Abbey Healthcare (Mill Hill) Ltd v Simply Construct (UK) Llp

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The recent decision made by the Court of Appeal in Abbey Healthcare (Mill Hill) Ltd v Simply Construct (UK) Llp [2022] EWCA Civ 823 (21 June 2022) has overturned the earlier Technology and Construction Court (TCC) decision; now confirming that the significant benefit of adjudication can be available to a wider range of parties involved in a construction project.  From the perspective of our education clients, the decision in this case is likely to have an effect on the procurement process and those who are to benefit from collateral warranties and other construction documents.

What is Adjudication?

Adjudication was introduced by the Housing Grants, Construction and Regeneration Act 1996 (the “act”). It offers a relatively quick dispute resolution procedure by an appointed adjudicator, usually in just 28 days. The adjudicator’s decision is temporarily binding until the dispute is finally determined by court proceedings, arbitration, or settlement; albeit that the decisions are largely followed without the need for such additional enforcement measures to be taken.

Under Section 104(1) of the act, the statutory benefits of adjudication only extend to certain types of agreements – those defined as “construction contracts” for the carrying out of “construction operations”.  This case was therefore of great interest to the construction industry as it shed light on what the courts would interpret as a construction contract which fell within S104.

Background

Abbey Healthcare (“Abbey”) was the tenant operating a care home.  Defects in the works were notified to Simply Construct (“Simply”), but were carried out by another contractor. Following completion of the works, Simply was required to execute a collateral warranty in favour of Abbey. This collateral warranty was executed four years after practical completion of the original works, and some eight months after the completion of remedial works.  Claims were brought by adjudication to recover losses relating to the defects. An adjudicator’s award was made in favour of Abbey, but enforcement was resisted by Simply on the basis that there was no implied right to adjudicate under Abbey’s collateral warranty.

The TCC had found in favour of Simply.  The warranty was to be construed against the factual background and the timing of its execution.  The warranty was executed after the works had been completed and defects remedied by another contractor. It was therefore a warranty only of a state of affairs and could not be construed as an agreement for the carrying out of construction operations.  The TCC therefore concluded that Abbey’s collateral warranty was not a construction contract for the purposes of the Construction Act.  There was no contractual right for Abbey to adjudicate under the Construction Act and so the decision in the Abbey adjudication was not enforced.

Court of Appeal decision

The Court of Appeal, by majority decision, has overturned the decision of the TCC.  It has been held that Abbey’s collateral warranty was a construction contract for the purposes of the act and there was a statutory right to adjudicate.  This was the case, notwithstanding that the warranty was signed years after the works were complete. The timing of its execution was not held to be determinative. Instead, the wording of the warranty was key.

Taking here some of the key parts from Lord Justice Coulson’s decision, he reasoned that:

  • There is no reason to limit the words of s.104(1) to refer only to the primary building contract.  A collateral warranty may, therefore, be capable of being a construction contract for the purposes of s.104(1). What may be critical is whether the warranty is in respect of the ongoing carrying out of construction operations, on the one hand, or is in respect of a past and static state of affairs, on the other.

  • Simply had warranted to Abbey that it "has performed and will continue to perform diligently its obligations under the contract." Therefore the warranty plainly set out the standard to which the construction operations would be carried out. That was by reference to the detailed terms of the building contract. To that extent, the building contract is the marker or standard denoting the level of quality that Simply Construct was required to achieve

  • Simply Construct was warranting that, not only had they carried out the construction operations in accordance with the building contract, but they will continue so to carry out the construction operations in the future. That is an ongoing promise for the future. As a matter of common sense, this is "an agreement for the carrying out of construction operations". It is not a warranty limited to the standard to be achieved; neither is it a warranty limited to a past or fixed situation. It is a warranty as to future performance. It is that which differentiates Abbey’s collateral warranty from a product guarantee.

Although the Abbey collateral warranty was executed after the works had been completed, it was retrospective. It made a promise both as to the standard of past work and to the future carrying out of work to the same standard. It was therefore an agreement for the carrying out of construction operations which had retrospective effect. Once that is accepted, the delay between the completion of the works and the execution of the warranty does not matter. Otherwise arbitrary lines would start to be drawn. For example, in this case, it was inferred by the judge that four years was too long. But what about two years? A year?

As Abbey’s collateral warranty contained future-facing obligations and was retrospective in effect, the date of execution was ultimately irrelevant. The warranty is a construction contract.

To find otherwise, would in Lord Justice Coulson’s judgment, be “wholly unsatisfactory”. It would also encourage contractors not to sign collateral warranties until after they had finished as many of the construction operations as they could. On the basis that, in such circumstances, whatever the wording of the collateral warranty, they could avoid the implication of the act and therefore avoid being the subject of a claim in adjudication.”

The decision has brought welcome clarity to the interpretation of the act and will have far reaching, positive implications for the various stakeholders in any construction project and also confirms the availability of an alternative route to recovery of costs avoiding costly litigation.

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Chloe Fellowes is a proactive Paralegal with a demonstrated history of working in the legal services industry.

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Don’t waste money on space you don’t use! Re-gear

Blog | Real Estate

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With many companies now operating a hybrid working model following the work from home directive in 2020, many businesses no longer need the amount of physical space they once did.  Businesses should not go on paying for unused space, and waiting for their leases to expire, so what is the answer?  Re-gearing a commercial leases could be the financial solution.

What does re-gearing a lease mean?

Re-gearing a lease involves a landlord and a tenant deciding to change the terms of the lease. From the tenant’s point of view, this involves changing the terms consensually with the landlord to meet their interests.  There are often commercial levers on both sides of the negotiating table that make this process an attractive and mutually beneficial arrangement.

In response to the pandemic, businesses quickly invested in technology and platforms which made working from home easier than ever before. Now restrictions have eased many workforces simply do not want to go back into an office environment full time, with a recent survey showing that 57 per cent of employees said they preferred hybrid working – splitting their week between office and home.  With less people onsite every day, offices can now be smaller while still accommodating employees’ needs.

When re-gearing a lease, all terms can be changed/negotiated such as rental rates, length of term, underletting, and issues relating to service charge. From a tenants perspective understanding what works for their business is key to getting the right deal from their landlord.

With inflation at a 40 year high, any way of mitigating the impact of rising inflation has to be worthy of consideration and with premise costs making up such a large proportion of a business’ expenditure – working to reduce that can only be a good thing.

For tenants, re-gearing a lease can allow more flexibility than simply switching to a smaller office, enabling them to transform the space into one that works more efficiently for the business. Many companies are choosing to repurpose their traditional office space into a ‘hub’ for employee collaboration and socialising. This creates the perfect opportunity for companies to really think about the needs of their business and raise any potential layout changes or improvements to the building that may be needed.  Offices can no longer be ‘one size fits all’ but should have features bespoke to the individual needs of the company.

The advantages of re-gearing can be attractive to landlords too, for example they may be persuaded to re-gear the leases to increase the value of their portfolio. Re-gearing a lease can also provide more certainty for landlords, as the lease could be renewed prior to the anticipated renewal date. Landlords would rather have renegotiated leases than vacant premises and have to pay empty business rates. Compromising with tenants and allowing them to adapt offices in line with their needs may mean that they become more invested in the space and are less likely to move in the future. If a tenant wants refurbishment or alterations, then they may want to secure a longer lease term.

A major benefit of re-gearing is that it can be done at any point during the lease term, as long as there is mutual agreement. It is important for both parties to maintain a good relationship and regular dialogue. For tenants, this means ensuring that there are no rent arrears that need to be paid, as well as keeping the space in good condition. Basics like this make it more likely that both parties will be open to negotiation, making the process more straightforward for all involved. If the relationship is strained or logistics mean that negotiation is challenging, it may be possible to be in contact via the agent.

As with any change to legal documentation it is so important for both parties that the re-geared leases are properly documented. The consequences of the new documentation not being properly considered could include the tenant having to pay extra stamp duty land tax, or the tenant losing their security of tenure. Like any legal contract, if any part of the document is unclear, there is greater risk of a lawsuit, costing both parties valuable time, money and resources, so seeking expert advice early on can help to ensure the process goes smoothly.

Re-gearing leases gives both tenants and landlords the opportunity to check that it is still fit for purpose and beneficial for both parties. It can provide an immediate solution to the problem of wasted space and a way of minimising the impact of rising inflation by reducing the business’ outgoings. It can allow companies to modernise, minimise their expenditure and improve their employees’ work/life balance, while simultaneously giving landlords the opportunity to increase their return on investment. Essentially, re-gearing a commercial lease can be a win win situation.

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We appoint expert director into our company secretary team

News | New Joiner

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Shakespeare Martineau has appointed a new director to help grow and enhance the reputation and brand of its company secretarial and governance business.

With more than 30 years’ experience, Maddie Cordes has joined the firm’s company secretary business, where she will also be sharing her knowledge with the team, as well as Shakespeare Martineau’s existing and new clients.

Prior to her new role, Maddie – who is based at the firm’s London hub but working with clients nationally – worked across both professional practice, including EY, Capita and TMF Group, and in-house as a company secretary for a range of listed and unlisted companies across all sectors.

She also spent three years as head of corporate services at law firms offshore where she was responsible for a team of 50 across four jurisdictions, supporting more than 13,000 legal entities and providing board support for investor funds.

Maddie said: “I am thrilled to have joined Shakespeare Martineau as a thriving and dynamic business and be given the opportunity to return to professional practice after working in-house as a company secretary recently to share my experience more widely. In particular, I am looking forward to developing new services and offering mentoring and training within the team and for our clients.

“I enjoy finding new opportunities and forging client relationships, so my top priorities in my new role are to raise awareness of the business in the marketplace generally and how we can help Shakespeare Martineau’s wider client base and businesses, while also growing my own client base.

“Corporate governance is ever-changing and developing, and the role of company secretary is full of variety. There are always new ways to support our clients and the wider company secretarial marketplace with thought leadership and practical advice in carrying out the role.”

Maddie is skilled in governance, business development, training and operational management, specialising in board and shareholder meeting support, company law, staff development, and change and performance management.

She has also been the co-editor of Shackleton on the Law and Practice of Meetings for more than 10 years and is a mentor and examiner with the professional body for company secretaries, the Chartered Governance Institute UK & Ireland.

Ben Harber, partner who heads up Shakespeare Martineau’s London-based company secretarial team, said: “We are delighted to welcome Maddie to our team. Her experience across both professional practice and in-house means she has an in-depth understanding of our clients’ challenges.

Whether we are providing a fully outsourced company secretarial function or assisting a client carrying out the company secretarial role part-time alongside their other duties, our job is to provide comfort to both our client contact and the overall board that the role is being fulfilled professionally with an appropriate level of up to date governance knowledge and external support.

With the ever-increasing spotlight on how companies implement and then apply good governance, our primary role is to ensure this is truly embedded. Boards rely heavily on us as governance advisers.

I am looking forward to working with Maddie and to see her bring her deep knowledge and expertise to help strengthen and grow the team, as well as our overall client base.

