Commonly used legal terms and their definitions.
Another word meaning contract or pact.
Where a property is bought at an auction house and an agreement is made to sell to the highest bidder (see exchange of contracts below).
A search made by the conveyancer to see whether the intended borrower or a purchaser has ever been, is, or is about to be declared bankrupt.
The person taking out a mortgage or loan on their property, otherwise known as a mortgagor.
The boundaries define the perimeters of the property and are sometimes but not always marked out on the ground by fences or hedges. Boundaries are also often shown on the deeds plans although this too is not always the case and can sometimes cause disputes.
A loan taken out to “bridge” the time whilst waiting for the receipt of a mortgage or the sale of a property.
Insurance taken out by the owner of the property to insure the property against risks such as fire, flooding etc. The responsibility to insure the property will often pass to the purchaser on exchange of contract. On a new build property, the developer will always insure the property until completion. Our sister company Taylor Rose Financial offer insurance and protection in this respect.
Buy to Let
This is where a purchaser buys a property with the intention of letting it out commercially. There are usually mortgages specific to this type of purchase called ‘buy to let’ mortgages.
Sometimes also known as the purchaser, this is the person that is buying the property.
Literally means let the purchaser beware. The purchaser is responsible for finding out the condition of the property by survey and is aware they are buying ‘as is’ and subject to all defects.
These are the property sellers and purchasers that link together to make the chain for a particular purchase or sale. The chain may be relatively short, consisting of only two people, i.e. you as purchaser and the person you are buying from as seller or alternately it may consist of several purchasers and sellers. The longer the chain, the more time a purchase or sale may take as the pace of the entire transaction can only go as fast as the slowest link.
The purchaser/seller who has asked for legal help from a conveyancer.
This is the date when the purchase becomes final. By this time the seller must move out of the property and the purchaser is allowed to move in as the purchase price is paid by the purchaser’s conveyancer and received by the seller’s conveyancer.
This is the final account that the conveyancer will send and it will detail his/her fees plus the VAT and all searches etc. This is usually sent between the exchange and completion stage.
Conditions of Sale
The conditions of the sale are detailed in the contract that the seller’s conveyancer prepares and sends to the purchaser’s conveyancer. There are standard Law Society conditions to which the conveyancer adds any special conditions.
This is land protected by a local authority. Properties in conservation areas may be subject to planning restrictions mainly in relation to the exterior of the property.
The legal document confirming the sale/purchase of a property. This is prepared in a draft form by the seller’s conveyancer and sent to the purchaser’s conveyancer. Once all questions are resolved it is then approved and the seller and the purchaser each sign their own copy.
Conveyancing’s legal description is the work that is done to transfer ownership of a property from one person to another. Conveyancer is the job title of the person doing the legal work.
Council for Licensed Conveyancers (CLC)
the official council that governs licensed conveyancers.
These are restrictions/obligations that are attached to the property. For instance, there may be an obligation to maintain a fence or boundary which is a positive covenant or alternately there may be a restraint on the type of building on the land which is called a restrictive covenant.
Legal documents that contain information about a property.
There are two types of deposit that a purchaser may be asked to produce. Sometimes the estate agent will ask for a deposit to secure the property in “goodwill”. You are not advised to pay this deposit without first consulting with your conveyancer. The second type of deposit is the one a purchaser will pay to the conveyancer to hand over with the contract. In convention, this is 10% of the purchase price but often less than this will be agreed to.
Simply put, this means items that the conveyancer must pay to other persons for you. Typically, these are things like VAT, Land Registry fees, stamp duty and other searches.
Conveyancers carry out these searches for the purchaser to check whether the property is connected to mains water and drainage.
These are searches where environmental issues are considered by the conveyancer to see if the land has a history of contamination, and other surrounding land issues. It can also cover flood risks and the possible presence of radon gas.
The equity in a property is the amount that is left over after you take the current worth of the property and deduct from that any mortgages still on-going on the property.
The estate agent acts on behalf of the seller to sell the property. They are the negotiator between purchaser and seller and iron out any disagreements, providing lawfully accurate details.
