aim to include in any agreement the UK’s continuing participation in various EU programs for science and innovation, space, overseas development, defence capabilities and so on.

It envisages a UK/EU trading relationship of goods on the basis of a free trade agreement, like the one between Canada and the EU.

Both parties are looking to establish administrative cooperation in regard to customs, VAT, exchange of information to combat fraud, going beyond World Trade Organisation requirements so that we can continue to trade very closely.

Each will also seek to establish a close security cooperation. For example, we are looking to be able to exchange data regarding DNA, fingerprints, vehicle registration, cooperate on exchange of information to tackle crime and money laundering and counter-terrorism and to end the anonymity associated with the use of virtual currencies.

In terms of a future co-operation, the political declaration envisages the possibility of the UK and the EU forming an association agreement. This type of agreement is defined in the European treaties and it provides for the European Union and a non-EU country (which the UK will be after withdrawal) to have “an association involving reciprocal rights and obligations, common action and special procedures.”

At the moment the EU has at least 20 association agreements with its neighbours. For example, there is an association agreement between the EU and Ukraine. The EU sees an association agreement as a privilege for the non-EU member. They were originally created by the EU to prepare non-member countries for accessions. These association agreements typically contain a free trade agreement, access to the single market (with the non-EU country sharing the relevant EU regulations) and opportunities to cooperate in areas of mutual interest.

Insolvency Concerns for Company Directors

By | Criminal, Employment law, Food for thought

This week’s post covers a multitude of issues surrounding Insolvency Concerns for Company Directors – each addressing a new topic of concern to ensure that you’re ‘clued up’ on the risks involved and the responsibilities you need to be mindful of…

Wrongful Trading.

As a Company Director, you have a duty of care to act in the best interest of the Company. If a Director continues to run the company – taking orders and supplies – at a time when they knew (or ought to have known) that there was no reasonable prospect the company could avoid becoming insolvent, after insolvency they may be asked to make a contribution to the company’s assets.

“Director” is widely defined and so it’s worth noting that these rules also apply to a “de facto” Director (one who acts as a Director before appointment) or a “shadow” Director (a person whose instructions the legally appointed Directors are used to following).

It is a defence for a Director accused of wrongful trading to show they took every possible step to minimise the loss to the company’s creditors.

If the Court decides there has been such “wrongful trading” it will measure the increase in the company’s deficit between the time the Director knew (or ought to have known) of the impending insolvency and the time the company went into liquidation. The increase in that deficit is the amount the Director may be asked to contribute.

Fraudulent Trading.

If a company is being wound up and it seems to the insolvency practitioner that the business had continued with the intent to defraud creditors, they can seek a declaration from the Court that the Director who has arranged the fraud make a contribution to the company’s assets.

The difference between fraudulent and wrongful trading is that the Directors have carried on business with the DELIBERATE PURPOSE of deceiving and defrauding creditors.

An example of this would be Directors setting up a company and taking orders and deposits for a product which did not exist.

A Court can order the Director to make whatever contribution the Court thinks is appropriate in the circumstances.

A Director held liable for fraudulent trading is almost bound to be disqualified from acting as a Company Director in the future.

Reviewable Transactions.

This is a common area of Director default coming to light on an insolvency – commercial pressure may cause Directors to treat third parties preferentially, or transact with them at an under value.

“Reviewable transactions” may be generated by:-

– Granting security to a previously unsecured supplier;

– Paying some unsecured creditors while leaving others unpaid;

– Making severance payments to Directors or senior employees;

– Getting the company to re-pay monies guaranteed by a Director;

– Making a gift;

– Entering into a transaction which is not genuinely third party.

In most cases, the insolvency practitioner will make an application to the Court which has a wide discretion and can order the Director to pay sums back to the company.

Investors in the company can also make an application to the Court.

Unlawful Distributions.

A Director who authorises (usually pays themselves) dividends which exceed the company’s distributable profits are probably in breach of their statutory common law duties and are personally liable to repay the company.

It’s not just whether the Director knows: it’s whether they ought to have known, as a reasonably competent and diligent Director, that the company did not have sufficient profits to make the dividend payment.

These things tend to come to light on insolvency.

If a company becomes insolvent the insolvency practitioner will always be looking back to see what dividends were paid and when, and whether that payment was unlawful at the time.

What is the Disability Discrimination Act

Disability Discrimination – Be Aware

By | Employment law, Food for thought

What is Section 15 of the Equality Act 2010?

It’s always important to know where you stand; whether in life or, in a legal situation, with people. We are still regularly finding that clients are being caught out by Section 15 of the Equality Act 2010 aka The Disability Discrimination Act.

Here is what it says (bear with me a minute – this is important and could save you in the long run!):

A treats B unfavourably because of something arising in consequence of B’s disability; and 

A cannot show that the treatment is a proportion of means of achieving a legitimate aim 

In the Equality Human Rights Commission Employment Statutory Code of Practice ( an example given explains how this may be applicable in a working scenario. It reads:

    An employer dismisses a worker because she has had three months’ sick leave. The employer is aware that the worker has multiple sclerosis and most of her sick leave is disability-related. The employer’s decision to dismiss is not because of the worker’s disability itself (so not direct discrimination). However, the worker has been treated unfavourably because of something arising in consequence of her disability (namely, the need to take a period of disability-related sick leave). (Paragraph 5.3, EHRC Code.)

