This week marks a landmark moment in the private rented sector in England. With Royal Assent granted on 27 October 2025, the Renters’ Rights Act 2025 (“RRA”) has now become law and is anticipated to come into force in Spring of 2026 — bringing to fruition the government’s promise to rebalance the relationship between the roughly 11 million private renters and 2.3 million landlords in England. 

What’s Changing?

Here are some of the key reforms that landlords (and tenants) will need to know about:

Why Is It Changing?

For many renters, the system has long felt skewed. The government sought to address the power imbalance which meant tenants may have felt insecure — or worried that even if they paid their rent and looked after the property, they might still be asked to leave without reason. 

By removing Section 21 evictions and converting tenancies into more stable forms, the RRA gives renters more security and places more costly sanctions on landlords that do not comply with the new requirements.

At the same time, the reforms aim to modernise and improve the private rented sector, recognising that long term renting is often the norm in many people’s lives now (not just a temporary stopgap) and that renters deserve dignity, safety and fairness. 

The new framework demands a more structured, transparent approach to property management. For the landlords who already uphold high standards, transition should occur smoothly, but ongoing compliance will be key.

But It Is Not Without Challenges

Of course, any major overhaul brings questions and potential unintended consequences. For example:

What Does This Mean For Possession Claims?

The RRA introduces significant changes to how landlords can make possession claims. Under this new legislation, landlords can no longer rely on “no-fault” evictions under Section 21 of the Housing Act 1988. However, landlords will have new grounds for possession to reclaim their property under the RRA. This means landlords can still seek possession for specific grounds such as rent arrears, antisocial behaviour, or when they genuinely need to sell or move back into the property.

It is anticipated that there will be a transition period between now and the implementation of the RRA where landlords can still seek possession under the Housing Act 1988, but there is no clear date when the new legislation will take effect.

There is no news as yet as to if or when the Court service will be updating possession claims online or the Court forms for manual claims to allow for new claims to be made under RRA once this takes effect. 

For now, the old rules still apply. Our solicitors can advise and assist should you wish to bring a possession claim under the Housing Act 1988 before the RRA takes effect, from the pre-action stages through to enforcement.

Final Thought

The RRA represents the biggest shake-up of England’s private rented sector in a generation. For renters, it promises more security, stability and fairness. For landlords and agents, it signals a move to a more regulated and transparent sector.

How smoothly it all works out in practice remains to be seen, but one thing is clear: change has arrived. If you’re in the rental market — whether as renter, landlord or agent — now is the time to pay attention.

We offer advice and assistance to landlords only in respect of possession claims, should you require any assistance please contact our client services team by email [email protected] or by telephone on 01483 457500.

HOPCRAFT V CLOSE BROS; JOHNSON V FIRSTRAND BANK; WRENCH V FIRSTRAND BANK  

[2025] UKSC 33

Last year, we reported on the Court of Appeal’s decision in three cases heard together, in which it was held that both car dealers and lenders engaged in vehicle finance had been breaching the civil law, by, amongst other matters, failing to disclose commissions to buyers.  

The motivation for pursuing the lenders was to establish liability against parties with deeper pockets than the car dealers.  

In relation to the claims against the lenders, the Supreme Court (“SC”) has now given judgment restricting the Court of Appeal’s findings.  The SC concluded that the legal routes by which the claimants were seeking to make the lenders liable under the common law or in equity were not available in the circumstances of the case.  That meant that two of the claimants had no claim.  However, the third claimant was successful on the basis that, in breach of the Consumer Credit Act 1974, the relationship between the lender and the claimant as a consumer had been unfair.

The underlying facts

The structure of each transaction was that, once the claimant had agreed a price for the vehicle, the dealer would approach a prospective lender, or a panel of lenders, for terms of credit.  The dealer then put forward a single proposal to the claimant for the financing. Once the terms of the loan were agreed, the dealer sold the car to the lender and the claimant then entered into a hire purchase or other credit agreement with the lender.  

Separately from this transaction, the lender also had a side agreement to pay a commission to the car dealer, funded from the interest payments made by the claimant. 

In the first of the three cases, Hopcraft, the commissions were not disclosed to the claimant at the time of the transaction.  

In the second case, Wrench, the hire purchase agreement provided amongst other matters that the lender “may” pay a commission to “the broker” who had introduced the transaction.  The standard terms did not explain how this commission would be calculated, or who “the broker” might be. 

In the third case, Johnson, the claimant was given what he described as “an enormous amount of paperwork” and asked to sign the agreement then and there.  The hire purchase agreement he signed incorporated standard terms in substantially the same form as Wrench, above.  However, in addition, the claimant signed a “Suitability Document” which stated amongst other matters that the dealer may receive a commission from the product provider, and that the option offered would be the one appearing most suited to the customer’s requirements. 

