Business-Lawfirm.co.uk Articles

Planning Applications and Planning Law Jargon Explained

Thu, 04 Feb 2010 16:48:52 GMT

Dealing with commercial premises on a day to day basis our Commercial Property Team are fully familiar with all the common planning jargon you might come across. In this article we explain some of the most commonly used planning terms from A-Z

Affordable Housing
It is a requirement for most large residential development sites to include a proportion of social housing.

Appeal
If a planning application is refused or not determined then an appeal can be made. These can be dealt with by written representations, hearing or public inquiry.

Breach of condition notice
The local planning authority has the power to serve a notice requiring a planning condition to be complied with.

Brownfield Site
Abandoned or underused industrial and commercial facilities available for re-use. Expansion or redevelopment of such a facility may be complicated by potential contamination.

Building regulations
Building regulations exist to ensure the health, safety and convenience of people in and around buildings, and the water and energy efficiency of buildings. Most works will require Building regulations approval.

Call-in
The local planning authority deals with most planning applications but high profile or major projects can be “called in” by the Secretary of State for determination.

Change of use
For a change of use planning permission will be required except where it falls within the same use class or it is allowed by the General Permitted Development Order. For example B1 (Offices/Light industry) can be changed to B8 (Warehouse/Distribution Centre).

Certificate of lawfulness of existing use or development
An application may be made to the local planning authority for a certificate confirming the lawfulness of a use that has taken place for ten years or works that were undertaken over four years ago both without having originally obtained planning permission.

Certificate of lawfulness of proposed use or development
An application may be made to the local planning authority for a certificate confirming the lawfulness of a proposed future use or development.

Community Infrastructure Levy (CIL)
CIL is set to be the new way of providing for investment in infrastructure through the planning process. Due to come into force in 2010, a local planning authority may levy on the developer an amount based on the increase in land value following the grant of planning permission. The local planning authority will still have available the option to require a planning agreement instead of imposing the CIL.

Commuted sum
Payment made to a local planning authority in place of providing on site facilities such as affordable housing.

Compulsory purchase
A lengthy and complex process whereby property can be acquired by a public authority for a specified purpose. The London Olympics site assembly provides a good example of this in practice.

Conditions
When planning permission is granted the local planning authority can impose conditions. If the developer does not believe these are reasonable they can appeal or after six months make an application to vary the conditions.

Conservation area
A conservation area is an area of land that has been designated to ensure its natural character and appearance are protected. The status imposes additional restrictions on development. Special consent is required before demolishing any building in a conservation area.

Compulsory Purchase Order (CPO)
An order confirming the compulsory purchase of land.

Delegated powers
The local planning authority has the ability to delegate powers to planning officers in respect of minor applications or to issue planning permission following completion of a planning agreement.

Detailed planning permission
Planning permission without reserved matters.

Development
Planning permission is required for all development, which in planning law is defined as the carrying out of building works or a change of use. The only exception is where the General development procedure order applies.

Development Plan
A document put in place by each local planning authority that outlines current planning policy for the area it covers. Planning applications will be considered in accordance with the development plan unless material considerations apply.

Enforcement Action
The extensive powers that a local planning authority has available to enforce planning controls including criminal sanctions for non compliance.

Enforcement notice
The local planning authority will issue an enforcement notice where they have grounds to believe that there has been a breach of planning.

Enforcement time limits
The local planning authority generally only has a certain amount of time in which it can take enforcement action. This is four years after the buildings works were completed and ten years for change of use. Once these time limitation period ends a Certificate of lawfulness of existing use or development can be applied for.

General Permitted Development Order (GPDO)
Permits certain development or change of use without having to obtain planning permission. Although it is important to check whether the local planning authority has excluded these rights in the area where the land is located.

Green belt
An undeveloped tract of land neighbouring an urban area protected from development by the local planning authority.

Infrastructure
Roads and other services which may be required to implement a planning permission. See also Section 38, 104 and 278 agreements.

Injunctions
The local planning authority may apply for an injunction to prevent a breach of planning control rather than take enforcement action.

Judicial review
This is the legal process by which a third party can challenge the decision of the local planning authority. The Court has the power to quash the planning permission if it is proved that the decision to grant was unlawful. Judicial review must be applied for within 3 months.

If a developer enters into a contract to buy land conditional on the grant of planning permission then it should ensure that they are not obliged to complete before the Judicial review period had expired. Likewise most developers will wait for the same period before implementing a planning permission.