Shakespeare Martineau is proactively seeking talented people to join the firm on its growth journey, including mergers, team recruitment and lateral hires nationally.

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Ben leads our team of company secretaries in our London office, providing invaluable compliance and corporate governance services to a wide range of companies.

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We win top intellectual property award

News | Award

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Our IP team was last night awarded IPEC Firm of the Year at the 17th annual Managing IP awards. The awards were held at the Royal Lancaster Hotel, London.

One of eight firms shortlisted in the hotly contested Intellectual Property Enterprise Court (“IPEC”) firm of the year category, the win is another milestone in the team’s ambition to be recognised as one of the top IP teams in the marketplace.

The IPEC is a specialist IP court within the High Court, which aims to provide a procedure for intellectual property litigation which is speedier and less costly than is the case in the rest of the High Court. The IP team is well placed and highly experienced in representing clients in this forum, having issued proceedings in a substantial number of cases in the last couple of years, including success at trial in the Claydon Yield O Meter v Mzuri patent dispute in 2021, and the Marflow v Cassellie patent dispute in 2019. This award recognises the team’s successes and experience.

Managing IP awards showcase the best providers and suppliers of IP services across the globe and recognise the firms, individuals and companies behind the most innovative and challenging IP work of the past year, as well as those driving the international IP market.

Commenting on the win, national head of IP Nick Briggs said, “We are absolutely delighted to have won this competitive category at these prestigious industry awards, especially amongst such high calibre competition. It is a great honour and testament to the hard work and standard of work the team has been undertaking over the past 12 months and beyond. Every member of the team has played a part in this fabulous award which moves us closer to our goal of being one of the leading national IP teams. Finally, and above all else, we look for success for our clients who trust us with their work, and to whom we extend our thanks”.

The team has recently expanded its regional footprint with the further development of our Sheffield office and the firm’s move into Bristol provides an opportunity to extend westwards our strong reputation in the Midlands market.

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Nick helps UK and international clients enforce and protect their Intellectual Property rights, and defends those accused of infringing IPRs.

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Lovely jubbly - English Courts provide guidance on when an intended parody becomes copyright infringement

Intellectual Property | Judgment update

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SHAZAM PRODUCTIONS LTD -v- ONLY FOOLS THE DINING EXPERIENCE LTD & ORS [2022] EWHC 1379 (IPEC)

A recent decision by the IPEC should act as a warning to anyone who is intending to base their own productions or works on existing works, particularly where they intend to do so for their own commercial gain.

The Case

The Intellectual Property Enterprise Court (“IPEC”) has provided (perhaps overdue) guidance on some key copyright issues, including whether fictional characters themselves are eligible for copyright protection, and when a parody or pastiche defence to copyright infringement may be raised.

The case concerns whether an interactive dining experience based on the BBC comedy series Only Fools and Horses constituted copyright infringement and/or passing off.

The claimant alleged copyright subsisted in particular scripts, the body of scripts as a whole, and the character Del Boy.  The claimant first needed to show that each of these was a copyright work under the Copyright, Designs and Patents Act 1988 (“CDPA”).

In relation to the scripts, the Judge concluded that they were dramatic works under Section 3 (1) of the CDPA, rather than literary works, as they were intended to be performed.

The “world of Only Fools and Horses” contained in the body of scripts however was not found to be a dramatic work (as it would never be performed in one go), or a literary work (as there was no intellectual creation in the arrangement of the scripts together).  Each script was simply a separate dramatic work.

In relation to the Del Boy Character, the claimant was ordered to identify five features of the character in which they allege copyright subsists from a particular script, and came up with the following:

Copyright

The claimant alleged copyright subsisted in particular scripts, the body of scripts as a whole, and the character Del Boy.  The claimant first needed to show that each of these was a copyright work under the Copyright, Designs and Patents Act 1988 (“CDPA”).

In relation to the scripts, the Judge concluded that they were dramatic works under Section 3 (1) of the CDPA, rather than literary works, as they were intended to be performed.

The “world of Only Fools and Horses” contained in the body of scripts however was not found to be a dramatic work (as it would never be performed in one go), or a literary work (as there was no intellectual creation in the arrangement of the scripts together).  Each script was simply a separate dramatic work.

In relation to the Del Boy Character, the claimant was ordered to identify five features of the character in which they allege copyright subsists from a particular script, and came up with the following:

  • His use of sales patter with replicated phrases

  • His use of French to try to convey an air of sophistication

  • His eternal optimism

  • His involvement in dodgy schemes

  • His making sacrifices for Rodney

There was no English case law authority that provided that copyright subsisted in the concept of a character. However, the Judge proceeded to apply the standard two part copyright test for whether copyright subsists from the EU Cofemel decision (C-683/17 Cofemel v G-Star Raw [2020] ECDR 9):

  1. that there exists an original subject matter, in the sense of being the author’s own intellectual creation” - the subject matter must reflect the personality of its author, as an expression of his/her free and creative choices.
    The Judge found that Del Boy as a character is an original creation of John Sullivan (the writer) which is the expression of his own free and creative choices. In deciding this, the Judge described the unique characteristics of Del Boy, including that he was “a fully rounded character with complex motivations and a full backstory”.

  2. classification as a work is reserved to the elements that are the expression of such creation” - the subject matter protected by copyright must be expressed in a manner which makes it identifiable with sufficient precision and objectivity, even though that expression is not necessarily in permanent form.
    The Judge found that the character of Del Boy is clearly and precisely identifiable to third parties in the scripts, and in particular the five characteristics identified by the claimant.

The Judge therefore concluded that the character Del Boy constituted a literary work for the purposes of section 3(1) of the CDPA.

Once this had been decided, the question of infringement was much easier, as the Judge found that “the evidence of infringement by the defendants is overwhelming and obvious” and that the level of copying was far more than the substantial copying required for infringement.

Fair Dealing Defences - Parody/ Pastiche

Section 30A of the CDPA provides: “Fair dealing with a work for the purposes of caricature, parody or pastiche does not infringe copyright in the work”.  The defendant sought to rely on this.

However this defence only applies where it does not conflict with a normal exploitation of the work or other subject matter and does not unreasonably prejudice the legitimate interests of the right holder (found in EU Directive: 2001/29/EC – the Info Soc Directive, in which section 30A has its origins.)

In order to qualify as a parody, the Judge noted that there should be an expression of some kind of opinion by means of imitation, but noticeable difference, from the work parodied.  This is more difficult, and far less common, where the parodied work itself is a comedy - mere imitation of a work of comedy (as in this case) is not enough to constitute parody.

In order to qualify as a pastiche, the use must either imitate the style of another work, or be an assemblage/medley of a number of pre-existing works, but must be noticeably different from the original work.  In theory this may therefore apply to a broad spectrum of ‘mash-ups’, fan fiction, music sampling, collage, appropriation art, medleys, and many other forms of homage and compilation – with each to be assessed on their own facts and merits.  The defence did not apply to these facts however, as the dining experience merely took the characters, back stories, jokes and catch phrases, and presented them in a live dining format, and so was more akin to reproduction by adaptation than pastiche.

Even if the use was found to properly fall within the definition or either a parody or pastiche, the Judge concluded that the use was not fair either, because:

  • the taking from the scripts was very extensive both in terms of the quantity of material and its quality;

  • the use made of the scripts was not a type of expression which attracts particular protection or engages fundamental rights e.g. political views, artistic dialogue or aesthetic criticism;

  • the aim was of putting on the show was simply to entertain the audience by bringing them into contact with the copied characters;

  • the use competes with the claimant’s own exploitation of the works, through promotional items and its own musical production, and conflicts with its legitimate interests in such.  The claimant would ordinarily look and expect to be able to control use of the works e.g. by licencing to third parties.

Passing Off

The Judge also found that the dining experience “passed off” the claimant’s rights in the Only Fools and Horses show, with the facts meeting the three part test in Reckitt & Colman Products Ltd v Borden Inc (No.3) [1990] 1 WLR 491:

  1. The claimant had significant goodwill in the name and characters, from for example the broadcast and merchandising since 1981;

  2. The name “Only Fools The (cushty) Dining Experience” was liable to confuse and mislead (misrepresentation); and

  3. There was a real likelihood of damage in the form of diversion of trade from the official musical production to the defendants’ (cheaper) dining experience.

Comment

This decision shows that copyright in the UK may be used to protect more abstract concepts such as characters within a script, mirroring similar protection granted in Germany for the character of Pippi Longstocking, and the US for the characters Sherlock Holmes and Dr Watson.  There was previously some concern that the UK courts had to stick rigidly to the specific types of ‘work’ listed in the CDPA, but following Cofemel this decision shows that the UK courts may be more flexible in finding that something is protectable by copyright.  Here they found that a character in a script, with five key characteristics, was classed as a “literary work”.

However, it also shows that not everything will be protectable, as the body of scripts, or the “world of Only Fools and Horses”, was not separately protectable outside of the individual scripts constituting such.

The decision should also be a warning to anyone who is intending to base their own productions or works on existing works, particularly where they intend to do so for their own commercial gain.  This may constitute copyright infringement and passing off.  Where the pre-existing work is as well-known as Only Fools and Horses, it may be both more likely that the owners of the relevant rights will take action and also that they will succeed.

Just because the derivative work is a comedy does not mean that it will fall within the parody or pastiche defences, particularly where the original work was also a comedy itself.

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Danny is an associate in our Intellectual Property team, with a specific focus on contentious intellectual property matters.

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Arron Banks loses libel claim - It is in the public interest for defamatory statements about him to be published

Litigation | Defamation

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A much anticipated judgment was handed down today (13 June 2022), which saw Arron Banks lose his high profile claim against journalist Carole Cadwalladr.

Arron Banks, who was famously described as one of the “bad boys of Brexit”, has a colourful reputation. However, he successfully persuaded the court that although a tweet by Cadwalladr had not met the threshold for causing serious harm to his reputation, a talk given by Cadwalladr had caused serious harm to his reputation - overcoming one of the key thresholds to bringing a defamation claim.

After a preliminary hearing to determine the meaning of publications (a process commonly seen in libel cases which can often narrow the issues and potentially avoid trial - albeit not in this case), Cadwalladr abandoned a defence of truth. This meant she had to accept the court’s meaning of her publication that “on more than one occasion Mr Banks told untruths about his secret relationship he had with the Russian Government in relation to acceptance of foreign funding of electoral campaigns in breach of the law on such funding” was untrue - she did not intend to mean that this was important.

This meant Cadwalladr had to rely upon a defence of public interest.

What is a public interest defence?

A public interest defence allows a defendant to avoid criminality if they disclose classified information that they believe is in the public’s best interest.

While typically used by journalists, this defence may also be employed more often, as we move forward in its new era of social media where every individual can potentially publish to the world at large.