Exchange of Contracts
This is done via a telephone conversation between the purchasers, conveyancer and the seller’s conveyancer. The purchase is legally binding upon exchange of contracts.
Is accountable for arranging the mortgage or finances to purchase the property and will often organize any life insurance, mortgage protection insurance necessary etc. Our sister company Taylor Rose Financial often work in conjunction with our property department to provide a swifter and more comprehensive service.
Fixtures and Fittings List
A legal binding list; documenting any items being left in or taken from the property. This is completed by the seller and a copy is attached to each part of the contract.
The way in which an owner holds the property. Freehold means owning the property entirely subject only to any mortgages, easements, charges, covenants etc. documented in the deeds.
This is where the seller will sell to a different purchaser for a higher price and will only occur prior to exchange of contracts.
This is where after agreeing a price with the Seller, the purchaser then lowers his offer on the property.
This is the rent a landlord is paid usually on a leasehold property if there is a long lease.
A government department that collects tax. The Inland Revenue now insists by law that every purchaser of property must fill in a stamp duty land transaction form which must be sent to Inland Revenue along with any stamp duty within 30 days of completion. Not doing so leads to considerable fines.
This means authorisation by the client to the conveyancer. The conveyancer will keep the client informed and act on the client’s instructions and wishes.
Where two or more persons buy a property, they are called joint tenants or tenants in common no matter whether the property is common hold, freehold or leasehold. In joint tenancy if an owner dies the property passes automatically to the other owner without a Will. If, however, an owner dies and the property is held as Tenants in Common each purchaser has their own share to be distributed by being passed on or given in a Will.
The majority of properties are registered at the Land Registry. It is a government department that holds a record of most properties in the UK.
Land Registry Search/Fees
Throughout the process the conveyancer will need to make regular searches at the Land Registry to check for information relevant to the property. At the time of completion, the conveyancer will then send the deeds to the Land Registry. The property will be registered with the new owner and then they will charge a fee for their services.
A lease is a complex document which documents issues affecting a leasehold property. Usually these will incorporate lease length, the cost of rent, service charges, rights of way, water, drainage and access. It encompasses all aspects a tenant needs to agree to and understand.
A qualified legal professional governed by the Chartered Institute of Legal Executives.
Otherwise known as the mortgagee; the building society or bank who lends money to property owners.
Are subject to planning restrictions as they are protected by a local authority.
A conveyancer makes these searches on behalf of the purchaser; or in the case of a re-mortgage on behalf of the lender. The search covers local authority issues relevant to the property.
Local Search Indemnity Insurance
Insurance which is taken out on re-mortgages where there is no reason to undertake a full local authority search and protects the lender from losing out financially.
Low Cost Housing
Also called Social Housing these are properties sold to local Housing Associations or the Local Authority for shared ownership or rental income.
The deed signed to show agreement with the mortgage offer, this is then sent to the Land Registry.
This contains all the terms and conditions upon which money is loaned on a property.
The mortgage valuer does not always inspect the physical condition of the property. The borrower pays a fee to the lender in order to have the property evaluated for the mortgage.
Where a property is being bought for the first time from the developer or builder.
Where a property yet to be constructed is bought.
The Land Registry may not be able to list all matters which affect the property, and sometimes certain rights will still be unknown. Regardless of this, the rights will still apply nonetheless. The purchaser will take on the property on this basis even if they were not registered on the title.
Preliminary or Pre-Contract Enquiries
Typically, these questions will consist of basic questions relating to the property and is sent to the seller’s conveyancer by the purchaser’s conveyancer.
Property Information Form
Is a legally binding form completed by the seller. This gives basic information about the property.
This is the term for when an owner pays back the mortgage. Firstly, you need a redemption statement, a statement of what is owed, and if you are paying the loan back early it is possible you will be charged an early redemption charge (ERC).
The amount of searches necessary depends on the property itself.
- Tin Mining Search
- Bankruptcy Search
- Brine Search
- Water Authority/Drainage Search
- Coal Mining Search
- Commons Registration Search
- Company Search
- Environmental Search
- HM Land Registry Search
- HM Land Charges Search
- Index Map Search Local Search
Shared Ownership Property
A property that has been bought with the housing association or council jointly.