Listed building
A building or other structure officially designated as being of special architectural, historical or cultural significance. Most works will require listed building consent from the local planning authority. Interfering with listed buildings without consent is a criminal offence.

Listed building consent
This will be needed for any works which alter the character or appearance of a listed building. If the works also require planning permission this must also be obtained separately.

Local planning authority
The authority that is empowered to deal with planning applications for a particular area. This is often the local Borough or District Council.

Material considerations
The local planning authority can only make a planning decision that conflicts with the development plan where material considerations exist. For example it may take account of the layout and density.

Minded to grant
Where the local planning authority resolves to grant planning permission subject to completion of a planning agreement.

Mixed Use
Development that includes residential and commercial elements.

Non-determination
The term used where the local planning authority fails to determine a planning application within eight weeks. This time limit is extended to sixteen weeks if an Environmental Impact Assessment is required.

Non determination amounts to a planning refusal and can be appealed.

Objection
An objection to a planning application can be made by any third party.

Outline planning permission
An application can be made for outline planning permission. If granted this approves the development in principle subject to a further application for approval of reserved matters.

Party Wall Act 1996
Provides a framework for dealing with matters in relation to party walls, boundary structures and excavations near neighbouring buildings. Anyone intending to carry out work of the kinds described in the Act must give adjoining owners notice of their intentions and otherwise follow the procedure set out.

Permitted development
The general permitted development order outlines the type of development and change of use where planning permission is not required.

Planning agreement
The local planning authority may require the developer to enter into a planning agreement as a condition of granting planning permission. See section 106 agreement.

Planning committee
A group of elected councillors that sit as part of the local planning authority and have the power to determine planning applications. The planning committee will be guided by planning officers but are not obliged to follow their recommendations.

Planning contravention notice
The local planning authority may serve notice on a land owner/occupier requesting information so that it can decide whether there has been a breach of planning control.

Planning obligation
Duties imposed on a developer to provide a benefit to the community e.g. build a new school. These are usually contained in a planning agreement.

Planning officer
Responsible for dealing with development and planning matters for the local planning authority. The role includes making recommendations to the planning committee.

Planning permission
The permission required to carry out development.

Public inquiry
A way in which a planning appeal can be dealt with by the planning inspector. The other two are by written representation or a hearing.

Refusal
The refusal of an application for planning permission.

Reserved matters
Outline planning permission is granted subject to a condition requiring the subsequent approval of one or more reserved matters. These relate to the detail of the development such as layout, appearance, access and landscaping.

Section 38 agreement
An agreement under section 38 of the Highways Act 1980. A developer agrees to build a road to a specified standard and will generally lodge a bond to secure performance of this obligation. The highways authority in turn agrees to adopt and maintain it after the expiry of a maintenance period.

Section 104 agreement
An agreement under section 104 of the Water Industry Act 1991. The developer agrees to construct sewers to a specified standard and will generally lodge a bond to secure performance of this obligation. The water company in turn agrees to adopt and maintain them after the expiry of a maintenance period.

Section 106 agreement
An agreement made under section 106 of the Town & Country Planning Act to secure a planning obligation.

Section 278 agreement
An agreement made under section 278 of the Highways Act 1980 to allow developers to either pay for or carry out works to a public highway.

Statutory challenge
Some planning decisions may only be challenged under the Town & Country Planning Act and not by judicial review. The time limit for instigating such a challenge is six weeks.

Statutory consultation
When the local planning authority receives a planning application it must also consult with other relevant bodies such as the highways authority before making a decision.

Stop notice
This is a measure used by the local planning authority in conjunction with an enforcement notice to bring an immediate end to an alleged breach of planning control. Stop Notices are rarely used as the recipient can claim damages for improper use.

Sui generis
In planning terms it relates to a use that is unique and does not fall within a particular use class e.g. a nightclub.

Town and Country Planning Act 1990 (TCPA)
The main piece of town planning legislation.

Tree preservation order (TPO)
Trees can be protected by a preservation order. This makes it an offence to top, lop or fell it without the consent of the local planning authority.

Unilateral undertaking
A unilateral undertaking is a planning obligation offered by a developer to the local planning authority either in support of a planning application or more commonly during the course of a planning appeal.

Use classes order (Town and Country Planning (Use Classes) Order 1987)
Under the schedule to this order, land uses are arranged in classes, for example shops and offices. A change of use within a particular class does not require planning permission.

