Contractors can go slow until Employers take notice

February 2nd, 2012 by David Eminton

 In a case heard by the Technology and Construction Court on 21 December 2012  a sub-contractor, Leander,  had carried out work to a certified value but a withholding notice had been served by the Main Contractor, Mullalley. The reason stated for withholding the certificated interim payment was that Leander had not progressed as quickly as originally anticipated by the parties. Mullalley accepted there was no contractually binding programme but argued that Leander was in breach of an implied duty to generally proceed regularly and diligently.

One of the primary arguments put forward by Counsel for Mullalley was that as the contract contained a provision (as is commonplace) entitling the Main Contractor to serve a 7 day notice to terminate if the Sub-Contractor did not proceed regularly and diligently, it should be implied that there was a general duty on the sub-contractor to so proceed at all times. It was said that the parties must have intended that there would have been such a duty otherwise why allow the contract to be terminated for delay? Mullalley claimed that Leander was in breach of that implied duty and so it should be entitled to deduct damages from the certificated payment.

The Technology and Construction division of the High Court decided that in the absence of an express provision, considering past case law and on a proper interpretation of the contract there was no justification for the court implying such a term.

The right to serve a 7 day notice to terminate for delay (referred to by the Judge as a “Hurry Up!” notice) was purely a contractual mechanism that could be used to impose the  time critical sanction of termination upon the sub-contractor if it failed to comply with the notice and there was no necessity to go further and imply extra words imposing a general duty to progress diligently.  Rather than that provision being suggestive of an implied term the judge considered if anything the opposite to be true. Had there been no notice provision relating to the progress of the works the court might have been more prepared to imply an extra term to give the contract business efficacy but there was no need to do so here as the contract provided an agreed sanction for unreasonable delay.

The case highlights the importance of careful contract drafting by employers and main contractors to ensure that progress of works is sufficiently covered in the express wording of the contract. This can be done by an express duty to proceed with reasonable expedition and/or by ensuring there is a contractually binding programme of works.

Whilst there may be no implied term to at all times progress works diligently there is, as with all contracts for services, in the absence of words to the contrary an implied term that works will be completed within a reasonable time.

This case (Leander Construction Ltd v Mullalley & Co Ltd [2011] EWHC 3449 (TCC)) does not bring any radical changes to construction or general contract law but it highlights the need to ensure that your contracts are properly drawn and that particular thought is given by the employing party as to what weaponry it needs within the terms to ensure that the works are carried out on a timely basis to avoid irrecoverable losses due to disruption of the works as a whole.

Enquiries to James Snaith or David Eminton

Child Support: Value for Money?

February 2nd, 2012 by Rachel Osgood

In 1993, the Government of the day removed the right for single parents to seek maintenance for their children through the courts.  Instead, it provided the infamous Child Support Agency, the purpose of which was to calculate, collect and (if necessary) enforce maintenance assessments from the non-resident parent. 

Parents had little or no control.  If they could not agree, then their only option was to apply to the Agency, which would calculate the amount of maintenance due (according to a hideously complicated and almost wholly incomprehensible formula), regardless of other financial arrangements the parents may have made and without the flexibility of the court system to take individual circumstances into account.  Parents who had been left to rely on the State for support following the departure of the other parent by and large had no choice:  they either applied to the Agency to assess and enforce payment, or their benefits were cut.

 Unpopular with resident and non-resident parents alike, and woefully inadequate, the Agency failed to fulfil its purpose.  By 2007, it was costing the taxpayer £520m to run, but despite the cost it had failed to collect maintenance totalling about £3.7b.  Some amendments had been made along the way (eg simplification of the calculation, recognition in limited circumstances of additional payments made by the non-resident parent towards joint debts and travel costs; power to depart from the statutory formula where, for example, the non-resident parent was living a lifestyle incompatible with his or her declared income), but by 2007 the Agency was in its dying days.