The tax you pay when you buy a property.
Stamp Duty Exempt
The government has special areas of the country that are exempt from paying stamp duty. A conveyancer will let you know if the property for purchase is in one of these areas. Additionally, at present some first-time buyers are also exempt from stamp duty.
Stamp Duty Land Tax Form
A complex form with many guidance notes.
Subject to Contract
All negotiations are not legally binding until the exchange of contracts.
Usually be a member of the Royal Institute of Chartered Surveyors RICS, the surveyor will physically inspect the property.
Telegraphic Transfer Fee
Where a bank will charge for sending money from bank to bank.
Tenants in Common
Both you and your partner will own the property; however, you will each own shares of the property which you are free to sell or pass on to anyone you wish when you die in your Will.
The legal document that will transfer ownership of the property.
The Advisory Conciliation and Arbitration Service (ACAS) was founded in 1975 to help improve employment relations. All employment tribunal cases have an appointed ACAS officer to 'conciliate' (to act as an independent intermediary to facilitate settlement).
Dismissal where the employer has terminated the employment contract as opposed to constructive dismissal where the employee resigns because of the employer's fundamental or serious breach of contract.
Evidence to the employment tribunal (ET) may be in documents or oral (spoken). Some forms of evidence will not be allowed by the ET and are termed inadmissible. Most forms of evidence are admissible although some may not be given much weight, such as written unsworn statements from absent witnesses or incomplete or unclear tape recordings.
A formal sworn statement for use in legal proceedings which has been sworn in front of a lawyer.
This has two meanings:
a) A solemn non-religious promise to tell the truth in a court or tribunal in contrast to an oath (on a holy book of the particular religion);
b) An employee 'affirms' his employment contract when he acts in a way that keeps the contract alive or in some way approves a change to it after the employer has committed a fundamental (serious) breach of contract. For example, the employer may unlawfully change the employee's working hours. If the employee accepts them by working in accordance with them, he or she may be said to have affirmed the new contractual term. An employee's affirmation of his or her contract after the employer has done wrong can deprive the employee of a claim for constructive dismissal.
A party's right, once an ET has made a decision, to appeal against it on a point of law to the employment appeal tribunal (EAT). An appeal can be made against a preliminary or a final decision or judgement.
Any party who appeals a decision. Either the employee or the employer may become an appellant if they appeal the outcome of an employment tribunal to the EAT.
Case law that has decided a particular legal principle. Legal principles are developed by cases which raise issues on new points of law not previously decided. Case law (the 'common law') is a feature of English law and other legal systems based on English law.
Breach of Contract
In the employment context, breaking or not complying with one of the agreed terms of a contract of employment. A fundamental or repudiatory breach of contract is an extremely serious breach going to the heart of the employment relationship. If done by the worker, it may entitle the employer to dismiss without notice. If done by the employer, it may entitle a worker to resign and claim constructive dismissal.
The collated documents which both parties to an employment tribunal case have agreed which is used as part of the evidence to try key issues. The bundle is generally presented in lever arch files and paginated (page numbered) with an index.
Burden of Proof
This refers to the party that has the responsibility of proving matters that form the claim. The party with the burden of proof cannot simply make an allegation and expect the other party to do all the work disproving the allegation.
The standard form on which ACAS conciliation officers record a negotiated agreement.
Case Management and Case Management Discussions (CMDs)
Case management is about the preparation of cases for hearings which involves each party disclosing documents, arranging the exchange of witness statements etc. A case management discussion or CMD deals with these matters at a private meeting at the ET. Typically, a CMD is the first tribunal meeting held at a tribunal after a claim has been submitted.
The lawyer (solicitor or barrister) of at least seven years' experience who acts as judge in an employment tribunal. As part of a national recruitment drive to attract more lawyers to fill vacancies, these chair people are now known as employment judges.
This has two meanings:
a) the subject matter of the case;
b) the worker's document which starts the ET proceedings (originating application), usually written on an ET1.