If you don't want to try and find your way around this jargon when you are trying to buy business premises call Paul Harrison Property Solicitor on 01604 456 591.

Licensing Law Update - January 2010

Fri, 22 Jan 2010 15:46:49 GMT

This briefing note explains some new laws and other changes to look out for.

With election fever setting in the government is frantically trying to put its house in order, and also trying to stay one step ahead of the opposition when it comes to the issue of binge drinking. Minimum pricing does seem to be high on the agenda and a distinct possibility whichever party wins the election.

Electronic Licensing Applications

The necessary legislation was only passed on 3 December, and came into force on 28 December. But I suspect that many Licensing Authorities are still not geared up for electronic applications. Most make no mention of this possibility on their websites.

The electronic system will apply to most licensing applications and notifications such as applications for and variations of Premises Licences, and Temporary Event Notices, but it will not be possible to apply on-line for Personal Licences and renewal of Personal Licences, and reviews of Premises Licences. These will still have to be made in paper format.

The good news is that the government have seized the opportunity to sort out some of the red tape that made the process so tiresome and expensive. For example, with electronic applications it will be the Licensing Authorities who will have to copy some applications to the Responsible Authorities such as the police, fire authority, planning, and trading standards. This will make life a lot easier and cheaper for the applicant. Also they have been forced to look at the requirement for plans. Can you imagine trying to send a 1:100 plan electronically? So they have abandoned a scale requirement, and will insist that the plan must only be "clear and legible in all respects". The other good news is that the relaxation on plans will also apply to paper applications.

So how will this work? A central information portal will be established on the business link website www.businesslink.gov.uk. It will go by the name of Electronic Application Facility (EAF). Licensing Authorities can opt to set up their own portals, in which case there will be a direct link to them from the EAF. Of course an important part of the system will be the ability to pay on-line, as no application can be accepted unless and until payment is made.

I know that there will be teething problems with the new electronic process, and it might be wise to avoid it for the first few months unless in an emergency. It will be especially good for service of Temporary Event Notices which are quite simple to deal with.

Major changes from the end of January 2010

The Policing and Crime Act 2009 of November allows members of Licensing Authorities to object to applications and initiate a review of a Licence, gives power to the government to impose new mandatory conditions on Premises Licences and Club Registration Certificates, will make it an offence to sell alcohol to children on 2 occasions (currently 3 occasions) within 3 consecutive months (in addition to other offences), and will introduce a whole new regime for Sexual Entertainment Venues.

The following changes will come into force on 29 January 2010:

Allowing members of Licensing Authorities to object to applications and initiate a review of a Premises Licence or Club Registration Certificate
Making it an offence to sell alcohol to children on 2 occasions (currently 3 occasions) within 3 consecutive months
A new offence for under 18's of persistently possessing alcohol in a public place (3 or more occasions in 12 consecutive months)
Changes to the law on confiscation of alcohol from under 18's and directions to those aged 10 or over to leave a public place

More in store

So what else is the government addressing in "Johnny come lately style"? Well, they have issued a new consultation (responses by 9 February 2010) to address issues we have been complaining about for many years. Firstly they are proposing to allow 28 days rather than 7 days for the issue of an Interim Authority Notice after death or bankruptcy. Remember the Welsh pub which had to go dry for 2 months whilst they got a new Premises Licence because the grieving widow of the Licensee did not (understandably) get in the notice within 7 days of her husband's death? I and others said back in 2002 that this was bonkers and should be changed, but I suppose better late than never.

And the government have had a look at Temporary Event Notices, and propose that the Police should have 2 working days rather than 48 hours in which to object, and (hooray!) have proposed that even late Temporary Event Notices (less than 10 working days before the event) could still be allowed if the Police give permission.

And finally, the voices that have long been complaining that the Licensing Act 2003 has been killing music in pubs, have been listened to. There is a consultation running until 26 March proposing that live music will be exempt from the 2004 Act provisions for audiences of no more than 100. This would if implemented allow pubs, village halls, even cafes restaurants and record shops, to put on small scale live music events. But the performances must be indoor and between 8am and 11pm, and there would be a provision for objections in the case of specific venues.

It’s a case of watch this space to see the final result of the consultations and the impact of some of these changes.

Need advice?

For more information and advice on licensing law and the impact of these changes call Nigel Musgrove of Cousins Business Law on 01285 847001 or email Nigel here.