What is Meant by Discrimination ‘Arising from’ Disability

“Arising from…” can easily be missed. The second example given in the code shows this:

    A woman is disciplined for losing her temper at work. However, this behaviour was out of character and is a result of severe pain caused by cancer, of which her employer is aware. The disciplinary action is unfavourable treatment. This treatment is because of something which arises in consequence of the worker’s disability, namely her loss of temper. There is a connection between the ‘something’ (that is, the loss of temper) that led to the treatment and her disability. It will be discrimination arising from disability if the employer cannot objectively justify the decision to discipline the worker. (Paragraph 5.9, EHRC Code.)

What is “Objectively Justified” or a “Proportionate Means of Achieving a Legitimate Aim”?

A legitimate aim is the reason behind your decision. It must be genuine. Proportionate means the action must be appropriate and necessary in the circumstance.

Example of Disability Discrimination in the Workplace

For example – dismissing a lorry driver who becomes blind might be objectively justified, as it is necessary for the safety of the driver as well as others on the road. Therefore, it is a proportionate means of achieving a legitimate aim.

In summary, if you are an employer, be courteous and careful at all times, and remember: disabled employees may also be protected from consequences arising from…


Need advice on disability discrimination? Check out how we can help you with Employment Law.

Directors Duties Company Act 2006

Company Directors – Be Aware of the Companies Act 2006

By | Food for thought

Companies Act 2006 and Cato Solicitors

Here at Cato Solicitors, we are no strangers to working with Company Directors and many we have spoken to believe they are the company and the company is them, considering themselves to be the “owner.” Although commendable, this is not the case in law.

In law, a company is considered a separate legal “person” and can do things as any other “person” does, such as:

  • Enter into agreements
  • Bring court proceedings
  • Own property

The Company Directors Duties – Companies Act 2006

Directors have a “fiduciary” relationship with a company. “Fiduciary” means a special relationship of trust. For example, looking after the savings of an elderly parent, making sure the money is only spent on their best interests.

So a good way of relating to the duties of a Director is to imagine the company you “own” is like a disabled relative whose finances and business you manage because they are unable to do it themselves.

In a broad sense the statutory rules are based on this understanding, and the relevant sections in the Companies Act 2006 say that Directors must:

171: act within their powers
172: promote the success of the company
173: exercise independent judgement
174: exercise reasonable care, skill and diligence
175: avoid conflicts of interest
176: not accept benefits from third parties
177: declare an interest in any proposed transaction or arrangement with the company

So: take great pride in what you do, but be mindful of how you carry it out!


Need assistance with Directors Liability? Here at Cato Solicitors we provide expert Corporate Crime and Criminal Allegations assistance. See how we can help you today.

Private Parking Signs Law

Private Parking & Rogue Car Parking Companies

By | Criminal

Is this the End of Unfair Private Company Parking Fines?

It’s never nice to be caught off guard when it comes to parking, especially when something isn’t as it seems. More and more, people are being ‘caught out’ with parking penalties due to no fault of their own. Private parking companies can be very sneaky with the way they use parking fee signs, often hiding them out of sight or making important information so small, it’s illegible. But, luckily for us, this is all about to change.

In Excel Parking Services Limited v Cutts in Stockport County Court, the Judge agreed with the Defendant that the parking sign used was not displaying its information clearly and correctly. The words ‘pay and display’ could not be seen from his car and therefore, it was fair to assume the car park was free.

The Judge said:

“If I look at the signs, they tell me very little. It is by no means clear, whether from the coloured photographs of the signs, nor, indeed, from the inspection of the signs that took place by me, that this is a pay and display car park”, suggesting that “perhaps the claimant’s real interest lies in a failure to comply, [rather] than actually seeking to bring to a driver’s attention the fact that they are about to enter a pay and display car park.”  

Private Parking Laws are Changing

The situation may be improved because on March 15th, 2019, The Parking (Code of Practice) Act 2019 received Royal Assent, approving a new “Parking Code” that protects drivers from unfair fines and will bring the ‘Wild West’ parking industry into line.

The Code is being introduced to make it more difficult for car parking companies to use less-than-informative signs in even less obvious places. Tactics sometimes include:

  • Hidden signs in spaces drivers cannot see, e.g. placing a sign on the left side of an entrance which a busy motorist is unlikely to see when turning in
  • Making information regarding fees too small to read
  • Not making clear outlines of where the parking rules are enforced

This year it is expected that £6.5 million worth of car parking fines are to be issued to a high amount of unaware and confused drivers. This is a severe rise compared to 10 years ago, when the figure for ‘Penalty Charge Notices’ issued by parking companies was £687,000.

