In House News: Award Winning Firm
The ongoing success of Banbury and Rugby’s largest law firm was recognised with a double award win from two highly esteemed industry publication awards:
Both awards faced strong competition from national law firms, the ceremonies were both held in London and attended by professionals from the world of Insolvency and Property Law. Edward Bible who heads up the Insolvency team at Brethertons accepted the award for national Insolvency Litigation Team of the year and Yashmin Mistry who heads up the Property Enfranchisement team won the award for Regional Enfranchisement Solicitor of the Year.
Richard Pell, Senior Partner at Brethertons explains: “These awards recognise all the work, effort and specialist legal expertise both Edward and Yashmin along with their teams have delivered to their clients, they are very much deserved. Client satisfaction is the real measure of the success for the work we do. It’s a real honour and mark of our success to win such prestigious awards which saw us judged alongside some of the best organisations operating in the legal profession.”
Established 200 years ago, Brethertons is one of the fastest growing and innovative firms of solicitors in our region. Brethertons have 170 staff in 5 office locations in Banbury and Rugby and provide commercial and private client services.
Are LLP Members Employees?
In many ways a Limited Liability Partnership (LLP) is as much like a company as a partnership. Recently, an LLP member who was required to retire from the LLP claimed he had been unfairly dismissed.
The Employment Appeal Tribunal concluded that he was not an employee of the LLP and could not therefore bring the claim. The main reason for rejecting his argument that he was, in effect, an employee was that the Limited Liability Partnerships Act 2000 provides that a member of an LLP is not to be considered an employee if, had the LLP been a normal partnership, he would have been considered a partner. If he would not, then the common law tests for determining whether he is or is not an employee are to be used.
The Employment Tribunal had been correct to consider first whether the claimant was a partner in the LLP. Having found that he was, it correctly considered the common law tests and decided that they would not have conferred employment status on him.
Data Protection – New Two-Tier Notification Fee
Every organisation that processes personal information has a statutory duty under the Data Protection Act 1998 to notify the Information Commissioner’s Office (ICO), unless they are exempt from so doing. The current annual notification fee is £35 and failure to notify is a criminal offence.
Notification involves the data controller informing the ICO of certain details about their processing of personal information. These details are used to make an entry describing the processing in the register of data controllers held by the ICO. The register is available to members of the public for inspection so that they can find out how personal information is being processed by data controllers.
From 1 October 2009 a new fee structure will apply to notifications and renewals. Organisations with 250 or more members of staff and a turnover of £25.9 million or more will be required to pay a fee of £500, as will public authorities with 250 or more staff members. This higher rate will not apply to charities or small occupational pension schemes however.
For organisations with fewer than 250 staff members and those with a turnover below £25.9 million the fee will remain at £35.
It is anticipated that the two-tier fee structure will augment the ICO’s resources by approximately £4.7 million per year.
Guarantee Clause Not Linked to Assignee
With times being tough, unexpected traps in agreements are coming to light with greater regularity. A recent landlord and tenant case shows the sort of thing that can happen if insufficient attention is paid in negotiation to clauses that might seem unimportant at the time.
It is usual for a commercial lease to contain a clause which will bind the tenant to guarantee the payment of the rent and performance of covenants under the lease should it be assigned. In a recent case, a lease was assigned and the new tenant later became insolvent and went into liquidation.
The relevant lease agreement bound the original tenant to guarantee performance during the period the assignee was ‘bound by the tenant covenants of the lease’. The liquidators disclaimed the lease, making no payments, and the landlord sued the tenant under the guarantee.
The tenant claimed that it was not liable for the assignee’s rent etc. after the liquidator had disclaimed the lease, the argument being that the assignee was no longer bound by the covenants in the lease and the original tenant could not therefore be bound by them after the lease was disclaimed.
The Court of Appeal did not accept this argument. The original tenant was liable under the guarantee. The liability of the original tenant as guarantor was separate from that of the assignee.
