Tuesday, December 30th, 2008
The UK Government has begun a consultation process on EU plans to develop a uniform set of consumer rights across Europe.
The Consumer Rights Directive is intended to harmonise rules in several important areas such as protection against unfair contract terms and rules on faulty goods. There will also be new rules on internet shopping and door-step selling.
The proposed measures include a 14-day cooling off period for goods bought online or on the doorstep and more consistent protection when goods are not delivered.
Another important proposal concerns a consumer’s rights when goods are found to be faulty. At present in the UK, the customer has the right to reject the faulty goods and ask for a refund. The European Commission is proposing a different system which would allow the trader to offer to repair or replace the faulty item. A refund would only be obligatory in a more limited set of circumstances.
The consultation period ends on 2nd February.
Meanwhile, the Department for Business Enterprise and Regulatory Reform has asked the Law Commission to consider legal remedies for consumers who discover that an item they buy doesn’t conform to contract.
We shall keep clients informed of developments.
Tuesday, December 16th, 2008
The Government has announced new measures which it says will ease the administrative and financial burden on employers running their own pension schemes.
One of the key changes is that employers will be able to “self-certify that their pension scheme meets the quality standard based on the expected value of pension contributions to be made over the course of each coming year”.
However, employers will only be able to self-certify in this way if they are confident that all members of the scheme remain on course to receive the minimum level of pension savings.
Under the provisions of the new Pensions Bill, the required quality standard for money purchase schemes is that members receive contributions of 8% of qualifying earnings, of which 3% is contributed by the employer.
The rates for the General Levy and the PPF Administration Levy for 2009/10 are to be frozen at the 2008 level.
Rosie Winterton, the Minister of State for Pensions, said: “These reforms are based on a broad consensus among stakeholders. For our reforms to work it is vital that wherever we can we make them simple and straightforward for employers to implement. This will be to their benefit and their employees.
“The amendments will mean that employers who are confident their workers will receive the new minimum level over the year can certify to this extent as opposed to doing so for each individual over each pay period.
“By freezing the General and Administration levies at this year’s level I believe we are meeting the commitment we made last year to provide levy cost stability for pension schemes.”
The Government is now preparing draft regulations relating to the certification procedure. These will be issued for formal consultation in the next few months.
The new minimum level of pension saving is scheduled to come into force in 2012. We shall keep clients up to date with developments.
For more information contact Jonathan Friend.
Monday, December 8th, 2008
The danger of overlooking a potentially important point of contention when resolving a dispute was highlighted in a recent case involving an accountancy firm and one of its former partners.
The firm had arranged a loan facility with a bank using a life insurance policy taken out by one of its partners as security. The firm paid the premiums on the understanding that the policy was used for its benefit and was listed as one of its assets.
Later, the business converted to a limited liability partnership. Shortly afterwards, a dispute arose between the partner who had taken out the policy and the others. They eventually agreed to mediation and the firm made an offer to the dissenting partner to finally settle the dispute between them.
The agreement stated that the settlement would be full and final and so neither side would be able to take further action against the other.
Following this settlement, the partner surrendered the policy and kept the proceeds for himself. The remaining partners objected saying he merely held the policy as a trustee and began proceedings to recover the money.
They lost the case, however. The court ruled that the purpose of the settlement was to finally resolve the differences between them. It was evident that both sides had wanted to draw a line under their relationship and remove anything that might lead to claims against each other in future.
This meant that the firm had relinquished any claim it might have against the former partner in relation to the life policy and therefore he was free to deal with it as he wished.
The judge also pointed out that the negotiations that led to the settlement had been carried out by commercial people dealing with each other in a detached manner. In these circumstances, the former partner was under no obligation to alert the other side to the possible consequences of their actions.
He was entitled to assume that they could make their own assessment of how the terms of the settlement would work out.
If you have a partnership or business dispute then talk to Steven Kinch
Tuesday, December 2nd, 2008
Landlords and developers now have to provide Energy Performance Certificates (EPCs) when they build, sell or rent out flats and commercial properties of all sizes.
EPCs have been required since 6th April this year for all new homes being built and also for the construction, sale or rent of commercial properties with a floor area of more than 10,000sq metres. On 1st July, the threshold was reduced to 2,500sq metres and now, since 1st October, the regulations apply to all remaining buildings apart from a few minor exceptions.
The changes place new responsibilities on anyone constructing a new building or selling or renting out an existing property.
For example, when a new building is completed, the person responsible for the construction must obtain an EPC and provide it to the owner. This is obligatory under Building Regulations. The same thing applies if a building is converted into more or fewer units and there are changes to the heating and hot water provision or to the air conditioning system.
