How to comply with the rules on the Register of People with significant control (PSC)

As of 6th April 2016 Companies and LLPs must keep PSC register, which must be available for inspection at their registered office. The aim to increase transparency of control of corporate entities.

A person will be a PSC if they:

  • own more than 25% of the company’s shares, or
  • hold more than 25% of the company’s voting rights, or
  • hold the right to appoint or remove the majority of directors, or
  • have the right to, or actually exercises significant influence or control, or
  • hold the right to exercise or actually exercises significant control over a trust or company that meets one of the first 4 conditions.

For many SMEs this will be simple – the PSCs will be the owner proprietors already recorded on the Share Register and Annual Return. The PSC register should include their name, service address, country of residence, nationality, date of birth, usual residential address, date of becoming a PSC, and nature of control. This information is likely to be in the company’s registers already, but should properly be recorded in a separate register too.

From 30th June 2016 Annual Returns will be replaced by “Confirmation Statements” which will require this information. Companies can then elect not to keep a separate PSC register but simply to record this information at Companies House through their Confirmation Statements.

For entities with complex structures, corporate owners, shares in classes with different voting rights or with “shadow directors” identifying PSCs and completing the register may require professional help.

For guidance see keeping your people with significant control (PSC) register and the link in that to the guidance on the Small Business Enterprise and Employment Act.

Harris & Harris Discuss & Do

We are starting off the latest series of events to support businesses in Frome.

Frome Chamber of Commerce together with Frome Town Council are to re-start the popular ‘Discuss and Do’ series of monthly evening sessions for businesses and social enterprises keen to enhance their skills and share best practice. If you are a small company or organisation trying to make the best use of social media, understand employment law, pension regulations or get to grips with accounting systems such as Sage then these regular sessions could be very useful.

The new ’Discuss & Do’ sessions will be held on the 4th Tuesday of every month at the Cornerhouse. The first evening on March 22nd will kick off at 6pm with an informal buffet followed by a talk at 6.30 by Neil Howlett and Andy Hambleton of Harris & Harris, who will share more than 30 years practical experience. There will then be time for further discussion and networking.

Neil Howlett  says, ”Business people worry about Employment Law. You can make your life as an employer a lot easier if you are aware of the things you must and the things you can do. I aim to alert you to the issues, help you find reliable sources of information so you can protect yourself as an employer and ensure you don’t breach your employees’ rights. There will be a guidebook you can take away to help you set up your procedures as you grow.”

Town Centre Coordinator Mark Brookes said ‘We already have the popular business breakfast events as well as retail group meetings and through those it has become obvious that constructive and informative sessions on subjects that affect the small business owner would be very popular in Frome’

Book here.

Avoiding unintentional discrimination

It is often overlooked that rights to equal treatment don’t begin when an employee starts work. They start with the recruitment process, and even with the job advert. The right to equal treatment in the provision of services also covers advertising.

The Equality and Human Rights Commission has published new guides on advertising, for organisations who advertise jobs or services. They are written in plain English, and give helpful examples.

Have a look at the ECHR guidance, their ECHR Checklist and ECHR FAQ document.
The risk of a claim for discrimination through advertising may be small, but the costs of defending a claim may be significant. There have been examples of vexatious claimants who have brought claims based on discrimination on the job application process who have issued claims against multiple employers. Even where these have been struck out and the litigants barred from issuing more claims that has involved costs for employers which have rarely been recoverable.

As there are many claims about the UK being deluged with laws required to meet EC requirements we would point out that the Equality Act 2010 was a consolidating Act which helpfully out in one place laws introduced by the UK Parliament over the previous 40 years. Although it had the same goals as the EC Equal Treatment Directive 2006/54 that was a case of the EC catching up with UK law in the Equal Pay Act 1970, the Sex Discrimination Act 1975, the Race Relations Act 1976, the Disability Discrimination Act 1995 and three statutory instruments..

Supporting the Royal United Hospital, Bath by Making a Will

Harris & Harris are pleased to announce that they have raised over £1,000 in support of the Royal United Hospital, Bath’s charity The Forever Friends Appeal.

The month of September 2015 saw people across the Royal United’s catchment area being urged to put their affairs in order and make or update their Wills as part of the hospital’s first ever Make a Will Month scheme which raised a total of £33,000.

The Forever Friend’s Appeal provides a vital service to help improve the hospital’s environment, providing additional medical equipment, facilities as well as all the finishing touches and extras that help care for patients more effectively, together with its ongoing research and development.  Every donation raised by Harris & Harris as part of the Make a Will Month will help to continue providing this care.

