Ian Randall

Why you should not represent yourself at an Employment Tribunal

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Everything for business meeting

The Employment Tribunal process is governed by the Employment Tribunals Rules of Procedure 2013 (amended up to October 6, 2021). For many claimants, navigating this process without legal representation can be challenging, and seeking professional guidance is often recommended.

Initial Steps: Notifying ACAS and Early Conciliation

  1. Notifying ACAS: Before submitting a claim, you must notify the Advisory, Conciliation and Arbitration Service (ACAS), though you are not obligated to settle at this stage.
  2. Early Conciliation Certificate: ACAS will issue an early conciliation certificate with a reference number, a requirement before proceeding with a tribunal claim.

Filing a Claim with the Employment Tribunal

Completing the ET1 Claim Form

  • ET1 Submission: The ET1 form outlines the basis of your claim. It must be completed within strict time limits—usually within three months minus one day, considering the early conciliation process.
  • Importance of Accuracy: Properly completing the ET1 is crucial for moving forward with the case.

Responding to the Claim: ET3 Defence

  • ET3 Filing Deadline: The respondent (the person or company against whom the case is filed) must submit their ET3 defence within 28 days of receiving the claim.
  • Failure to File: If the respondent fails to submit the ET3 on time, they may be excluded from the hearing unless they successfully request an extension, which is rarely granted.

Preliminary Hearing (PH) and Case Management

Purpose of the Preliminary Hearing

The Preliminary Hearing (PH) serves several key functions:

  1. Assessing Success Prospects: The Employment Judge (EJ) will evaluate the potential success of the claim or defence.
  2. Deposit Order: If a claim or defence has limited prospects, the EJ may order a deposit of up to £1,000 for the party to continue.
  3. Case Management Orders (CMOs): Known as ‘Directions,’ CMOs guide the progression of the case. In straightforward cases, standard CMOs may be issued without a hearing.

Building Your Case: Preparation and Evidence Gathering

Reviewing the ET3 and Respondent’s Defence

Once the ET3 defence is filed, the claimant can analyze the respondent’s arguments. Consider the following:

  • Identify Supporting Documentation: Gather documents and other items to support your position and counter the respondent’s defence.
  • Thorough Preparation: A strong grasp of your case’s issues and facts is essential to clearly present your argument to the tribunal.

Objectivity and Legal Understanding

  • Assessing Your Case’s Merits: Objectively evaluate your claim as the tribunal would, focusing on factual evidence rather than personal views.
  • Understanding Relevant Laws: Identify and understand the specific statutes and case laws that pertain to your claim to ensure thorough legal grounding.

Evidence Review and Witness Preparation

  • Examine All Evidence: Review all documents and evidence exchanged between parties to prevent surprises.
  • Witness Statements: Ensure that both the claimant and witnesses fully agree with the contents of their statements.

Final Hearing and Decision

Structure of the Final Hearing

  1. Introductions and Confirmation of Claims: The tribunal will introduce participants, confirm the claims to be heard, and resolve outstanding case management issues.
  2. Evidence Presentation: Typically, the claimant and their witnesses testify first. Testimony includes:
    • Evidence in Chief: The witness confirms the truth of their statement.
    • Supplementary Questions: The party may address points raised by the other side.
    • Cross-Examination: Opposing parties question witnesses.
    • Re-Examination: Opportunity to clarify points after cross-examination.
  3. Closing Submissions: Prepare a skeleton draft of closing submissions that can be adapted as the hearing progresses.

Judgment and Costs

  • Judgment Delivery: The judgment may be given immediately or reserved for later, accompanied by written reasons.
  • Costs: Unlike other courts, Employment Tribunals typically do not award costs unless one party’s conduct is unreasonable or the claim is misconceived or vexatious.

Benefits of Legal Representation

Advantages of Professional Representation

  1. Expertise in Employment Law: A representative brings specialized knowledge and experience.
  2. Case Assessment: Legal professionals can assess the strength of your case and advise on the best approach.
  3. Evidence Gathering and Presentation: Skilled representatives know how to compile and present evidence effectively.
  4. Procedural Guidance: Legal representatives can guide you through each procedural step, enhancing your case’s efficiency and clarity.

