Litigation funding

Sensible steps on litigation funding

Litigation funding is definitely a growth area and represents a very sensible option in many cases. The one potential drawback at the moment is that the funding is generally only available for bigger cases, and this represents a fairly small section of the commercial litigation market.

Having said this it appears, according to the Civil Justice Council, that consensus has been reached on a set of rules which the major funders are likely to voluntarily adopt, which will address many of the concerns about litigation funding. The main points which will apparently be in the code of conduct are :-

  • For membership the members will have to prove solvency and adequate funding for cases.
  • Model litigation funding agreements will contain a type of arbitration clause where if the funder and fundee disagree on settlement or termination of litigation a senior lawyer will determine the issue.
  • an Association of Litigation Funders will be set up to give further credibility to the funders who are members and top the litigation funding concept generally.
  • Brokers for funding will be eligible to also join the new Association as associate members.

We are fans of litigation funding generally, what do you think and do you think litigation funding can be utilized in the smaller value commercial litigation cases or in other categories. Most of the current funders will only look at cases with a value of over £250,000.00.

Party Wall Act notices

Party walls – chimney removal

Before your neighbour carries out any work to remove a chimney from the shared wall between your 2 properties, he/she must give you notice of it.

The Notice needs to set out what type of work you wish to do, and how you are to do it, and over what period of time. The Notice needs to confirm that you will be responsible for any damage caused.

The Notice must be in writing and must give you sufficient time to consider what works are being proposed.

If you ignore the Notice, contrary to common belief and indeed logic, under the Party Walls Etc Act 1996, silence is deemed to be dissent, not consent.

That means that your neighbour cannot carry out any work without employing a Party Wall Surveyor. Equally you will need a Surveyor, which is usually paid for by the adjoining Owner.

The surveyors will get together and discuss the best way to remove the chimney stack so as not to cause any structural damage to the Party Wall, and to cause minimum cosmetic damage.

If they cannot agree on a way forward, a 3rd Surveyor can be appointed under the 1996 Act.

If he is carrying out work which would otherwise be notifiable, and no Notice has been served, and no agreement is in place, you need to ask him to stop work until a Party Wall Award has been published. If he ignores you, you need to seek advice urgently and in some instances an Injunction preventing him from continuing notifiable works will be appropriate.

Bear in mind with Party Wall matters and any other neighbor issues that “what goes around comes around”. Being difficult or ignoring the issue, putting your neighbor to expense for no good reason, is not a sensible way to operate. There may come a time in the future where you need your neighbour’s co-operation. Ill-feeling between neighbours is a big legal issue and a small issue can easily escalate into all sorts of unfriendly or even very hostile actions. Conversely, if you are genuinely concerned about works your neighbour may be carrying out, make sure you deal with the issue in an objective and constructive way, but utilize your rights as detailed above if your neighbor behaves as though they will do what they want when they want regardless of your concerns and disruption to you.

The writer is a Solicitor-Advocate, Partner and head of Litigation at Darlingtons, a member of the Pyramus and Thisbe Club, and an Associate Professor of Law at Brunel University.

What is vicarious liability ?

What is vicarious liability ?

Vicarious liability is the legal term describing a situation where one individual or legal entity is held responsible for the actions or inactions of others in law. The most common context for vicarious liability is in employment law, where the employer can be found to be liable for the actions of employees in situations such as sexual harassment, even in situations where the employer was unaware of the conduct of the employee and however unfair this may appear. Issues can arise in this area as to whether an employee has acted unlawfully during the course of his or her employment, whether the employee was acting outside of any authorized behavior during employment and also as to whether an independent contractor working for the employer can in some circumstances be considered to have been, in reality, an employee and not an independent contractor.

Employment law – pro employer or employee ?

Employment law – who does it favour ?

Employment law is one of the most fast changing and interesting areas of law in our opinion.

What makes it so fascinating is it’s interplay with politics. Bearing in mind many millions of the voting population are also employees, when set against the fact that the business community are a vital part of the economy and source of funding for political parties, this area of law is always going to be finely balanced.