In all three cases, the claimants assumed that the dealer was deriving its income from the sale of the vehicle.  The claimants were in fact unaware of the commissions and said that, if they had known about them, they would have shopped around, rather than proceed with the transaction. 

The fact that the lenders had paid commission to the dealers subsequently came to light.  On discovering the true position, the claimants sued the lenders, seeking return of the commissions paid to the dealers.  They argued that the dealers had owed them duties as a fiduciary and/or pursuant to a duty to act in a disinterested manner (akin to the duty owed by a professional valuer) when selecting a finance package for the claimant.  The claimants said that the dealers had a duty to avoid any conflict between their duties to the claimants and their own interest.

The Supreme Court’s decision

Starting from first principles, in a situation where there is a “principal” type of person (here, the customer) and an “agent” type of intermediary (here, the dealer arranging finance for the vehicle purchase), there is a remedy for the principal if a third party (here, the lender) intermeddles in the relationship by making a payment to the intermediary.  The rationale is that the payment cuts across the duty owed by the intermediary to the principal.  

Relying on equitable principles, the claimants contended that the lenders were liable as accessories because they had provided dishonest assistance to the intermediary (in the form of the commissions), who was breaching his duty to the customer by not making full disclosure of the commission he was receiving.

Relying on the common law, the claimants contended that the lenders were liable to the customer for the tort of bribery, because they had given the intermediary a payment that was not disclosed to the customer. 

The SC accepted that the tort of bribery can be committed even where the payment has been partly disclosed: the question is whether the claimant gave his fully informed consent.  

However, the SC ultimately rejected both of the claimant’s contentions.  The SC concluded that, for the lender to be liable to the customer, both legal avenues required the intermediary to whom they had made the payment to come within the legal classification of a fiduciary, that is, a person who owes his principal single minded or undivided loyalty in the performance of his duties and who has taken on the role of acting in the interests of his principal to the exclusion of his own personal interest. It is not a question of whether the principal trusts the intermediary or is commercially vulnerable: the duty arises where the intermediary takes on the role of fiduciary. 

Thus the SC held that, in the present case, and even where the dealer had said that it would seek out the most suitable financial package, it was commercially unrealistic to regard the dealer as providing credit brokerage as a separate service. Each of the customer, lender and dealer were pursuing separate commercial objectives in a three-way commercial transaction and this was not the type of case in which a fiduciary relationship arose.

Consumer Credit Act 1974 (“the CCA”)

Section 140A(a) of the CCA is in broad terms and provides that the court may order a remedy in connection with a credit agreement if it determines that the relationship between the creditor and the debtor arising out of the agreement is unfair because of any of the terms of the agreement or any related agreement. 

Under the CCA, the car dealer was to be regarded as the agent of the lender.  The SC held that the relationship between  Mr Johnson and the lender was unfair and also a breach of the FCA handbook rules, firstly because the dealer did not disclose that, on one way of calculating it, commission (which was to be paid to the dealer out of interest received by the lender) amounted to 55% of the total charge for credit.  Secondly, it was not disclosed to Mr Johnson that the dealer had agreed that FirstRand would have a right of first refusal for any financing arranged by the dealer, this being contrary to the impression given by the dealer in its Suitability Document.

Lovetts’ comment

The Supreme Court has made clear that the route for claiming compensation from a lender in this type of case is under the Consumer Credit Act 1974, rather than the general law.  

The many claims of a similar nature will be swept up into a redress scheme, on which the FCA will be consulting later in 2025.  This is the second car finance mis-selling enquiry currently being looked at by the FCA, the other one concerning Discretionary Commission Arrangements.  The aim is that consumers will start receiving compensation early in 2026.  Issues of limitation and also levels of compensation will require careful consideration.

Meanwhile, the judgment appears relevant to consumers in other areas, over and above vehicle finance, an example being residential mortgages arranged by financial advisers.

For further information, please contact Wendy Miles, Chris Earl-Anderson or William Sturge at Lovetts.

A recent Law Gazette article reveals what many clients already know: law firms that offer fixed fees tend to cost significantly less than Solicitors that rely on traditional fee estimates and charge hourly rates.

After 30 years of offering transparent, fixed-fee debt recovery services, Lovetts Solicitors has been demonstrating this value to businesses long before it became a regulatory talking point.

Why Fixed Fees Matter

Then vs Now: Why Statistics Back Our Approach

The Legal Services Board’s findings confirm what we’ve known for decades: clients prefer certainty. Fixed-fee arrangements remove the guesswork and the stress usually tied to traditional legal billing.

For businesses tackling debt, this means they can issue letters and issue Court proceedings confidently, without worrying that costs will spiral. On average, clients will spend as little as 2p for every £1 of debt collected.

What This Means for You

If you are responsible for debt recovery or credit control, fixed fees provide a reliable path forward. You can take decisive action knowing:

Looking Ahead

For three decades, Lovetts has been committed to this ethos — quick action, clear communication, and fixed costs. The latest Legal Services Board survey only reinforces the client-first approach we have taken for the past 30 years.