However, the requirements for a public interest defence are stringent. It requires a defendant to establish that:

  • they believe they were publishing in the public interest;

  • that belief was reasonable, having regard to all of the circumstances; and

  • there had there been a significant change in circumstances since the original publication, such that any defence should cease to apply

The court’s decision

The case was heavily contested and Mr Banks was found to have given evidence which was evasive and lacking in candour, which undoubtedly did not help him. Evasive or potential unreliable evidence given by a claimant can be the death knell for any claim. That is especially because appeals on findings of fact are notoriously almost impossible to bring successfully.

However, fundamentally, the burden to establish a public interest defence is on a defendant and it was accepted that she believed the publication was in the public interest.

Most importantly the court found that she had intended to convey a less serious, albeit still defamatory, meaning and it was not so obvious that the meaning she intended to convey was not the correct one as to bar the defence.  That meant that the public interest defence was considered against her intended meaning, not as found by the court or argued by Banks.

In all the circumstances, and having reasonable grounds to have believed her intended meaning to be true, she succeeded in establishing a public interest defence.

That said, there was a significant change of circumstances when the National Crime Agency and Electoral Commission documents were published that rendered the reasonable belief that Cadwalladr had, no longer reasonable. However, crucially, no serious harm was established as arising from the defendant’s publication after that date.

What can we learn from this case?

The public interest defence, as set out in the Defamation Act 2013, is a new defence and this is an important test of the applicable principles.

It has also been seen by many as being a test of journalistic freedom where reasonable reporting is undertaken based upon the best available information but later turns out to be incorrect.

Some have viewed Bank’s case as a powerful, wealthy individual targeting an individual journalist; while others have taken the view that something was published which was untrue and a journalist should not be allowed to get away with even an innocent mistake of that nature.  Bank’s history with Brexit means this case is fraught with political history and judgments.  This is perhaps one of the best examples of why, unlike the USA, jury trials for defamation are a thing of the past.

Just as Johnny Depp lost in the UK, but won in the US based upon an almost identical alleged libel, Bank’s case may have played out differently before a jury. We will never know.

The key takeaway for journalists, whether they are high-profile professional ones, novices or potentially amateurs, can see the public interest defence as being open to them.

What should you do to if you’re planning to use a public interest defence?

Anyone seeking to publish and rely upon this defence must do their homework.  It’s clear that the scope of research that the defendant had undertaken, as well as the diligent show, were vital in establishing the reasonableness of the belief that she then in turn had.

It may also be that this will also be a positive judgment for the standard of journalistic investigation, and research prior to publication may potentially be able to take the benefit of this defence.

Finally it is important to address some of the other comment about this case and libel law. Although libel cases are often expensive, to think of them as only for the rich is wrong; libel law and the same principles are there to protect anyone. Every business or individual has a reputation that can be seriously harmed by others and therefore protecting those is key.

It is also important not to lose sight of the fact that many people can be, and are, defamed by press, media or members of the public - business can be ruined or reputations smashed. Libel and slander laws must strike a balance; and the legal sector must help shape the law and protect wronged parties.

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Daniel is a highly regarded experienced specialist commercial litigator and defamation expert.

Litigation & Dispute Resolution Solicitors | Shakespeare Martineau

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Charity expert vows to ‘stand up for the sector’ after committee appointment

Blog | Charity

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Charity law and governance expert Catherine Rustomji has been elected to sit on the Charity Law Association executive committee.

As head of charities at full service law firm Shakespeare Martineau, Catherine’s position on the executive committee will see her play a leading role in improving knowledge and awareness of charity law issues, as well as working closely with the Charity Commission to pursue both technical and practical issues facing the sector.

The role of the Charity Law Association is to support charities of all sizes navigate the legal landscape of the third sector, providing a forum for members to exchange ideas and information as well as responding to consultations from government and regulators.

Working alongside other leaders in the sector including advisors, academics and charity professionals, Catherine will share best practice with the association’s 900+ members.

Catherine, who has more than 20 years’ experience in the charity sector, said: “I’m thrilled to have been elected to sit on the executive committee – I am looking forward to getting back into the thick of developments in charity law and discussions with peers about the latest issues affecting charities, and working as a team to stand up for the sector and make a real difference.

“This additional role will position me at the coal face of charity law, keeping me at the forefront of developments so that I can better support my clients too.”

For more than two decades, Catherine has been exclusively advising charities, social enterprises and not for profit organisations – specialising in charity law and governance, not for profit legal structures, trustee training and board development.

Over the years, she has supported national, regional and local charities, not for profit organisations, community groups, schools, colleges, churches, welfare and professional associations – operating across the health, education, arts, public and private sectors.

Nearly 1,000 members of the Charity Law Association were asked to vote for the executive committee, with appointments announced at the organisation’s recent AGM. Positions are voluntary and held for three years, subject to re-election by members.

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Catherine Rustomji is a partner and head of charities at Shakespeare Martineau. She has been advising charities, social enterprises and not for profit organisations exclusively for over 20 years.

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Lawyers trade office for canal as part of litter pick

News | Our People

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Tyres, carpets and suitcases were among the items collected by Shakespeare Martineau’s lawyers as part of a litter pick along the Birmingham & Fazeley Canal towpath.

An entire barge was filled with rubbish by the law firm’s Birmingham-based corporate team, who gave up their time on Tuesday (31 May) to take part in the volunteering day, which was organised by the Canal and River Trust.

The team started at Cambrian Wharf, which was developed in 1769, before making their way down the canal on a barge – collecting kids’ shoes, clothes, bricks, a step ladder, duvets, cans, bottles and umbrellas along the way.

Jody Webb, corporate partner at Shakespeare Martineau, said: “Canals provide vital access to green and blue spaces, which improve wellbeing and enhance communities. However, too often, litter is dropped along the towpath.

“The damage rubbish causes to our environment, aquatic ecosystems and wildlife is well-documented. We were really surprised at the amount of rubbish we collected over the course of the day, but it shows how much can be done when people give up their time.

“We are proud to have supported the Canal and River Trust in helping to keep our city clean and tidy for use by the local community, as well as in readiness for the Commonwealth Games this summer, and we are looking forward to helping out more over the next 12 months.

Tara Sexton, volunteer leader at the Canal and River Trust, added: “The work all volunteer groups undertake is essential to the management and maintenance of the heritage assets and environmental concerns prevalent throughout the region. As a wellbeing charity, it is vital we can provide accessible and safe spaces for everyone who visits the canals in Birmingham.

As part of its responsible business strategy, Shakespeare Martineau is aiming to deliver 10,000 volunteering hours in 2022.

People from the firm – including partners Jody Webb, Michael Stace and Peter Mayhew; solicitor Gweni Rees-Evans; consultant Tim Newman; litigation legal assistant Jakub Mikulecky; and paralegal Mia Georgiou – contributed towards this by taking part in the litter pick.

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Jody leads on substantial transactions including acquisitions, disposals, management buy outs and private equity investments with a particular focus on the UK mid-market with values of circa £5m – £100m across a variety of sectors.

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Shakespeare Martineau recognised as top large employer nationally

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Full-service law firm Shakespeare Martineau – as part of legal and professional services group Ampa – has been named one of the top 100 best large companies to work for in the UK by Best Companies.

  • Ranked 61 in top 100 best large companies

  • Ranked 12 in top 25 law firm

  • Ranked 25 in top 75 East Midlands companies

  • Ranked 25 in top 75 West Midlands companies

  • Ranked 33 in top 50 large London companies

BCA2022_company_2star

The Best Companies lists are the highest regarded league tables for great places to work – recognising business’ commitment to employee engagement and positive culture. Rankings are produced based on an independent and anonymous survey of people within the business.

Ampa brands were also awarded Best Companies’ second-highest standard two star accreditation – representing ‘outstanding’ levels of and commitment to workplace engagement.

Last year was Ampa’s first time being involved in the awards – ranking 58 in the top 100 Midlands companies and 42 in the top 75 large London companies.

It is truly fantastic to have achieved recognition as a top large employer nationally, as well as in law, the East Midlands, West Midlands and London, which is testament to our positive, passionate and authentic culture.

Ben Buckton, chief marketing and people officer at Ampa

Last year, we featured on three lists and it is incredible to have retained and, in some cases, significantly improved our places on these league tables while also ranking so high nationally too.

“We are also delighted to have received such high levels of engagement from our people and a two star ‘outstanding’ accreditation. Our people are our greatest assets, greatest advocates and what we are all about. They drive our business forward and by investing in them, their ambitions, development, and wellbeing, we are able to provide the best service and outcomes for our clients.

“The insights we’ve gained from the B-Heard survey, alongside our own regular internal Pulse feedback, helps us keep our commitment to continuous improvement as we strive to be one of the most empowering and inclusive workplaces in the UK.

Ampa, which has pending B Corporation status, is proactively looking for like-minded businesses to join the group. All Ampa brands are recruiting lateral hires and teams.

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Keeping Children Safe in Education - updated for September 2022

Blog | Education

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Earlier this year we updated you on the Department for Education’s consultation regarding the proposed changes to Keeping Children Safe in Education (KCSIE). The consultation closed in March, and the updated KCSIE guidance which incorporates the findings of that consultation, has now been published. The updated version comes into effect from 1 September 2022, but in the meantime, KCSIE 2021 continues to apply. The new version can be accessed here: Keeping children safe in education 2022 (publishing.service.gov.uk).

The good news is that there are not many significant changes this year, following some extensive amendments over recent years. The vast majority of changes are to add clarity. This year, the main changes include:

General changes:

  • A definition of perpetrator and of victim has been helpfully included in the Summary section of the guidance. These definitions have been taken from the Sexual Violence and Sexual Harassment guidance (which has now been completely absorbed into KCSIE, and is consequently now statutory guidance which schools must follow) so schools should be familiar with these definitions.

  • There has been a change in language throughout KCSIE from peer-on-peer abuse to child-on-child abuse, and with reference to abuse in intimate personal relationships between peers, this is now referred to as ‘teenage relationship abuse’ throughout.

Part One (Safeguarding Information for all staff)

  • Clarity that there should be a staff behaviour policy or code of conduct covering topics such as low-level concerns, allegations against staff and whistleblowing (para 13).

  • Paragraph 18 has been reworded to make clear that children should never be made to feel like they are creating a problem for reporting any form of abuse and/or neglect, not just sexual abuse or harassment as per the previous wording.

  • At paragraph 19 there is new wording which recognises that children may not be ready to make a report, or may not know how to tell someone they are being abused, exploited or neglected. It includes an emphasis on staff having ‘professional curiosity’ and speaking to the Designated Safeguarding Lead (DSL) in light of any concerns. This is echoed in paragraph 21, which reminds staff of the early signs of abuse and neglect. More examples of indicative behaviours are also included at paragraph 31.

  • More examples of extra-familial harm are now also included at paragraph 23, and the definition of abuse at paragraph 26 now includes a definition of ‘harm’.

  • Clarity is provided in the footnotes on page 12 that consensual image sharing between children of the same age may not amount to abuse and may require a different approach.

  • Additional guidance regarding domestic abuse as a specific safeguarding concern is now included at paragraph 43.

