Lords committee rejects plan to harmonise contract law in Europe
A proposal to harmonise contract law across the European Union has been rejected by a House of Lords sub-committee.

The Draft Common Frame of Reference was put forward by the European Commission as a way of making it easier to resolve disputes between companies from different member states.

The proposals were examined in detail by the House of Lords Sub-Committee on Law and Institutions. The chairman, Lord Mance, said the EU draft was “a hugely impressive academic work” which would be valuable to law makers across Europe. However, he said the sub-committee felt it should be rejected because it “takes an approach and makes choices which raise concerns and have been subject to some criticisms - particularly as to whether they would be beneficial or usable in a practical sense”.

The Lords also rejected an alternative proposal that there should be a body of European law that countries could choose to adopt if they so wished.

Contracts between companies in different countries often present difficulties and great care should be taken in the way terms and conditions are drawn up. Many firms will want to specify that disputes are dealt with in their own country under their own legal framework.

UK companies should ensure they know and fully understand how potential disputes will be handled. Otherwise, they could find themselves having to resolve a problem in a foreign language and under a legal system which is very different to that in Britain.

Please contact Peter Sutherland if you would like more information.

BACK TO TOP

Small businesses spending £12bn a year on compliance

Small businesses are spending a total of £12bn a year on complying with various regulations, according to research by the Forum of Private Business (FPB).

The FPB says that a survey of its members shows that employers in small to medium firms are spending an average of 37 hours a month on compliance.

Employment law provides the greatest challenge and costs small businesses £2.4bn a year dealing with issues such as dismissals and redundancy, discipline, absence controls and management, parental leave and holidays.

Health and safety administration costs £1.2bn and small firms also find themselves bogged down in tax administration, building and property regulations, and equality and diversity.

The costs seem enormous when quoted in this way and it’s not surprising that many firms will try to save money by dealing with these issues in-house. However, it is usually more cost-effective and safer to get good legal advice to ensure that compliance matters are dealt with quickly and correctly.

This can save money in the long term and reduce the risk of creating problems unnecessarily – particularly in the area of employment law where failure to follow the correct procedures can lead to costly tribunal claims.

Please contact Anthony Kay if you would like more information about compliance with the various regulations affecting business. Expert advice can you save you time and money, leaving you free to concentrate on running your business. We offer a FREE 30 minute consultation to take advantage of this offer call Anthony Kay directly on 0115 988 6739.

BACK TO TOP

Right to rescind leasehold sale contracts must be exercised promptly
The right to rescind a contract for the sale of leasehold property must be exercised promptly within reasonable time limits or else it would be forfeited.

That was the ruling of Mr Justice Sales in the case of Alchemy Estates v Astor and Another.

The court heard that Alchemy exchanged contracts to buy a leasehold property from Astor on 15^th January 2008. The contract was due to be completed on 13^th March but this was delayed because the landlord’s consent had not been obtained in time.

Both parties continued to act as if the contract was still going to continue to completion. However, on 19^th May 2008, Alchemy served notice that it was going to rescind the contract because the seller had failed to obtain the licence to assign by the agreed completion date.

The Astors disputed that Alchemy had a right to rescind and further submitted that if there was such a right, it had been lost because of the delay in exercising it.

The terms of the contract relating to the point under dispute were based on condition 8.3 of the Standard Conditions of Sale (4^th Edition). The contract required the seller to take all reasonable measures at his own expense to obtain the landlord’s consent, and obliged the buyer to comply with reasonable requests for information and references.

It also stated that if consent had not been obtained three working days before completion, then in line with condition 8.3, the contract could be rescinded by either party as long as they weren’t in breach of their obligations.

In giving judgment, Mr Justice Sales said the objective of standard condition 8.3 was to allow each side to assess their positions in the event of the landlord’s consent not being obtained in those few days before completion. It gave them the opportunity to reconsider and possibly rescind if it became apparent that there might difficulty in obtaining consent.

However, Alchemy could not use condition 8.3 to rescind the contract because it had not served notice to exercise its right in the three days up to the contract completion date. Nor had it served notice within a reasonable time afterwards, such as one or two days. In fact, it had not served notice until more than two months later. For more information please contact Peter Sutherland.

BACK TO TOP

Healthcare firm recovers cost of building access road
A health care firm has successfully taken legal action to assert its right to recover the cost of building an access road to its premises. 

The firm bought a plot of land to build a psychiatric hospital. The plot was cut off from the main highway but this should not have been a problem because a consultancy group which owned the adjoining land was covenanted to build a distributor road to provide access.

The healthcare firm began building a psychiatric hospital and gave notice to the consultants asking them to comply with the covenant requirement to build the distributor road. However, despite numerous requests, nothing was done.