We are delighted to have made a contribution towards the Appeal and would like to thank all our clients who made generous donations.


Online dispute resolution platform postponed

Businesses were supposed be ready to implement the new laws on online dispute resolution (ODR) by adding a link to their websites, and online ordering systems by 9th January 2016. The Department for Business, Innovation & Skills (BIS) has issued a statement delaying that which says :

‘We have been informed by the European Commission that due to a number of other member states not being in a position to implement the requirements of the ODR Regulation by 9 January, the ‘go live’ date of the platform has been delayed to 15 February. Businesses will now not be required to carry a link to the ODR platform until it is launched on this new date of 15 February.

‘We recognise that the decision to delay is not ideal as a number of businesses and consumer organisations have been gearing up for 9 January. However, we also acknowledge that as we have not been able to provide you with a link to the platform the six-week delay will give additional time to get ready for its introduction.

‘We can reassure you that although the date of 9 January remains in our Regulations, we fully understand that it will not be possible for businesses to meet this date as the ODR platform will not yet be launched. There will of course be no question of enforcement action before 15 February.’

See the ‘Alternative dispute resolution’ guide which has been updated to reflect these developments, and diarise for early February in the hope we will know more then.

Zero Hours Contracts

The Department for Business, Innovation and Skills has produced a guide for employers on zero-hour contracts. There is also guidance from ACAS.

The BIS guide explains how zero-hour contracts work, the difference between appropriate and inappropriate use of such arrangements, and gives guidance on best practice and alternatives to zero-hour contracts.

BIS says:

Zero hours contracts allow flexibility for both employers and individuals. However, they should not be considered as an alternative to proper business planning and should not be used as a permanent arrangement if it is not justifiable.”

Having contractors available for call–in is not a zero hours contract, if the contractor remains genuinely self-employed.

In contrast someone who is not self-employed will acquire employment rights as a ‘worker’, including the National Minimum Wage, protection from discrimination, rest breaks, annual leave, sick pay and pensions auto-enrollment.

If the arrangement is one under which they work regularly but do not work regular hours, they are likely to be an ‘employee’, with additional rights to a written statement of terms & conditions, holidays, holiday pay and in time protection against unfair dismissal or the right to a redundancy payment. This will apply where there is not a full week without work from Sunday to Saturday between the times they do work, but leaving that break will not necessarily be enough to prevent a ‘worker’  becoming an ’employee’.

Because ‘zero-hours contract’ is used to cover a wide range of situations, it is important for employers to ensure that written contracts contain provisions setting out the status, rights and obligations of their zero-hours staff. Having done that they must keep to those contracts, as otherwise they may find that a ‘worker’ has become an ’employee’. A court or employment tribunal will look at the reality of what happens not just what is written down.

It is important that employers and employees understand what they are doing. Not being clear can lead to disputes, disgruntlement and litigation. Employers may feel that claims from zero-hours staff will be deterred by the costs of paying the high fees to make a claim to an Employment Tribunal, but many claims can also be brought in the Small Claims Court, which is much cheaper.

We are pleased to store your Property Documents and / or Wills free of charge

If you have important documents that you would like to be securely stored by us free of charge, please telephone Dorothy Baker on 01749 674747 or by email to

You do not have to be an existing client of Harris & Harris to use this service, but we will need you to provide proof of identification.

We are a firm of solicitors regulated by the Solicitors Regulation Authority and maintain insurance which means that you can rest assured your documents will be safe and secure, and available if you need them.

Consumer Rights – 5 Alternative Dispute Resolution (ADR) Schemes

This is the last in our series of brief summaries of the changes in consumer protection law, highlighting their significance, and with links to further advice.   This is not intended to be legal advice upon which you should act, but awareness of issues which you need to consider. For legal advice please contact Neil Howlett or Andy Hambleton

Another change to consumer rights effective from 1st October 2015 simultaneously with the Consumer Rights Act is the requirement for all traders dealing with consumers to provide details of available ADR schemes.

Good Alternative Dispute Resolution (ADR) schemes can be very helpful, and many sectors and trade organisations offer them.  However, they tend to blur the distinction between consumers legal rights in contract law and their right to moan if their (unreasonable) expectations are not met.

ADR has been the flavour of the month with governments for many years.  Currently, the governments thinks that the eBay scheme is excellent (which may not be the experience everyone who has used it).