Interested in learning more?

If you would like to see how fixed-fee debt recovery can work for your business, speak to our team or explore our pricing structure for full transparency.

 TYSON INTERNATIONAL V PARTNER REINSURANCE EUROPE SE  

[2024] EWCA Civ 363

In this case, the parties signed two documents covering precisely the same risk, parties and period, one a London market reinsurance contract and the other a facultative certificate of reinsurance commonly used in the USA.  

The  law and jurisdiction clauses were not consistent across the two agreements and, when a claim arose, a key issue was as to which set of clauses applied.

The facts

Tyson, as reinsured, obtained reinsurance from Partner Re, as reinsurer, relating to certain property risks for which Tyson was proposing to provide insurance cover. 

The first year of the cover –  At the time of negotiating the first year of the cover, the broker provided Partner Re with an agreement in the form of the Market Reform Contract (‘MRC’), this being a form in common use in the London market. This was referred to as a ‘slip’, for signing. The form contained an English law and exclusive jurisdiction clause.  Partner Re signed, stamped and returned it to the broker.  

 A few days later, the broker provided what was described as the ‘facultative certificate’, a contract in in the form of the Market Uniform Reinsurance Agreement (‘MURA’), this being a form in common use in the property reinsurance market in the USA.  This MURA covered the same parties, risks and period as the MRC, and bore the same market reference.  According to contemporaneous communications between the parties, the premium would not be administered until this later document was executed.  The MURA provided for New York law and arbitration and contained an ‘entire agreement’ clause.  

The brokers also provided an endorsement to the agreement on the MRC form, to the effect that the terms of the MURA form were subject to the terms of the MRC. Further, the Service of Suit clause in the MURA form was left blank.  These documents were signed and stamped by Partner Re.

The second year of the cover – The second year of the cover was not simply a renewal of the first year.  However, once terms had been agreed, matters proceeded in a similar manner to the first year: a few days after the MRC was signed, the brokers provided an agreement in the MURA form, which Partner Re signed, stamped and returned.  However, in contrast to the first year, there was no endorsement providing for the MURA to be subject to the MRC.  Further, in the second year, the Service of Suit clause was completed, so as to provide for service on a New York law firm, Mendes & Mount.

When a dispute arose in respect of a claim relating to a large fire, Tyson issued proceedings in the English court, in reliance on the MRC wording. Partner Re then began an arbitration in New York, in reliance on the MURA wording, and applied for a stay of the English proceedings.  Tyson objected to arbitral jurisdiction and sought from the English court an ‘anti-arbitration injunction’, to restrain Partner Re from pursuing the arbitration.

The decision

The Commercial Court found that each of the agreements would have been a self-standing contract, if viewed in isolation from the other.  In the first year, the effect of the endorsement had been to make the MURA agreement subject to the MRC agreement.   

However, in relation to the second year, where there was no endorsement, the court observed that it appeared fairly clear from the evidence that Tyson intended and understood subjectively that the MRC form would continue to govern the parties’ relationship, while Partner Re intended and understood that the MRC would be superseded by the MURA.  In these circumstances, the court held that its approach must be to make an objective assessment of what the parties said and did. 

The result was that the agreement contained in the MURA form, being (a) later in time, (b) contemplated at the time the MRC was signed, (c) clear, (d) fully executed and (e) a sufficient expression of consensual contractual sovereignty, cancelled and replaced the agreement in the MRC form, or at least those provisions in the MRC relating to applicable law and jurisdiction.   The reinsurance was therefore subject to New York law and arbitration.  This decision was upheld on appeal.

Custom of the market not taken into account – In coming to this conclusion, the court rejected the evidence of Tyson’s witnesses of fact, to the effect that the MURA document was simply a ministerial instrument or piece of administrative or recapitulative paperwork which is habitually or customarily issued by a reinsurer, but which did not, without more, alter the terms already agreed pursuant to the MRC wording.  Thus, the argument was that there was a market custom or practice as to the use of each type of contract.  

However, the Court held that it was not the function of witnesses of fact to give such evidence.  In any event, such evidence would not have had the effect of dictating the contractual effect of the documents, which was a question of the parties’ common intention, objectively assessed in context.

Improbability not taken into account – Tyson had also argued that it was inherently improbable and commercially absurd to suggest that the parties would have agreed (a) to sweep away provisions incorporated into the MRC agreement, (b) to replace an agreement containing negotiated, specific, bespoke provisions with a shorter document comprised of standard terms and (c) to replace fundamental provisions on applicable law and jurisdiction, within a few days of executing the contract of reinsurance.  Nowhere in the MURA was it stated that the MURA superseded the MRC.  Nor had the ‘change of contract’ terms in the MRC been operated to replace it with the MURA form.