The employee who brings the ET proceedings (formerly known as the 'Applicant'.)
Discrimination is the concept that someone has been treated 'less favourably' than others as a result of a particular characteristic that they possess. With minor exceptions, treating someone less favourably is unlawful where that characteristic is, for example, age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, sex, sexual orientation or religion and belief. The central question is 'less favourably than whom?' This requires a comparator, who does not have the particular characteristic which is presumed to be a factor in the discrimination, enabling a comparison to be made. The comparator can be a real or a hypothetical person.
A settlement agreement through legal or other authorised representatives meeting specified requirements to make it binding on the Claimant in respect of ET claims.
Conciliation, Conciliation Officer
Normally refers to the role of an ACAS (Advisory, Conciliation and Arbitration Service) officer once a case has started in liaising between the parties or their representatives off the record, usually on the telephone, to help encourage a settlement. ACAS now offers a conciliation service before the tribunal case has been lodged. Conciliation officers cannot provide legal advice.
Where an employee resigns because of the employer's fundamental or repudiatory breach of the employment contract. It is treated as a form of unfair dismissal like actual dismissal.
This is often used to refer to workers employed on fixed-term contracts who may or may not have unfair dismissal rights, according to whether they meet the eligibility criteria.
Questioning of a witness to undermine the case of the person who called the witness or to discredit the witness' evidence. Advocates typically use leading questions designed to limit what the witness will say. The golden rule of cross examination is not to ask questions you do not already know the answers to.
Data Protection Act 1998
This statute can be used by employees to obtain copies of their personnel records. Employers must comply with this statute's rigorous provisions. It can also be used to obtain copies of references given in confidence. We advise employers and employees on how to comply and make best use of this legislation.
A formal binding statement about the legal rights of a party given as a remedy by a court or tribunal.
Where a person is treated unfavourably on a prohibited ground because of a protected characteristic.
A procedure followed by the employer in dealing with disciplinary matters. Employers that do not have written disciplinary procedures are frequently penalised in employment tribunals. We can produce a disciplinary procedure upon request.
Disclosure of Documents
The formal process of parties revealing relevant documents to the other. The term 'discovery' is still sometimes used.
An old-fashioned term for disclosure of documents.
EAT (Employment Appeal Tribunal)
The Employment Appeal Tribunal is the first level of appeal from an ET decision (this is followed by the Court of Appeal and the Supreme Court). The EAT deals with questions of law and does not make determinations of fact which is the task of ETs. For this reason, it is only possible to appeal an ET decision to the EAT if there is a legal technicality in dispute or a clear case of bias or perversity in the decision made by the ET.
This stands for Employment Tribunal, formerly known as Industrial Tribunal (IT). Most employment cases are heard in ETs although some are heard in the civil courts.
The ET1 (previously IT1) is the standard form on which the Claimant's tribunal claim is written. It is also known as the 'originating application'.
The ET3 (previously IT3) is the standard form on which the employer's (the Respondent's) response or defence to the claimant's ET1 is written.
Effective Date of Termination (EDT)
The day that an employment contract ended. This might be the day the employee was dismissed or the day they resigned.
Different categories of worker are eligible to claim different employment rights. The definition of 'employee' varies from statute to statute. Certain rights can only be claimed by employees.
Evidence in Chief
The oral or written evidence usually given by a party in the form of a typed witness statement not including the questions that they are asked by the other party or their representative in cross-examination.
Examination in Chief
Asking questions of your own witness.
Reasons or a judgement are said to be given 'extempore' if they are given straight away at the end of a hearing.
Fact-Questions of Fact, Fact Findings
If something is a question of fact for the ET it means that the issue is decided on the facts of the particular case as opposed to on the law alone. A fact finding is the ET's decision on where the truth lies between two conflicting pieces of evidence.
Final Submissions or Closing Submissions
The closing speech or written submissions in an ET hearing. Both the Claimant and Respondent or their representatives are expected to make a closing speech summarising the main factual points arising from the evidence and to provide legal argument. Sometimes final or closing submissions are given in writing instead.