  • There is a reminder that schools and colleges should have policies and procedures in place for managing any safeguarding concern no matter how small. Paragraphs 71 to 73 also now set out clearly how these concerns should be handled, dependent on whether they do, or do not, meet the harm test

Part Two (Management of Safeguarding)

  • There is a new obligation for governing bodies to ensure that all governors and trustees receive appropriate safeguarding and child protection (including online) training at induction (and regular updates thereafter). This is to equip them with the necessary knowledge to challenge, test and assure themselves that the school’s safeguarding policies are effective and robust (paragraph 81).

  • New guidance on the obligations regarding safeguarding, sexual violence and harassment under the Human Rights Act 1998, the Equality Act 2010 and the Public Sector Equality Duty (for those that are subject to it) is now included at paragraphs 83 – There are no new obligations, this just serves as a reminder of existing ones.

  • It states that safeguarding policies and procedures need to be clear, transparent and readily available to parents and carers as well as staff and students (paragraph 96).

  • Additional wording has been added to extend the existing requirement for schools to take a proportionate risk approach regarding information provided to temporary staff and volunteers, to now include contractors (paragraph 100).

  • Guidance on the role of the DSL has been moved to Annex C for clarity.

  • Additional information regarding the timescales for sharing child protection files for transferring students has been added at paragraph 121.

  • The guidance on teaching safeguarding to children has been updated and now includes additional information about the new Relationships Education curriculum (paragraphs 128 – 130).

  • There is a change of wording to reflect that it is the governing body’s responsibility (not the school’s) to ensure that online safety is a running theme in the school’s approach to safeguarding (paragraph 136).

  • Recognition that mobile phones and smart technology can be used to bully children (paragraph 137).

  • Reminder that schools should use its communications to parents to reinforce online safety at home, and that schools should inform parents what their child is being asked to do online as part of their schooling (paragraph 139).

  • Schools should review their IT filter and monitoring systems regularly and staff should be made aware of how to escalate concerns when identified. KCSIE now references a tool by the South West Grid for Learning for schools to check whether their current filtering provider is signed up to relevant lists (paragraphs 140 – 141).

  • The new KCSIE recognises that LGBT children (paragraph 202 – 204) may be at additional risk of safeguarding concerns.

  • There is additional guidance regarding SEND children, which recognises that they have additional vulnerabilities that schools need to be aware of in a boarding setting (paragraph 158) and that they face challenges online and offline, in particular in relation to children with cognitive understanding issues as they may struggle to distinguish between fact and fiction online (paragraph 198). Further resources for supporting SEND children is now included at paragraph 201.

  • Last year, guidance was included regarding the use of school facilities for non-school activities (for example, summer camps). The new KCSIE 2022 has clarified that these safeguarding obligations apply even if the children in attendance attend the host school or not (paragraph 166).

  • The role of the virtual school head has also been extended to include strategic oversight for education attendance, attainment, and the progress for children with a social worker (paragraph 194).

Part Three (Safer Recruitment)

  • Clarity has been added regarding when a CV can be accepted for applicants. KCSIE 2022 makes clear that a CV will only be acceptable alongside an application form, not instead of (paragraph 214).

  • As part of the shortlisting process, and for due diligence, schools should now carry out online searches on shortlisted candidates to help identify publically reported incidents which can be explored with a candidate at interview (paragraph 220).

  • Clarity that references should include the facts (not opinions) of any substantiated safeguarding concerns/allegations which meet the harm threshold, but should not include unsubstantiated, unfounded, false or malicious allegations, even if they are repeated allegations (paragraph 223).

  • More guidance is included about DBS checks for existing volunteers and professional visitors (paragraphs 301 and 311).

  • Interestingly, the wording regarding suspension which made clear it should be used as a last resort has been removed in KCSIE 2022. It does however continue to emphasise that suspension following an allegation against staff should not be an automatic response, and that the school should make an informed decision about suspension in the context of the allegation.

Part Four (Safeguarding concerns and allegations about staff)

  • Some clarity to the low-level concerns guidance has been added following the consultation earlier this year. In particular:

    • The list of examples no longer includes “the use of inappropriate, sexualised, intimidating or offensive language” as an example of a low-level concern (paragraph 425).
    • Further information has been provided to provide clarity on the process for sharing low level concerns. There is inclusion of a reminder that schools can liaise with the Local Authority Designated Officer (LADO) regarding low level concerns where there is any doubt about whether a report should be made (paragraphs 433-435).

Part Five (Child-on-child sexual violence and sexual harassment)

  • Throughout Part Five there is now an emphasis of the types of child-on-child behaviours and warning signs for child-on-child abuse, including new guidance on how to manage allegations of abuse, taken largely from the former Sexual Violence and Sexual Harassment standalone guidance. Case studies have also been included throughout to add context and assist schools.

  • One of the important changes is the inclusion of a reminder that when a child has made a report, it is important to explain that the law is in place to protect children rather than criminalise them. Care should be taken to explain this to the child in such a way that avoids alarming or distressing them (paragraph 468).

  • A new section regarding confidentiality and anonymity is now included (paragraphs 470 – 478).

  • Clarity that a risk and needs assessment following a report of sexual violence should include the time and location of an alleged incident and details of any action required to make the location safer (paragraph 479).

  • The list of considerations at paragraph 482 has now been updated to recognise that children of “well known social standing” can contribute to a power imbalance in the context of child-on-child abuse.

  • New sections regarding disciplinary action against pupils (paragraphs 543 – 545) and working with parents (paragraphs 546 – 551) is now added.

  • Recognition that schools and colleges, as relevant agencies, should be part of discussions with statutory safeguarding partners to agree the levels for the different types of assessment and services to be commissioned and delivered, as part of the local arrangements (paragraph 492).

  • Reminder that children may exhibit differing signs of trauma and responses to their experience, and that schools should remain alert to the possible challenges of detecting those signs and be sensitive to the needs of the child (paragraph 533).

Annexes

  • Annex C continues to include information about the role of the DSL. Some of the information previously included in the main body of the guidance has now been deleted and rehomed here. The only ‘new’ piece of information to be aware of is a reminder that the DSL must be aware that a child requires an appropriate adult when being interviewed by police and in certain circumstances.

  • The previous Annex D (Online Safety) has been removed. Guidance has been incorporated throughout KCSIE 2022 instead, and there has been an added emphasis in Annex A that technology is a significant component in safeguarding issues and recognising the role of online abuse in safeguarding the wellbeing of children.

What should you do now?

We would encourage schools and colleges to review their policies and procedures as soon as possible, in readiness for September. As always, there is a helpful table at Annex F of KCSIE 2022 which summarises the substantive changes from the September 2021 version, which may be useful, alongside this note, when undertaking this work.

If anything is unclear, or if schools have any queries about the impact of the revised guidance, do contact us.

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Emma is a Solicitor within the firm’s Education team specialising in employment advice for education clients including independent schools and academies, as well as both further and higher education institutes.

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Institutions underestimate importance of sustainability for prospective students – new research reveals

Research | Education

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Higher and further education institutions risk underestimating the importance sustainability holds for applicants when choosing a college or university, new research from law firm Shakespeare Martineau has shown.

  • Just half of educational institutions consider sustainability as an ‘important’ factor of their student recruitment strategy – despite 79% of prospective students saying that ‘clear strategies to reduce environmental impact, promote sustainable development and reduce waste’ is a influencing factor in the college or university they apply for.

  • 90% of prospective students would be proud to study at a green campus.

Around three quarters of prospective students would be influenced by: the use of green energy to power campus buildings (73%), sustainability being an important part of learning, teaching and research (78%), and decision makers at that institution factoring in climate change in all decisions (75%), when choosing their place of study.

However, institutions themselves undervalued these factors, with less than half (48%) agreeing they believe that factoring climate change into decision making would be important to prospective students.

Shakespeare Martineau’s survey of 1,000 16 to 19-year-olds planning on applying for college or university* showed nearly 7 in 10 (69%) are worried about climate change.

The majority (62%) of young people questioned felt that it was the government’s responsibility to address climate change, followed by individuals (37%) and big corporations (34%).

Almost 3 in 10 (29%) believed responsibility lies with educational institutions, but despite this figure being relatively low, an institution’s green credentials are a strong influencing factor in applicant decision making.

More than 130 representatives from the further and higher education sector were also questioned by the firm, with the results showing a severe disconnect between what applicants value and what institutions think are important to young people.

When compared to the responses from prospective students, institutions undervalued the importance of green energy (54% vs 73%), sustainability in learning and research (58% vs 78%), clear environment strategy (65% vs 79%) and ethical investment (45% vs 72%).

Interestingly, educational respondents overestimated how important a good social scene and night life is to students (92% vs 76%) and position on league tables for subjects (91% vs 82%).

The top priority for prospective students however – above and beyond even fulfilling academic needs – was ‘that the college or university provides support for my personal well-being and mental health’ (87%).

The research also demonstrated disparity between factors most important on a green campus for prospective students and institutions. While institutions ranked ‘minimal food, water and energy waste’ and ‘buildings are powered by renewable energy sources’ as top, applicants associated green campuses with ‘reducing carbon emissions to meet government targets’, ‘open green spaces’ and ‘working with the wider community to encourage green practices’ most with the term green campus.

Smita Jamdar, head of education at Shakespeare Martineau, said: “Climate change is on the minds of the world, but no one more so than young people who will have to live with the consequences of the actions of generations before. Our findings show there is disconnect between what students want and what institutions are delivering, but our research has also highlighted common themes in the barriers preventing greater green campus adoption, which we hope to tackle in our next research paper.

“What’s clear is that the solutions to this disconnect lie in cross-institutional activities, such as leadership and management, teaching and learning, research and innovation, and services and facilities. These will be challenging to co-ordinate and implement, but also offer a common, cohesive goal for the whole institution to work towards.

“What is great to see is that 90% of the students we surveyed said they would be proud to attend a green campus. But time is running out and changes urgently need to be made across funding, planning, energy, and governance if we are to help meet climate change targets and provide students with a campus, and a future, to be proud of.”

This data is the first set of statistics to be revealed by Shakespeare Martineau, with a full report on Green Campuses expected in September this year.

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Smita leads the team that works to shape the universities and colleges of the future by providing strategic advice and sector specific insight across all their legal needs.

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We launch litigation funding with DBA option

Litigation | Product

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Shakespeare Martineau is to offer, for the first time, damages-based agreements (DBAs) as part of its portfolio of litigation funding options called ‘FeeManage’.

DBAs are a fairly new addition to English law and are contingency-based agreements where legal fees are payable as a percentage out of the damages received in the event that the case is successful. Shakespeare Martineau is proud to be in a position to offer DBAs as part of its FeeManage proposition.

If a DBA is entered into, and the predetermined success criteria is achieved, but the recovery from the losing party is relatively low, the DBA percentage fee from recovered monies may be a sum significantly less than that which would have been payable by the client on a normal retainer basis or pursuant to a conditional fee arrangement (CFA) – meaning an increased shared risk between client and legal advisors.