Financial Considerations for Representation

  • Conditional Fee Agreement (CFA): Often, representation operates under a CFA, where the representative receives 35% of any settlement or judgment.
  • Additional Fees: Representation fees for hearings can range from £500 to £2,000 per day, plus VAT.
  • Monies on Account: Some representatives charge an account fee (e.g., £500–£1,000) that is deducted from the CFA payment but is non-refundable if no CFA payment is obtained.

Why Consider Legal Representation?

Instructing a legal representative can significantly improve your chances of success, offering expertise in evidence gathering, negotiation, and navigating complex procedural requirements.

by
Ian Randall

Construction Adjudication Intricacies

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An individual exercises his hand under the scales of justice.

Adjudication is a mandatory dispute resolution process specifically designed for the construction industry, introduced under the Housing Grants Construction and Regeneration Act 1996 (Construction Act 1996). It provides a fast, 28-day mechanism (extendable by agreement) to address and resolve disputes, ensuring continued cash flow during a project. This approach is often referred to as “pay first, argue later.”

Key Features of Adjudication

  • Applicable to Construction Contracts: Parties in a “construction contract” cannot opt out of adjudication.
  • Interim Binding Decisions: The adjudicator’s decisions are binding until the dispute is ultimately resolved through legal proceedings, arbitration, or mutual agreement.
  • Focus on Cash Flow: Adjudication helps maintain cash flow, critical in construction projects, by resolving financial disputes quickly.

Types of Disputes Resolved by Adjudication

Adjudication can address a wide variety of claims within construction, including but not limited to:

Common Financial and Project-Based Claims

  • Interim Payments: Payments made to subcontractors throughout the project to ensure financial flow.
  • Delay and Disruption: Compensation claims due to delays or disruptions affecting project productivity.
  • Extensions of Time: Requests to extend the project timeline due to unforeseen delays.
  • Defects in Works: Issues relating to construction defects, such as water intrusion or structural flaws.
  • Final Account: The final settlement detailing the total amount due to the contractor.

Complex Claims

  • Breach of Contract: Claims for failure to meet contractual obligations, such as completing work on time or according to standards.
  • Termination of Contract: Cases where contract termination becomes necessary due to significant non-performance.
  • Professional Negligence: Claims against construction professionals, such as architects or engineers, who fail to meet professional standards.

Legal Framework for Adjudication

Rights Under the Construction Act 1996

The Construction Act grants parties the right to refer a dispute to adjudication at any time during a project. Part 1 of the Scheme for Construction Contracts 1998 provides additional terms where a contract does not contain all adjudication provisions.

Interim Binding Nature of Decisions

Adjudicator decisions are binding on an interim basis, usually enforced by the Technology and Construction Court (TCC). Challenges to these decisions by the losing party are rare and typically unsuccessful.

Preparing for Adjudication

Steps Before Starting Adjudication

To initiate adjudication, it’s essential to ensure the dispute is clear and specific. Key preparatory steps include:

  1. Defining the Dispute: The dispute must be well-defined in the notice of adjudication.
  2. Including a Single Dispute: Adjudication generally covers one dispute per notice unless the contract allows otherwise.
  3. Meeting Time Limits: Adhere to any time restrictions outlined in the contract.

Receiving a Notice of Adjudication

Upon receiving a notice, parties should verify:

  • Existence of a Construction Contract: Confirm if a valid construction contract applies.
  • Crystallization of Dispute: Ensure the dispute has fully developed.
  • Consistency of Referred Dispute: Verify that the dispute in the notice aligns with the actual issue.
  • Adjudicator’s Appointment and Jurisdiction: Confirm the validity of the adjudicator’s appointment and assess any potential grounds to challenge jurisdiction.

Reviewing the Adjudicator’s Decision

Once the adjudicator’s decision is issued, both parties should evaluate:

  • Timeliness and Accuracy: Check if the decision was issued on time and if there are clerical errors.
  • Adherence to Natural Justice: Ensure the adjudicator acted fairly and without bias, avoiding conflicts of interest.
  • Jurisdictional Compliance: Confirm that the adjudicator addressed the correct question, even if the outcome was unfavorable.

Benefits of Adjudication for Subcontractors

Strategic Tool for Subcontractors

For subcontractors, adjudication is a powerful tool when negotiating with employers. However, effective use requires:

  • Process Knowledge: A thorough understanding of adjudication steps and requirements.
  • Advocacy Skills: The ability to present a clear, persuasive argument that effectively conveys their position.

