Harris and Harris – going from strength to strength in 2017

Two new faces have joined Harris + Harris Solicitors to build its specialist legal teams.

The firm now employs more than 50 people in its two offices in Frome and Wells after welcoming Christiana Olomolaiye and Victoria Panchal, who work from the Stony Street office.

Christiana, who has been practising as a solicitor since 1992, brings a wealth of experience to the firm’s Commercial Property department in the public, private and charity sectors.  Her expertise is mainly in the sales, leases and disposals of commercial and charity properties, agricultural land, and in development and planning agreements, construction contracts, and urban regeneration schemes.

Quote from Christiana:  “Frome’s creativity and enterprise boosts its commercial property market. It is great that Harris and Harris is well positioned to offer its services in such a dynamic environment”.

Victoria, who grew up in Bristol, joins the firm’s Residential Property department after spending several years in London.  Victoria deals with freehold and leasehold sales and purchases as well as re-mortgages and transfers of equity.

The two new appointments build on previous recruitment to the Wills and Probate department led by Caroline Fletcher in Frome, who has developed the Private Client Department since joining the firm in August 2013.

Partner Neil Howlett welcomed the new recruits to the Frome team:  “We, and our clients, are fortunate that we have been able to recruit so many experienced and talented Solicitors to work in Frome.  They will continue Harris & Harris’s ethos of being professionals with a human face.”

Consumer Rights Act 2015 – 4 Off-Premises and Distance Sales, Variations, and Timing

From 1st October 2015 there are fundamental changes to consumer rights introduced under the Consumer Rights Act 2015.   This Act replaces almost all existing consumer protection legislation.   It introduces significant new concepts and protections for consumers.   All businesses should be reviewing their Terms of Business for consumers, their procedures and staff training.

We are posting a series of brief summaries of the changes, highlighting their significance, and with links to further advice.   This is not intended to be legal advice upon which you should act, but awareness of issues which you need to consider.

See the guidance issued by Business Companion – the sale and supply of goods from 1 October 2015.

For legal advice please contact Neil Howlett or Andy Hambleton

Variation of Terms

It will be much more important for traders to obtain the agreement of the customer before delivery to any changes in the goods to be supplied.  There is draft CMA guidance allowing minor technical adjustments or changes required by law or necessity which can be or not real significance to the consumer.  However, traders may have still an obligation to inform consumers of such changes.

If there is the likelihood of a need to make changes between the date of the contract and delivery it may be possible to do so fairly if the possible variation is clearly described, there is a valid reason for it, and the consumer will be given notice in advance and the right to cancel.

In principle a trader may be able to change any terms provided that the consumer is given the right to terminate without being left worse off, although traders will need to be wary of anything that may give rise to a claim for breach of contract and civil damages.

Timing and Delivery

Goods must be delivered without undue delay and in any event not more than 30 calendar days after the date of the contract, unless that period is varied by agreement.

Services must be performed within a reasonable time, which is a question of fact in each case, unless the time or a method for fixing the time is set out in the contract.

On-premises and Off-premises contracts.

One element of the current law not brought into the Consumer Rights Act is the requirement for giving Notice of Cancellation Rights for Off-premises contracts.  These remain the same as before.

See Business Companion – Consumer contracts – off-premises sales

Distance Selling

The Consumer Rights Act has not changed the law of Distance Selling – the sales of goods, services and digital content without face-to-face contact with the customer. This includes sales online, by mail order or by telephone. In our experience many websites are not compliant with this law.

See Business Companion – Distance Selling

Consumer Rights – all change again . . .

In May 2014 we wrote about the new Consumer Contracts Regulations. Consumer law is set for a major change later this year, and all traders dealing with consumers will need to prepare for that.