In addition to DBAs, the firm is working with a variety of funders to offer, third party funding (TPF) and after the event (ATE) insurance in combination with CFAs as potential options.

Unlike competitors, Shakespeare Martineau is not tied to a single funding provider, in order to flex requirements and offer full or part funding for litigation claims.

Too often businesses are put off from pursuing debts and assets that are rightfully theirs due to the associated costs, impact on the balance sheet and risk,” explains Barry Jervis, partner and litigation expert at Shakespeare Martineau.

Litigation was buoyant across the country before the pandemic and, as we emerge into a post-pandemic economy, we can expect disputes to increase further. However, the costs of litigation are climbing sharply, alongside increasing numbers of businesses experiencing cash flow issues as a fall out from the pandemic.

Our new ‘FeeManage’ service helps to reduce the financial risk of litigation.”

Every individual and every business is unique and while traditional CFAs might work for one client, third party funding might be more appropriate for another. Whatever the size or complexity of the litigation, we have an option that will suit.

We’re really proud to be taking a different approach to litigation funding. We’re not fixed to a single provider and we’re giving our clients every option available for funding their claim.

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The OfS supplementary consultation on publication of information about higher education providers

Blog | Education

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Around 18 months ago, the Office for Students launched a consultation into the publication of information about higher education providers. As a result of the provisions of the Skills and Post -16 Education Act (the Skills Act), the OfS has launched a short supplemental consultation which is due to close on 9 June 2022. The results will be analysed alongside the responses to the earlier investigation.

There are three specific aspects of the consultation that are of particular concern. The first is the proposal to publish information about the opening of an investigation (i.e. before any finding of regulatory breach has been made), the second is to publish “provisional decisions”, and the third is to publish the decision to refer a matter to another regulator for consultation.

What did the Skills Act say about publication?

The Skills Act amends the Higher Education and Research Act 2017 and expressly confirms the OfS’s power to publish “notices, decisions and reports given or made in the performance of its functions”. This does not affect any other power of the OfS to publish such a matter. In deciding whether to publish a notice, decision or report, the OfS must consider:

  • the interests of students, prospective students and graduates

  • the interests of providers

  • the need to avoid publishing information about a particular body or individual, where publication would or might, in the opinion of the OfS, seriously and prejudicially affect the interests of that body or individual; and

  • the public interest

The Skills Act expressly authorises the publication of decisions to conduct an investigation, subject to the same considerations, with the additional safeguard that if the OfS subsequently terminates an investigation without taking any action, it must publish that fact too.

The Skills Act includes provisions protecting the OfS from defamation claims arising from publication of information about providers, unless malice can be shown. But there is an important qualification to this protection where the publication relates to the opening of investigations.

The OfS is not protected from claims for defamation in relation to the publication of the decision to conduct the investigation if it includes any information other than -

  • a statement of the decision to investigate

  • a summary of the matter to be investigated, and

  • the identity of the provider, body or individual under investigation

What are the potential issues with the proposal to publish the opening of an investigation?

The OfS’s supplementary consultation indicates that it will “normally” expect to publish information about the opening of an investigation, and in so doing will have regard to the matters it set out in its earlier consultation under Annex C.

Annex C referred broadly to factors similar to those in the Skills Act, summarised above, but they are not identical. Annex C also merely states that the OfS would normally have regard to these factors, rather than as required by the Skills Act, that it “must” consider them.

By stating it will “normally” publish, the OfS may also create doubt that it will apply its mind objectively and properly to the statutory considerations. After all, the Skills Act indicates that each decision to publish should be based on the statutory considerations, rather than creating a blanket presumption in favour of publication with limited exceptions, which is what a statement that something will normally be published implies.

This is particularly so given that the factors set out at Annex C made sense when applied to a finding of regulatory breach, but make far less sense when applied to a decision to investigate. There is also no clear articulation of the threshold for launching an investigation – does the OfS have to be satisfied that there is a prima facie case of breach, or is it merely making enquiries as a result of a particularly pearl-clutching tabloid newspaper column, for example?

For example, Annex C states that one of the reasons publication may be in the student interest is so that prospective students have information to help them make an informed choice about the value of the course and provider in question. How does the knowledge that there is an investigation underway assist a prospective student, especially given the very basic information that the Skills Act anticipates will be published? It would of course be wrong for anyone to infer or imply that the opening of an investigation equated to a settled conclusion of breach. Isn’t it therefore more likely that it will confuse prospective students who can hardly be expected to understand what level of confidence they can have that the alleged breach has in fact occurred?

What are the potential issues with the publication of provisional decisions?

The main problem with the proposal to publish provisional decisions is that it is not at all clear what these are. The supplementary consultation refers only to provisional decisions about sanctions, which it describes as “provisional” in the sense that the sanction may be subject to appeal. Regulatory Advice 15 (Monitoring and Intervention) includes one reference to provisional decisions in different terms: “we expect there to be cases where the evidence the OfS already holds is sufficient to reach a provisional decision that there is a breach of a condition….in such a case, the OfS would be unlikely to seek further evidence and the provider would be invited to submit further information it considers relevant as part of a formal representations process.”

There needs to be a much clearer explanation of how and when a provisional decision might be made, how this relates to the opening of an investigation and how it differs from the process for reaching a final decision.

What are the issues with publishing referrals to other regulators?

By definition, the OfS is likely to refer matters to other regulators where it does not have the power, capability or the competence to act on its own account. Just as it is difficult to see how the Annex C factors apply to a decision to commence an investigation, so too is it hard to apply them to a referral to another regulator. For example, one of the factors against publication listed in Annex C is that it may prejudice the investigation of another regulator, but at the point of referral by the OfS, it would not be possible to know what might prejudice such a putative investigation.

It is also the case that at least some of these other regulators or enforcement agencies have their own publication standards. Some, for example, will not publish until they have opened an investigation themselves, or until they have commenced enforcement proceedings. It is difficult to see what possible public interest there would be in publishing information ahead of the point at which the statutory regulator responsible for investigation of the matter in hand considers it appropriate to do so.

Conclusion

There is definitely a strong student, sector and public interest in transparency in regulation. But it is important that the reliable conclusions can be drawn from the information published by a regulator, to protect the interests of providers and their students and to maintain public confidence in the system of regulation itself. For the reasons set out above, the OfS’s current proposals fall short in both respects.

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Procurement Bill 2022

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The big news for procurement watchers is that the Government has finally published its Procurement Bill. The Bill follows a public consultation and announcement during the 2021-22 Parliamentary Session, but failed to find Parliamentary time. The Procurement Bill re-regulating public sector procurement was introduced in the House of Lords on 11 May, and the Second Reading is scheduled for 25 May. This article considers some of the key issues which impact on the HE sector.

Impact on Higher Education Institutions

The first, and most fundamental question is whether Higher Education Institutions (“HEIs”) remain in scope of procurement law. To recap, under the current rules, the HEIs are treated as within scope of procurement law to the extent that they fall within the legal definition of “body governed by public law”. That term has a specific and narrow euro-definition, so that it is common across the EU. In brief, that usually means that HEIs undertake an annual assessment of their income streams. If more than 50% of its income is from public financing, then they are caught. This explains why some of the more historic institutions (with large endowments and extensive property and investments) or research-intensive institutions with commercial income have considered themselves outside of the scope of the procurement rules. There has always been a question whether student funding through the Student Loans Company is public finance. It is hardly a surprise that the lawyers can’t agree when the Office for National Statistics struggles with how to categorise it. Not only is this not clarified in the Bill, but this is made even more unclear.

On the one hand, neither the Green Paper nor the Explanatory Notes to the Bill raised any suggestion that the scope of procurement law would change. On the other hand, the Bill provides that the concept of public authority includes an authority with “functions of a public nature” that is “funded wholly or mainly from public funds” which echoes the broadly similar and widely drafted definition in the Human Rights Act and merged into an amalgam of both pieces of legislation.

The courts have already decided that a private provider of social housing could be a public authority under that Act as it performs “functions of a public nature”: R (Weaver) v London and Quadrant Housing Trust. The courts have not decided whether SLC funding is public funding and, most importantly, have not decided whether that, in any event, matters. It merely “includes” those that are publicly funded and does not exclude those that are not, and creates new uncertainty for those HEIs that are currently outside of the scope of procurement.

What are the Key Changes?

The key change is that the Bill consolidates the current Public Contracts Regulations, Defence and Security Public Contracts Regulations, Concession Contracts Regulations and the Utilities Contracts Regulations into one handy Act. One of the benefits of the Bill is to “slash” red tape by “removing” more than 350 complicated and bureaucratic rules. The Bill is still 116 sections (not including Schedules) so the jury is out on whether that objective has been met.

Streamlined Procedures

The Bill does certainly have the useful change in that it streamlines the current raft of procurement procedures to three: open competitive procedure, the inelegantly described “other” competitive procedure and direct award. The “other” competitive procedure now encompasses the panoply of competitive procedures which range from the extremely formal restricted procurement procedure (i.e. inviting a manageable number of bidders to tender) through to the still pretty formal competitive dialogue and negotiated procedures. This will likely be unequivocally welcomed, in order to allow some sensible flexibility to the operation and management of a procurement process.

An end to MEAT

The Bill proposes an end to the requirement to award the contract on the basis of the “most economically advantageous” (“MEAT”) criteria and replace this with the “most advantageous tender” (“MAT”). MEAT provides for an evaluation of price or cost (which could include the best price-quality ratio), but only permitted social or other criteria which were linked to the subject-matter of the contract. This means that buyers can now include criteria that go beyond the subject matter of the contract and award contracts to suppliers that contribute to wider economic, social or environmental outcomes.

Below-threshold Contracts

A real difficulty with the current state of procurement law is not so much the regulations, but law which is not part of the regulations. Despite their length, the Public Contracts Regulations are not a complete code of procurement law and are supplemented by rules which are derived from case-law derived from the EU Treaties, including on the advertisement and procurement of contracts which are below the value threshold set out in the Regulations. Section 4 of the EU (Withdrawal) Act 2018 maintains rights and remedies which are recognised under English law. This could certainly include the obligation to consider and to advertise below-threshold contracts, which has been recognised by the English High Court in Mansfield DC v DCLG. Unhelpfully the Bill does not set out whether those rights continue or whether they have been repealed leaving this puzzle very much one for my learned friends.

Transparency

The Government notice promises that the Bill will deliver “a step-change in transparency and openness”. The Bill retains the existing current obligations to publish notices for contracts and award decisions, but now also includes new obligations. The Bill introduces “planned procurement notices” (which rename, rather than replace the optional “prior information notices”), and also oblige buyers who have an annual contract spend of £100 million to publish “Pipeline Notices” for any contracts which may have a value of £2million.

Buyers are obliged to include at least three key performance indicators in contracts with a value over £2 million and, in addition are obliged to publish details of the supplier’s performance against those KPIs including where there has been a settlement agreement between the parties. While the Green Paper alluded to the principle of “transparency by default”, I am not sure that the market was expecting transparency of defaults, including potentially, overriding the commercial confidentiality of settlements of claims.