Dispute Resolution - Neutral Evaluation

Thu, 21 Jan 2010 10:20:41 GMT

Also known as Early Neutral Evaluation (ENE), this alternative dispute resolution (ADR) process emerged in the late 1990’s. The main difference to the other forms of dispute resolution is that any evaluation is non-binding.

So why would a non-binding evaluation be of any help? The key is that the evaluator is usually either a judge or QC, someone who is used to court trials as well as having legal expertise and experience. If a technical issue is involved they may also be chosen because of their expertise in that area. The idea is that their decision would be very persuasive and be a strong indicator of the likely outcome if the matter went to trial.

Early Neutral Evaluation can also be useful to clear a stalemate when other forms of dispute resolution are being used and it is necessary to resolve a dispute of opinion on a point of law or technical point on given facts.

The parties can agree the process for Early Neutral Evaluation, including the evaluator. Costs can be kept down by limiting the documentation and keeping to a case summary rather than preparing expensive witness statements.

Early Neutral Evaluation is encouraged in high value complex cases which would be dealt with in the High Court, particularly the Technology and Construction Court and the Commercial Court.

The disadvantages are that the process can be expensive and usually each party pays their own costs and their share of the evaluator’s fees, whatever the outcome. But it may be a worthwhile process when the costs of trial are huge and the parties want some early indication from a neutral evaluator of how the case is likely to be decided.

Dispute Resolution - Expert Determination

Thu, 21 Jan 2010 10:13:33 GMT

Expert Determination is a confidential and binding process which is agreed by the parties to the dispute, either in the original contract documentation, or in a subsequent agreement. An expert appointed will reach a decision which will be binding on the parties.

The advantages of expert determination

It is confidential, carried out in private, and so can protect commercial confidences and sensitive subjects. It is flexible, as the expert instructed can be carefully chosen to meet a particular need for someone who has a specific technical skill or knowledge of the industry or unique circumstances of the area of dispute. Also the expert can agree the most suitable procedure with the parties. It is fast and far less formal compared to other dispute resolution processes, and is ideal for multi party disputes.

What types of dispute are suitable for expert determination?

It is most suitable for technical disputes where there the help of an expert is required. For example the expert may be an engineer, IT consultant, or valuer of certain types of property or goods. It is often used in

rent valuationsland valuations
insurance disputes such as valuations and terms
valuation of shares
sale of goods disputes such as fitness for purpose and faults
boundary disputes
and other areas where it is necessary to have an assessment of value, turnover, or profit.

The parties can decide that an expert’s decision is final and binding and not subject to appeal to the courts. An expert’s determination can be enforced in court proceedings in England and Wales, but there may be problems with enforcement in other countries.

As far as costs are concerned, it is usual for the parties to agree that they will meet their own costs and share of the fees of the expert. Unless the parties have agreed in their terms of reference, the expert cannot award costs against another party.

Solving Disputes Using Arbitration

Thu, 21 Jan 2010 10:01:26 GMT

Arbitration is the oldest form of procedure for dispute resolution out of the courts. It grew up due to the need to have a forum for resolving international trade disputes, for example shipping and carriage of goods. It is only usually relevant in high value cases, as it can be just as expensive as a court action.

Arbitration is similar to court proceedings. The final decision, known as an award, is final and binding, and enforceable through the courts. There are a number of international conventions, for example the New York Convention of 1958, which allow an arbitration award to be enforced in any country in the world regardless of where it was made. That is why it is so attractive and so relevant to international trade. But arbitration agreements can be found in all sorts of business arenas. For example, the rules of the Football Association require arbitration in disputes between clubs. That is why in February 2009 West Ham United was prevented from going to the Court Of Arbitration for Sport in Switzerland to appeal an award made in arbitration proceedings in their dispute with Sheffield United. The FA rules provide that there is no right of appeal from an arbitration.

Arbitrations are at present governed by the Arbitration Act 1996. There is only a limited right of appeal against any award.

So what are the advantages of arbitration?

Firstly, it is consensual, so it can only be pursued with the agreement of all parties. That agreement is usually set out in a binding contract. This does mean that if a dispute flares up one party cannot march off to court, and must submit to arbitration, unless the other parties agree. If they do go to court the other party can get the court to uphold the arbitration clause and freeze the court action until the arbitration has been completed.

Secondly, the parties chose the arbitrator, and if they do not agree there is usually an agreed procedure for using a professional body to appoint a suitable arbitrator. The arbitrator is usually someone who has the necessary legal knowledge, but who is also a technical expert in the area which the dispute is all about.