However, the court found that the parties, judged objectively from what they did and said, and however unusual their conduct may have been, had intended to replace the MRC with the MURA. A different view might have been taken if the replacing agreement led to complexity or uncertainty, but that was not the case here.  Some clauses may not have been swept away because, for example, terms of the original insurance were incorporated into the reinsurance as a matter of New York law, or there might in future be a claim for rectification.  The ‘change of contract terms’ provisions in the MRC may not have been operated because the parties simply entered into a further contract which was not an attempt to change the agreement from the MRC form.

Lovetts’ comment

A party contracting through an agent will usually be bound by the terms which the agent negotiates and therefore needs to check the agent’s work carefully.

If conflicting sets of terms are used in an agreement, clear provisions must be incorporated, to determine how the terms are to operate together.

Further, if a party wishes to adduce expert evidence, for example as to custom or practice, they must apply for permission to do so, provide it from a person whose evidence may be relied on by the court as an independent expert, and the expert evidence must establish that such practice or custom imposes an immutable characterisation of events. 

For further information, please contact Wendy Miles, Chris Earl-Anderson or William Sturge at Lovetts.

Understanding the consequences and options available after sending an Letter Before Action can make all the difference in recovering your late payments efficiently. Let’s delve into what follows once an LBA has been issued.

What is an Letter Before Action?

A Letter Before Action (LBA) is a formal letter of demand sent to your debtor seeking payment of any outstanding sums due to you. It also puts debtors on notice that if payment is not made within a specified period of time you intend to issue legal proceedings.

This gives the debtor a final chance to settle the debt before facing potential legal action for the recovery of the outstanding sums, together with costs and interest.

At Lovetts, we have seen 86% of our clients overdue invoices have been paid upon receipt of our LBA, without any further legal action required.

What happens when my Letter Before Action expires?

If you send a Letter Before Action to your debtor, but payment is not made the next stage of the legal process would be to issue legal proceedings through the County Court. Once the claim is issued by the Court it will be served on the debtor who will have 14 days to file a response to the claim.

If the debtor fails to file a response to the claim within 14 days, you can apply for judgment in default. The Court will then process this request and issue a County Court Judgment (CCJ). 

A County Court Judgment (CCJ) is a Court Order that says the debtor owes you the specified sum. Once you have obtained the CCJ you can then seek to enforce the judgment by a number of different methods.

The CCJ will be recorded against the debtor’s credit record affecting their ability to obtain credit for a period of up to six years, unless the debtor pays the judgment in full within one month of the judgment being entered against them.

What interest can I claim for late payment?

In the first instance you should check the terms of the contract between the parties. There is usually a provision for interest in respect of late payment of invoices within most terms and conditions, where these have been agreed.

If no contractual provision has been agreed for interest you may still be able to seek interest on a statutory basis under Late Payment provisions for commercial debts or under s69 of the County Courts Act 1984 where debtors are individuals.

If your debtor is a business you may be entitled to seek Late Payment Compensation, Late Payment Interest or Reasonable Legal Costs where the Late Payment of Commercial Debts (Interest) Act 1998 applies (“Late Payment Act”).

The Late Payment Act will only apply when dealing with late payments if there is no contractual provision agreed within the terms of the contract between the parties and both parties are businesses.

If the Late Payment Act does apply, you will be able to seek fixed Late Payment Compensation in the sum of £40, £70 or £100 per invoice, depending on the value of the same. You will also be able to seek Late Payment Interest, at a rate of 8% above the Bank of England base rate, together with reasonable legal costs. Reasonable legal costs are only usually awarded if the compensation and interest do not cover the full amount of your costs of any recovery action.

If your debtor is an individual and there is no agreed rate of interest payable under the terms of the contract, you may still be entitled to seek interest under s69 of the County Courts Act 1984, at a rate of 8% per annum in respect of the overdue sums.

SECTIONS 127 AND FOLLOWING OF THE INSOLVENCY ACT 1986

The Insolvency Act 1986 (“IA”) as amended contains provisions designed to assist the pari passu (i.e. equal, by category) distribution of the company’s property to its creditors.  Key provisions relating to a liquidator’s ability to recover company property from directors are as follows (a broadly similar regime operates in the case of company administrations).

Effect of the petition on the directors’ powers of management

The winding up of a company is generally deemed to commence at the time of issuing the winding up petition, and not on the subsequent making of the court order to wind up (section 127 IA).  The purpose here is to prevent directors from disposing of company property to the prejudice of creditors.  Dispositions of the company’s property, whether in the course of carrying on business or otherwise (and unless subsequently validated by the court) will generally be void if a winding up order is made. If the property is not recovered, the directors may be personally liable to reimburse the insolvent estate.

Effect of making the winding up order

A compulsory winding up order has the effect of terminating the appointment of directors and their powers as directors.