Transparency will be implemented through a central data platform and enforced by, among other things, a new Procurement Review Unit (job advertisements are still open at the time of writing …) which proves, if nothing else, that even an efficiency drive can be implemented by another layer of government.

You can find out more at the Parliamentary website.

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The new Procurement Bill raises important questions for higher education institutions

Blog | Education

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The big news for procurement watchers is that the Government has finally published its Procurement Bill. The Bill follows a public consultation and announcement during the 2021-22 Parliamentary Session, but failed to find Parliamentary time.

The Procurement Bill re-regulating public sector procurement was introduced in the House of Lords on 11 May, and the Second Reading is scheduled for 25 May.

Which bodies are covered by the new procurement Bill?

The procurement rules in the Bill will apply to both public bodies and to utilities. So far, this simplifies the existing legislation by consolidating the regulation of public bodies and utilities under the current suite of rules: the Public Contracts Regulations (PCRs), Defence and Security Public Contracts Regulations, Concession Contracts Regulations and the Utilities Contracts Regulations.

The draft bill uses the defined term “public authority”, which excludes certain listed authorities. These excluded authorities include Scottish authorities, which are governed by the Scottish law regulations - those remain firmly aligned to the EU Directives, in case that particular parachute cord needs be pulled - and the security services.

What is the definition of “Public Authority”?

The concept of a public authority would be fine, but the Bill provides the entirely unhelpful non-definition of public authority as follows:

“’public authority’ includes any authority with functions of a public nature that:
(a) is funded wholly or mainly from public funds, or
(b) is subject to contracting authority oversight.”

Using the term “includes” unhelpfully means that the concept is now an open list. While those authorities which exercise functions of a public nature and are wholly or mainly publicly funded are within that list, conceivably this could also include those authorities which are not.

Unlike the current PCRs, this definition does not even include a legislative test which you can apply in order to determine whether an entity falls within the scope of the definition or not and leaves it to judicial discretion. This legislative approach where “you will know it when you see it” is completely counter to the principle of legal certainty.

It contrasts with, for instance, the Freedom of Information Act which contains a schedule clearly defining the scope of public authority for the purposes of that Act and is more in line with the definition of public authority in the Human Rights Act. It makes much more sense to adopt the FOI, rather than HRA definition as a matter of legal policy and principle: it would provide legal certainty and in principle, it shares the same underlying policy goal of FOI which is to provide transparency.

How does this affect higher education institutions?

The current procurement rules under the PCRs currently apply to higher education institutions to the extent that they derive more than 50% of their funding from public sources. There has always been a puzzle with determining whether Student Loans Company funding was treated as public funding or not. This is because on the one hand the funding is referable to a student, but on the other, the funding never leaves public control and even the ONS treats student loans, in part, as public funding on the basis that around 45% of them are never repaid.

With this definition we now have the double-puzzle of (a) identifying whether SLC funding is “public funds”; and (b) even if it is not, whether a higher education institution is nonetheless subject to the procurement rules if it exercises functions of a public nature.

You can find out more and register for a Government webinar tomorrow at the following website.

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The Building Safety Act 2022 – how it will affect house builders

Blog | Residential Development

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Finally, nearly five years on from the tragedy at Grenfell in 2017, the Building Safety Bill has received Royal Assent, providing the construction industry with the Building Safety Act 2022 (“the Act”). The 262 page act is the first step towards lasting change in the construction industry, and the safety of dwellers across the UK for years to come. The various parts of the act will be implemented into law in stages over the next few years.

This update is the second in our series (our first having provided an introduction to the act here) and will provide a whistle stop tour of what we consider to be the key provisions of the act for house builders and their potential ramifications. Certainly, some of the new provisions have the potential to shock the construction and development industry given the significant changes involved.

Key provisions of the act

The act primarily applies to England, with certain provisions also applying in Scotland, Wales and Northern Ireland.

1. Stages of Project Management – the three ‘gateways’

The act has established three main ‘gateways’ that must be considered and satisfied during the design and development of higher-risk buildings (which is a building in England that is at least 18 metres in height or has at least seven storeys, and is of a description specified in regulations made by the Secretary of State (which hasn’t been specified as of yet)). These ‘gateways’ are used to determine whether a building can be occupied. The ‘gateways’ are:

  • Planning – At this stage, applicants for planning permission must satisfy that they have considered wider issues in relation to fire safety through the production of a fire safety statement. As such, fire safety considerations can no longer be an afterthought, but instead a decisive factor in relation to the construction of the building.

  • Pre-Construction – The regulator (which is the HSE as the Building Safety Regulator ‘the Regulator’) must be satisfied at this stage that the planning proposals comply with Building Regulations and address how a ‘golden thread’ of important safety information will be held as well as any other safety management expectations.

  • Completion – The regulator is given the opportunity to assess and determine whether the works to the high-risk building have been carried out in accordance with Building Regulations, and proceed to undertake a review of the completed works. If satisfied on all fronts, the regulator will then issue a completion certificate and the building will then be registered on the system. This must happen before any building can be occupied.

These ‘gateways’ are an essential requirement introduced by the act which create a necessary focus on safety management from the get go.

2. Defective Premises Act 1972 (DPA) – Scope and Limitation

Currently, the DPA imposes a duty on those involved in building and designing new dwellings to work in a professional or workmanlike manner, to use proper materials and to see that the completed dwelling is fit for habitation.  This duty is owed by all persons taking on such works and clearly extends to house builders.

The act introduces two fundamental changes to the DPA.

  • The act has widened the scope of the DPA to include refurbishment and rectification works which were otherwise excluded, providing those who are doing the work are doing so in the course of business. This ensures that the duties under the act apply to a wider scope of works, therefore providing a higher level of protection to occupants. This will only apply going forward (prospectively).

  • The act extends the limitation period under the DPA (which is expected to come into force within the next two months):

    • From the original six years to a much longer period of 15 years for those claims which arise after the act comes into force); and
    • From six years to an astonishing 30 years for claims which arose before the act became law.

This is a significant change from the previous six year limitation period, and should be recognised as an important shift that could have an array of potential ramifications that boil down to even the simplest of issues, such as the way in which project records should be kept.

3. Building Safety Levy

The act provides a new power to the Secretary of State to introduce a charge that will be payable by any developer when seeking permission to develop certain high-rise buildings. This charge is referred to specifically as the Building Safety Levy.

This levy will become payable at gateway 2, the pre-construction phase, and acts as a further incentive for developers to comply with the various safety requirements introduced by the act.

4. Building Liability Orders

The principle of a Building Liability Order was only introduced as a concept late in the day.

It was introduced to address the possibility that certain developers might escape civil liability for safety defects because they had carried out the works using a special purpose vehicle (SPV) or shell company.

Its effect is that the act will grant a power to the High Courts to allow them to extend specific liabilities for one company to any other associated companies and make them liable. The High Courts will have the power to do this where it considers that it is ‘just and equitable’ to do so.

In practice, this may have the effect of piercing the corporate veil, which is a significant development and potentially a worrying time for those developers that operate using SPVs.

Conclusion

The act will have far reaching consequences for house builders, particularly as it will be necessary to:

  • Ensure that it understands the requirements that will be necessary to ensure compliance under the three ‘gateways’, as well as factor in the building safety levy into its build cost analysis that will payable at gateway 2.

  • Ensure that its document retention policies are amended to take into account the changes to the limitation periods under the DPA. For those developments that may be subject to the retrospective limitation period change, house builders should ensure as far as possible to retain any relevant project records.

House builders will also need to consider the effect that building liability orders may have on its approach to procurement, although how this will operate in practice remains to be seen.

Moving forwards, we will keep you updated on when the various parts of the act will be implemented into law and any notable examples of the act in operation.

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What’s in a childs name? Your family holiday could be riding on it

Blog | Family

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The main holiday season is fast approaching and for the first time in a couple of years, many people will be taking their children off to sunnier climes.

As well as packing the usual beachwear, sun cream and passports (do check they are still valid and have the required time left on them!), it could be necessary to take a little extra paperwork along for those people whose surname is different to their child’s.

A different surname might arise for a host of reasons, such as a divorce and subsequent name change, keeping a maiden name on marriage or re-marriage, or having a child with a double-barrelled surname.

If a child, who is coming on holiday with an adult, does have a different surname, it’s important to be aware of the pitfalls of not having sufficient paperwork to show that the child is perfectly entitled to be on holiday with that person.

As well as the child’s passport, taking a paper trail to prove who their parents are is vital.  This includes the child’s birth certificate, as well as the parent’s, and if they have changed their surname upon divorce, the change of name deed and a copy of the final order (old decree nisi) is also necessary. Bringing along an expired passport, which proves the name change could also be helpful.

Obtaining the written consent of the other parent or anyone who has parental responsibility for the child is another wise move. A properly drawn up consent form, or if that’s not possible, a letter from the other parent, confirming their full contact details, that they are the parent of the child and that they have given consent for the holiday, along with their signature, should suffice.

Having an awareness of the questions that might be asked at the immigration desk is important, as it allows a level of preparation between parent and child. They might be asked the identity of the other parent, for example.

Consent is not legally required by the other parent if the holiday is for less than 28 days and a Child Arrangements Court order is already in place to confirm the child lives with the parent taking them on holiday, but it is always better to have it, rather than run the risk.

If the other parent won’t agree to the holiday, it’s not too late, speaking to a family lawyer about obtaining an order from the court is an option.

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Flexible working requests – will need to wait a little longer

Blog | Employment

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As the final restrictions lift following the pandemic and business recovers, employers were looking to the Queen’s Speech this week to see what important employment law changes were on the horizon in 2022, as part of the long awaited Employment Bill. One change expected which is very much as a result of the pandemic and employees being required to work from home, if they could, is the opportunity to request flexible working arrangements as a day one right.

Sadly, it looks like the wait for this will go on, as there was no mention of the Employment Bill in this latest Queen’s Speech. The Employment Bill has been long under discussion and one of the aims of the new Bill has been stated to give employees more confidence and negotiating power to request agile working, enabling them to perform their role flexibly from the outset, which has been proved in many cases to be entirely possible.

What is the current law?

Currently, employees must wait until they have completed 26 weeks’ service with an employer before they can make a flexible working request. If this is rejected, the employee must then wait 12 months before they can submit another formal request.

What was expected from the new bill?

The new Employment Bill intended to make this a right from day one and planned to remove the once-a-year request limit.

This doesn’t mean, however, that employees would have an automatic right to work flexibly, but it does mean they would be entitled to request to do so, immediately upon starting their new role.

Disappointingly, the Employment Bill was not included in the Queen’s Speech and so these planned changes still appear some time off.

What does this mean for employers?

When this bill does finally make its way through Parliament, if this intention to broaden access to flexible working is introduced, employers will have to tread carefully with flexible working requests, as they will face stricter requirements for rejection, and will have to propose alternative options rather than dismissing a request outright. Requests will need to be considered in full. Currently, there are eight reasons that employers can give to justify refusal, but it is anticipated that the number of valid reasons will be reduced.