The Consumer Rights Bill is currently before Parliament. This will implement the EU Consumer Rights Directive and codify consumer law that is currently set out in a number of fragmented (and sometimes inconsistent) pieces of legislation, some of which date back to the 1970s. In particular, it introduces consistent definitions of key concepts (such as who classifies as a ‘trader’ or ‘consumer’), introduces new statutory rights and remedies for consumers, and updates and modernises the law, in particular for the digital economy.

The Bill sets out a series of tiered remedies for the consumer in the event the consumer’s statutory rights are breached. These comprise:

  • A short-term right to reject the goods, lasting 30 days. If the consumer requests that the goods be repaired or replaced (see below), this is extended by the time taken to repair or replace) or 7 days from the date of return (whichever is longer);
  • The consumer may also require the trader to repair or replace the goods at the trader’s cost, and within a reasonable time and without causing significant inconvenience to the consumer (unless this would be impossible, or the costs required would be disproportionate compared to the consumer’s other remedies).
  • If the trader refuses to repair or replace the goods or is unable to do so at the first attempt, or if the consumer cannot enforce this right as it would be impossible or disproportionate, the remedies move on to the next tier;
  • The next tier is a right to an appropriate price reduction (up to the full price paid by the consumer), or a final right to reject. The final right to reject is subject to a right of deduction for use, to take into account the use the consumer has made of the goods since they were delivered.

The Department for Business, Information and Skills (BIS) intends that the Bill will come into force on 1 October 2015 and intends to publish guidance on the Bill in April 2015. This will give businesses six months’ notice to make the changes required to inform consumers of their new rights in relation to faulty goods, services, or digital content.

The primary source of information will be the Trading Standards Institute Business Companion website, which will present general advice and also more detailed advice on the law.

Businesses will need to plan to review and update their terms and conditions for consumers once the Bill is passed and the Guidance issued, and review their sales processes and staff awareness so they are ready for the planned implementation in October 2015.

Contact: Neil Howlett

Copyright for Photographers

Copyright for Photographers

Neil Howlett, Commercial Law Partner at Harris & Harris, gave a talk on 16th January 2015 to the members of Wessex Camera Club on copyright for photographers. This covered what could be protected by copyright, and the practicalities of taking photographs in public places. He also advised them about protecting and exploiting their rights, something which has become much more difficult in the modern world of digital photography and publishing.

As in any other context good evidence and record keeping are the start. People are much better protected if they put in place good legal agreements; model releases, licensing agreements, and contracts when they are commissioned to take photographs. They should define who can do what and be practical. Legal documents can never give 100% protection but without them the position of a rights owner may be worse.

Harris & Harris are happy to help photographers and others in the creative industries with legal agreements.

There is plenty of reliable advice available for free. The Intellectual Property Office (IPO), the Government body responsible for Intellectual Property Rights, publishes useful material written in plain English. Their Copyright Notice 1/2014 “Digital images, photographs and the Internet” explains how to use digital and photographic images on the internet. The IPO also provides online tools including IP Equip training and an IP Health Check, to help you create value from your ideas, turning inspiration into sustainable business success.

Please contact Neil Howlett

Is a verbal contract worth the paper on which it is written?

We regularly see clients who say “I haven’t got a contract”. What they mean is “I haven’t got a bit of paper”. Under English law almost any contract (except for buying land or a guarantee) can be made by word of mouth (or email). The main difference is that there is much more room for disputing the terms of a contract if it isn’t recorded – that’s more business for lawyers. Even for those areas where writing and signature are required the courts may find those in an exchange of emails.

A contract comes into existence once the parties have agreed the terms. It isn’t necessary for them to have agreed all the terms. The test is objective – the court looks at what the parties have said and whether the essential terms have been agreed. That is now commonly working through a set of emails.

Even for substantial commercial contracts there no requirement for greater formality. It is possible to create a legally binding contract before a document is drawn up and signed by the parties, even where they both expect to move on to that. As one judge put it – “Even if certain terms of economic or other significance have not been finalised, an objective appraisal of their words and conduct may lead to the conclusion that they did not intend agreement of such terms to be a precondition to a concluded and legally binding agreement.”

