"If you can't stand the heat, get out of the kitchen".
The well-known phrase, designed to prevent individuals becoming embroiled in a position which carries too much pressure for their liking.
There are those who believe that the wording can be easily applied to business, ensuring that people stay within the limits of their talent, comfort and capabilities.
There are few instances when the metaphor mixes with the very literal and fewer still when the tensions created by such a situation have a considerable impact not just on a firm but also a family. One such high-profile example hit the news in January 2015, involving a well-known chef who now faces a considerable cost as a result of a dispute with his father-in-law over a restaurant lease.
The High Court dismissed Mr Ramsay’s claim that he had been duped into paying £640,000-a-year rent for a London gastro pub. Ramsay alleged that Mr Hutcheson had unlawfully used a machine which automatically reproduced a copy of the celebrity's handwriting to 'sign' the lease.
As a result, Mr Ramsay will now have to pay £10.8 million over the course of the remaining 17 years of the 25-year lease as well as £1.6 million in outstanding rent and legal fees to date. The dispute had already seen Mr Hutcheson leave as chief executive of Gordon Ramsay Holdings. Mr Hutcheson's daughter, Tana, had also given evidence in court against her father and brother.
Not all litigation involving families have such a value or a profile attached to them. Nevertheless, there is a lot of common ground between Mr Ramsay's predicament and that of many other entrepreneurs who do business with relatives and end up seeking my advice when difficulties arise.
For me, embarking on a business venture with family members should be even more reason to ensure that all agreements are properly documented. The same can be said when going into business with colleagues or close friends. As unfair as that might sound, it avoids the temptation to cut corners just because you're dealing with someone you know.
Courts and competitors will give companies no more leeway because there are blood ties between the people running them. My team and I have encountered many problems between siblings, parents and their children, and spouses arising from business ventures between them. My advice is clear; when going into business with a family member, take advice on the structure, purpose and intentions of all parties, and document it carefully. Hopefully you’ll never need to look at it again, but in case you do, you’ll avoid a lot of heartache.
As Gordon Ramsay can now attest, investing in a family business does not necessarily create the perfect recipe.
Contact Oratto on 0845 3883765 to speak with an adviser or use our contact form to arrange a call-back.
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In December 2015, the Mercedes Formula 1 team confirmed that they were in the midst of taking legal action against an employee who was due to join their arch-rivals Ferrari at the end of the month.
Benjamin Hoyle was accused of searching and saving Mercedes Formula 1 race data with the intention of transferring this confidential information to Ferrari.
Mercedes released a statement confirming that “the company has taken the appropriate legal steps to protect its intellectual property".
This is an example of the importance that companies often place on their intellectual property and the steps available to employers to stop employees taking their confidential intellectual property. The steps available to employers in similar scenarios include a High Court injunction to stop the employee from transferring the data to his new company and an injunction to stop the new employer (in the case of Benjamin Hoyle, Ferrari) to use and benefit from the confidential intellectual property. A company's confidential data is often one of its most valuable assets, giving the company the competitive edge in the market. Any misappropriation and misuse can provide a competitor with a significant and unfair advantage, and the employer needs to act quickly to minimise damage or potential damage to its business.
Employers should be aware of behaviour that indicates that employees may be misusing, or considering misusing, confidential information, for example:
Working on projects or maintaining regular contact with customers without their line manager's knowledge.
Making extensive use of their personal email account or emailing documents to their personal email address.
Using a memory card or USB stick at work.
Taking documents (whether in hard copy or electronically) out of the employer's premises without authorisation.
Working outside their normal working hours, particularly just prior to their employment terminating or when this is not their usual practice.
An unusual amount of photocopying. If it is necessary to enter initials or a code before using the copiers it may be possible to detect who has been doing what.
Requests for secretaries or other team members to put together business information (for example, lists of customers) without an obvious business reason.
The Hoyle case represents and interesting blend of intellectual property law, breach of contract and employment law.
Magmatic, the manufacturer of the popular children’s ride-on suitcase ‘the Trunki’, has lost its long running legal dispute with rival manufacturer PMS International (“PMS”). This decision is likely to have far reaching implications for the enforceability of community registered designs against copycat products.
The Supreme Court concluded PMS’ Kiddee Case range didn't infringe the registered design rights of Magmatic’s Trunki range, which features small, brightly coloured suitcases designed to look like animals.
Magmatic originally won in the High Court, only for that decision to be overturned by the Court of Appeal. The Supreme Court has now decided that the Kiddee Case doesn’t infringe the intellectual property contained in the design of the Trunki.