Of course, employers have a business to run and it will be up to them to decide if the requested arrangements are viable. If an employer has reasonable grounds for rejection, it is possible to insist the job is performed as advertised, even when faced with an immediate request for flexible working.

And for employees?

Even with a new right under an Employment Bill (when this finally gets introduced) employees may still be nervous about setting off their employment on the wrong foot.

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Industrial action participation - protection from detriment cannot be read into TULR(C)A

Blog | Employment

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In a further case of real interest to those involved in unionised sectors of the economy, the Court of Appeal has now overturned the Employment Appeal Tribunal’s (EAT) decision that S.146 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULR(C)A), which provides protection to workers against detriment arising from union membership or activities, should be read as encompassing participation in industrial action.

The background of the case

Mercer v Alternative Future Group Ltd and anor

Mercer was a support worker at Alternative Future Group Ltd and a workplace representative for UNISON, her trade union.  Mercer was involved in planning and organising strikes and participated in media interviews in relation to them.

Mercer was suspended, and she was informed this was because she abandoned her shift on two occasions without permission and that she had spoken to the press without prior authorisation.  Mercer was issued with a first written warning for abandoning her shift.

Mercer made an employment tribunal claim under S.146 TULR(C)A, which protects workers from detriment associated with trade union membership or activities. The legislation does not expressly confer protection from detriment for participating in industrial action. An employment judge found that interpreting S.146 as extending to industrial action would go against the grain of the legislation.

Mercer appealed to EAT.  The EAT concluded it was possible to interpret S.146 compatibly with Article 11 of the European Convention on Human Rights, and therefore provide protection from detriment arising from taking industrial action, by adding additional words to the legislation.

The decision was appealed to the Court of Appeal.  The Court of Appeal restored the employment judge’s decision.

What are the key points in this case?

The effect of interpreting S.146 as extending to industrial action would go against the grain of the legislation and if parliament had intended for there to be a right to make a claim of detriment arising in respect of having taken industrial action, it would have expressly legislated for that fact.

Furthermore, under European Court of Human Rights case law, it is not established that a state’s positive obligations under Article 11 require that private employers should be unconditionally prohibited from treating workers detrimentally, in relation to having participated in industrial action.

What does this recent case highlight for employers?

This decision is an important one regarding the protection for workers taking part in industrial action, or rather the lack of it, and reinstates the legislated position that protection from detriment cannot be read into TULR(C)A in relation to participation in industrial action. It also provides clarity for employers, after a period of uncertainty as a result of recent case law development, and ultimately reduces the likelihood of meritorious claims arising from employees after a period of industrial action.

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We support new Muslim youth mentoring scheme

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Midlands law firm Shakespeare Martineau is supporting British Muslim charity Mercy Mission UK in launching a new mentoring scheme.

100 local businesses across Birmingham will take action to help young people from across the region, improving their life chances through confidence and resilience building.

The scheme will offer mentoring and work experience placements to Muslim youth across the city directly tackling the long term inequities they face as people of faith.Initially centred in Birmingham, those first 100 businesses will take part in the scheme championed by Shakespeare Martineau in partnership with Mercy Mission’s ‘Faith in Our Cities’ initiative.

Speaking at the recent launch event, Azim Kidwai, CEO of Mercy Mission UK, urged business leaders to find out more about the youth empowerment programme and shift the dial domestically for a generation of young people, marginalised through lack of cultural understanding and fit for purpose employment opportunities.

Mohammed Saqub, partner at Shakespeare Martineau and head of Islamic finance, said: “It’s estimated that 17% of UK prisoners are Muslim, despite Muslims making up just over four per cent of the UK population.

A core challenge is that there is an issue with young people heading for a life of crime, as they see little alternative in their future or simply not fulfilling their true potential. Increased mentoring – especially from people who speak and look just like them and share the same cultural heritage – could make all the difference in the path a person chooses to follow.

When I was at school in the centre of Birmingham, I was influenced by a lawyer who came into our school to talk about what he did. Without him, I’m not sure whether I would have chosen this path – his mentoring opened-up possible options for a career and I am passionate about doing the same for others.

Spearheading the scheme is local civil society leader Jehangir Malik OBE, from Mercy Mission UK. He said: “We are really excited about launching this new scheme and are very optimistic by the initial response we’ve had from diverse local businesses in Birmingham.

The project is co-created by young people and local businesses as part of an intergenerational approach to strengthening British Muslim civil society. We recognise the untapped potential of British Muslim youth and the positive role they can play in shaping and enriching our society.

To this end, we are focussing on creating a multi-faceted developmental approach that ensures that Muslim youth in Britain can fulfil their true potential by launching the Muslim Youth Connected Youth Futures Programme in Birmingham.

For more information about the Muslim Youth Connected Futures Programme, please visit Mercy Mission or get in touch with Jehangir Malik.

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Employment spring 2022 update: News in brief

Technical | Employment

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A quick round-up of recent employment law developments

Click below to jump to the relevant piece

Fire and rehire – Statutory Code of Practice

The government has announced that a new Statutory Code of Practice will be published on "fire and rehire" practices used to bring about changes to employees' terms and conditions. The government has been under pressure to address the use of fire and rehire for a while and has previously said it will not legislate. This announcement follows events surrounding the mass redundancies made by P&O Ferries, which took place without prior notice or consultation.

The Code of Practice will detail how businesses must hold fair, transparent and meaningful consultations on proposed changes to employment terms and will include practical steps that employers should follow. Tribunals and courts will be required to take the code into account when considering relevant cases, including claims for unfair dismissal, and will have the power to apply an uplift of up to 25% of an employee's compensation where the employer unreasonably fails to follow the code.

We understand a draft code will be published and representations, including from trade unions, will be considered in accordance with section 204 of the Trade Union and Labour Relations (Consolidation) Act 1992 (TULRCA), although no timescale has been given.

Digital fit notes

The Social Security (Medical Evidence) and Statutory Sick Pay (Medical Evidence) (Amendment) Regulations 2022 (SI 2022/298) came into force on 6 April 2022 enabling fit notes to be issued digitally.

Given the significant shift to virtual GP consultations since the outbreak of the COVID-19 pandemic, there has been increasing demand for fit notes to be provided in digital form.  The new regulations prescribe a new form of fit note, which will be used in parallel with the existing version of the form. The regulations remove the requirement for the fit note to be signed in ink and the new form of fit note no longer contains a signature box.

Employment tribunals road map

The presidents of the Employment Tribunals in England and Wales and in Scotland have published a new ‘road map’ for employment tribunal proceedings in 2022/23. The road map indicates that preliminary hearings will continue to default to video, and that this is likely to become permanent. However, the presidents wish to reduce the reliance on video, and intend to move towards greater use of in-person hearings, especially for final hearings of standard track and open track claims.

The majority of hearings across Great Britain are still taking place on a fully remote basis, and, in some parts of the country, over 90% of hearings are still by video. The presidents state that they want to bring that percentage down. However, they accept that, in some cases, a video hearing reflects the preferences of the parties and their representatives, and can be less costly and less disruptive to the lives of those participating.

Changes to immigration rules

The government has announced changes to the UK immigration rules. Key changes include the introduction of several new entry routes, including:

  • Global Business Mobility route. There are five new routes for businesses based overseas who wish to establish a presence in the UK.

  • High Potential Individual route. This route is for graduates of top global universities to come to work in the UK without a job offer.

  • Scale-up route. This route is for migrants with a job offer from a qualifying “Scale-up business” i.e. with an annualised growth of 20% or more in terms of turnover or staffing for a three-year period.

  • Representative of an Overseas Business route.

  • Skilled Worker route.

Compensation limits

This year's compensation limit increases are:

  • A week's pay (basic award / redundancy payment) - £571 (up from £544)

  • Maximum compensatory award - £93,878 (up from £89,493)

The new limits apply to dismissals occurring on or after 6 April 2022.

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Employment case law update | Spring 2022

Technical | Employment

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Here we take a quick look at some key employment case law decisions from recent months.

Click below to reach your chosen case

Macken v BNP Paribas

Ms Macken was employed as a financier at BNP Paribas from 2013. She remains an employee but was placed on long-term sick leave from July 2018. She brought three employment tribunal claims against BNP Paribas in 2017, 2018 and 2019 in relation to various issues.

In March 2019, the employment tribunal upheld Ms Macken’s claims against BNP Paribas for direct sex discrimination, victimisation and equal pay arising from conduct by senior colleagues. This included one of Ms Macken’s colleagues placing a witch’s hat on her desk and another colleague dismissing her using the phrase “not now Stacey”, which was later copied by other colleagues. Another of her senior colleagues would answer the phone with greetings such as “hi sexy”. Ms Macken’s relationships with her senior colleagues worsened after she raised a complaint internally regarding inequality in pay and bonuses and resulted in her performance ratings worsening. In March 2021, a remedy hearing took place in respect of Ms Macken’s successful claims.

The Employment Tribunal awarded Ms Macken a staggering £2,081,449.70 in compensation, one of the largest ever awards made by an Employment Tribunal, and a timely reminder of the potential cost of discriminatory behaviour.

Breaking down each of the heads of loss, the tribunal awarded Ms Macken a total of £614,461.95 for past losses, comprising of £401,797.86 for equal pay and £212,664.09 for personal injury. In relation to the award for personal injury, the tribunal held that, as Ms Macken had been on long-term sick leave due to the discriminatory treatment she suffered at BNP Paribas, and as there was no intervening act which broke the chain of causation, Ms Macken was entitled to compensation for losses arising from being ill.

Furthermore, Ms Macken was awarded £860,120.11 for future losses. While the tribunal acknowledged that Ms Macken may be able to work in the future, it was accepted that she would never be in a position to return to her role at BNP Paribas, nor would she be likely to obtain a new position that paid her as much as she was entitled to through her Private Health Insurance (PHI) with BNP Paribas.

The tribunal concluded that, as Ms Macken would continue to satisfy the definition of ‘incapacity’ under the PHI until she retired, the best way for her to mitigate her losses was by remaining employed by BNP Paribas, but not carry out any role, and continuing to receive the PHI benefit for 15 years, until she was 65.

An additional £124,315 was awarded as compensation, which included an injury to feelings award of £35,000 and aggravated damages of £15,000. The tribunal also made adjustments of £479,789.57, including an ACAS uplift of £317,016.34. Furthermore, the Employment Tribunal ordered BNP Paribas to carry out an equal pay audit under regulation 2 of the Equal Pay Audit Regulations 2014.

Kocur v Angard Staffing Solutions & Another

Mr Kocur was employed by Angard Staffing Solutions (Angard), an employment agency. Angard is a wholly owned subsidiary of the Royal Mail, which provides agency workers exclusively to Royal Mail to assist with fluctuations in demand for postal workers. Mr Kocur was supplied to the Royal Mail by Angard to work in its Leeds Mail Centre in an operational post grade (OPG).