“Your potential responsibilities under a guarantee if you assign a lease may not be uppermost in your mind when you are negotiating to take on new rented premises,” says Brethertons’ “However, attention to detail pays dividends and, in the present environment, landlords may agree to limit or remove guarantee clauses if pressed.”
Registering a Trade Mark
Your business has its own unique brand and reputation and it is vital in a competitive marketplace to ensure that these are protected from unscrupulous third parties.
Some business owners do not believe there is any point in registering their trading or brand name because they consider their business not large enough to warrant such protection, despite the risk of losing business while others profit from their goodwill. This can be a dangerous view.
Although there is limited redress available to owners of unregistered trade marks in the common law action of ‘passing off’, this can be difficult and extremely costly to prove. If a dispute arises in relation to a registered trade mark, this will be less expensive to resolve. Both the Police and Trading Standards can prosecute those who misuse registered trade marks and infringement can result in a considerable fine or imprisonment.
There are other benefits, too. Although registered trade marks do not entitle the owner to register a domain name as of right, in the event of a dispute it will be the trade mark owner who is more likely to be granted rightful ownership of the domain name. Also, the owner of a registered trade mark can protect it from being used (for example) as a Facebook ‘named profile’ (i.e. www.facebook.com/yourtrademark). Failing to protect your trade mark on social networking sites might allow someone unconnected with your business to use your trading name as part of their profile: the risks are obvious
Reliance on Pre-Contract Negotiations Revisited
The 2007 case involving Persimmon Homes and landowner Chartbrook Ltd. has now been decided in the House of Lords. The case turned on the meaning of an agreement which contained a ‘grammatical ambiguity’, which applied to a formula used to calculate the sum due under a property contract. This led Chartbrook to claim more than £4 million from Persimmon. Persimmon calculated its liability at under £900,000, basing its argument on pre-contract negotiations.
The Court of Appeal had rejected Persimmon’s claim, ruling that relying on definitions of terms agreed in pre-contract negotiations was only appropriate when a claim for rectification was made. Rectification is the phrase used for a contract being altered to mean what both parties to it thought it meant originally. No claim for rectification of the contract had been made in the initial case, so the Court could not entertain one. In any event, the meaning of the contract was clear.
Persimmon appealed to the House of Lords, which overturned the decision of the Court of Appeal. It ruled that interpreting the contract under the ordinary rules of syntax made it commercially nonsensical. The contract had to have the meaning that a reasonable person would have understood to be the intention of the parties to it when it was made.
We can assist you to make sure that the contract you sign incorporates the exact terms agreed in your negotiations.
Unsigned Distribution Agreement Leads to Dispute
A recent case, in which a dispute arose over the right to terminate a distribution agreement, has illustrated the risks of not having formal written contracts in place governing business transactions.
Jackson Distribution Ltd. entered into an arrangement with Tum Yeto Inc. in which Jackson Distribution would be the sole distributor in the UK and Ireland of certain Tum Yeto products. A number of emails were exchanged between the two companies, after which Jackson Distribution sent a draft agreement to Tum Yeto. Receipt of this agreement was acknowledged by Tum Yeto’s CEO, but it was never signed. Some time later, Tum Yeto sought to terminate the arrangement and, predictably, the matter entered up in court.
The court had to consider what terms actually applied, as well as whether or not Tum Yeto was entitled to terminate the relationship and whether Jackson Distribution had suffered any loss as a result.
The court found that there was no evidence that Tum Yeto and Jackson Distribution had ever agreed that the contractual relationship between them should be governed by the draft agreement. However, it found that the emails exchanged did constitute an agreement that Jackson Distribution should be Tum Yeto’s sole distributor and that either of them could terminate the agreement by giving ‘reasonable notice’. The court decided that, in the absence of a breach of contract by Jackson Distribution that would entitle Tum Yeto to terminate the agreement, a period of nine months constituted reasonable notice. In reaching this conclusion, the court considered various factors, including the length of the relationship, the initial investment and the percentage of Jackson Distribution’s turnover represented by the agreement.