What’s more… the DVLA pulls in £16 million a year by charging a £2.50 per driver ‘detail request’ from these parking companies. This joint scheme is charging an unfair whack from unsuspecting drivers who are none-the-wiser when it comes to unclear signs.

But, hopefully, not for much longer; the new code will enforce that any parking company that breaks it will be knocked off the ‘approved’ list by the government, meaning they can no longer source driver details from the DVLA.

It’s important to remember that these private parking notices have no statutory basis and depend on the common law of contract. As you drive onto their premises, the parking company makes you an offer to park on certain terms and conditions – which you accept by proceeding to park. If these terms and conditions are not clearly incorporated (as in the Excel case above), they cannot be contractually enforced…
Need help disputing a parking ticket? Check out what legal services we provide to help you win against unfair private parking.
Food for thought -prorogation of parliament

Under the Bonnet – What’s all this fuss about the Prorogation of Parliament?

By | Criminal, Food for thought, Travel

The decision of the Supreme Court to suspend the prorogation of Parliament seems to be a trespass by the judges on the constitution. It will have wide-ranging and extensive consequences. I expect it will be corrected when Parliament resumes after the next general election.

Here is why…

The Government won its case in the High Court (Gina Miller & Others v the Prime Minister- link here) on the following basis:

In our constitution, “Parliamentary Sovereignty” means that the Queen in Parliament is sovereign in the sense that it may enact whatever it wishes by way of primary legislation, subject to its own self-imposed restraints.

Miller advanced a new interpretation of “Parliamentary Sovereignty”; she said the principle of Parliamentary Sovereignty must also include the ability to conduct its business unimpeded.

The Courts should intervene if Parliament was impeded.

The High Court disagreed:

‘….alongside the principle of Parliamentary Sovereignty, the separation of powers….. [between]…..the courts, the Executive and Parliament, is also a fundamental principle of our unwritten constitution.

As we have said earlier, the line of separation is set by the courts in the present context by reference to whether the issue is one of “high policy” or “political” or both.

In the circumstances and on the facts of the present case the decision was political for the reasons we have given.

Secondly, the purpose of the power of prorogation is not confined to preparations for the Queen’s Speech. It may be used for a number of different reasons, as, on the evidence, it has been in the present case. Such reasons may, depending upon the precise facts and circumstances, extend to obtaining a political advantage.

Thirdly, again as we have already said, even if the prorogation in the present case must be justified as being to enable preparations for the Queen’s Speech, the decision how much time to spend and what decisions to take for such preparations is not something the court can judge by any measurable standard.’

The Court thus held the Prime Ministers decision to prorogue Parliament was not justiciable – in other words, it was not capable of legal challenge. It was a political decision.

The Supreme Court found differently:

It said:

‘The sovereignty of Parliament would …be undermined as the foundational principle of our constitution if the executive could, through the use of the prerogative, prevent Parliament from exercising its legislative authority for as long as it pleased. That, however, would be the position if there was no legal limit upon the power to prorogue Parliament (subject to a few exceptional circumstances in which, under statute, Parliament can meet while it stands prorogued). An unlimited power of prorogation would therefore be incompatible with the legal principle of Parliamentary sovereignty.’

It must therefore follow, as a concomitant of Parliamentary sovereignty, that the power to prorogue cannot be unlimited.

The first question, therefore, is whether the Prime Minister’s action had the effect of frustrating or preventing the constitutional role of Parliament in holding the Government to account.

The answer is that of course it did.

The next question is whether there is a reasonable justification for taking action which had such an extreme effect upon the fundamentals of our democracy.

The Supreme Court decided no justification had been put forward.

This judgement puts the judicial cart firmly in front of the Parliamentary horse.

Firstly, the argument on which the judgement seems to be based is illogical. If Parliament is supreme, the voice of the people, and can make any law it wants, it makes no sense to conclude that it is necessary for the Court to limit and define the governments prerogative power.

It is for Parliament to limit the prerogative power if it wants to, not for the courts to intervene in political struggles in Parliament. (Parliament passed the Benn Act (or Surrender Act – depending which side of the fence you fall) with lightning speed).

Secondly, our constitution depends on the separation of powers – Government, Parliament, Courts. It is essential this separation is maintained.

What might happen now this principle of separation has been so egregiously eroded?

Perhaps we, the people vote for a Parliament that supports a government which, in accordance with its manifesto promise, brings forward legislation introducing a trade deal with the United States whereby amongst other goodies, they can sell us their chlorinated chicken – something to go with the chlorinated (“washed”) salad you already eat. I can now make an application to the Supreme Court to hold that it is unreasonable for a minister to put forward such a Bill to Parliament. It would lead to people ingesting poison. The minister making the decision to put forward the bill was not “in Parliament”, so the court has jurisdiction to decide my petition.

Ok… perhaps a silly argument, but you get the point.

The problem with the argument is in this presupposition:

‘The sovereignty of Parliament would ……be undermined as the foundational principle of our constitution if the executive could, through the use of the prerogative, prevent Parliament from exercising its legislative authority for as long as it pleased.’

…Because the executive can only do that if Parliament allows it to.

Parliament does not need the Court to look after it.


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