Thirdly, arbitration is private and confidential. It is therefore particularly suited to parties who need to settle their dispute but who do not want to wash their linen in public.

Fourthly, the arbitration agreement can itself set out the procedure to be followed, and whether the arbitrator can award costs, or perhaps that costs are to be shared equally whatever the outcome. If the parties do not agree on the procedure, the arbitrator may decide how the arbitration will be conducted, having consulted all the parties.

Fifthly, arbitration can be quicker and cheaper than court action, but more often than not the use of lawyers and experts on complex matters does mean that there is often little saving to be made on court actions.

Points to watch

But there are a few disadvantages. An arbitration agreement does not stop a party taking a court action in another member state of the European Union, a point decided by the European Court of Justice in February 2009. So whilst an agreement to arbitrate in an English contract can be enforced in the English courts with a freezing order, it cannot stop a party getting round the arbitration clause by starting court proceedings in another member state.

An arbitration agreement is also subject to the test of reasonableness in consumer contracts. In a 2008 case a builder’s standard terms and conditions with an arbitration clause were found to be in breach of the Unfair Terms in Consumer Contract Regulations of 1999. The arbitration clause had not been drawn to the householder’s attention, and explained to her, and given the high expense of arbitration relative to the value of the claim, there was a significant imbalance in the parties’ rights.

The Arbitration Act and regulations provide that in any event an arbitration agreement for a claim not exceeding £5,000 is automatically unfair. In the case mentioned above the value exceeded £5,000, but the clause was still found to be unfair on general principles. It should also be noted that due to another recent decision of the European Court of Justice any court deciding a dispute involving a consumer must look at the Unfair Contract Regulations even if they have not been asked to do so!

Adjudication - how does it serve construction disputes?

Mon, 23 Nov 2009 09:10:02 GMT

There are a variety of alternative dispute resolution (ADR) methods available, adjudication is one only used in the construction industry. It was born in 1996 and came into play for written construction contracts entered into on or after 1 May 1998. It was a statutory cure for long running disputes which became bogged down in litigation and blighted the completion of projects. Something had to be done so adjudication was created to provide a quick and temporary solution to construction contract disputes.

When is adjudication used?

Adjudication as a means of dispute resolution is compulsory in any contract for construction works to be carried out in England, Scotland or Wales. It only applies to contracts in writing, and it does not apply to contracts with a house owner for domestic works. It covers agreements for architectural, surveying or design work, for provision of labour for construction operations, and advice on building, landscaping, engineering, and interior and exterior decoration.

The adjudication does not cover disputes over the terms of the contract itself, or works involving the manufacture or delivery to site of building materials, machinery, or plant.

Most adjudications involve payment disputes, but can also involve issues of delay and disruption, defective works, extension of time, declarations, and orders directing a party to do some act.

How does adjudication work?

The process is started by serving a Notice of Intention to Refer to Adjudication. There is a very short timetable for adjudications to be completed, usually 28 days, so things do move quickly. Either an adjudicator is appointed who is identified by the contract, or in the absence of agreement between the parties by a professional body known as an Adjudicator Nominating Body (ANB), who for a fee arrange for a suitable adjudicator to be appointed. The adjudicator is the decision maker in the process, who will have experience in dispute resolution and will usually be a professional such as a surveyor, architect or engineer.

There are no formal rules to deal with, and this type of quick dispute resolution allows for the works to continue and hopefully prevents relationships between contractors souring to the point where it affects on site performance.

Normally the party giving the Notice of Intention must prepare a detailed statement of their case, prepare a bundle of the core documents, and where necessary produce witness statements. It may be necessary to get an expert’s report. Given the short time period for completion of the adjudication, it is strongly advised that all these steps are taken before the Notice of Intention is served.

Once the statement of case has been provided, the adjudicator will normally allow the other party between 7 and 14 days to respond, and then a further 7 days for a reply to the response. The adjudicator may call for meetings and arrange hearings, give directions, ask questions of the parties, call for additional documents or witness statements, carry out site inspections or tests, and appoint experts, assessors or legal advisors. Remember that the adjudicator’s decision must be given within 28 days. It is clear that the adjudication period will be a very intense period of work for all involved.

The costs of adjudication

Parties to the adjudication are jointly and severally liable for the costs and fees of the adjudicator. What this means is that if one party does not pay their share the other party must pay. The contract itself can say who will be responsible, for example the winning party, or an equal share, but the adjudicator can recover in full from any party. Otherwise the adjudicator can order that their costs and fees or a part of them are paid by for example a losing party.