When selling an existing building, the owner will have to provide a certificate for all prospective buyers. Landlords will have to do the same for prospective tenants of commercial properties. However, there is no need to provide a certificate for an existing tenancy; only for a new one. Commercial property certificates are valid for 10 years and if they are still in date when a tenancy changes there is no need to obtain a new one.
Landlords letting out rented accommodation must also provide EPCs for prospective tenants if the property concerned is self-contained. The certificates are not required for situations where the tenant rents a room and shares facilities.
Some buildings are exempt from the regulations but not many. EPCs are not required for places of worship, stand alone buildings of less than 50sq metres (except for homes), temporary buildings which won’t be used for more than two years and buildings with a low energy demand such as barns and farm outbuildings. In some circumstances, buildings due to be demolished may be exempted.
For advice on all commercial property and property developing contact Paul Slot.
Wednesday, November 26th, 2008
It has taken six years of wrangling but the European Parliament has finally voted to accept the Directive giving equal rights to agency workers.
The Temporary Agency Workers directive will ensure equal treatment in terms of basic working and employment conditions including pay. This applies from day one of employment unless individual governments negotiate alternative arrangements with social partners such as trade unions and business organisations.
The British Government reached agreement in the summer with unions and the CBI that temporary workers will be entitled to equal treatment after 12 weeks. At the time, the three parties said the agreement would protect the rights of workers while maintaining flexibility for employers.
They issued a statement saying that the equal treatment to which agency workers will be entitled after 12 weeks “will be defined to mean at least the basic working and employment conditions that would apply to the workers concerned if they had been recruited directly by that undertaking to occupy the same job.”
Although agreement on the 12-week qualifying period was reached in the summer, the Government could not implement it until the Directive was adopted by the EU. Now that has happened, the UK Government says it will move to implement the agreement as soon as possible. It will then come into effect within three years.
In the meantime, there will be further negotiations between the Government, the unions and the CBI to find mechanisms for resolving disputes regarding the definition of equal treatment and compliance with the new rules.
They will also be looking at anti-avoidance measures with particular reference to such things as repeat contracts for the same worker.
For guidance and advice on any employment matter contact Jonathan Friend.
Thursday, October 2nd, 2008
The retail clothing chain Matalan has angered many of its suppliers by announcing that it is deducting 2% from their invoices.
It says the move will help to pay for TV advertising and expansion plans. That might be very helpful for Matalan but it’s a major blow for many of its small suppliers who are already struggling in the wake of the credit crunch.
The problem of late payments seems to be getting worse every month. Nearly nine out of ten firms who took part in a survey carried out by the Forum of Private Business said that their bigger customers failed to pay their invoices within the agreed timescale.
Nearly one in three is owed between £1000 and £5000 which they say is causing cash flow problems.
The question, of course, is what can firms do about it? The answer is that they can do a great deal if they are prepared to exercise their rights.
When companies fail to meet their agreed payment dates or decide to impose arbitrary deductions they are essentially flexing their business muscle. They are relying on the fact that many suppliers will be too afraid to challenge them for fear of losing future business. The dilemma for firms is whether to sit back and accept it or to take action and insist on getting the money due to them.
The course taken will be influenced by many factors including how important the debtor company is to your business and how desperate your cash flow problem has become.
For many firms, however, the issue ultimately boils down to this: what is the point of working hard to supply a firm that then puts your very survival in jeopardy by delaying payment or even refusing to pay the agreed amount.
It is at this point that many firms decide enough is enough and press on to assert their rights.
The first step may be to simply ask your solicitor to draft a letter requesting payment and outlining what action may be taken if the debt is not settled.
Under the Late Payment of Commercial Debts (Interest) Act 1998, for example, firms are allowed to charge interest on overdue invoices. This punitive charge is currently 8% above base rate. They are entitled to levy a statutory late payment fee of between £40 and £100 depending on the size of the debt.
Most companies will pay up immediately when they see you are serious about exercising your rights but for more hardened cases, it may be necessary to initiate legal proceedings. This steps up the pressure even further and often results in payment before the matter ever gets to court.
Suppliers are also protected from unilateral changes to contract terms such as when a customer suddenly decides that they are going to pay less than the amount agreed. The supplier is entitled to insist on sticking to the original terms. That is basic contract law which cannot be overturned on the whim of one of the parties involved.
If one of your customers does decide to pay less than agreed then you will almost certainly be able to claim interest on the outstanding amount and impose a late penalty charge under the Payment of Commercial Debts (Interest) Act 1998.
You should be cautious if you are tempted to continue with contracts after you have received a letter from the customer informing you that they are going to pay less. If you go ahead and fulfil the order it may suggest that you have accepted the new terms.
Firms will always have to balance the need to be paid on time with the need to maintain a good relationship with an important customer, but for those who feel the time has come to act, the law offers a considerable level of protection.