To comply with the EU directive on ADR which is intended to make online ADR available to all consumers traders will now be required to advise consumers about relevant ADR schemes if they cannot resolve their complaints.  Confusingly, the traders will not be required to participate in such ADR schemes unless there is an existing regulatory obligation to refer complaints to an ADR scheme or ombudsman, e.g., the Financial Conduct Authority for the financial services sector or the Legal Ombudsman for solicitors. If that applies your professional or trade body should have informed you.

See Business Companion – Alternative Dispute Resolution

Consumer Rights Act 2015 – 3 Consumer Notices & Unfair Terms

From 1st October 2015 there are fundamental changes to consumer rights introduced under the Consumer Rights Act 2015.  This Act replaces almost all existing consumer protection legislation.   It introduces significant new concepts and protections for consumers.  All businesses should be reviewing their Terms of Business for consumers, their procedures and staff training.

We are posting a series of brief summaries of the changes, highlighting their significance, and with links to further advice.   This is not intended to be legal advice upon which you should act, but awareness of issues which you need to consider.

See Consumer Rights Act 2015 – 1 All Change? and 2 Services & Digital Content

For legal advice please contact Neil Howlett or Andy Hambleton

The Consumer Rights Act will apply to all forms of contract.  Previously, obligations of fairness were restricted to contracts which were not individually negotiated.  The Consumer Rights Act’s test of fairness will apply to all contracts, including oral contracts.   It will be much more important for a trader to be able to prove on the balance of probabilities what they agreed to provide or do, and on what terms.  That will be a great deal easier if the terms are in writing and there is a copy signed by the consumer.

Consumer Notices & Pre-contractual statements

The Consumer Rights Act introduces a new concept of a Consumer Notice.  That is anything which sets out the rights or obligations of the trader and consumer or restricts the trader’s liability.   Anything in these will be subject to the same test of fairness as if they were set out in a trader’s Terms & Conditions.

This will apply to marketing communications, brochures, and signs at premises, all of which will be treated in the same way as if they were contract terms.

Anything said or written to a consumer about a service or trader, whether by or on behalf of the trader, will be treated as a term of the contract if the consumer takes it into account when deciding whether to enter into the contract, and when making any decision about the services after the contract is entered into.

This will make it a great deal easier for consumers to bring claims which would previously have had to be pursued under the complex law of Misrepresentation.

Unfair Terms

The Consumer Rights Act 2015 replaces the Unfair Contract Terms Act 1977 and the Unfair Terms in Consumer Contracts Regulations 1999 (though UCTA remains for B2B contracts).

All written terms of a consumer contract must be “transparent”, i.e. in plain and intelligible language, not using jargon the average consumer must be able to understand them. One ECJ decision said that it must enable the consumer “to evaluate, on the basis of clear, intelligible criteria, the economic consequences for him which derive from it”. Any ambiguity will be interpreted in favour of the consumer. In addition terms must be:-

  • Legible, if in writing, which means that they cannot be hidden away in small print
  • Prominent, which is a new definition, requiring that they are brought to the consumer’s attention in a way that an average consumer would become aware of them.  The average consumer is assumed to be reasonably well informed, observant and circumspect.  The more significant the term, or the closer to the boundary of fairness, the greater the obligation to make it prominent.

Although a term which is not “transparent” may still be enforceable it is more likely to fail the test of “fairness”.

The CRA does not apply to unwritten terms.  Although Sam Goldwyn was not precisely correct any trader seeking to rely upon verbal terms which are advantageous to them as against a consumer is going to be climbing Mount Everest.

A term is unfair if “contrary to the requirement of good faith it causes a significant imbalance in the parties’ rights and obligations under the contract to the detriment of the consumer”.  Any attempt to limit or exclude liability is subject to review. In particular for:-

  • Breach of contract
  • Liability for injury or death not caused by negligence
  • Damage to property

There is a ‘black list’ of items that cannot be excluded.  Any attempt to exclude them will be ineffective.  They are:

  • Excluding liability for death or personal injury resulting from negligence
  • Excluding the statutory tests for conformity
  • Excluding liability for incorrect installation of goods
  • Excluding the obligation to provide services with reasonable skill and care.