Defining a Construction Contract Under the Act

Under the Construction Act (Section 104), a construction contract involves agreements related to construction operations, including:

  1. Construction, Alteration, and Repair: Broadly defined to cover structures, industrial facilities, and infrastructure such as roads, power lines, and harbors.
  2. Internal Works: Includes installations like heating, electrical systems, fire protection, and communications.
  3. Excluded Contracts: Some contracts are excluded, such as those involving oil extraction, nuclear processes, or residential projects lasting under 45 days.

Key Elements in Common Claims

  • Interim Payments: Scheduled payments throughout a project, ensuring subcontractors don’t wait until completion for compensation.
  • Delay vs. Disruption Claims: Delay claims extend the timeline; disruption claims seek compensation for productivity losses.
  • Extension of Time: Allows contractors to avoid penalties if delays are justifiable.
  • Defects: Defect claims address structural or functional issues, allowing recovery for damages or cost of repairs.
  • Final Account: Final settlement on agreed project costs.

By understanding adjudication’s mechanisms, rights, and limitations, parties in the construction industry can effectively navigate disputes, ensuring swift resolutions and project continuity.

by
Ian Randall

The Importance Of Obtaining Early Legal Advice

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Early Legal Advice

Commercial disputes are an inevitable part of business for many owners. These conflicts—whether breaches of contract, non-payment issues, or internal disputes—can disrupt operations, harm relationships, and damage reputations. While not all disputes lead to litigation, managing them effectively from the start is essential to avoid serious repercussions.

Types of Commercial Disputes

Contract Breaches and Non-Payment Issues

One-off issues, like a late invoice payment, can sometimes be resolved with a simple reminder. However, persistent issues may require a more structured approach. For instance, a client consistently paying late might tempt you to terminate the contract. Yet, terminating without proper understanding of contractual obligations could lead to a breach of contract claim against you.

Shareholder and Employment Disputes

Conflicts involving shareholders, directors, and employees can escalate quickly if not handled properly. Such disputes not only strain internal relationships but can also harm the public image of the business.

Seeking Legal Advice Early

When to Consult Legal Professionals

Legal advice should ideally be sought as soon as a potential issue arises. While minor matters, like an overdue invoice, may be handled independently, more complex disputes—especially those involving contractual interpretations—demand professional guidance. Engaging legal help early minimizes risks and often proves less costly than attempting to resolve disputes alone.

Risks of Resolving Disputes Without Legal Guidance

Attempting to navigate disputes independently can backfire, especially if you lack expertise in procedural rules or relevant areas of law, such as contract, employment, or intellectual property. Misunderstanding the legal process or making unintentional admissions could lead to unfavorable outcomes and even increase costs in the long run.

Importance of “Without Prejudice” Communication

Understanding Without Prejudice Rules

In dispute resolution, “without prejudice” communication allows businesses to negotiate openly without fear of their statements being used against them. However, using these rules improperly can lead to additional legal challenges. Legal advice can ensure you stay protected, avoid costly mistakes, and prevent satellite litigation over the misuse of “without prejudice” communication.

Alternative Dispute Resolution Methods (ADR)

Court’s Expectation of ADR

The court expects parties to explore alternative dispute resolution methods, such as mediation, arbitration, or adjudication, before pursuing litigation. Failing to attempt ADR without good reason may lead to cost penalties, even if the case is ultimately successful.

Benefits of Mediation and Other ADR Options

Mediation and other ADR options often yield quicker and less expensive outcomes compared to litigation. These methods not only save time and resources but also help preserve business relationships by avoiding the adversarial nature of court proceedings.

Pre-Action Protocols and Compliance

Understanding Pre-Action Protocols

Prior to initiating court proceedings, parties are generally expected to follow specific pre-action protocols, including attempts to settle the dispute independently. Legal guidance on complying with these protocols can protect you from increased costs and ensure adherence to procedural expectations.

Legal Support in ADR Processes

Dispute resolution lawyers can provide invaluable assistance in navigating ADR processes, including drafting relevant documentation, advising on appropriate dispute resolution methods, and maximizing cost protection through compliance.