In 2008, the Agency was subsumed into the Child Maintenance and Enforcement Commission (CMEC), which took over responsibility for the functions of the Agency.  According to its annual report (2009/10), CMEC “will not be burdened with the historical problems of the CSA, but the Commission will also continue to improve the existing schemes in the meantime”.  Legislation was passed which changed the formula once again and provided a “gateway” through which parents must pass before they are allowed to apply for an assessment.  The gateway is also referred to as “Options”, but rather than providing genuine choices, it imposes a requirement to agree maintenance with the other parent or at least to take “reasonable steps” to do so.  Parents are to be “supported” in this respect. 

 So far, so good.  Except that only a tiny part of the legislation has come into effect.  The Child Support Agency is still, in reality, lumbering like a wounded beast after its quarry.  The old formulae still apply.  Administrative costs have increased to £572m (although reduced from their 2008/9 high of £605m).  Arrears still stand at about £3.7b.  In its 2011 Green Paper[1], the Government stated that for each £1 of maintenance recovered the cost was 40p, which was not good value for money for the taxpayer.

Even worse news for the taxpayer was the abolition of the old provisions which reduced a recipient’s benefits by £1 for each £1 of maintenance collected.  One of the Agency’s original purposes was to shift responsibility for the financial support of children from the State back to the non-resident parent.  However, we now find the megalithic Child Support Agency, funded by the taxpayer to collect maintenance, working alongside the Department for Work and Pensions – also funded by the taxpayer -  to provide maintenance in addition to benefits.  Thus, those parents who were able to recover maintenance from the non-resident parent were in a significantly better position than those who could not, all at the expense of the taxpayer and – more importantly – leaving at a disadvantage those children whose non-resident parents could not or would not pay.

 Against this backdrop was the news last week that the Lords have rejected the Government’s proposals to charge people to use CMEC.  In fact, these proposals are not new, and appeared originally in the 2008 legislation from which CMEC was born[2].  They are now being discussed as part of the hugely controversial Welfare Reform Bill[3], and it is suggested that the charge should be £100 (£50 for people in receipt of benefits).

 On the face of it, charging people to use the service provided by CMEC appears to be commonsense.  People expect to pay for services.  Why should this be different?

 The Lords objected on the basis that it was unfair to charge lone parents who had tried and failed to get their ex-partners to pay maintenance.  These people, it was argued, are amongst the most vulnerable in society.  Left without support for their children, often reliant on benefits and living on a severely restricted income, they are already at a disadvantage compared to their counterparts who are receiving maintenance in addition to benefits, but who may now be forced to pay for a service which is at best patchy, and at worst wholly unreliable.  Not only this, but in the event that CMEC does manage to recover maintenance, it is proposed that the recipient will be obliged in the future to pay ongoing charges of 7 -12% of any maintenance recovered – a double whammy for the unfortunate families of reluctant payers.

 So, under these proposals, a parent left with the care of the children, and dependant on benefits, would have no choice but to stump up £50 (£20 up front and the balance by instalments, but no doubt a significant proportion of the weekly income nonetheless) before being allowed access to a system which was created to force non-resident parents to support their children.  In these circumstances, if it is reasonable for the parent to pay for the service, it must also be reasonable to expect the service to deliver.  If it cannot deliver, then genuine “options” should be available.

 In these challenging times, it is of course incumbent upon the Government to seek value for money in all things.  It is however difficult to understand the basis upon which the most vulnerable families whose hands (in the words of Barnados’ chief executive) are tied by poverty should be penalised for being forced to use a system which has never been fit for purpose and is even now struggling under the weight of its unfulfilled obligations.

 

 

  Rachel is a specialist family lawyer with many years’ experience dealing with divorce and related issues, including substantial experience of complex and/or large money cases.  She deals with both collaborative and more traditional cases, and her cases include a significant proportion involving pensions, large-scale property interests, trusts, family companies and partnerships.  She is also experienced in dealing with cases where assets need to be protected or traced – sometimes urgently – and the particular and often difficult financial issues arising from the breakdown of an unmarried relationship, such as the future of jointly owned property.  Rachel has experience in dealing with cases involving an international element, both in relation to financial issues and in relation to children.

