Jargon Buster

Sometimes legal language can be complex. We aim to simplify it by putting it into plain English. If you need an explanation for a legal term that you can’t find listed here please let us know, by email, by phone or request a call back.

A

Administration

Administration is an alternative to liquidation of a company. It is intended to be a rescue mechanism in the first instance or to produce a better return to creditors if rescue is not possible. The benefit of administration is that it creates a moratorium protecting the company from legal proceedings and enforcement action.

Administrators

The persons who are entitled to benefit from a deceased person’s estate where there is no will (generally they are the next of kin) and who therefore take on the responsibility usually given to Executors by a will.

Alternative Dispute Resolution

The use of various methods to resolve a dispute instead of litigation, such as arbitration, mediation and expert determination.

Attorney

A person or persons appointed under a Power of Attorney with authority to carry out certain actions on your behalf.

B

Bankruptcy

Bankruptcy is a process by which the Official Receiver or an Insolvency Practitioner is appointed to realise the assets of an insolvent individual for distribution among his creditors. Bankruptcy is commenced by the presentation of a petition (either by the individual themselves or by one of their creditors). The effect of Bankruptcy is to “write-off” the individuals debts as at the date of the bankruptcy.

Beneficiaries

A person or persons who are entitled to certain rights under a will or trust.

C

Case Management Discussion (CMD)

A hearing to discuss an Employment Tribunal claim (either in person or by telephone) where an Employment Tribunal Judge tries to establish the issues in the case and gives specific dates on which certain key tasks must be done to prepare the case for Hearing.

Charge

Security over an asset which gives the lender the right to have the particular asset and its proceeds of sale appropriated to the discharge of the debt in question. A charge does not transfer ownership; it is merely an encumbrance on the asset.

Compulsory Liquidation

This is an in-Court process commenced by a creditor of a company seeking for the company to be wound up. Any such order will be made by the Court following a hearing.

Court of Protection

The Court which has responsibility for overseeing the role of Attorneys in England and Wales and fro registering Powers of Attorney and considering applications for orders to appoint Deputies or grant permission for attorneys to make gifts or authorise statutory wills.

Covenants

An agreement or promise to do or provide something, or to refrain from doing or providing something, which is meant to be binding on the party giving the covenant. Some types of covenant may also be enforceable by, or against, persons who were not a party to the original arrangement.

Creditor

A person or body corporate who is owed money by an individual or company.

 

Creditors’ Voluntary Liquidation

A process commenced by the company whereby the shareholders resolve for the company to be wound up. A meeting of the company’s creditors is then called for a vote on the chosen insolvency practitioner to be liquidator. This is a relatively simple and controlled method to liquidate the company’s assets and wind up an insolvent company.

CVA

CVA means Company Voluntary Arrangement. CVA is a procedure which enables a company to reach an agreement with its creditors about how debt is to be repaid. The CVA may provide for partial or full repayment depending on what the company can reasonably afford to pay.

D

Debtor

A person or body corporate that owes money to another.

Deeds of Variation

A document that can be signed within two years of a persons death by which a beneficiary of that person’s estate can vary their entitlement and redirect it to other person(s).

Deputy

A person appointed by the Court of Protection to look after someone’s finances who has lost mental capacity to make decisions and has not prepared Powers of Attorney to appoint Attorneys to act for them.

E

Easements

A right benefiting a piece of land that is enjoyed over land owned by someone else. Usually, such a right allows the owner of the dominant tenement to do something on the other person’s land, such as use a path, or run services over it.

ET1

The form used by an employee to submit an Employment Tribunal claim.

ET3

The form used by an employer to defend to an Employment Tribunal claim.

Executor

A person or persons named in a will who are responsible for ensuring that the deceased’s estate is dealt with in accordance with the terms of the will. If the person who has died has not left a will then Administrators take over this role.

Express Terms

The terms expressly stated in the contract between the parties, either written or verbal, that are agreed before or at the time the contract is made.

F

Freehold

An estate in land which provides the holder of the estate with rights of ownership.

H

HR1

The form an employer is required to give the Secretary of State as advance notice of collective redundancies (20 or more employees).

I

Implied Terms

Terms that are implied into a contract by law, statute and/or custom that have not been expressly agreed between the parties.

Injunction

A Court Order which either prohibits a person or company from taking a particular action (known as a prohibitory injunction), or requires them to take specified action (known as a mandatory injunction).

Insolvency

Means the inability to pay one’s debts as they fall due. Insolvency can be defined in two different ways: a) cash flow insolvency – being unable to pay debts as they fall due; or b) balance sheet insolvency – having negative net assets (i.e. liabilities exceed assets).