Even where there is an agreed intention for further condition to be fulfilled or terms to be agreed that may not prevent the contract coming into existence, if a reasonable person experienced in the business sector would think it had. A statement that a ‘formal contract will then follow in due course’ did not necessarily indicate that acceptance of a signed quotation was not legally binding.

If the parties can’t agree such further terms the existing contract is not invalid. If the parties can’t agree the court will, if necessary, enforce terms that are standard in the sector or give business efficacy to the terms agreed. What the court is very unlikely to do is to write in for you the terms that are often the most important, such as limitations on liability or practical protections for your assets and intellectual property.

The lesson is that when negotiating contracts all written communications relating to negotiations and contractual terms should be marked “Subject to Contract” unless and until you are to enter into a binding agreement on the basis of the terms agreed. As you approach that point be ready to instruct a solicitor to prepare a formal contract. Help us do that for you by letting us have clear “Heads of Agreement” setting out the essential commercial terms, and marked “Subject to Contract”. Help us save you money and protect your business.

 

Flexible Working – Does it work?

All employees who have worked for an organisation for more than 26 weeks now have the right to request flexible working arrangements. This includes part-time working, flexitime, job sharing, shift working or homeworking.

This is a much wider right than was available previously. It remains only a right to request and only once every 12 months. The old prescriptive rules on how to deal with such requests are gone; requests have to be considered in a reasonable manner and within a reasonable time. ACAS has produced a Code of Practice and Guidance for employers to help them understand the changes and how to handle requests in a reasonable manner.

Employers can refuse requests if granting the request would have an adverse impact on the business based on one of the business reasons set out in the legislation. These are: the burden of additional costs, an inability to reorganise work amongst existing staff, an inability to recruit additional staff, a detrimental impact on quality, a detrimental impact on performance, detrimental effect on ability to meet customer demand, insufficient work for the periods the employee proposes to work or a planned structural change to your business.

Although this system is fairly simple employers will need to be very careful about the overlap between a request for flexible working and direct or indirect discrimination. An employee seeking flexible working is supposed to specify the change which is being requested, when it is to come into effect, what effect they think the change would have and how they think any such effect might be dealt with. Employers are only required by this new law to consider requests that do that, and to respond to that specific request, but a failure to consider a request that doesn’t meet those criteria or a refusal of one that does may still result in a claim of Discrimination under the Equality Act 2010. Compensation for breach of the Flexible Working Regulations is capped at £4,000; compensation for Discrimination is unlimited. Remember that protected characteristics are wide: race, disability, age, sexual orientation or religion or belief, and part-timers should be treated equally with full timers.

There will also be challenges where several employees request flexible working; ACAS recognises that may require an employer to choose between them, though not many employers are likely to take up the suggestion of drawing names out of a hat! Remember too that health & safety obligations continue for employees who work at home.

Flexible working can work for both employers and employees. Here at Harris & Harris we have many years’ experience of partners and staff at all levels working part-time and job sharing – more than 40% of us work “flexible hours”, including many who by choice work less than 5 days a week. It requires flexibility on both sides, but it enables us to recruit and retain good people so it’s worth the effort.

For advice please contact Neil Howlett or Andy Hambleton.

New Consumer Contracts Regulations

On 13th June 2014 the law changes on consumer contracts and distance selling. The Distance Selling Regulations and the Doorstep Selling Regulations are replaced by The Consumer Contracts Regulations 2013. The concepts remain broadly the same, but the difference is now between “on-premises”, “distance” and “off-premises” contracts. This doesn’t apply to commercial contracts or to normal over the counter shops sales where the customer takes the product away, and there are a series of exemptions.

There are new obligations which apply to all consumer contracts. These include:

  • Traders must, unless the consumer agrees otherwise, deliver any goods purchased within 30 calendar days.
  • Traders must not make the consumer use a premium rate telephone line to contact the trader about an existing contract.
  • Traders must not impose excessive payment surcharges when consumers pay by certain means, such as credit or debit cards.