In reality, English employment law, in terms of the underlying law on the big areas such as unfair dismissal, largely favours the employer. As long as the employer acts within a “range of reasonable responses” in any given situation, and complies with appropriate procedure, dismissals will be fair. Yet, whilst the law may favour the employer, there is so much employment law, it changes so fast, and the procedure in Employment Tribunals is favourable to employees. All of this means that employers have to spend significant time and money in complying.

Perhaps the best example of how employment law, in terms of practicalities, favours the employee, is the current no-costs rule in the Employment Tribunal. Generally, with litigation, frivolous parties and claims do not bring cases because of the cost of court fees and threat of having to pay an opponent’s costs if a case is lost. Neither of these apply in the Employment Tribunal, subject to exceptions, so employees are encouraged to “have a go” at the taxpayers or employers expense. An employer faces the choice of settling even weak cases or wasting money on legal costs defending, with little chance of recovering those costs.

So, ask an employer whether employment law favours the employee. As a recent survey shows, the answer is overwhelmingly yes.

Pinsent Mason solicitors recently asked this precise question and a huge 97% of a fairly small sample of employers, albeit big employers with generally more than 500,000 employees, answered that  they consider employment law is highly skewed in favour of employees. On the other hand, employees may feel encouraged to make claims, but a good employment solicitor will need to make it clear to the prospective client that the underlying legal tests largely favour the employer and that if an early settlement, albeit for a modest sum, and perhaps involving a compromise agreement being signed, is available, this is often a better option. This is particularly the case since, like most areas of English law, employment law generally relies on the employee suffering financial loss in the form of ongoing loss of earnings and does not award large damages for injury to feelings, even in discrimination cases. There is a duty of mitigation for employees, who need to be actively looking for work even if unfairly dismissed and need to be able to prove this to the Tribunal. Consequently, the average award in the Employment tribunals tends to be less than £10,000.00. After paying lawyers fees (don’t forget, the no costs rule works both ways) many employees would have been better off with an earlier settlement as a means to an end.

 

Returning to Pinsent Mason’s survey findings, here are some additional interesting points :-

  • Around 2/3rd of employers advised that the perceived threat of a  tribunal claim impacts on everyday management decisions.
  • Employers feel that the Tribunal system takes too long and too many cases are cancelled at the last minute due to Tribunal overlisting on the basis that many claims will settle at the last minute.
  • Over 80% of employers would favour mediation over Tribunal cases
  • Government proposals to lengthen the time that employees need to have worked to qualify for bringing a claim from 1 year to 2 years received 65% support.

Franchising – a good idea ?

Franchising: advantages and disadvantages

Advantages

  • Research suggests that as many as 50% of franchisees would not otherwise become self-employed were it not for the franchise format.
  • By “piggybacking” on the franchisor’s name and market position,  success can be achieved much faster, in turn potentially reducing working capital requirements.
  • Specialist franchise finance may be more readily available than with a start up business and on more favourable terms.
  • Risk of business failure tends to be reduced.
  • Typically, the franchisor will continue with a significant and highly successful marketing and advertising campaign which would not otherwise be available.
  • Assistance and training are likely to be available and provided during  the term of the franchise.

Disadvantages

  • Being subject to significant control by the franchisor
  • Hidden costs such as having to buy stock at above market price from the franchisor or to pay for training and such like, even when economic conditions are difficult, and this creates a lack of flexibility.
  • Many franchise agreements significantly restrict the franchisee’s ability to sell the franchised business without approval of the franchisor.
  • The franchisee’s operation will be directly affected by the actions or insolvency of the franchisor.

 

The Bribery Act

The Bribery Act

The Bribery Act is a new piece of legislation that was passed in 2010 and will come into force in July 2011.  The Act updates the law on corporate bribery and creates four separate offences, which includes a strict liability offence for failing to take steps to prevent bribery.