Liquidator’s powers of investigation

Liquidators have powers to require directors to provide information.  This is not only to assist them to get in the assets of the estate and identify liabilities but also to identify the causes of the failure of the company and, if considered appropriate, to pass evidence to the Secretary of State or prosecuting authorities, with a view to disqualification or criminal proceedings. 

Thus, directors and other specified persons are under a duty, on notice, to provide a statement of affairs. There are civil and criminal consequences for default. Directors may also be obliged to produce accounts for up to the three previous years and information concerning the promotion, formation, dealings, affairs and property of the company.

Directors and former directors, whether resident in the jurisdiction or abroad, can also be required to attend court for public examination.

It is the responsibility of the liquidator to take the company’s property into their possession or control.  The directors and certain other third parties are under a duty to cooperate with the liquidator and must therefore hand over the company’s books, papers and records. 

The liquidator can apply to the court to require the attendance of any person within the jurisdiction known or suspected to have in his possession any property of the company or who is supposed to be indebted to the company, or any person who the court considers capable of giving information concerning the business dealings, affairs or property of the company, and to produce any records in their possession or control relating to such matters (s. 236 IA).  In making such an application, the liquidator will be acting as agent of the company, such that a legal adviser of the company prior to the winding up is unlikely to be able to resist on the grounds of privilege.

Directors’ Liabilities in Insolvency Proceedings

Liquidators have the power to bring proceedings in the name of the company against directors for breach of fiduciary and other duties, to recover company property in their possession or control, or to recover debts owed to the company. Remedies are available for the following actions of directors:-

Wrongful Trading when insolvent liquidation is unavoidable – The court is given power to order a person to make a contribution to the company’s assets if (a) the company has gone into insolvent liquidation, (b) at some time the person knew or ought to have known that insolvent liquidation could not be avoided, (c) at that time, the person was a director and (d) the court is not satisfied that after that time the person took every step with a view to minimising the potential loss to the company’s creditors as they ought to have done (s.214 IA). Whether a director ought to have known that insolvent liquidation could not be avoided is treated as a question of objective fact.  However, the question is not to be approached with the benefit of hindsight.  The cases in which directors have been held liable are typically those in which they closed their eyes to the reality of the company’s position, or failed to maintain accounting records compliant with UK legislation.

Even persons who are “sleeping” directors are subject to the above test, which in effect requires  reasonable diligence.

Fraudulent Trading –This provision may be invoked in similar circumstances to the above, save that establishing the liability of the director is more onerous for the liquidator, who must satisfy the court that the individual concerned was knowingly a party to carrying on the business of the company with intent to defraud creditors, or for any other fraudulent purpose (s.213 IA).  A finding of actual dishonesty is required.  

Unlike the provision for Wrongful Trading, the provision for Fraudulent Trading was not temporarily suspended during the covid pandemic.

Transactions at an undervalue – Under this provision, the liquidator may apply to the court for an order where the company, within two years of the onset of insolvency and at a time when the company was unable to pay its debts, entered into a transaction with any person at an undervalue (ss.238-41 IA).  There is a presumption of inability to pay debts where the transaction was with a ‘connected person’.   However, the court may not make such an order if it is satisfied that the company entered into the transaction in good faith for the purpose of carrying on its business and at the time there were reasonable grounds for believing that the transaction would benefit the company.  An example of this might be selling a property at less than its full value to raise working capital.

The finding that a company was unable to pay its debts at some earlier time than its entry into liquidation has additional consequences for directors.  They will have been required to take account of the interests of creditors at that earlier stage (s.172 Companies Act 2006) and may not have the effective protection of a resolution of the members ratifying their conduct.

Preferences – Under this provision, the liquidator may apply to the court for an order where the company has, within two years prior to the onset of insolvency in the case of a connected creditor, or six months in the case of other creditors,  done anything which has the effect of putting that creditor into a better position in the event of insolvency than they would have been in if the action had not been taken (s.239 IA).  However, the court may only make such an order if the company was, in so acting, influenced by a desire to produce this effect.  This is presumed in the case of connected persons, other than employees.

Public policy to facilitate the pursuit of claims for the benefit of unsecured creditors – Where there is a floating charge relating to property of a company in liquidation and the liquidator brings a claim under any of the provisions mentioned above, or assigns (i.e. sells) a claim of such a nature, the proceeds of the claim or assignment are not to be treated as part of the net assets available to satisfy the claims of holders of debentures secured by floating charges (IA s.176 ZB). In terms of calculating the level of contribution to be made, the starting point is to ask whether, as a result of the director’s wrongful act, there was an increase or reduction in the net deficiency of the company as regards unsecured creditors – Re Ralls Builders Ltd (2016).