As far as the costs of a party to the adjudication are concerned, the adjudicator cannot award these against another say losing party unless the contract allows it or the parties to the adjudication have agreed

The adjudicator’s decision is binding on the parties to the adjudication during the construction period. It is a sort of interim decision, but the parties can challenge the decision by arbitration or court action once the contract is over. However, not many parties bother to challenge the point after the contract has been completed. An adjudicator’s decision can be enforced through the courts.

Adjudication has proved a very successful means of resolving construction disputes. It is not cheap, involves a very intensive period of work, but it does provide a quick method of resolving a dispute, and avoids the damaging, long drawn out, and often fatal effect of court action.

As with any business deal it’s essential to ensure the written contract covers all aspects of the project. In the case of construction contracts there’s also the opportunity to determine the details of the arbitration clause. Do take advice from a suitably qualified solicitor.

For advice on solving your construction dispute contact Cousins Business Law.

Alternative ways of resolving disputes - mediation

Fri, 23 Oct 2009 11:22:19 GMT

Having a business dispute go to court, whether it’s with a member of staff, a supplier or customer, must be every business owners dread. In a tough economic climate there tends to be less tolerance of mistakes and increased stress created by financial pressures. Some would say money worries even encourage some unscrupulous souls to join the compensation culture and look to ‘sue’ those around who that fail to deliver.

Going to Court is a difficult and costly process for any business, but of course it is not the only way to tackle the problem.

Mediation is perhaps the most common forms of ADR. With mediation the process is confidential, “without prejudice”, flexible, and only binding if the parties agree. The mediator is a trained professional facilitator, skilled in identifying the strengths and weaknesses of each party’s case, and in moving the parties towards a settlement.

Going to Court does deliver finality, with the judgement binding on both parties. The same can be true in mediation, where the parties agree at the outset how an agreement will be formed and whether or not they will be bound by it. The crucial difference in mediation however is that there is no judgement. Instead the mediator’s job is to bring the parties to a consensual agreement.

In court cases all relevant documents have to be disclosed and witnesses can be called upon to give written evidence or be summoned to attend court. This is not the case with mediation where the parties (and sometimes their lawyers) meet with the mediator and are given an opportunity to put their side of the case and state what they want by way of resolution.

Perhaps one of the main advantages of the court process is the power of the courts – to grant an injunction to prevent or enforce certain actions, and to order that costs are paid by the party deemed to be ‘in the wrong’.

Mediation is a much less draconian approach. Unlike court proceedings which are in the public domain mediation is strictly confidential. This can make mediation ideal for sensitive commercial disputes with employees or cases with potentially damaging publicity implications.

The mediation negotiations cannot be referred to in any subsequent court action, except in very limited circumstances such as where the parties are arguing over whether there was a binding agreement reached or arguing over the terms of such an agreement. The ‘without prejudice’ nature of mediation means that the parties can come to compromise more easily and can lead to a far more pragmatic, solution centred approach, rather than the blame and counter claim of court cases.

Compared to court action mediation is very flexible and informal, meaning the parties can generally act very quickly and find remedies which suit both parties rather than being held within the strict code of the law. This is a great advantage where the parties wish to continue their ongoing commercial relationship.
The mediator will act as “devil’s advocate” with each party in private, forcing them to recognise the weaknesses of their case, and the strengths of the opposing party, and so make them more amenable to a reasonable settlement. The mediator will bring their expert experience to bear in identifying solutions.

There are some perceived weaknesses to mediation. For example the agreement is only binding if the parties agree. And unlike the judge a mediator has no legal power.

But compared with the expense, inflexibility and often long drawn out process of court proceedings mediation is often favoured and is certainly worth consideration alongside other forms of alternative dispute resolution. It’s worth remembering that where ADR has not been tried, the courts will bring pressure to bear in the proceedings, and will often suspend the proceedings for the parties to attempt ADR.

Read more: alternative forms of dispute resolution.

How to resolve commercial disputes

Fri, 23 Oct 2009 11:06:55 GMT

Understanding all the options

Prior to 1999 the first choice for resolving disputes was always the court process. There was an aggressive culture of litigation, a first strike attitude, or as some would say of getting your retaliation in first. Many a litigation lawyer had a paperweight proclaiming “Sue the ********”!