Freedom of Information Act 2000
A statute that enables members of the public to obtain access to information from public authorities. This enabled access to and revelation of information which led to the Parliamentary expenses scandal. It can be particularly useful to the employee if their employer is a public authority such as a council.
Grievance and Grievance Procedure
Grievances are internal complaints made by workers to their employers. The grievance may concern the behaviour of a work colleague or manager. Employers that do not have a grievance procedure are often penalised in employment tribunals. We can produce an inexpensive grievance procedure upon request.
This is a form of discrimination. In everyday non-legal use, the word describes verbal or physical abuse. The legal definition tends to be wider and to describe unwanted conduct that creates a hostile environment. Its precise legal definition varies in the different anti-discrimination statutes.
Where employees are made subject to a rule or treatment that on its face is neutral between different groups but which indirectly discriminates. For example, imposing the same minimum height requirement on all employees could disproportionately affect women who are generally not as tall as men and who may as a result be discriminated against indirectly.
This refers to all procedural matters between lodging the claim and the hearing. An interim hearing deals with such matters and may, for example, be a case management discussion or a pre-hearing review.
The ET may adjudicate only on certain claims brought by certain workers. These are matters 'within its jurisdiction'.
Otherwise known as 'wing members', these are the representatives from each side of industry (e.g. CBI and Trade Unions) who sit on many ET hearings.
Liability, Hearing on Liability
The issue as to whether or not the worker wins his/her case, i.e. whether the employer is found 'liable' for unfair dismissal, discrimination, etc, as distinct from the issue of what compensation or remedies the worker should receive.
The time period within which a claim must be brought. For example, a claim of unfair dismissal should be submitted within three months of the effective date of termination (in rare circumstances this can be extended by the ET). Generally, breach of contract claims should be brought within six years of the breach.
Mitigation refers to reasonable steps which should have been taken or were taken by a worker to find new employment to mitigate (i.e. reduce) the loss of earnings resulting from his/her dismissal. A worker who fails to seek new work after dismissal without good reason may encourage an employment tribunal to award no or less compensation than would otherwise be the case.
A contractual clause that imposes a disproportionate monetary penalty on one party for breach of contract in order to obtain strict compliance by coercion. In contract law, generally penalty clauses are void and unenforceable.
Pleadings are the document which set out each party's case, i.e. the ET1, ET3 and any additional information. To plead something is to put it into any of these documents.
The courts decide cases by applying the law to given facts. There is a hierarchy of courts and tribunals for employment law purposes (Supreme Court, Court of Appeal, EAT, ET.) Each level of court/tribunal is compelled to follow legal principles and interpretations (precedents) set by higher level courts unless a case can be 'distinguished' on its facts. Where no higher-level decision exists, the courts (except the ET) follow the interpretation of other courts of the same level. Precedent may also be referred to as 'authority'.
Certain verbal or written communications are private and need not be disclosed to the other side during a case. These are referred to as 'privileged'. The issue tends to come up on disclosure and the definitive rules are set out in the Civil Procedure Rules 1998. The rules can get very complicated, but the most well-known form of privilege is communication between a party and his/her own solicitor. See also 'Without prejudice'.
The Equality Act 2010 sets out nine 'protected characteristics'. These are grounds upon which it is unlawful to discriminate against those who fall within the scope of the discrimination legislation. The protected characteristics are: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation.
A category of information attracting whistleblowing protection under the provisions of the Public Interest Disclosure Act 1998. For example, that a criminal offence has been, is being, or is likely to be committed.
The system by which certain state benefits may be re-claimed from part of the compensatory award in an unfair dismissal claim.
Remedies comprise monetary compensation, reinstatement and re-engagement which a worker may receive if she or he wins. A remedies hearing is sometimes dealt with separately from and after the main liability hearing.
A contract is said to be repudiated where an employer or an employee has breached it in a fundamental (serious) way.
A judgement is said to be 'reserved' if it is not given at the end of a hearing but will instead be made available on another day.
This is the legal term for the employer in ET proceedings.
An ET can review a decision it has made on a number of specific grounds. This is different from appealing to the EAT and has a shorter time limit.