There is a set of basic information that has to be given to all consumers for all contracts, plus enhanced information that has to be given for “distance” and “off premises” contracts. The definition of “distance” is complex, requiring “an organised distance sales or service-provision scheme . . . with the exclusive use of one or more means of distance communication up to and including the time at which the contract is concluded”. A trader selling via a scheme offered by a third party, such as an online platform is selling via an organised distance sales or service provision scheme. “Off premise” contracts may include contracts concluded at business premises if that followed an offer made at or is immediately after an “off premises” meeting. For these the Regulations:-

  • Extend the list of pre-contract information that a trader must give to a consumer (there are some differences between distance and off-premises contracts).
  • Introduce new rules on the cancellation of contracts for the supply of digital content not on a tangible medium.
  • Extend the statutory cancellation period (sometimes known as the cooling-off period) to 14 calendar days.
  • Where a consumer has a right to cancel a contract, require the trader to provide the consumer with a model cancellation form.
  • Extend the cancellation period to, broadly, one year if the trader fails to provide certain pre-contract information.
  • Require online traders to make it clear (for example by labelling the payment button with “Order with obligation to pay”), where proceeding with the transaction will trigger a payment.
  • Require a consumer to return goods within 14 calendar days of cancelling the contract.
  • Allow the trader to withhold a refund until the goods are returned (or evidence of their return is provided).
  • Allow the trader to deduct an amount for the diminished value of the goods when refunding payments.
  • Extend the list of ancillary contracts which will be automatically terminated on termination of a distance or off-premises contract.

This is a good time to check your contracts and processes comply. BIS has published Implementing Guidance which is worth reading to see if and how this will apply to you. However, we can’t understand how BIS can claim their horribly drafted Cancellation Notice complies with the Unfair Terms in Consumer Contracts Regulations 1994, which say that terms in consumer contracts must be in “plain and intelligible language”. Traders will have to make a decision whether to go for safety and use the BIS version or redraft it so that their customers might actually understand it. If you need it we can help.

Contact: Neil Howlett

Employment Tribunal statistics and Early Conciliation

The Ministry of Justice has published the quarterly employment tribunal statistics for October to December 2013 – the first full quarter since the introduction of fees for applications.  Compared with the same period in 2012 there was drop in the number of individual applications lodged of nearly two thirds.

Is this necessarily a good thing? Although there were quite a few claims that were never likely to succeed, and those imposed costs on employers, I don’t think that two thirds of claims were without any merit. Even if there were do we know if it is those claims that have dropped out? Knowing the character of some of the people who brought them I doubt it.

If that means that valid claims are not being made is that wholly good for employers? Will it allow those whose employment practices are poor to get away with that? Those employment practices are undercut those who do things properly and are anti-competitive. Is this the law of unintended consequences?

Early Conciliation through ACAS is coming in April – that may help good employers resolve disputes, but bad employers will probably ignore it, and there is little incentive for them to improve,

For advice please contact Neil Howlett or Andy Hambleton.

Break Clauses – Get it right first time

Many commercial leases include break clauses allowing the tenant to bring the lease to an end before the contractual term ends. These give tenants flexibility from being tied into a long term. In the recent economic downturn tenants have been attempting to exercise break clauses to release themselves from leases with upwards only rent reviews or other obligations that landlords used to be able to impose.

Some of these attempts to escape have come unstuck. Even very minor failures of no commercial value may block a break. There have been many court cases recently about whether or not break clauses have been effectively operated.

This is a high risk area for any business. If you plan to break your lease but don’t get it right you don’t get a second chance. You may be stuck for several more years with an obligation you have decided to get rid of and possibly two sets of premises. For landlords the stakes are equally high;  they and their lawyers will go over any attempt to operate a break clause with a fine toothcomb.