Wednesday, October 1st, 2008
We are offering a fixed price one hour on-site trading terms and conditions audit and advice service for all businesses within 20 miles of one our offices in Brighton, East Grinstead or Worthing booked before the end of October 2008.
Want to check your trading terms and conditions?
Do you have questions about getting your bills paid?
Contact Jonathan Friend now to take advantage of our October business offer - a one hour on-site trading terms and conditions audit for £99 inclusive.
Saturday, September 20th, 2008
The Government has decided that Britain should opt in to new EU regulations for dealing with cross border contract disputes.
Such disputes are currently governed by the 1980 Rome Convention on the Law Applicable to Contractual Obligations. The EU Council of Ministers has now agreed new rules known as the Rome I Regulation.
The existing Convention does not harmonise contract law across the EU but it allows courts to determine which country’s law should apply if the parties have not already reached an agreement in advance.
Rome I has several subtle differences. For example, courts would be able to apply the law of the country “with which the situation has its closest connection”. This could apply even where the parties involved had chosen the laws of a different country.
The UK Government had originally opted out of Rome I but now it says it plans to seek permission to opt in. The Ministry of Justice believes the “Rome I proposal will provide clarity over which law applies if a dispute arises over a contract made between people or businesses from different countries, allowing cross border trade to continue with confidence”.
The Government undertook a consultation on the issue and says the overwhelming response was that Britain should opt in.
Rome I comes into effect on 17th December next year. The Government will now seek consent from the European Commission to see if Britain can opt in at the same time.
Wednesday, September 10th, 2008
The Department of Health (DoH) has begun a public consultation which could result in the alcohol industry’s current voluntary code being replaced by tougher, mandatory regulations.
The current voluntary code, the Social Responsibility Standards, was introduced in 2005 to coincide with the implementation of the Licensing Act. Its aim is to promote good practice and it has been signed by 16 trade associations.
An independent review of the effectiveness of the code was carried out for the Government by KPMG.
The review found that those within the industry felt too much blame was being placed upon them for the harm caused by alcohol. They felt it was a multi-faceted problem with an underlying cultural issue.
However, those outside the industry saw the code as having little impact because it is not enforceable. They felt it was not fit for purpose and was overridden by commercial considerations.
KPMG conducted observation studies over a five-day period of nearly 600 premises in eight different locations across England. The report says: “We have concluded that currently the Standards are not being consistently adopted and applied across the whole of the alcohol industry.
“In the current trading climate the commercial imperative generally overrides adherence. Inducements to people to drink more and faster, to allow under-age people entry to restricted premises, and blatantly serving intoxicated people are evidence of this conclusion.
“The Standards are currently having negligible impact in either reducing bad practice or promoting good practice on the ground. They lack focus, they are a confusing mix of regulatory and voluntary provisions, and they are not cross referenced to the Licensing Act.
“In driving responsible practice they are ineffective because of a lack of consistent monitoring and enforcement.
“We have concluded that the Standards should be strengthened and enforced more effectively by Government, industry and other agencies working more closely in partnership at a national and local level.”
The consultation proposals put forward by the DoH would oblige retailers to offer drinks in small as well as large measures, restrict happy hours and irresponsible promotions, and display alcohol in separate areas in off-licences – not by the checkout.
They would also need to give point of sale information on units and train staff to recognise and refuse alcohol to underage or drunk customers.
Health Minister Dawn Primarolo says the Government now wants the views of the public, the drinks industry and other interested parties. “There are significant choices to make, for example, on whether industry should do more, whether they have the right incentives, and what the Government can do to reduce alcohol-related harm.”
Contact Paul Slot, our licensing expert, for practical advice on all aspects of pubs, clubs and restaurants licensing or visit our special pubs and clubs licensing website.
Saturday, August 30th, 2008
The Regulatory Enforcement Sanctions Bill, which is designed to reduce the burden of red tape on honest businesses while clamping down on rogue traders, has received Royal Assent.
The aim is to create a more flexible, risk based approach which specifically targets the worst offenders. Ministers claim it contains no new paperwork for harassed businesses and should help firms in England and Wales save an estimated £64m.
One of the main proposals is that regulators should be given additional powers to tackle businesses which put people or the environment at risk by cutting corners and then use the savings they make to enable them to undercut more law-abiding companies.
There is to be a new body, the Local Better Regulation Office, to oversee enforcement. It will support local authorities and is designed to improve and simplify regulation in such areas as environmental health, trading standards, and alcohol and gambling licensing legislation.
Regulators will be encouraged to focus enforcement effort on businesses most likely to cause harm, at the same time as improving advice and reducing unnecessary burdens for honest businesses.
© Copyright 2008 Burt Brill and Cardens Solicitors