Legal Jargon

A Company Voluntary Arrangement, often called a CVA, is a formal way for a company in financial difficulty to make a legally binding agreement with its creditors about how to repay its debts. It can help a business avoid insolvency and continue trading while dealing with what it owes.

A CVA is open to limited companies and limited liability partnerships (LLPs) that cannot pay their debts as they fall due. It is overseen by a licensed insolvency practitioner, who works with the directors to prepare a proposal and then puts it to the company’s creditors for a vote.

For a CVA to go ahead, at least 75% (by value) of the creditors who vote must agree to the proposal. If approved, the arrangement becomes binding on all eligible creditors, even those who voted against it or did not vote at all.

A CVA usually involves the company agreeing to pay creditors over a fixed period, often on reduced terms, based on what the business can afford. The aim is to give the company breathing space to recover while providing creditors with a better return than they might receive through liquidation.

In simple terms, a CVA is a debt repayment plan agreed with creditors, which allows the company to carry on trading and manage its debts in a structured way rather than shutting down immediately.

A contract term that, if breached, gives the aggrieved party the opportunity to terminate the contract and/or make a claim for damages or losses.

The ‘without prejudice’ rule means that statements made in discussions or communications as part of a genuine attempt to settle a dispute are private and cannot later be put before the Court as evidence of admissions against the interests of the party that made them. For example, a suggestion of a way to settle a dispute made by one party during mediation cannot later be used to indicate that the party had accepted responsibility or to frame any compensation or damages. ‘Without prejudice’ exists to encourage parties to negotiate an agreement rather than depend on the court to make a judgement, both to save cost and reduce pressure on Court. The contents of ‘without prejudice’ communications cannot be divulged to the Court unless it is “without prejudice save as to costs”, when it can then be divulged after the final hearing has been dealt with or the case has been settled.

In the context of an employment dispute, ‘without prejudice’ refers to private settlement discussions that should not be referred to in regular correspondence or to the Employment Tribunal. These can be to settle the dispute, or sometimes employers use this term to discuss possible exit packages with an employee.

A witness statement is a formal document, addressed to the Court, in which a witness sets out all the facts that they are aware of that apply to the case. They are normally treated as ‘evidence in chief’.

This is generally for lower value and less complicated claims. It is usually not cost-effective to obtain legal advice.

The statutory time limit for making a claim. This varies depending on the case type.

The process at a hearing whereby a party’s solicitor or barrister can ask follow up questions to issues that were raised during the cross examination.

A ‘tort’ is a civil wrong that occurs where someone unfairly causes another person to suffer loss or harm and, in the law of England and Wales, tort describes all civil claims that are not contractual disputes. A person committing a tort is legally liable to the party injured, who may claim financial compensation/damages or an injunction to compel or prevent certain conduct.

A formal legal structure where property or other assets are held by one or more people for the benefit of another.

The people or entities appointed to oversee the management of property or other assets on behalf of beneficiaries, who might be private individuals, a charity or another type of organisation. In the context of estate administration following a death, trustees will be the people named in a will to manage the money held in trust for the beneficiaries. The trustees are the legal owners of the assets held in a trust and their role is to deal with the assets according to the deceased’s wishes, as set out in the trust deed or their will.