And then came along Lord Wolff with his broom, introducing a whole new court procedure in 1999 with an emphasis on the courts as a last resort, exhorting parties to be reasonable and try to resolve their differences by Alternative Dispute Resolution (ADR). But the change in behaviour has been slow. Even 10 years on there is still reluctance among many to embrace ADR, perhaps through fear of the unknown, or fear that to suggest ADR appears too conciliatory, too soft.

The court rules require parties to consider ADR before proceeding or indeed continuing with court action, and any refusal without good reason can result in a costs order against a party, even a successful party.
Commercial enterprises are beginning to grasp the opportunities of ADR. There are numerous forms of ADR:

Expert Determination is where the parties jointly appoint an expert to decide a question which the parties accept will be binding on them. Usually this is a technical question which may be the deciding factor in a dispute. The expert could for example be a valuer of goods or property, or an engineer.
Adjudication is common in the construction industry. Usually the decision is persuasive but non-binding, and often covers a many issues arising in an on-going contract.
Arbitration is perhaps the oldest form of ADR. It is usually as expensive and inflexible as court proceedings, but with the advantage that the arbitrator who will decide the issues is an expert in the subject matter of the dispute, and hearings are in private. Many commercial agreements provide for disputes to be determined by arbitration. Awards made by an arbitrator are binding on the parties.
Neutral Evaluation where the parties approach a neutral expert in the area of dispute for an indication of the likely outcome of court proceedings. The decision is non-binding but persuasive.
Mediation is perhaps the most common form of ADR. The process is confidential, “without prejudice”, flexible, and only binding if the parties agree. The mediator is a trained facilitator only, skilled in identifying the strengths and weaknesses of each party’s case, and in moving the parties towards a settlement.

Each has their place and it’s important that the lawyer you choose can explain their suitability for your case.

To discuss a commercial dispute in strict confidence contact Cousins Business Law on 0845 003 5639.
Read more about the pros and cons of mediation in the October 2009 Cousins Business Law ezine.

Easements - Know Your Rights

Mon, 21 Sep 2009 18:34:39 GMT

The word ‘easement’ is typical of the legal profession’s love of technical terms which are not commonly used outside legal circles. It is, in fact, a very important term for anyone who owns or is about to buy property as it means a right enjoyed over land.

There are a whole host of rights which are classified as ‘easements’ from rights of way to rights to lay drains. What is not commonly known, however, is that a certain type of easement does not grant identical rights in every case. The extent of your rights is governed by the exact words used when the right is granted.

An example of this is an easement which gives you a right of way over a pathway running across your neighbour’s garden. Such a right of way will almost always be limited by the words ‘on foot only’ or ‘a pedestrian right of way’. In other words you cannot drive a car over the path. If you want to be able to drive a car over a right of way then the wording of the right should include the words ‘a vehicular right of way’ or ‘with vehicles’.

Sometimes a right of way will be restricted to a certain purpose. A right of way may be expressed to be limited to gaining access to a particular property or for a particular type of use, for example, agricultural purposes.

Here are a few examples of where the wording of easements can give rise to possibly unintended consequences:

A right to lay an electricity cable over a neighbour’s land does not require the owner of that land to enter into an agreement with the electricity distributor. As a result the distributor may refuse to lay the cable.
A right of way does not require the owner of the land over which the right of way is enjoyed to maintain the surface of the right of way (the land cannot, however, be allowed to deteriorate to the extent where the right can no longer be exercised).
A landowner can install speed bumps on an access road without the consent of those who enjoy a right of way over that road.
A right to use a water pipe does not automatically include a right to lay a replacement pipe if the original pipe falls into disrepair
A right of way over land does not entitle you to park on that land
Someone with the benefit of a right of way can insist on exercising that right over the exact route specified when it was originally granted even if you provide an alternative route which is just as convenient. This can frequently prevent the construction of an extension if a right is enjoyed over land immediately to the rear of a property.

The exact wording of easements can be especially important to property developers as very often a developer may want to lay new utilities across a neighbour’s land or upgrade the surface of a right of way. The act of developing land can often mean that a right of way is used more often or for a different purpose (or to gain access to new buildings) from that originally envisaged when the right was originally granted. The wording of an easement can prevent development being carried out or being used when it is completed.