Evidence Gathering for Disputes

Types of Evidence Required

Success in any dispute hinges on the evidence presented. For commercial disputes, key evidence might include:

  • Contractual agreements
  • Correspondence related to the business relationship
  • Purchase orders, invoices, and delivery notes
  • Photographs (e.g., evidence of defective goods)

Importance of Timely Evidence Collection

The sooner evidence is gathered, the more accurate the legal advice and assessment of the case can be. Relying solely on memory can be unreliable, whereas documented evidence provides a stronger basis for evaluating the merits of a position.

Understanding Limitation Periods in Disputes

Limitation Periods for Different Types of Claims

Each type of claim has a specific limitation period. For instance, breach of contract claims generally have a six-year limitation from the breach date. Missing these deadlines bars the right to pursue claims, underscoring the need to act swiftly and understand any contractual time limits.

The Value of Early Legal Advice and ADR

Advantages of Early Mediation and ADR

Engaging in mediation or other forms of ADR at an early stage often leads to faster, more amicable resolutions. Addressing issues before positions harden can facilitate settlement, preserve business relationships, and save on legal expenses.

How Legal Advice Preserves Business Resources

Taking proactive legal advice minimizes the time and resources spent on prolonged disputes, allowing business leaders to focus on growth rather than litigation. Early intervention can also prevent escalation, protecting both financial and reputational interests.

By understanding the landscape of commercial disputes and seeking timely legal support, businesses can safeguard their interests, minimize disruptions, and foster a foundation for continued success.

by
Ian Randall

Understanding Your Duties as a Director Under the Companies Act 2006

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Settling Dispute

Navigating the role of a director can be complex, especially under the regulations outlined in the Companies Act 2006. For both new and seasoned directors, understanding these legal duties is crucial to ensure the successful governance of a company. The Act introduces a framework that outlines the specific responsibilities and expectations placed on directors, making compliance not just a best practice but a legal requirement. At the heart of this, a director’s duties include promoting the success of the company for the benefit of its members as a whole.

Directors have a variety of responsibilities that go beyond mere decision-making. They must follow a code of conduct that prioritises transparency and accountability, requiring declarations of interest in proposed transactions. This means that directors must always act honestly and with a commitment to being trustworthy stewards of their companies. These duties also extend to maintaining high standards when dealing with conflicts or potential liabilities faced by the company.

The Companies Act 2006 is a significant piece of legislation that holds directors accountable through a structured set of duties and principles. Directors who breach these legal duties may face serious consequences, which highlights the importance of understanding these guidelines thoroughly. Whether it’s making strategic decisions or complying with statutory requirements, the role is multifaceted and demands a keen awareness of the legal landscape.

Key Takeaways

  • Directors must promote company success for the members’ benefit.
  • Compliance with legal duties is essential to avoid serious consequences.
  • Transparency and accountability are core elements of directors’ responsibilities.

The Legal Framework of Director Duties

Directors play a critical role under the governance of company law, especially in England and Wales. Their responsibilities are shaped by both the statutory requirements set out in the Companies Act 2006 and influences from common law principles.

Key Provisions Under the Companies Act 2006

The Companies Act 2006 outlines several statutory duties that directors must follow. These include acting within the powers given by the company, promoting the success of the company, and exercising independent judgment. Directors are also required to exercise reasonable care, skill, and diligence.

A significant aspect of this Act is the duty to avoid conflicts of interest. Directors must not accept benefits from third parties, which could risk their loyalty to the company. Moreover, they must declare any direct or indirect interests in proposed transactions with the company. These legal duties ensure that directors manage the company responsibly and ethically.

Common Law Influence and Statutory Duties

Common law has historically played a role in shaping director responsibilities. Before the Companies Act 2006, many duties were not codified in legislation but rather developed through judicial decisions, forming the basis of fiduciary duties. These duties include acting in good faith and prioritising the company’s best interests.

While the Companies Act 2006 has formalised these duties, common law principles continue to support and interpret statutory duties. They help in understanding concepts like loyalty and care, which remain relevant in modern business operations. Directors must integrate both statutory requirements and common law principles to fulfil their roles effectively.

Core Responsibilities of Directors

Directors of UK companies have several important responsibilities outlined in the Companies Act 2006. They are bound by specific duties, such as acting within their powers, promoting company success, and exercising independent judgment. Each responsibility plays a crucial role in the ethical and effective governance of a company.

