Averta Employment Lawyers

15 February 2012

Restrictive covenants – the meaning of solicitation

Towry EJ Limited v Barry Bennett and others

A large number of clients followed a group of financial advisers when they left their employer, Towry (a financial services business) and went to work for a competitor. Their contracts of employment prohibited solicitation of Towry’s clients. There was no direct evidence of solicitation but it was alleged there was a clear inference of solicitation from the volume of business which followed them. Towry sued the financial advisers in the High Court.

In the High Court, Mrs Justice Cox DBE concluded there was no such inference; that for a number of the clients who gave evidence, the information given to them about fees was wholly irrelevant to their decision to request a transfer of their assets. For others who did regard this information as relevant, by the time that each of the financial advisers was providing it the decision had already been made that Towry was not for them, that they wished to retain their personal financial adviser to advise them and that they wanted to transfer their assets.

The clients were exercising an independent decision to transfer, without any encouragement or persuasion to do so by the financial adviser.

Whilst the Judge did not rule out the possibility of a case based on inference, the burden of proving solicitation was on the claimant and they had failed to do so.

It is interesting to note that there was no restriction on ‘dealing’ with clients, in the financial advisers’ contracts. The financial advisers would clearly have been in breach of such a restriction if it had been there. However, given the large number of clients who had decided to leave Towry without having been encouraged to do so i.e. the evidence was they would have left Towry even if they could not follow their adviser, one might question whether Towry could have a legitimate interest in restraining such clients from transferring their assets to a competitor where the financial advisers had taken no unlawful steps., Whilst the judge suggested that the strong personal relationships between financial advisers and their clients might be protected with a non-dealing clause,  the reasonableness and enforceability of a non-dealing restriction in these circumstances could be open to challenge.

David Sykes
Averta Employment Lawyers LLP

Bonus payments - the Devil's work?

Alan Jones comments:

http://bit.ly/AccuKg

10 February 2012

21 September 2011

Legal 500 September 2011

We are very pleased to see that three of our team are mentioned in the latest edition of the Legal 500 directory. The firm is ranked in the 4th tier for the West Midlands, the only niche practice to appear in the rankings.

"Averta Employment Lawyers is a leading firm for executive severance work, and recently secured a £1.5m severance package for a CEO of a major plc within seven days of being instructed. David Sykes is ‘supportive, knowledgeable, easy to work with, and goes the extra mile’; ‘remarkable negotiator’ Rachel Broughton is ‘very meticulous and responsive’; and Alan Jones is ‘particularly good."

http://www.legal500.com/c/west-midlands/human-resources/employment

 September 2011

Employment Tribunals backlog

The annual Employment Tribunals and Employment Appeal Tribunal statistics for 1 April 2010 to 31 March 2011 were recently published (see our 15 September 2011 news report below).

The report reveals that 218,100 claims were issued in the Employment Tribunals during 2010-11 as against the 236,100 claims issued in 2009-10, i.e.  a reduction of 8%.

However, when we compare these figures with the 151,000 claims issued in 2008-09, we can see there has been a 44% increase in the number of claims issued over the last three years (many of those being working time claims). 

The statistics also reveal that as at 31 March 2011, there were 484,300 claims outstanding.  This figure has increased by approximately one fifth when compared with the number of outstanding claims as at 31 March 2010.

The number of claims over the last three years has increased by a significant amount, and the volume of claims that are yet to be concluded is staggering.  From these figures it does appear that the ET system is struggling to cope with a vast number of claims. The tribunals are not excluded from the Government’s cost cutting and are unlikely to receive any additional resources to cope with the huge backlog.

Whether the ACAS pilot scheme of attempting to conciliate claims before they have been issued will alleviate ETs, or whether the reforms that the Prime Minister announced in January will come to fruition and reduce the number of claims, remains to be seen.  For the time being however, it seems that claimants, respondents and their representatives face the prospect of prolonged ET proceedings. 

15 September 2011

Employment Tribunals and Employment Appeal Tribunal Statistics, 2010 – 11

The recently merged Ministry of Justice and HM Courts & Tribunals Service has issued its annual statistics for claims brought under the jurisdiction of Employment Tribunals (ETs) and the Employment Appeal Tribunal (EAT). 

The review analyses statistics from 1 April 2010 to 31 March 2011.

Key Findings 218,100 claims were received by the ETs. 

• This number demonstrates a fall of 8% compared to claims received from 1 April 2009 to 31 March 2010.
• However, this figure is an increase of 44% compared with claims received in 2008-09.
• ETs disposed of 122,800 claims.  Of those claims:

• • 32% received by ETs were withdrawn by claimants (due to no reasonable prospect of success or settlement by way of compromise agreement); and
  • 29% of claims reached settlement by way of ACAS conciliation.
  • 28,100  claimants (12%) were successful in their claims.

• The most successful claims were for breach of contract and the Wages Act
• The average award for unfair dismissal was £8,924 and the average award for all elements of discrimination combined was £15,105.
• 21,200 claimants (i.e. 9%) were unsuccessful with their claims.

• Claimants were mostly unsuccessful in claims of unfair dismissal and all elements of discrimination.

http://www.justice.gov.uk/downloads/publications/statistics-and-data/tribs-stats/annual-tribunals-statistics-2010-11.pdf