“This case shows how a dispute can arise as a result of the absence of a formal agreement,” says Brethertons’. “Had the two companies ensured that a signed contract was in place, detailing the circumstances in which the relationship could be terminated and the position of each party if this happened, the expense of bringing the case to court would almost certainly have been avoided.”
What to Do About Copyright Infringement
In the UK, copyright is automatic: there is no need to register it. It is normally the property of the creator as soon as it is created. However, it is not sufficient to be able to prove that you thought of something before someone else, since copyright does not apply to ideas, but to things created from ideas, such as written material or music. In fact, if you have an idea or concept, the best advice is to record it in detail so as to ensure you have, at least, the copyright to the words expressing the idea. One example is a business idea that, on its own, is not capable of being protected whereas a written record of the business plan would be copyrighted material.
An exception to the rule that the creator owns the copyright is when the creator is an employee. If an employee creates material for you in the course of his or her employment then, as the employer, you will normally be the copyright owner.
If employees or contractors create any form of intellectual property, it is sensible to have a clear agreement covering the ownership rights relating to it: in the case of an employee, this would normally be covered in the contract of employment.
If you discover that someone else is using your copyright material without permission, there are various courses of action you can take.
Depending on the nature and extent of the infringement, you may need to obtain a search order and/or an injunction to prevent further use of the copyright material. You may also take various other steps in relation to recovering and destroying the relevant items. In less serious cases, a carefully worded letter that spells out the legal position may suffice.
Who is Responsible? Look at the Contract
In a contract, who is responsible for what is determined by the wording – which is why it is crucial to get the wording right from the outset. In a recent case, a company bought oil on a standard FOB (free on board) contract.
The oil was of satisfactory quality when it was put on the ship, but not when it arrived in port after an uneventful passage at sea. The buyer held the seller responsible, implying a condition into the contract that the oil would be fit for purpose on delivery. The seller denied responsibility, pointing to a clause which excluded ‘all guarantees, warranties or representations, express or implied, of merchantability, fitness or suitability of the oil…’.
The case turned on the wording of the contract. The court ruled that there was an implied term (a ‘condition’) in the contract that the oil would be of satisfactory quality on delivery to the port after a normal passage at sea. The exclusion clause did not, as stated, exclude a change in quality of the oil. The effect of the condition was that the vendor was responsible for the oil failing to be of merchantable quality at the port of discharge.
Webinars
Training your Staff for Mediation
Speaker: Shaun Jardine
Date: 8th December 2009
From April 2009, each County Court in England and Wales has had an in house mediator, who will be encouraging parties to participate in the mediation process and not proceed to trial. Whilst many credit controllers may be familiar with the legal process, mediation is something new. This webinar will aim to explain what participants should expect when the Courts are not involved in the debt recovery process, and how mediations work and the tactics that should be adopted.
Effective Letter Writing
Speakers: Shaun Jardine and Jackie Ray
Date: 21st January 2010
If your debts remain unpaid you may find yourself attending a hearing before a District Judge in the Small Claims Court. This Webinar will cover the following subjects:
Terms and Conditions
Speaker: Kate Ollis
Date: 17th February 2010
All businesses should have Terms and Conditions of Trading, as failure to do so could mean that it is left to the Court to decide on what terms businesses have entered into contracts. Who in their right mind will want a Judge deciding the terms on which you do business? This Webinar will include:
- Why have them?
- The principle clauses to use
- The clauses to avoid
- How to include T&C's to your advantage
- How to win the battles of the forms
All the Webinars will commence at 12.30pm, a convenient time to get your team together for an hours training over lunch. You need no special equipment other than a telephone with a hands free facility and a computer with an internet connection. You will hear the speakers through your telephone and see interactive slides/graphics on your PC as the speaker makes the presentation. Copies of the speakers handout/slides will be emailed in advance of the presentation.