A developer should not just be concerned about the rights the development site enjoys. It is important to establish what rights other people enjoy over the site. These may be spelt out in the deeds but many rights can be acquired by long user and adjoining properties may also enjoy rights of light which prevent the developer building in a way which restricts the light to neighbours’ windows.
At Cousins Business Law, we believe that the only way to establish the extent of all rights whether benefitting or burdening a site is to inspect the site in person. This is why you should always see your lawyer in his wellies and is an example of one of the many traps for the unwary developer.

For advice on easements and all aspects of commercial property contracts contact Steve Petty, commercial property solicitor.

Avoiding Contract Disputes

Mon, 14 Sep 2009 10:00:55 GMT

Disputes over contracts can happen for many reasons, but so often they blow up because those involved have a different opinion on what they had agreed. You know the situation – you’ve had some work done or purchased a piece of equipment and you’re not happy with what you’ve received. You scrabble around for the paperwork but…:

There is no paperwork OR
The paperwork does not record what you thought had been agreed OR
There is a reference to standard terms and conditions that you have never seen

It is commercial reality that everyone is so busy clinching the deal that they fail to keep the paperwork in order. Businesses regularly fail to record the pre contract negotiations and fail to record the full terms of the agreement reached.

So what is the position where the written agreement/contract says one thing, but you believe that you agreed something different?

You could be in trouble, unless a clear mistake is seen in the written terms. It is very important to say what you mean and mean what you say. The House of Lords, the highest appeal court, has recently confirmed that pre contract negotiations cannot be relied on if the written terms are clear and unambiguous. But if the written contract lacks commercial sense, so it is easy to see that a common mistake has been made, the pre contract negotiations can be looked for background information to help the courts decide the common intention.

Record Everything

So the moral must be to ensure that pre contract negotiations are fully recorded and the agreement reached reflected in the final contract documentation, and that the documents mean what you think them to mean. Our advice is to confirm everything you discuss in writing, an email is fine, but get it down. Not only does this cover you if things go wrong but it also allows for the other party to spot a misunderstanding and put it right.

Even if you have a contract you’re not out of the woods yet. All too often we see examples of the following which create their own problems:

Standard terms and conditions are on the back of an invoice
There is an exclusion clause preventing or limiting a claim
A term falls foul of the law on unfair contract terms

Be Fair

Exclusion clauses limiting or excluding liability for breach of contract pose their own difficulties. Most are subject to the unfair contract terms laws, with more stringent regulations for contracts with consumers than business to business contracts. Again you must take care that any clause you include to protect you from claims does exactly that, and that it is fair in the circumstances. In a recent case a contractor terminated the contact early, where they had no right to do so. The High Court decided that whilst it was perfectly permissible for contractors to exclude liability for a complete failure to perform a contract, compared to some defective performance, very clear words must be used to establish that the parties intended that result. A termination without right and reason cannot be excluded from liability without strong words in the contract covering that position. A case where strong language is not only allowed but demanded!

Standard terms and conditions also pose problems. They must not be on the back of an invoice otherwise they can only be relied upon if there has been previous trading with the particular customer on those terms. Such Standard Terms and Conditions must be produced to the contracting party at the time the contract is entered into, not when the goods or services are invoiced.

And it is no good using complex legal jargon and hiding the nasties in some deep, dark corner. With consumers in particular, this will be a waste of time. The High Court recently found against a firm of estate agents, deciding that parts of their standard terms were unfair and unenforceable. The agents not only tried to provide that they would be entitled to commission where they played no active part in a transaction, but they buried the term in small print and did not draw it to the attention of the consumer. This fell foul of the law on unfair contract terms.

Get the Paperwork Right

Many disputes can be avoided by getting the paperwork right in the first place, and making sure that everyone has a common understanding of what is expected of them and what will happen if things go wrong. But if, for whatever reason, you find a dispute brewing, it is best to get early advice on your legal rights, so that you know where you stand when dealing with your opposite number. This should help you negotiate a quick settlement of the dispute. Any problem left to its own devices will only get bigger and more expensive to solve.

So a few points on how to avoid contract disputes:

Make sure that agreement has been reached on all the important contract clauses.
Record all pre contract negotiations
Make sure that the contract states exactly what is understood to have been agreed
Negotiate exclusion clauses and make sure that they are fair and enforceable
Agree on any standard terms and conditions to be used and that they comply with the unfair contract terms law
Provide any standard terms and conditions with the contract paperwork, not on the back of invoices
Get advice on your contract documentation and repeat the process regularly to make sure that it has kept up with the law.

For advice on contract drafting and business disputes contact solicitor Nigel Musgrove on 01285 847 001.