Schedule of Loss, Schedule of Remedies and Loss
During the preparation of a case, the Claimant is often ordered to prepare a schedule setting out how much she/he has lost by way of earnings and the value of the claim generally. We can produce these for our clients.
Skeleton Argument or Skeleton
A written outline summary of the key arguments to be used in tribunal or court supported by references to statutes and case law. Advocates are expected to provide these for proceedings in the EAT.
Standard of Proof
An ET or court may never know the truth but they have to decide what to believe based on the evidence before them. Most people have heard of the standard of proof or threshold that has to be achieved in criminal trials - 'beyond reasonable doubt' (or almost entirely certain) which is a high standard. In civil (non-criminal) matters the standard of proof or threshold is lower. The standard is 'on balance of probabilities' (or more likely than not).
Statement of Truth
A sentence that is required at the end of a witness statement that states that its contents are true such as: 'This statement is true to the best of my knowledge and belief'.
Subject Access Request
A request under section 7(1) of the Data Protection Act 1998 entitling a data subject to copies of his or her personal information. In the context of employment disputes this is a useful tool by which an employee may see confidential information held in his or her personnel file.
This occurs when an employee's conduct is sufficiently grave as to justify immediate termination of the employment contract without notice. The worker is not entitled to either notice or pay in lieu of notice when summarily dismissed. Some employers breach the law in summarily dismissing employees where this is not legally justified. We are happy to advise.
This abbreviation commonly refers to the Transfer of Undertakings (Protection of Employment) Regulations 2006 which deal with what happens when a business entity is transferred.
This is where an employer is responsible for the unlawful acts of his/her employees as if she/he carried them out him/herself, regardless of whether she/he knew or approved of those acts. In the employment field, it is mainly relevant to discrimination law.
Making a disclosure of certain information (not all information) for which the employee is protected. Key whistleblowing provisions are contained in the Public Interest Disclosure Act 1998. In some circumstances dismissal for whistleblowing will be unfair.
A statement taken from a witness. Generally, ETs expect witnesses to read their statements aloud (providing they are not too long and there is sufficient time) and this is taken as witnesses' evidence in chief. Witness statements without the presence of witnesses in person are of limited value: witnesses are expected to attend so that they can be cross-examined to establish the reliability of their evidence.
WILLS & PROBATE
The period between the date of death and the estate being wound up.
Administration of the Estate
This is the task carried out by the executors or administrators of a person who has died. It involves assembling all the person's assets, paying the person's debts and any tax due and handing over whatever remains to the people who are entitled to it under the will or the statutory rules that apply when an intestate dies.
The person responsible for winding up the estate of a person who has died without a will or whose executors are unable or unwilling to act.
The transfer of an asset in full or part satisfaction of an entitlement under a Will or intestacy.
A gift of a specific item or part of the estate.
The Citizens' Advice Bureau.
A legal document which amends the terms of a Will.
A gift that is dependent upon the happening of a particular event, such as a beneficiary reaching a specific age.
The Department of Work and Pensions.
Everything that belonged to a person who has died and all the person's debts.
Accounts recording the financial position at the date of death and transactions during the administration period.
The person responsible for winding up the estate of a person who has died with a will and those named in the will act.
Grant of Probate
A document issued by the Probate Registry to the executors of a person who has died authorising them to deal with the person's estate.
Grant of Representation
The court order that authorises a person to deal with the affairs of the deceased. This is also called a Grant of Probate where the will is proved by an executor and a Grant of Letters of Administration where there is no will or a will is proved by someone not named as an executor.
Where a person dies without a will that disposes of all their assets.
A gift of money.
The legal definition (which dates from 1925) includes carriages, horses, stable furniture and effects, garden effects, domestic animals, plated articles, linen, china, glass, books, pictures, prints, furniture, jewellery, articles of household or personal use or ornament, musical and scientific instruments, wines and consumables. It does not include any chattels used for business purposes or any money or securities for money.
An executor or administrator.
Where an executor decides not to act but reserves the right to do so later.
The government office that deals with probate matters.