Rachel is particularly well respected for her ability to deal with complex cases and in relation to her attention to detail.  Perhaps even more importantly, her clients value her sympathetic approach and personal touch:  they know that each of them matters.  Rachel welcomes enquiries from anyone suffering the consequences of a relationship breakdown, whether that relationship is a marriage, a civil partnership or simply living together.

 


[1] ‘Strengthening Families, promoting parental responsibility: the future of child maintenance’ (Cm 7990)

[2] Child Maintenance and Other Payments Act 2008, section 6(1)

[3] Section 137(3)

Footballers – Know Your Worth!

February 2nd, 2012 by Diane Pearce

 The recent flurry of activity and subsequent closure of the transfer deadline for English football clubs, has once again highlighted the brand value of footballers and their attraction.

It cannot have escaped anyone’s attention the amounts that football clubs are willing to pay for players of their desire. The value is based on not only the footballer’s talent and ability to play football, but also what the player represents as a brand. Often, football clubs will outbid each other, to secure that player, which simply drives the price up. 

What makes them so valuable and attractive? Yes, talent and skill will play a significant role in the value of a player and statistics show that this will affect the value of a player . However, footballers now have enormous value as individuals, due to their “iconic” status and the image rights that follow. This can be lucrative business for football clubs, and many footballers go on to pay for themselves through the club’s use of their image rights and shirt sales.

Brand protection is critical when trying to maximise profits of a business. There are many ways for a company to use Intellectual Property and the law, to its advantage. Intellectual property is an intangible asset, but is increasingly being used by companies wishing to capitalise these assets and commercially exploit them.

The Intellectual Property team at Paris Smith offers a wide range of services in relation to the creation, acquisition, protection, commercial use and enforcement of such rights.

For more information regarding this blogpost, or any services that Paris Smith offer, please contact Diane Pearce on 023 80 482299 or diane.pearce@parissmith.co.uk

Community Infrastructure Levy – time to take note

February 1st, 2012 by Victoria Onofriou

A significant number of planning authorities will be adopting a charging schedule during the course of 2012 with a view to having a framework in place to facilitate the implementation of the Community Infrastructure Levy (CIL).

CIL, introduced by the Planning Act 2008, is intended to provide a more uniform approach towards the provision of local infrastructure than has been possible via the traditional route of contributions secured pursuant to Section 106 of the Town & Country Planning Act 1990.

 The adoption of CIL is discretionary, however from 2014 councils will not be permitted to pool Section 106 contributions for more than five developments and this seems likely to prompt many local authorities to expedite the implementation of a CIL charging regime.

 CIL will be payable within sixty days of the implementation of any relevant consent.  There will be scope for making viability arguments (as under the current planning regime) but unless the council has an instalments policy, all payments will need to be made within sixty days of commencement of development.

The implementation of CIL may result in a higher level of contributions than was previously the case, and developers will need to keep a keen eye on the developing charging structure within any areas in which development is proposed.

 Developers will also need to keep an eye on the implications of varying consent granted under the old regime since a variation may produce a consent which is deemed to be subject to CIL.

 The detail (and practical implications) of CIL will become apparent within the next few months.  Further updates will follow.  In the meantime if you wish to discuss any of the points raised in this blog, please contact Victoria Onoufriou at Victoria.onoufriou@parissmith.co.uk

 

Village Greens – Still A Stumbling Block?

February 1st, 2012 by Mark Withers

The Commons Act 2006 provides a mechanism whereby applications can be made to register land as a town or village green.  If successful, an application can ultimately operate so as to prevent redevelopment of the land in question. 

A number of pre-conditions have to be satisfied in order for an application to be successful. One of the key requirements is that a significant number of the inhabitants of the locality must have indulged as of right in lawful sports and past times on the land for at least 20 years.

An application made under the 2006 Act was considered in the case of R (Barkas) –v- North Yorkshire County Council and Scarborough Council. The case concerned a recreation field which had been used as such since at least 1948 and was set out and maintained as a recreation ground under section 80 of the Housing Act 1936. Its status under the Housing Act proved to be crucial in that the Inspector determined that the use of land by members of the public for recreational purposes had been pursuant to the legal right (since it was a playing field and not simply an area of land which they used and ultimately acquired rights over). The existence of the legal rights under the Housing Act prevented use ‘as of right’ (as required under the Commons Act 2006) and consequently the application failed.