Duty to Act Within Powers

Directors must act according to the powers defined in the company’s Articles of Association. These articles form the company’s constitution and must guide directors in their decisions. Misusing these powers can lead to serious legal consequences and affect the company negatively.

The board of directors should understand the rules set forth in these documents. This includes not only legal limits but also the purpose for which the powers are granted. Acting outside these powers could risk directors’ liability and undermine the company’s stability.

Directors should regularly review and familiarise themselves with the Articles of Association. It ensures their actions are aligned with the company’s objectives and maintain the trust of stakeholders.

Duty to Promote the Success of the Company

Section 172 of the Companies Act 2006 outlines the duty to promote the success of the company. Directors must consider the long-term effects of their decisions.

Key factors to consider include the interests of employees, relationships with suppliers and customers, and the impact on the environment. Balancing these elements can increase the company’s value for shareholders.

In fulfilling this duty, directors should document their decision-making processes. This documentation can serve as evidence of their considerations and ensure transparency and accountability.

Duty to Exercise Independent Judgment

Directors must make decisions independently without undue influence from others. This duty ensures that personal interests or external factors do not interfere with what’s best for the company.

While advice from experts or fellow directors is helpful, the final decisions should rest with the individual director. They should not relinquish their decision-making responsibilities.

Maintaining independence requires directors to critically evaluate all available information. They should assess each situation fairly and make decisions based on sound reasoning and the company’s best interests. This independent thinking supports effective governance and robust company leadership.

Standards of Conduct and Performance

Company directors must adhere to specific standards of conduct and performance set out in the Companies Act 2006. These standards ensure that directors are fulfilling their fiduciary duties to act with integrity and protect the interests of the company and its stakeholders.

Exercise of Reasonable Care, Skill and Diligence

Directors must demonstrate reasonable care, skill, and diligence in their roles. They are expected to perform to the standard of a reasonably diligent person with the general knowledge, skill, and experience one might expect from someone in a similar position.

Directors must also consider their personal knowledge and skills. If a director has expertise in a particular area, the law requires him or her to apply this knowledge when making decisions. This expectation ensures that directors are consistently making informed and well-considered decisions.

Failure to meet these standards can lead to legal action or removal from their position. Directors should stay updated with relevant information pertinent to their roles and continuously refine their skills to uphold these standards.

Avoiding Conflicts of Interest

The duty to avoid conflicts of interest is fundamental in maintaining trust and transparency. Directors must put the company’s interests above their own and declare any conflicts before participating in decision-making processes.

Conflicts can arise from personal, financial, or other relationships that might compromise objectivity. By recognising these situations early, directors can take steps to mitigate any potential impact on their responsibilities.

When conflicts cannot be avoided, directors must disclose them to the board. Being proactive about identifying conflicts helps safeguard the company’s reputation for high standards of business conduct and ensures decisions are made in the company’s best interest.

Declarations, Disclosures, and Compliance

Directors must adhere to specific rules to maintain transparency and integrity within their companies. These rules are critical to managing potential conflicts and ensuring proper company conduct.

Declaration of Interest in Existing Transactions

Directors need to declare any personal interests in transactions that the company is undertaking. Declare Interests means they must disclose this to the other directors in writing or at a board meeting. This helps prevent conflicts and ensures that decisions are made in the company’s best interest. If directors fail to declare these interests, they could face legal consequences or penalties.

Connected Persons, such as family members or business partners, must also be considered when disclosing interests. Directors should be transparent about any potential indirect interests to avoid conflicts aligning with the Interest of Creditors and the Interest of the Company’s Employees. This practice of openness supports the ethical management of the company’s affairs.

Maintaining Accurate Company Records

Keeping accurate records is a fundamental duty for directors. This includes maintaining a comprehensive Director Information Hub that logs important details like financial statements, minutes of meetings, and any declared interests. Records must be updated regularly to reflect any changes in the company’s structure or transactions.

A Confirmation Statement must be filed annually to ensure the information held is up to date. This helps in tracking the company’s compliance with statutory requirements. Proper record-keeping also ensures that everything is transparent if the company faces scrutiny or audits. Directors should ensure all data is safeguarded against loss or unauthorised access, which is crucial for legal and operational integrity.

