Tuesday, 8 November 2016

Lexit before Brexit

The judiciary has just reminded us of its role as the guardian of our constitution which, although unwritten, is clear about the division of powers between the executive and the legislature.

Despite the people having spoken in a referendum, Mrs May is not able to trigger Brexit without an Act of Parliament to authorise it.   So held three eminent judges last week, who ruled that the government’s attempt to give notice under article 50 of the Lisbon Treaty would otherwise be unlawful.

It was Parliament which first subjected us to European law, making it directly applicable in our own domestic law by the European Communities Act 1972.  Under our constitution, this can only be changed by further Parliamentary authority.  The 1972 Act did not reserve executive power, even with popular support, for the government to reverse the position and cast out European law on its own, so a fresh Act of Parliament is needed for this to happen.

The government is entitled, by virtue of the Crown prerogative, to act independently in matters of international law.   However, as Brexit would also affect the laws of the land, the government’s claim to be able to use Crown prerogative for giving notice under article 50 was “flawed at this basic level.”

MPs are elected to make our laws and we can’t pass the role to the executive, even on one off issues by referendum.  Brexiteers may consider that this is undemocratic, Leavers that it prevents mob rule but the High Court has said it is the law.

If the government loses its appeal to the Supreme Court in January (and assuming Mrs May doesn’t contemplate a further appeal to the European Court of Justice!) a bill will in due course be laid before Parliament.   Whatever political twists and turns accompany it, the result will no doubt be an Act of Parliament to authorise Leave, in support of the referendum decision.  Brexit therefore still seems inevitable but the issue behind the current constitutional diversion begs the question “what actually would be the effect on our own laws when European law no longer applies?”  We’ll give some thoughts on this next time…

Link to art 50 http://www.lisbon-treaty.org/wcm/the-lisbon-treaty/treaty-on-European-union-and-comments/title-6-final-provisions/137-article-50.html


Friday, 3 June 2016

Changes to the Companies Act 2006 - The PSC or 'persons with significant control' register and "confirmation statements"

The PSC Register

As from 6 April 2016 most UK companies and LLPs are required to keep a new statutory register called the PSC register in order to ensure that their ultimate beneficial owners and controllers are identified and that details of their holdings are made public. It is one of a number of recent amendments to the Companies Act 2006 and is designed to combat tax evasion and money laundering. 
PSCs are individuals who meet one or more of the following conditions:

- they hold more than 25% of shares in the company;
- they hold more than 25% of voting rights in the company;
- they hold the right to appoint or remove the majority of the board of directors of the company;
- they do not fall under the conditions above, yet have the right to exercise, or actually exercise, significant influence or control over the company; and/or
- they hold the right to exercise, or actually exercise, significant influence or control over the activities of a trust or firm that would, if they were an individual, satisfy one of the first four conditions.
Confirmation Statements

As from 30 June 2016 the information held on the PSC register will be required to be filed at Companies House as part of the company’s “confirmation statement”.

The confirmation statement will replace the existing annual return and will broadly cover the same areas but with some amendments to reflect the other changes to the filing regime also being introduced (including the information held on the PSC register). It should ease the administrative burden on companies as it will not require information previously filed at Companies House to be repeated.  Instead a confirmation will be given by the company that all specified information has either already been filed as required, or is being delivered with the confirmation statement.

Unlike the annual return, there will be no set date each year on which the confirmation statement needs to be made.  It can be made at any time, although no more than 12 months must elapse between confirmation statements. Once a confirmation statement has been made a new 12 month period starts to run.


Monday, 25 April 2016

Adverse Possession - 1066 and all that

For William the Conqueror, possession was not nine tenths of the law, it was ten tenths.  In the thousand years since then and still today (save for the last 13 years in the case of registered land) physical possession has been the foundation of land ownership under English law.

Adverse possession of land (sometimes known as ‘squatters rights’) is when someone is in physical possession of the land, without the express permission of the owner on the deeds.  After 12 years adverse possession, the prior owner will be time barred from recovering the land, which will then belong to the squatter.

There are qualifications to this.  The squatter must demonstrate ownership intention (for example, in the case of a field, by fencing it off and working it) and may not occupy the land by “force or secrecy” but otherwise, if he can prove 12 years possession (by statutory declaration and such other independent evidence – e.g. of payment of rates and bills – as can be provided) then he can apply to the government Land Registry to be registered as the new owner.

The main qualification, since 2003, is with registered land, i.e. of which the ownership has already been registered at the Land Registry, being the case now with most land in the country.   The old rules continue to apply only to unregistered land (i.e. where the owner on the deeds has not yet applied to become a registered owner).   It is still possible, under the new rules, for a squatter to apply to the Land Registry for ownership of already registered land by virtue of adverse possession but notice of the application would be given to the prior registered owner, who can then defeat the squatter’s claim by mere objection to it.

The result of the new rules is rather odd, in that ownership of land is decided (once there has been adverse possession) by simple process rather than underlying land law and can be lost by an easy oversight on the part of the prior registered owner.   A practice point for registered owners who are not owner/occupiers is to ensure that the Land Registry has their up to date contact addresses.  

Land law is complex and the above is necessarily a simplification of the rules but these are still an example of how English common law is rooted in pragmatism.