The Code for Leasing Business Premises in England and Wales recommends that the only pre-conditions to a tenant exercising a break clause should be that they are up to date with the main rent, give up occupation and leave behind no continuing sub-leases. In practice many older leases include other pre-conditions which can be a trap for tenants.

Any tenant considering exercising a break clause should plan ahead. The starting point is to look at the lease:

  • When is the break date ?
  • Notice will have to served – often several months in advance. What is the last date on which notice can be served?
  • Is there a specified form for the notice or is there specified information to be given ?
  • What does the lease say about serving notices? Who is to be served? Where ? How?
  • Are there any pre-conditions for exercising the break clause, and at what date do they have to be satisfied?
  • Rent will almost always have to be up to date, but that may include other payments defined in the lease as rent. Have you ever been late paying something and triggered an obligation to pay interest reserved as rent? There has been much litigation about what to do when rent is due for a period which continues beyond the break date. The basic advice is to pay everything that is due and try to get it back afterwards. The loss of a quarter’s rent is far less than being stuck with rent for several more years.
  • Is there an obligation to have complied with all the tenant’s obligations in the lease? At what date? Is that qualified by the word “material”? If not, even minor, previously unnoticed breaches may block compliance. If in doubt comply. Obligations as to the state of the premises on termination may be scattered throughout the lease. Can you identify tenant’s fixtures or alterations which you should remove? Aim to get work done well in advance of the break date and allow a margin for delays. Try to get the landlord to approve them.
  • You must give vacant possession – be very careful to do exactly that. Contractors still on site doing repairs, or even rubbish in the basement, have prevented tenants from meeting this obligation in recent cases.

Unless you are absolutely sure you understand everything you have to do get legal advice, and get it early. Deadlines for break clauses are absolute and if you miss them even the best lawyer in the land won’t be able to help you. You may be able to do a commercial deal, but from a position of weakness. With some other issues it may be possible to litigate whether you have complied or not, but this will be substantially more costly than getting early advice and getting it right first time.

Finally, when taking on new premises look carefully at any break clause – if you can’t make it unconditional, negotiate for it to comply with the Code for Leasing Business Premises.

Social Media at Work – Who owns it?

Social Media accounts may be an important part of a business model. They will be part of the way a business communicates with customers and potential customers and the image the business presents to the world. They can be a valuable asset. They can also be used to damage a business’s reputation or to steal its customers.

Who owns social media accounts as between and employer and an employee? The lawyers answer is that this should be defined in the Employment Contract. In reality that doesn’t always happen. Many employers are willing to allow junior employers to set up accounts because they know how. They may monitor them, or not. They may not systematically collect logins and passwords.

So what happens when an employee leaves and none of these in place? All is not lost for the employer. In a recent case the High Court ordered one former employee of a publishing company to hand over business cards he had collected whilst an employee, and another to hand over the access details for LinkedIn groups that she had managed. Both ex-employees had taken steps while they were still working to set up a company whose business model was similar to their employees, persuaded other staff to leave and used the cards and LinkedIn groups to contact customers of their former employer. The employee who ran the LinkedIn groups claimed they were “personal”, which was rejected as they were done at work, and the employee who had the business cards was alleged to have purchased software to download them all before handing them back.

The judge did not have any difficulty in finding that there was a strong case that the employees had breached their duties of good faith before leaving. Having done that the judge granted the employers a “springboard injunction” to restrict the employees’ activities in their new business in such a way that they gained no unfair competitive advantage from their wrongdoing. That was effective immediately, and will last until a full trial. In most such cases the parties having had a first experience of litigation settle out of court.

Such “springboard injunctions” are well established, though not cheap to obtain. Employers need to find evidence of the employees’ wrongdoings, which here was fairly easy as they hadn’t covered their tracks. That’s why lawyers, if asked, will always advise employers to cover these issues in contracts, handbooks and policies, and also to negotiate post termination restrictions for key staff.

For advice please contact Neil Howlett or Andy Hambleton.