Lord Neuberger concluded that whilst it was clear that the Kiddee Case was inspired by the Trunki, what matters for design disputes is not the novelty of the idea but the details of the design. Key differences included the different use of colour and texture and the fact that the Kiddee Case has plastic covered wheels.
This decision confirms that design rights create legal protection for specific designs, not the idea that created that design. The Supreme Court found that Magmatic’s inclusion of very specific design features, including dark uncovered plastic wheels, specific texture/shading and a dark stripe meant that these features became a core part of the design. By designing the Kidde Case slightly differently, the court concluded that PMS had sufficiently distinguished its case from the Trunki so that the Kiddee Case did not infringe on the Trunki community registered design.
Magmatic contended that these specific features should be ignored, but the court ultimately decided that these specific features, in addition to the “animal with horns” aspect of the Trunki, meant that the Kiddee Case, with its covered wheels, different features and “insect with antennae” face, is sufficiently different to the Trunki.
The important point for businesses to note is how careful they need to be when first registering their designs. In hindsight, Magmatic may have been successful if the six computer-aided design (CAD) drawings used in its design application had been more generic and considered in more detail. Ultimately, the effect of this decision is that if a business does want to protect a design, any application for a community registered design must be carefully thought through and only made with the assistance of specialist advice.
The gender pay gap. Three little words with very big meaning and although it's not immediately obvious which is the most contentious, when you look at the allusion as a whole, it's a sad and sorry affair that we are still talking about it in the 21st Century.
And so, the entire corporate world is waiting, eagle-eyed, for all companies with more than 250 employees, whether private or third sector, to be required to publish the difference between what they pay their male employees and what they pay their female employees. Employment lawyers may be expecting a potential slew of equal pay claims beginning to appear on the horizon, but it doesn't feel like it's going to wipe out the issue for women in the workplace. For real change to occur, it has to be within the commercial sector. If there's nothing to chase, then the hounds won't run. And commercial lawyers know this.
It seems faintly ridiculous that in 2016 a gender bias continues to exist or that legislative powers have allowed this to continue. Forty-six years ago the Equal Pay Act 1970 came into force, making it unlawful to pay different amounts to men and women working the same jobs. Despite this, there remains an estimated 19.2% pay gap between male and female employees according to the Office for National Statistics. It seems commercial employers have been shadowing the murky truth for more than four decades. So, now mandatory pay gap reporting, conferred by sec.78 of the Equality Act 2010, is being implemented, what impact is it going to have on commercial clients and their lawyers?
Read more: The difference between men and women - and their pay
In this fast changing business climate, more and more companies are coming into contact with Trusts and Trustees than ever before.
This may be in the form of pensions and pension providers, investment companies or simply business models to enable assets to be managed more efficiently.
However, it is likely that as some point in our business lives we will need, or use, Trustees.
What is the role of a Trustee?
A Trustee’s responsibility is to act in the best interest of the Trust as a whole and to be as impartial as possible.
They are sometimes, unfortunately, placed in a position of making incredibly controversial decisions in an attempt to protect assets for long-term goals rather than short-term gain.
The Trustees’ powers are governed by the terms of the Trust and the terms of the Trustee Act, but in brief they must protect and handle trust assets for the benefit of the beneficiaries (this could be a single beneficiary, or a small or large group of individuals).
The aims of the Trust and any restrictions placed on the Trustees will be set out the terms of the trust agreement. This is where is it important to be aware that poorly drafted Trust documents which fail to supply sufficient leeway for the Trustees to carry out their duties as custodians of the Trust funds, simply hamper rather than assist the efficiency of the trust as a whole.
The Trustees do not own any of the Trust assets personally, but they are expected to invest Trust funds prudently and productively taking professional advice if required. They will also have, unless specifically prohibited, the ability to lease, mortgage, or sell any trust asset if deemed necessary in fulfilment of the trust's objectives.
Choosing a trustee
Bearing this in mind, the Trustees must be chosen with great care and after accepting the role may not delegate, renounce, or resign their responsibility unless an acceptable successor consents to being the replacement.
Unless specifically prohibited by the terms of the Trust, a professional Trustee can be paid for their services, and any support assistance required by the Trustee as part of carrying out their duties (which can include legal services, financial services or investment advice required to carry out the responsibilities of a Trustee).
So if asked to be a Trustee, it is advisable that an individual should consider whether they feel able to deal with the duties, and whether they can put aside their personal views, if required to do so.
Contact Oratto on 0845 3883765 to speak with an adviser or use our contact form to arrange a call-back.