There is an extended ‘grey list’ of terms which will be assumed to be unfair and therefore ineffective.  These include:-

  • Disproportionate charges if the consumer ends the contract.
  • Terms which allow the trader to change the characteristics of the Goods (or Services) after the consumer has become bound by the contract.
  • Terms which allow the trader to change the characteristics of the goods or services after the consumer has become bound by the contract.  There is an exception where there is a contract which is “indefinite” and where the trader gives reasonable notice and the consumer has the right to terminate the contract.
  • Terms where the trader can set the price after the consumer has become bound by the contract and has not agreed the price or method of determining the price.  The explanatory notes to the Act gives as an example of lack of prominence a low headline price with hidden extras in separate terms and conditions.

The grey list is not exclusive.  A Court could determine that any term is unfair against the statutory test.

Provisions excluding common law rights are possible but are likely to be subject to assessment against the grey list and the test of fairness.

Terms can be excluded from assessment against fairness if:-

  • They are the main subject matter of the contract, or
  • Terms that set the price; although price may be excluded, terms such as time and method of payment may still be subject to assessment against fairness.

Courts considering consumer contracts must consider the issue of fairness if there is sufficient legal and factual material available, even if it is not raised as an issue by the parties.  The introduction of an obligation of good faith is also a novel concept under English law.  Courts continue to be reluctant to apply it in commercial contracts.

Given the present pressures on the Court Service it seems unlikely that there will be legions of campaigning Judges going through the small print of every consumer contract which comes before them.  The danger is of Judges looking for ways to find in favour of consumers and that these issues will arise at a hearing without prior notice to a trader who is attempting to defend their position.

Useful guidance

Rules for the supply of goods: BIS’s Consumer Rights Act: Goods Guidance for Business 

Rules for the supply of services: BIS’s Consumer Rights Act: Services Guidance for Business

Rules for the supply of digital content: BIS’s Consumer Rights Act: Digital Content Guidance for Business

Unfair terms: The current guidance on unfair terms is CMA Unfair contract terms guidance: CMA37 This guidance makes reference to Annex A, which contains examples of terms which the CMA’s predecessor body, the Office of Fair Trading (OFT), required be withdrawn and substitutes which were accepted under the UTCCRs.  The CMA has not updated Annex A but has stated that it remains of substantial illustrative value.

Consumer Rights Act 2015 – 2 Services & Digital Content

From 1st October 2015 there are fundamental changes to consumer rights introduced under the Consumer Rights Act 2015.  This Act replaces almost all existing consumer protection legislation.   It introduces significant new concepts and protections for consumers.  All businesses should be reviewing their Terms of Business for consumers, their procedures and staff training.

We are posting a series of brief summaries of the changes, highlighting their significance, and with links to further advice.  This is not intended to be legal advice upon which you should act, but awareness of issues which you need to consider.

For legal advice please contact Neil Howlett or Andy Hambleton

The legal standards and remedies for Services

As with goods, there is no fundamental change in the test for the quality of services, which must be provided with “reasonable care and skill”.

However, there are new specific remedies for services

  • Not performed with reasonable care and skill
  • Not performed in line with information given about the service.
  • Not performed within a fixed time given by the trader or within a reasonable time.

If services are not performed within the fixed time or a reasonable time, the consumer can demand a price reduction but cannot demand performance.

Where services are not performed with reasonable care or skill or in line with information given about the service the consumer can require repeat performance at the trader’s expense.  This must be within a reasonable time and without significant inconvenience to the consumer.  The trader can only refuse if it is impossible to re-perform the service.

The consumer can claim a price reduction at the consumer’s option.  There is no guidance on how to calculate the price reduction, but the Act does state that it may be the full price.

Consumers still retain a residual right to claim damages at Common Law (and also but less likely for Specific Performance).  The consumer also has the right to terminate a contract if there is a fundamental breach at any time.

Traders will also have to take into account the rights of Consumers to use ADR schemes.

See Business Companion – Services

Digital Content

In addition to goods and services the Consumer Rights Act introduces new rights for consumers purchasing digital content (including where no payment is made by the consumer).

Traders are obliged to use a reasonable skill and care, i.e. not to allow an App to be released unless it has been fully tested.

Where digital content is non-conforming, applying the test for Goods, the Consumer has a right to repair, replacement, a price reduction or refund.  The Consumer cannot reject digital content because it cannot be returned.  Traders are entitled to more than one attempt at repair or replacement.

The major new risk for suppliers of digital content is that if a consumers device or other digital content is damaged as a result of the traders digital product being non-conforming the consumer will be entitled to the repair of the damaged caused or compensation.  As that may be difficult to calculate and may be substantial traders should consider the availability of insurance against this risk.

See Business Companion- Digital