Intestate

A person who has died and not prepared a will

IVA

Means Individual Voluntary Arrangement. An IVA is a mechanism that allows debtors to reach a formal agreement with their creditors, under supervision of an insolvency practitioner, to make either a lump sum or monthly payments to reply a percentage of their debts over a period of up to 5 years. After such time, the debts are considered settled.

J

Job Evaluation (JE)

An assessment of a job which considers the requirements of the role for determining pay and grading.

Joint and Several Liability

Joint liability under a contract arises when two or more parties jointly promise to do the same thing for another party. Where there is joint and several liability if any one of those parties fails to keep their promise, a claimant may enforce the relevant contractual obligation, in full, against any of the jointly liable parties.

Joint Tenants

The form of ownership in which each owner is entitled to the whole property, rather than an undivided share of it. The right of survivorship applies (where the last surviving tenant becomes the sole owner).

L

Land Registry

The government department responsible for keeping and maintaining the Land Register of England and Wales.

Landlord

A person or organisation that has the right to let a property.

Lasting Powers of Attorney

Two types of legal document that allow you to appoint an Attorney (or more than one) to take decisions on your behalf in relation to either your Health and Welfare or your Property and Financial Affairs if you are unable to make decisions yourself.

Leasehold

An estate in land which provides the holder of the estate with rights of possession and use of the land but not ownership.

Licence

The lawful grant of a permission to do something that would otherwise not be legal or allowed, for example, to occupy a property.

M

Mediation

Mediation is a voluntary and confidential process conducted in which a neutral third party assists the parties to work towards a negotiated settlement of their dispute. The parties control the decision to settle and the terms of settlement.

Members’ Voluntary Liquidation

This is a process used to wind up a solvent company. It is necessary for the directors to swear a declaration of solvency before the process is commenced. Once the assets of the company have been released, any creditors must be paid in full and any surplus is paid to the company’s shareholders.

Misrepresentation

Where one party to a contract makes a false statement of fact or law to the other, which the other party relies on and suffers loss. Where there has been a misrepresentation the wronged party can recover damages for their loss, and depending on the particular circumstances may be able to rescind the contract (i.e. put things back to how they were as if there had never been a contract).

Moratorium

A period of time during which a certain activity is not allowed or required. Created in certain insolvency procedures so that creditors cannot enforce their rights for a certain period without the consent of the insolvency practitioner or the Court.

P

Pre-hearing review (PHR)

A Employment Tribunal Hearing which takes place before a final Hearing, to determine any preliminary issues about whether a claim has merit to continue.

Probate

The legal process by which the estate of a deceased person is administered according to the terms of their will or the intestacy laws.

Protected characteristic

The grounds upon which discriminatory treatment of an employee is unlawful: age, disability, gender reassignment, marriage and civil partnership, pregnancy and maternity, race, religion or belief, sex and sexual orientation.

Protective award

An award of up to 13 weeks’ full pay per employee made by an Employment Tribunal where an employer has failed to appropriately consult employees over a redundancy situation or TUPE transfer.

R

Restrictive covenant

A provision in an employment contract to protect an employer’s business interests by restricting what an employee can do for a defined period after their employment terminates.

S

Security of Tenure

The phrase given to statutory rights granted to tenants to protect their interest under a lease.

T

Tenancy in Common

The form of co-ownership in which each owner has a notional interest, although undivided, share in the property which passes with his estate upon his death. The right of survivorship does not apply to this form of ownership.

Tenant

The occupier of a leasehold estate.

Total Reward

The entire package of remuneration of employees including pay and non-financial benefits.

Trustees

The persons appointed on the creation of the trust with responsibility for ensuring the property within the trust is dealt with in accordance with the terms of the trust for the benefit of the beneficiaries.

Trusts

A legal arrangement where persons called Trustees hold property or assets for the benefit of others called beneficiaries.

TUPE

Transfer of Undertakings (Protection of Employment) Regulations 2006.  The law which governs how employees move from one employer to another when all or part of business changes hands or certain services are to be carried out by an alternative provider e.g. outsourcing.

W

Warranty

A promise or assurance in a contract, which if breached may give rise to a claim for damages.

Whistleblowing

Where an employee raises concerns in good faith to specified individuals about their employer’s business due to: a danger to health and safety, a failure to comply with any legal or professional obligation or regulatory requirements, bribery, criminal activity, miscarriages of justice or a breach of internal policies and procedures.

Without Prejudice

An expression used in negotiations where a concessionary offer is made. If a dispute proceeds to Court neither the offer nor facts stated to be without prejudice may be disclosed to the Court.

Wrongful dismissal

A termination of employment by an employer in breach of the employment contract. Usually a reference to dismissal without notice. Differs to unfair dismissal.