Playing fields and recreation grounds may, as a result of this case, become more attractive for development since claims by third parties to have acquired rights under the Commons Act legislation will be much less likely to succeed.

If you wish to discuss any of the points raised in this blog please contact  Mark Withers

Can you risk relying on your Solicitor to look out for you?

February 1st, 2012 by David Eminton

Pinsent Masons LLP,  a leading firm of solicitors in the construction industry, has successfully defended a negligence claim brought by their clients Shepherd Construction Limited.

The claim, on which judgment was given in the Technology and Construction Court on 19 January 2012, arose as a result of an error in a construction sub-contract that resulted in Shepherd Construction not being able to rely on a pay-when-paid clause after its employer became insolvent (it went into an out of court administration procedure).

The clause was effective at the time that it was drafted but subsequent legislation made it ineffective in certain circumstances.

Shepherd Construction argued that as it had retained Pinsent Masons LLP over many years to give construction law advice and to review a number of different construction contracts there was an implied overarching retainer, which imposed a duty on Pinsent Masons LLP to review advice previously given in the light of changes to legislation.

The Technology and Construction Court struck out the claim. The Judge said ” There is something commercially and professionally worrying if professional people are to be held responsible for reviewing all previous advice or indeed services provided. There is a difference to be drawn between a specific retainer or commission which imposes a continuing duty on a professional to keep earlier advice or services under review and some sort of obligation which requires the professional to review and revise previous advice given.”

For lawyers this decision will be received with a sense of relief confirming, as it does, that the mere acceptance of repeat instructions does not create a contract to keep past advice under review. For clients the case is a wake up call to make sure that even where they regularly instruct solicitors to give specific advice they must ensure that if they want past advice and drafting reviewed that this is specifically agreed as part of their retainer for legal services. No doubt clients can expect helpful recommendations and suggestions to be given by more pro-active lawyers but the client risks being caught out, as Shepherd Construction were, if they fail to ensure by way of an appropriate contract with their lawyers that their legal documentation is kept under constant review. The full judgment in this case is available at  http://www.bailii.org/ew/cases/EWHC/TCC/2012/43.html .

For further information on this case, please contact David Eminton .For further information on insolvency event clauses in commercial contracts please contact Mike Pavitt  or Richard Atcherley.

Health & Safety : You think you are ok?

January 17th, 2012 by Cliff Morris

Recently we were approached by a company that has seen rapid expansion over the last 10-15 years in the manufacturing sector.  The expansion has been good for business and for the employees, in that the company has been able to develop its range and expand it’s workforce. 

As the business has grown, the product lines have developed, as have the number of machines utilised to manufacture those products.  In accordance with good business practice, the company always buys state of the art machinery, whilst continuing to use and repair the machines that have manufactured their core products.

Following a visit from the HSE and the expansion to various locations there was a need for a new Health and Safety strategy and a review of the existing policies,. This review highlighted that a machine which was state of the art in the late 80’s or early 90’s was no longer state of the art now.  Whilst the manufacturing process may not have changed, the Health & Safety requirements for that manufacturing process had changed and advanced considerably.

Machines that were once sold with foot pedal operation, no guards, or no cut out in the event that guards were lifted, are no longer state of the art; to operate them in their original state could amount to a breach under section 2 of the Health & Safety at Work Act.  It is therefore vital that Health & Safety risk assessments are undertaken by a competent professional on an annual basis and policies procedures and practices are regularly reviewed. 

We at Paris Smith LLP can look at and review your Health & Safety policy, to ensure that it is up to date and compliant with the current legislation.

Just because the machinery and the associated policies have been working for years without any problems, does not mean there aren’t any.

For further information contact Cliff Morris or Sarah Wheadon.

Fancy some points on your Driving Licence? – Become a Company Secretary

January 17th, 2012 by Cliff Morris

It is perfectly possible as a Company Secretary of a company that uses fleet vehicles to receive 6 points on your driving licence for an offence that you may not even be aware of, or know has occurred.