Where an executor signs a document at the outset to decline to act.
A person entitled to a share of the residuary estate.
This is an order which places a company likely or currently going through the process of insolvency under the control of an administrator, following a petition by the company. This done to preserve the company’s business assets, protect it from action by creditors as well as allow the company in question to reorganise.
A court appointed practitioner who is responsible for the administration order of the company.
A group of companies with a common link or bond.
A statement made by an authorised auditor whom will have carefully examined the accounts of a business to ensure that an accurate view of the company’s position has been presented.
A term used to describe money owed to a company which is not recoverable and is written off as a loss.
A state in which describes someone who has been declared bankrupt by the court, either at their own request or that of a creditor.
A court order which makes an individual bankrupt.
This is a type of insurance which an insolvency practitioner will have, allowing them to act effectively.
Cash on delivery, this means that payment will be made after goods have been received.
The acquisition of property for the discharge of debt that does not give the creditor any possession of the property, or right to the asset providing security.
This is when the court places restrictions on the disposal of assets and puts priority of payment over to other creditors.
Company Voluntary Arrangement
An agreement by a company of which a procedure is outlined for a plan of reorganisation and the repaying of debts, this then put forward to the creditors and any shareholders involved.
This is interest calculated on the principal sum of a debt, plus any interest that has accrued in previous periods. Each time interest is added, the total becomes the new sum on which subsequent interest is calculated.
County Court Judgments
A county court passes judgement on cases where a debtor is refusing or cannot pay an outstanding debt. The debtor can choose to defend or accept the court claim and the court decide the outcome of the case.
A committee which is used to represent the interests of all the creditors involved.
This term is used to describe amounts which are outstanding in a 12-month period.
Deed of Arrangement
A method for an individual to settle with creditors short of formal bankruptcy.
Document of Title
A document enabling the person in possession to deal with the property described as if they were the owner.
If a debtor has been successfully sued in the county court, the usual process from that point is to apply to enforce the judgement. This is done through means such as Third-Party Debt Orders, Charging Orders, court bailiffs etc.
Extortionate Credit Transaction
This term is used to describe a credit transaction which is based on unfair terms when in comparison with the risk accepted by the creditor.
Tangible and intangible assets acquired to produce goods or services and not intended for resale.
This is a form of security granted over specific assets, preventing the debtor dealing with those assets without the consent of the secured creditor.
This is a charge applied to all company assets for a specified amount of time, the lender has no immediate right over the assets at that time.
This means that when the business is sold it is sold on so it can continue trading.
One party agrees to carry out their contractual commitments.
This is where a company is formed for the purpose of controlling and managing the financial affairs of another company.
When the debtor is not able to pay their outstanding debts and their liabilities exceed their assets.
Where a voluntary arrangement is made with creditors by the debtor, this is usually made before bankruptcy.
A partnership made by two or more companies to create success in a particular area of the market.
A decision given by the court after a claim has been made.
Limited Liability Partnership
In a company, a Partner is not liable for any professional malpractice which does not involve the Partner.
This is the term used to describe the ending of a company as it does not have the assets to pay its creditors.
Members Voluntary Liquidation
This is where the shareholders of a company mutually agree to settle the outstanding debts and go into liquidation.
An individual who is responsible for controlling any financial arrangements and posts to do with a company.
An additional income that comes from something other than the usual trading of the company, such as investments etc.
A company which has the controlling interest in another as they own over 50% of its shares.
Authority given to a person to speak on behalf of the creditor.
Assets which can be quickly and easily converted to cash.
Someone who has been appointed by the court for a specific purpose who will exercise their rights over the charges property.
A creditor who has specific rights over the debtor’s assets in the event of insolvency.
A notice which is issued demanding the payment of debt within 21 days.
Third Party Debt Order
A legal proceeding to recover money that is owed to the debtor by some third party.
A summary of all the assets.
A creditor who has no preferential rights over any other creditors waiting to be paid.
Winding Up Order
Where the court orders a company to begin the process of liquidation.
Winding Up Petition
A document is presented to the court suggesting that the company be ordered to begin the process of liquidation.
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