The “misfeasance” provision – Under this provision, if, in the course of a winding up, it appears that a person who is, or has been, an officer of the company has misapplied or become accountable for any money or other property of the company, or been guilty of any misfeasance in the nature of a breach of trust, or negligence or other breach of any duty in relation to the company, the court may, on the application of the liquidator, a creditor or a contributory examine into the conduct of the person and compel them to restore the property with interest or contribute to the company’s assets by way of compensation (s.212 IA).  Misfeasance applications can potentially be available where the complaint is that there was a failure to have regard to the interests of creditors.

There is the possibility of pursuing this remedy on a shortened procedural basis. Liquidators may assign this power to anyone willing to pursue the claim.

Transactions defrauding creditors – Rather than assisting the pari passu distribution of the company’s property, the purpose of this provision (under s.423 IA) is to protect creditors from fraud.  Upon an application by a liquidator or a victim of the transaction, the court may set aside the transaction or otherwise protect the interests of the victim, where it is satisfied that a purpose of the transaction was to put assets beyond the reach, or otherwise to prejudice, the interests of the victim. Rather than the shorter time periods in the case of the remedies referred to above, the time periods under the Limitation Act 1980 apply.

If a director causes the company to dispose of property in circumstances to which s.423 applies, it is likely that they will have breached their duties to the company and will be liable to compensate for any loss.

For more information contact Wendy Miles, Chris Earl-Anderson or William Sturge at Lovetts.

At Lovetts Solicitors, we recognise that mental health is important, not just in the workplace but throughout society. That is why we are proud to support Oakleaf, a Guildford-based mental health charity providing essential services to those in need.

Since 2020, Lovetts has been a committed corporate partner of Oakleaf, helping to fund mental health support and raising awareness about the challenges individuals face. Our partnership has directly contributed to funding the equivalent of 210 counselling sessions, offering crucial support to people who may have otherwise struggled to access professional help.

Jen Clay, Head of Partnerships at Oakleaf, commented:

“We are hugely grateful to Lovetts Solicitors, who have been a committed corporate partner of Oakleaf since January 2020. The direct donations they have provided since then could fund the equivalent of 210 counselling sessions for Oakleaf clients, making a profound positive impact on so many individuals managing their mental health in the Surrey community. Thanks to Lovetts’ ongoing support, people who may have otherwise struggled to access counselling have found a safe space to build resilience, improve their wellbeing, and regain confidence in their daily lives. Lovetts has been invaluable in helping Oakleaf sustain and grow the many vital services the charity offers.”

The Mental Health Founders Network

As part of our commitment, Lovetts is a member of Oakleaf’s Mental Health Founders Network, attending quarterly meetings to discuss workplace mental health and encourage more open conversations on the topic. Businesses play a vital role in ensuring that employees have the support they need, and through this network, we are helping to drive real change.

Ongoing Support and Sponsorship

Lovetts was also proud to be the headline sponsor for Oakleaf’s Annual Quiz Night in March 2025, an event attended by 170 guests. By sponsoring this event, we ensured that 100% of ticket sales and funds raised can go directly toward supporting Oakleaf’s mental health services.

Michael Higgins, Managing Director of Lovetts Solicitors, shared:

“It was a pleasure to sponsor Oakleaf’s annual quiz night. We are proud to be associated with Oakleaf, who provide vital mental health support and give people within the community self-belief through work-based skills training. The quiz is always a really enjoyable evening, and I am pleased that we were able to raise funds for such a great charity.”

We are also supporting several upcoming initiatives:

A Shared Commitment to Mental Wellbeing

Mental health is a growing concern in the business world, and organisations must take an active role in supporting their employees. At Lovetts, we are proud to be working alongside Oakleaf to ensure that individuals in our community receive the help they need.

For more information on how you can support Oakleaf and contribute to mental health initiatives, visit www.oakleaf-enterprise.org/support-us.

For small businesses, late payments can have a serious impact on cash flow. With business to business transactions where no terms have been agreed or you do not have a contractual provision for late payment, the Late Payment of Commercial Debts (Interest) Act 1998 can step in to imply late payment terms into your contracts.

This means you may be entitled to charge interest on late payments, seek compensation on overdue invoices, together with reasonable legal costs. This helps businesses to recover losses caused by late payment and encourage prompt payments. Here’s what you need to know:

Statutory Late Payment Charges

Under the Late Payment of Commercial Debts (Interest) Act 1998 (“the Late Payment Act”), where applicable, businesses can charge the following:

Interest on Late Payments

Under the Late Payment Act you are entitled to seek:

Compensation

In addition to interest, you can also claim a fixed sum of compensation for each invoice, as follows:

Recovery Of Reasonable Costs

You are also entitled to seek to recover an additional sum towards your reasonable costs if where the interest and compensation under the Late Payment Act do not cover all of your expenses in recovering the debt. Such expenses would include legal fees, debt collection agency charges or administrative costs.