Consequences of Breaching Director Duties

Breaching director duties in the UK can lead to significant legal and financial penalties. Directors may face personal liability and other serious consequences, highlighting the need to adhere to statutory requirements.

Remedies and Sanctions for Breach of Duty

When a director breaches their duty, several remedies and sanctions may apply. Disqualification is one of the most serious outcomes. Under the Company Directors Disqualification Act 1986, directors can be disqualified from serving on a board for a set period. Fines and compensation payments might also be imposed, impacting the director financially. Criminal charges could also be pursued, resulting in a criminal record. Moreover, directors might be required to pay for any financial losses suffered by the company, ensuring accountability and discouragement of future breaches.

Derivative Actions and Personal Liability

Derivative actions offer a way for shareholders to bring a lawsuit on behalf of the company. If the directors breach their fiduciary duty, shareholders can pursue these legal actions. This course of action holds directors accountable for misconduct or negligence. If successful, directors who have breached their duties may become personally liable for losses incurred. This liability ensures directors act in the best interests of the company. Equitable principles, including fairness and justice, are used by courts in evaluating cases, ensuring directors are responsible for upholding their duties.

Frequently Asked Questions

Directors have several important duties under the Companies Act 2006. These duties ensure that they govern responsibly and make decisions for the benefit of the company and its members. Breaching these duties can lead to personal liability and other serious consequences.

What are the statutory duties of a director as per the Companies Act 2006?

Directors must adhere to statutory duties like promoting the success of the company, exercising independent judgment, and avoiding conflicts of interest. These duties are codified in the Companies Act 2006 to provide clear guidelines.

How do the general duties of directors ensure responsible governance of a company?

The general duties include acting within powers and exercising care, skill, and diligence. These ensure directors act with responsibility and integrity, which helps maintain trust and stability within the company.

What are the consequences of failing to comply with directors’ duties outlined in the Companies Act 2006?

Failing to comply with these duties can lead to serious consequences, including legal action and being disqualified from serving as a director. Breaches can harm the company and its stakeholders.

Can a director be held personally liable for breaches of their statutory duties?

Yes, directors can be held personally liable if they fail to fulfil their statutory duties. This liability means they may have to compensate the company or third parties if their breach causes loss.

How does the Companies Act 2006 define the scope of a director’s role in corporate decision-making?

The Act defines that directors should consider various factors, such as long-term consequences and employee interests, in their decision-making. This ensures decisions benefit the company and its members.

What are the fiduciary duties imposed on directors under the Companies Act 2006?

Fiduciary duties require directors to act in good faith, prioritising the company’s interests above personal gains. These duties are essential for maintaining the integrity and ethical standards of company governance.

by
Ian Randall

What is a Briefing Note?

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Briefing Note

Briefing notes are used to keep decision makers informed about the issues they are responsible for. The demands of business these days are such that senior officials must constantly learn and retain information about an enormous range of topics and issues, which change rapidly.

A briefing note is a short paper that quickly and effectively informs a decision-maker about an issue, and are typically written for those senior-level decision-makers who, have to keep track of many, often unrelated issues and may not be familiar with the issues, and for whatever reason, need a capsule version of the key points and considerations about an issue

A well-prepared briefing note quickly and efficiently fills a person in on an issue. Briefing notes typically include some or all of the following sections, a concise statement of the issue, proposal or problem. The details the reader needs in order to understand what follows typically, the history of the topic. The current status describing the current situation, who is involved, what is happening now, the current state of the matter, issue, and situation.

A summary of the important facts, considerations, developments essentially everything that needs to be considered now, including options which are observations about the key considerations and what they mean. Finally conclusions summarising and highlighting what the reader needs to know.

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Ian Randall

Results driven Corporate and Commercial Lawyer with 30+ years of experience ensuring the legality of Corporate and Commercial transactions. Adept at drafting corporate and commercial documents, reviewing, disputing, and advising on Commercial and Corporate matters. Clear ADR: Accredited Civil and Commercial Mediator and Alternative Dispute Resolution Specialist.

Honours Degree in Law and a master’s degree in Employment Law and Practice from the University of Central Lancashire.

A member of the New York State Bar in Good Standing.

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