The question is how is this so?  The answer is fairly simple. If you operate a fleet of vehicles, and the driver of one of those vehicles commits an offence, where the driver has not stopped (for instance after speeding or going through a red light caught on camera), then a Section 172 Notice is sent directly to the Company asking for details of the driver of the vehicle.  If this document is not filed and answered, then the police can issue a prosecution notice against the person who is deemed to have received the notice. In the cases of fleet vehicles, that is often the Company Secretary.

The defences to this charge are either showing you have taken all reasonable steps to identify the driver and been unable to do so, or showing that the Section 172 form has not been received by the company. In order to prove the defences, evidence will have to be given at court, by the company secretary, the driver(s) of the vehicles(s) (if necessary) and the people involved in the post opening system, taking a great deal of time and incurring considerable expense.

The simple answer is to make sure all incoming post which amounts to official documents are logged, and also retain a log of who is driving which vehicle at all times.

We at Paris Smith LLP can help if such a situation arises, providing practical advice and assistance where required, and if necessary, representation in any court proceedings.

For further information contact  Cliff Morris or Sarah Wheadon

Rachel Osgood chairs Collaborative Law event

January 16th, 2012 by Paris Smith News

Rachel Osgood, Associate in Paris Smith’s Family Department, and Chair of the local Collaborative Law Group, played host to an audience of 60 local professionals at an event on 12 January.

The Collaborative Group of Southampton, Lymington and Winchester comprises a group of family lawyers from a number of firms across the region, all of whom are qualified to practise collaborative law, and all of whom are committed to it as the “no court alternative” for couples who are separating or divorcing.  Over the last few years, the Group has pooled its time and resources in order to establish a shared body of experience, expertise and good practice in this relatively new form of dispute resolution.  Its members work together in order to promote collaborative law and to raise awareness of it as an option for couples who are separating, but who wish to do so with dignity and respect.

The event took place at The Mayor’s Parlour at the Civic Centre in Southampton, and was attended by the Worshipful Mayor himself, Councillor Terry Matthews, and the Mayoress, Mrs Lesley Matthews.  Presentations were given by several members of the group, illustrating the way in which the process works, and Karen Morley – a life coach – spoke about the ways in which she can help people and couples who are going through a divorce or separation, and how her work dovetails with the collaborative law process.

Collaborative law relies upon a commitment by all parties – including the lawyers – to openness and respect, and to putting the children first.  The process takes place via a number of round table meetings, so that issues are discussed openly and constructively.  There is little written communication between meetings, so that the opportunity for misunderstandings and brewing resentments is more limited.  In that environment, trust begins to flourish once more, and the couple is free to explore solutions in a co-operative and often creative way.  If – which is unusual – they can’t reach agreement, then the lawyers are bound to withdraw from the process – an incredibly powerful incentive to keep talking.  The combination of openness and commitment with direct communication is extraordinary – what Rachel described as “a kind of magic”.

The event was attended by a capacity crowd of accountants, barristers, life coaches, solicitors and other professionals.  To those who had not previously heard of collaborative law, it seemed like the obvious way forward.  No-one wants to get divorced.  But if divorce is inevitable, then a “good divorce” is surely more likely if everyone is talking to each other.

Rachel is a specialist family lawyer with many years’ experience dealing with divorce and related issues, including substantial experience of complex and/or large money cases.  She deals with both collaborative and more traditional cases, and her cases include a significant proportion involving pensions, large-scale property interests, trusts, family companies and partnerships.  She is also experienced in dealing with cases where assets need to be protected or traced – sometimes urgently – and the particular and often difficult financial issues arising from the breakdown of an unmarried relationship, such as the future of jointly owned property.  Rachel has experience in dealing with cases involving an international element, both in relation to financial issues and in relation to children.
Rachel is particularly well respected for her ability to deal with complex cases and in relation to her attention to detail.  Perhaps even more importantly, her clients value her sympathetic approach and personal touch:  they know that each of them matters.  Rachel welcomes enquiries from anyone suffering the consequences of a relationship breakdown, whether that relationship is a marriage, a civil partnership or simply living together.