How Lovetts Solicitors Can Help

At Lovetts Solicitors, we specialise in commercial debt recovery, helping small businesses:

  1. Sending Letters Before Action which can include interest and compensation under the Late Payment Act;
  2. Issuing legal proceedings to recover the debt, together with interest, compensation and reasonable costs if payment is not received; and
  3. Enforcing judgments obtained against debtors.

Late payments should never be accepted as the cost of doing business. If you are struggling with overdue invoices, take action today.

 LIFESTYLE EQUITIES V AHMED  

[2024] UKSC 17

The Facts

Kashif Ahmed and his sister, Bushra Ahmed, were directors of two “Juice Corporation” group companies and in that capacity arranged for the manufacture and distribution of clothing displaying the logo of “Santa Monica Polo Club” and the image of polo players on horseback.  

Lifestyle Equities (“Lifestyle”), a company that owned registered trade marks displaying the logo of “Beverley Hills Polo Club” and a mounted polo player, successfully sued the Juice Corporation companies for infringement of Lifestyle’s trade marks. 

Under the relevant sections of the Trade Marks Act 1994, liability is “strict”.  To establish an infringement, there is no need to prove knowledge or fault – only that the defendant, without the consent of the owner of the trade mark, committed an act of the kind specified in the statute. Nor is it a defence that the defendant acted in good faith and without any improper motive. 

Neither Kashif nor Bushra Ahmed had themselves infringed the letter of the Trade Marks Act.  Nevertheless, Lifestyle sued the Ahmeds personally, as well as the Juice companies, on the basis that the individuals had (1) authorised or procured the Juice companies to do the acts complained of and (2) engaged in a common design.

The Ahmeds maintained that they had had no improper motive, had acted on advice and had delegated the design of logos to a professional design team.   The trial judge made no contrary finding of fact on these assertions but nevertheless found the Ahmeds jointly and severally liable with the Juice companies for the acts of infringement.  

Ultimately, the main issue for the Supreme Court raised by the appeals from this decision was: when are directors of a company liable as accessories for causing the company to commit a tort (i.e. a civil wrong) of strict liability – in this case, trade mark infringement?  In particular, is such liability also strict or does it depend on knowledge of wrongdoing or some other mental element?

The Supreme Court’s decision

The Supreme Court approached this question by explaining that, whilst the Trade Marks Act restricts various acts and imposes strict liability for infringement, it does not make authorising a restricted act an infringement in its own right. If the Ahmeds were liable, it could only be as accessories.  The test for whether a person authorising a wrongful act is liable as an accessory turns on principles of the common law, and the strict liability regime under the Act does not carry over to accessories who have not personally infringed the Act.

In relation to Lifestyle’s allegation that the Ahmeds had authorised or procured the Juice companies to do the acts complained of, the Court held that an accessory who knowingly procuresthe primary wrongdoer to commit an actionable wrong will be liable with the primary wrongdoer for the wrong committed.

Where the primary wrong is a breach of contract, this accessory liability takes the form of a distinct tort.

Where the primary wrong is a tort, the accessory is made jointly liable for the tort committed by the primary wrongdoer.

 What is required for liability is that the accessory acted in a way that was intended to cause the primary wrongdoer to commit an act which the accessory knew was a wrongful act.  Turning a blind eye would be sufficient for this purpose.

Turning to Lifestyle’s second allegation that the Ahmeds had engaged in a common design, under the common law the rule is that an accessory who assiststhe primary wrongdoer to commit a tort is made jointly liable for the tort committed by the primary wrongdoer if the assistance is given pursuant to a common design between the parties.  In order to be made liable, the accessory must have provided more than trivial assistance, must have had a shared intention that the act would take place and must have been aware of facts which made the intended act unlawful.

What is meant by requiring that the accessory must know that an act is unlawful? In the present case, this did not refer to a requirement that the accessories must have a sufficient knowledge of trade mark law – knowledge of the law is assumed.  What was required was to establish that the accessories knew or turned a blind eye to the essential facts which made the act wrongful.  These would have included knowing that the Juice companies needed to, but did not, own the relevant trade mark or have a licence to produce and sell the clothing to the public.

The Supreme Cout therefore held that the Ahmeds, who did not have the relevant knowledge and who had no intention that an unlawful act would be committed, were not personally liable to Lifestyle on the accessory principle.   

Position of directors – In the course of giving its judgment, the Supreme Court further explained, in terms of the personal liability of directors for wrongful acts, that there are no special rules protecting directors who commit civil wrongs.  For example, there is no “safe harbour” in the form of board resolutions ratifying the acts of a director.  Liability is decided by applying ordinary principles of the law of tort, including the principles concerning the liability of accessories explained above.

Normal understandings – However, the liability of a director can in some situations be restricted by various normal understandings of the common law.  Thus, a distinction needs to be made between the type of situation described above and the case where an agent (companies always act through agents), acting in good faith and within his authority causes his principal to breach its duty.  In a contractual situation, the normal understanding is that agents assume no liability for inducing a breach of contract and only the principal will incur liability to the other contracting party – Said v Butt (1920).  