The health care firm decided to bring in its own contractors to build the road so the project could be completed on schedule. It then began legal proceedings to recover its costs. 

The court ruled in its favour saying that the consultants had known when they bought the adjoining land that there was covenant requiring them to build the road and therefore they should bear the cost of construction. If your business is facing a dispute and you would like to speak to an expert take advantage of our FREE 30 minute consultation by emailing Faizal Essat or Marcus Brown.

BACK TO TOP

Building firms wins appeal over patent infringement
A building firm has won its appeal against a court ruling that one of its patents had not been infringed by a rival company.

The firm had patented a bolting mechanism with features which were different to those found in other systems used in construction. Its channels inclined inwards which meant it performed better than previous versions which were rectangular.

It was described in the patent as having a “generally elliptical cone shape”.

A rival firm produced an assembly which had virtually the same features except that there was no ellipse at the top. At the hearing, the judge held that the phrase “generally elliptical cone shape” was used in the patent to describe all shapes which had the essential feature of an ellipse.

As the rival assembly did not have an ellipse at the top, there was no infringement of the patent. However, the Court of Appeal has overturned that decision saying that taking such a strictly geometrical view would unduly restrict the scope of protection.

It held that the important question to ask was, what would a skilled person understand the patent to mean when it referred to the elliptical shape. Such a skilled person would understand that it referred to the parts of the mechanism that make it function, not the top part which was immaterial to its performance.

The rival mechanism may not have had the exact same shape as the patented version but it did contain the same essential elements and so therefore that patent had been infringed.

If you have a patent dispute and would like to seek legal advice please contact Faizal Essat. We offer a FREE 30 minute consultation to take advantage of this offer call Faizal Essat on 0115 988 6707.

BACK TO TOP

Changes to insolvency law could provide lifeline for struggling companies
Large and medium-sized companies could soon benefit from changes to insolvency laws which will help them avoid going into administration.

The Insolvency Service is now consulting on two major proposals. The first measure would give businesses more breathing space to enable them to seek legally binding Company Voluntary Agreements (CVA) with their creditors without first having to go into administration.

At the moment, only small companies are able to obtain a moratorium on creditor action while seeking an agreement with their creditors. This would be extended to large and medium sized businesses.

The second measure would give absolute priority to creditors who lend money to companies in administration or a CVA.  Such creditors would be at the top of the list for recovering their money if the company eventually failed.

It’s hoped this extra safeguard will make it more attractive to lend to companies in difficulties and thereby give those companies access to the funding they need to survive and stay in business.

A Government spokesman said: “Giving more businesses extra breathing space will encourage company rescues. It could make all the difference between a firm staying in business or entering insolvency - preventing the knock-on effects that failures have on employees, directors and creditors."

If the proposals do go ahead then they will help to keep struggling companies afloat and may help their creditors recover their money eventually. However, creditors can also protect themselves by monitoring their customers’ payments records closely and taking prompt legal action to recover debts before the situation gets out of hand.

Firms should also consider all their options carefully before entering into any agreements and take legal advice to ensure they are doing everything possible to protect their interests. For more information please contact Faizal Essat.

BACK TO TOP

Employers need to adjust to Lord's ruling on holiday entitlement
Businesses may want to reconsider some of their employment policies following a ruling by the House of Lords that staff are entitled to accrue holiday entitlement while off work sick.

An employee who resigns or is made redundant while off sick will be entitled to payment in lieu of holidays. This must be in addition to any redundancy payment. Employees will be able to take the case to an employment tribunal if the holiday entitlement is withheld.

The ruling follows a long running case involving staff at Her Majesty’s Revenue and Customs. The Court of Appeal ruled that the staff were not entitled to accrue holiday entitlement while off sick but in January, the European Court of Justice said that decision was wrong.

Now the House of Lords has also ruled in favour of the employees.

However, it only applies to statutory minimum holiday pay. Firms may be able to be more restrictive with contractual holiday entitlement which exceeds the statutory minimum.

Some firms may decide to try to find ways to make it easier for staff to return to work; others may feel obliged to move quicker than in the past to dismiss staff on long term sick leave. Whatever approach firms take they need tread carefully to avoid the possibility of a costly tribunal claim.

Please contact Anthony Kay if you would like more information.

BACK TO TOP

WE OFFER A FIRST 30 MINUTE FREE CONSULTATION
We have easy on-street parking outside the office.

Andersons Solicitors

About Andersons | Business services | Individual services | Who's who | Useful links | Contact & find us |
Email us | © Andersons Solicitors in Nottingham

Andersons Solicitors, 40-42 The Ropewalk Nottingham NG1 5EJ

Tel. 0115 947 0641  Fax. 0115 950 4252                                                     Click here for location map