Clearly, this is an important piece of legislation and it is important that you prepare your business prior to the Act coming into the force.

Will your business be caught by the Act?

The Act not only catches businesses based in the UK, but also businesses abroad if they conduct business within the UK through a subsidiary, agent or otherwise.

How can Solicitors help ?

Solicitors can:

  • Advise you on what the bribery act prohibits and how it affects your business
  • Conduct an audit to assess how compliant your business is with the bribery act
  • Help you devise measures to prevent acts of bribery occurring in your business
  • Assist in the training of staff on the bribery act
  • Advice on contracting with third parties
  • Help you assess whether corporate hospitality/marketing activities will be caught by the Act

For further assistance :-

http://www.darlingtons.com/blog/2012/08/08/bribery-act-advice-policies-procedures/

 

 

 

Breach of contract

What are the options in a breach of contract situation ?

At common law, an innocent party only has the legal right to terminate the contract if the breach is a “fundamental breach”. This can be hard to identify sometimes, but in common sense terms, a fundamental breach is a breach of one of the most obviously important parts of the contract. However, it is always important to note that terminating the contract may not always be the best option and can lead to reduced recovery by way of damages. It is one option of a number.

Breach of contract contractual clauses

In addition to the common law termination of contract rules, many contracts have express termination clauses, and it is not necessary in those circumstances to legally prove that the breach, if catered for expressly as giving rise to a termination right, is a fundamental breach of contract. It is worth noting also

  • Sums recoverable may be limited due to possibly being capped in the relevant clause.
  • Not all losses are necessarily recoverable.
  • That it is important to consider whether it is possible to terminate at common law as an alternative and what the implications might be.

What are the options on termination ?

As a basic checklist, it is suggested to examine :-

  • What type of breach has occurred, is the evidence clear
  • what  would be the consequences of termination, both practical, business and financial
  • the contract in detail
  • is it worth obtaining legal advice before acting
  • implications of delaying which sometimes result in losing certain accrued rights

Sale of goods faqs

Sale of Goods FAQs

Under Section 12 of the Sale of Goods Act 1979, the seller is under a duty to sell goods that he has a right to sell.  What does this mean ?

Quite simply it means that the seller must either own the goods or have the authority to sell the goods on behalf of someone else.  People selling goods on behalf of someone else will be an agent of the principal (who is the legal owner to the goods).  It could also be the case that you have been sold goods which turn out to be stolen.  Irrespective of the owner’s knowledge of whether the goods were stolen or not, in all instances where the seller does not have a right to sell goods, you will be entitled to cancel the contract (repudiate) or claim damages as Section 12 (1) is an implied condition (as opposed to warranty) in contracts for the sale of goods.

 

Under Section 13 of the Sale of Goods Act 1979, sellers are under a duty to sell goods as described.  What does this mean ?

When buying goods, there is an implied condition in contracts that goods match the description used by the seller where the goods are solely sold by description.  If you have had a chance to physically inspect the goods, you cannot later cancel the contract or claim damages by relying on this condition.  A description can include any written and spoken statements which describe the goods.

 

This section, however, is separate from quality and the two should not be confused.

 

Under Section 14 of the Sale of Goods Act 1979, sellers are under a duty to sell goods that are “of satisfactory quality”.  What does this mean ?

Before giving an answer, it makes sense to clarify that this section only applies where the seller sells goods in the course of business, which naturally excludes private sellers.  The definition of satisfactory quality is clarified in Section 14 (2A) and (2B):

 

Section 14 (2A): “For the purposes of this Act, goods are of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking account of any description of the goods, the price (if relevant) and all the other relevant circumstances.”

 

Section 14 (2b): “For the purposes of this Act, the quality of goods includes their state and condition and the following (among others) are in appropriate cases aspects of the quality of goods

 

(a) fitness for all the purposes for which goods of the kind in question are commonly supplied

(b) appearance and finish
(c) freedom from minor defects
(d) safety
(e) durability”