An example of a normal understanding applying in the case of tort is the case of the director who in good faith procured that his company’s financial projections should be provided to the claimants, who he knew would rely on them.  The projections were subsequently found to have been negligently prepared.  However, the director was found not to be personally liable.  This was because the director’s company’s liability arose from the fact that it had assumed responsibility for the statements made and the claimants had taken on the commercial risk of relying on them.  It would have subverted this allocation of risk if the director could also be held liable in tort – Williams v Natural Life Health Foods (1998).

Lovetts’ comment

The Supreme Court has restated the law relating to when directors will be liable to third party claimants for civil wrongs committed by their companies.  The Court has clarified that, in order to make a director liable as an accessory to the company’s wrongdoing, it is necessary to establish that the director knew the facts which made the act of the company unlawful.  The case raises the bar to making directors personally liable in this type of case, as issues such as good faith, the entitlement to rely on professional advice and the reasonableness or otherwise of believing that no wrongful act was being committed will need to be considered.

For further information, please contact Wendy Miles, Chris Earl-Anderson or William Sturge at Lovetts.

Late payment is a growing concern for businesses of all sizes. As we look ahead to 2025, it is crucial to stay informed about the trends that could impact your cash flow and overall financial health. The evolving landscape of debt recovery is reshaping how organisations manage their finances, interact with clients and implement payment systems. With technology advancing rapidly, late payments are not just an inconvenience; they can threaten business stability.

The impact of late payments on businesses

When invoices are delayed, companies struggle to meet their own financial obligations. This ripple effect can lead to disrupted operations and missed opportunities.

Small businesses often feel the brunt of late payments more acutely than larger firms. You may lack the financial cushion needed to absorb unexpected delays in revenue. Every overdue invoice represents not just a loss of income but also time spent chasing payments.

The stress associated with late payments can impact employee morale as well. Teams may face uncertainty when budgets tighten, which can hinder productivity and innovation. 

Trend 1: Increase in the frequency of late payment

The frequency of late payment is on the rise, creating significant challenges for businesses. As economic pressures mount, companies are stretching their cash flows further than before. This leads to a higher likelihood of missed deadlines.

Customers might delay payments due to unforeseen circumstances or tighter budgets. The ripple effect can be damaging, especially for small and medium-sized enterprises that rely heavily on consistent cash flow.

Moreover, the trend is not limited to specific industries; it is becoming a widespread issue across various sectors. Companies that once maintained solid payment histories are now falling behind.

Trend 2: The rise in electronic payment options

With technologies like apple pay and instant bank transfers flexibility is at an all-time high. This convenience encourages prompt payments and minimises delays often linked with more traditional payment methods.

As consumers become more accustomed to these seamless processes, businesses must adapt quickly to meet expectations. Embracing this trend is not just about keeping up; it is about staying competitive in a rapidly evolving market where speed matters.

The surge in e-payments also fosters transparency during transactions. Clear records help both parties manage their obligations effectively while promoting trustworthiness within business relationships.

Trend 3: The introduction of automated late payment compensation

As businesses evolve, so do their strategies for managing late payments. Automated late payment compensation are enhancing efficiency by automatically applying fees when deadlines are not met. This reduces the administrative burden on finance teams and encourages prompt payments from clients.

No longer reliant solely on human oversight, organisations can now set parameters that trigger notifications and late payment compensation seamlessly. This not only streamlines cash flow, but also fosters accountability amongst customers.

With technology taking centre stage, companies can focus on building relationships instead of chasing payments. The ease of implementation makes these solutions appealing across various industries.

For more information about Late Payment Compensation and the sums you may be entitled to claim, see https://lovetts.co.uk/debt-recovery-information/late-payment-law/

Trend 4: Growing importance of credit scores in business transactions

Credit scores are becoming a crucial factor in business transactions. Companies increasingly rely on these scores to gauge the reliability of potential partners or clients. A high score often translates into trust, while a low score raises a red flag.

More businesses are integrating credit checks into their vetting processes. This trend helps mitigate risks associated with late payments and defaults. With financial stability being paramount, organisations want assurance before committing resources.

Additionally, lenders look closely at credit scores when extending credit lines or financing options. A strong score can lead to better terms and lower interest rates, directly impacting cash flow.

Conclusion

Staying informed about these trends will help companies mitigate the adverse effects of late payments while enhancing overall financial health through effective debt recovery strategies alongside solicitors who specialise in navigating complex collections scenarios.

If you are facing challenges with unpaid invoices or struggling with debt recovery issues, Lovetts are here to help. Lovetts solicitors specialise in UK & International debt recovery with 30 years of industry experience. 

If your business needs help recovering outstanding debts, contact us today.