Vacancies for permanent positions arose at the Leeds Mail Office. These vacancies were advertised on the notice board and were first offered to OPGs who were either already in permanent posts or were reserve class OPGs. Mr Kocur was told that agency workers were not eligible to apply for these posts but could apply when the posts were advertised externally and that when he did apply, he would be in competition with external applicants. Mr Kocur brought a claim under regulation 13(1) of the Agency Workers Regulations 2010 (AWR). The Employment Tribunal upheld Mr Kocur’s claim stating that the right to receive information extended to an implicit right to apply for vacant posts.

However, on appeal, the Employment Appeal Tribunal (EAT) disagreed and held that regulation 13(1) entitles agency workers to be notified and given the same level of information about the vacancies as directly recruited employees. However, regulation 13(1) did not mean that agency workers have a right to be entitled to apply and be considered for internal vacancies on the same terms as directly recruited employees. Mr Kocur then appealed to the Court of Appeal.

The Court of Appeal unanimously upheld the decision reached by the EAT and dismissed Mr Kocur’s appeal. In its decision, the Court of Appeal concluded that on a natural reading of regulation 13(1) of the AWR, it does not provide agency workers with anything other than the right to be notified of a vacancy. The Court of Appeal rejected Mr Kocur’s arguments and concluded that there was no basis for implementing a broader interpretation of regulation 13(1). Furthermore, the Court of Appeal agreed with the EAT’s analysis that the consequences of giving agency workers a right to apply for, and be considered for, vacancies would be to prevent the hirer from being able to give preference to in-house candidates. If the legislator had intended this to be the case, it would have been expressly set out in the legislation.

R (on the application of Palmer) v Northern Derbyshire Magistrates’ Court

West Coast Capital (USC) Limited (USC) was placed into administration by its director on 13 January 2015, when Mr Palmer was appointed as one of the administrators. (Two others were also appointed, but due to the division of responsibilities, it resulted in only Mr Palmer being subject to proceedings.)

On the same date, a pre-pack sale of the business occurred, which expressly excluded a warehouse. The following day, Mr Palmer notified the 84 warehouse employees that they were at risk of redundancy and that a consultation meeting would be held later that day. Around 15 minutes later, the employees were handed a letter advising them that, following the consultation, USC could not identify any alternative to redundancy and they were dismissed.

On 30 January 2015, the Redundancy Payments Service asked the administrators whether a form HR1 had been lodged. Due to an apparent oversight, form HR1 was not lodged by the administrators until 4 February 2015. In July 2015, the Secretary of State issued proceedings against Mr Palmer (and the director) for failure to follow redundancy procedures under s.194 TULRCA and, specifically, failure to lodge form HR1 with the Redundancy Payments Service in the required timeframe.

The Magistrates’ Court found that Mr Palmer (as administrator) could be prosecuted for offences under s.194 TULRCA. Mr Palmer sought a judicial review of that decision to ascertain whether it was in theory possible to prosecute an administrator under s. 194. The Court held that administrators are capable of being prosecuted under s.194 TULCRA. From the date they are appointed, only they are in a position to notify the Redundancy Payment Service as they are carrying out a managerial function in place of the directors. The case will now proceed in the Magistrates’ Court to determine whether Mr Palmer committed a criminal offence.

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Restrictive covenants in practice

Blog | Employment

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What are restrictive covenants?

Whether an employee has left an organisation and is looking to set up on their own or join a competitor, a departing employee is likely to have acquired an insight into an employer’s confidential business operations, often helping them gain an unfair competitive edge.

Restrictive covenants are clauses that are incorporated into a contract of employment that seek to restrict the actions of an individual after their employment has terminated. They play an important role in protecting an employer’s commercial interests.

Broadly speaking, restrictive covenants fall into the following categories:-

Non-solicitation of clients/ customers

These covenants prevent an employee from attempting to persuade clients or customers to move their business. Usually, solicitation occurs when a former employee contacts a client to encourage that client to move its business from the former employer.

Non-dealing with clients/ customers

Like non-solicitation clauses, except these go further and try to prevent the employee from dealing with clients or customers even where they didn’t try to solicit them.  These are more restrictive than non-solicitation covenants and therefore are at greater risk of being found to be unenforceable.

Non-competition

This covenant seeks to prevent an employee from working for a competitor for a set period of time after termination of their employment. This kind of covenant can typically span between 3 – 12 months depending on the ex-employee’s seniority and/or access to confidential information.

Non-poaching of employees

These restrictive covenants prevent an employee from approaching former colleagues and persuading them to join a new business.

So when is a restrictive covenant enforceable?

Restrictive covenants are a restraint of trade and anti-competitive.  As a result, as a general principle, courts will not enforce restrictive covenants where the scope of the restrictions is wider than the employer needs to protect its legitimate business interests.  For this reason, it is usually better for an employer to have narrow covenants that are likely to be enforceable, as opposed to wide covenants which may look like they offer fantastic protection but which are actually unenforceable.

The courts will consider a whole host of factors in this regard, including the following:

  • Does the restriction last for a reasonable amount of time? 

  • Is the restrictive covenant limited in geographic scope? The wider the geographical area in which the employee is prevented from working, the harder it will be to justify the clause (albeit increased globalisation has made this factor less important in many industries).

  • Is the scope narrowly drafted and does it reflect the specific circumstances of the employment?

  • Did the employee receive a benefit in return for accepting a restriction?

  • The seniority of the employee.

  • Did the employee have access to confidential information or clients?

  • The loyalty of customers in the relevant market.

  • The standard industry practice in the context of a reasonable restrictive covenant.

  • Whether the restrictive covenant was reasonable at the time the contract was entered into i.e. when the employment started or when a new contract was signed by the employee. This is why it’s so important to update covenants as employees progress through an organisation.

A recent case

Law by Design Ltd v Ali [2022] EWHC 426 (QB) – Ms Ali was an experienced employment lawyer who worked for Law by Design Limited, which was a niche practice based in Manchester. The practice provided advice to clients within the healthcare services sector, particularly specific NHS entities in the North West of England and one in Hertfordshire. The majority of Ms Ali’s time was in the provision of employment advice to those entities.

Ms Ali’s service agreement, including the covenant, had been agreed between the parties as recently as 2021, less than four months before Ms Ali resigned.

The restriction required Ms Ali not to be “involved in any capacity with any business concern which is (or intends to be) in competition with any Restricted Business”. Restricted Business was defined as “those parts of the company with which the employee was involved to a material extent in the 12 months before termination”

The High Court found the non-compete covenant in the contract of employment enforceable.

The High Court noted that operation of the covenant was limited to parts of the firm in which Ms Ali was involved to a material extent proximately to her departure from the firm. This device ensured that the covenant was reasonable in the scope of its operation. In relation to duration, 12 months was considered reasonable by the court (as opposed to a shorter period) because 12 months would be reasonably necessary to find, successfully recruit, and then train/integrate a lawyer in a small firm working in a niche area in Manchester.

If you would like any advice on the drafting or enforcement of restrictive covenants, please contact a member of the employment team.

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Voluntary redundancy – Are you really safe from an unfair dismissal claim?

Blog | Employment

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Until recently it is fair to say, that where a business is having to consider making compulsory redundancies and employees are given the ability to volunteer for redundancy (often on the basis of an enhanced redundancy payment), the likelihood of an unfair dismissal claim being presented is somewhat negligible.

However, a rather large shadow has been cast over that general proposition by the recent case of White v HC-One Oval Ltd.  While the facts of this case are slightly unusual for most voluntary redundancy scenarios, it does provide us with a refreshing reminder that we should not assume that voluntary redundancy is a risk free option.  It should not be forgotten that voluntary redundancy is after all a dismissal and not a resignation.

Ms W worked part-time as a receptionist. She raised a grievance alleging that she had not received an acting up allowance.  However, shortly after her grievance was submitted, HC-One announced that it was reducing the number of employees carrying out reception and administrative work. Ms W was provisionally selected for redundancy, and she subsequently requested voluntary redundancy, which was agreed.

Because Ms W had requested voluntary redundancy, and had left the business, HC-One decided that they would not progress her grievance.

Having left the business, Ms W submitted a claim for unfair dismissal.  She argued that the redundancy was a sham on the basis that HC-One had taken on a new full-time receptionist several months before the redundancy exercise, and that this person had been retained to do both reception and administrative work. Ms W alleged that she had been targeted because the company wanted to get rid of part-time staff and also because she had raised a grievance.

As part of the defence, HC-One submitted an application to the employment tribunal (ET) asking for her claim to be struck out because it had no reasonable chance of succeeding (given that she had volunteered for voluntary redundancy).  The application was successful and the ET struck out her claim.

Ms W appealed to the employment appeal tribunal (EAT) and was ultimately successful.  The EAT found that the tribunal should not have struck out the claim.  If Ms W's account of the background to the redundancy was accepted (which the ET did not consider), the facts known to the decision maker (i.e. the dismissing manager) might well be found to include matters other than just Ms W's request for voluntary redundancy. In addition, Ms W alleged that the redundancy process was a sham, and the ET would therefore need to consider the fairness of the process, before making any final decision.

Learning points from this scenario

In this case, HC-One did not use a settlement agreement as part of the voluntary redundancy arrangement.  Had they done so, then clearly Ms W would have had a much more difficult task of bringing a claim.  Settlement agreements settle most statutory and contractual claims (like unfair dismissal and discrimination) and that is why they can be so useful where the business wants to avoid any risk of those claims. However, it is not always necessary to use settlement agreements for voluntary redundancy arrangements, but where (as in this case) there are outstanding grievances or complaints around the redundancy process generally, then you may want to consider making completion of a settlement agreement a conditional part of the voluntary redundancy exercise (particularly where the employee has over two years’ service).

Settlement agreements do usually come at a slightly additional cost to the business, and so where it is decided not to use those agreements, you should ensure that a fair redundancy process is adopted (making sure that there is some consultation with those selected) to ensure that the employee is given an opportunity to raise any specific queries, and any internal procedures (such as grievances) are progressed and resolved. In short, it may not pay to cut any procedural corners during the redundancy exercise if you choose not to use a settlement agreement.

For the most part, most businesses will be able to assess the risks of specific individuals, and for those that present a greater risk, use a settlement agreement to avoid any problems arising later.

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'Invisible’ trade marks. Is it possible to protect or infringe something you can’t see or touch? Yes it is

Blog | Intellectual Property

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The complex and constantly evolving art of SEO (search engine optimisation) has kept marketers and content writers busy in recent years but now lawyers are getting involved too.  A recent trade mark infringement case between US dating site group Match Group, owner of Tinder and OkCupid, and smaller UK dating site Muzmatch, a Muslim dating app, has centered on the use of trade marked words and phrases that appear in a company’s SEO strategy and metadata. The judgment was handed down on 20 April 2022.

It is not uncommon for businesses in a similar marketplace to employ various tactics to take advantage of a competitors brand presence but there has been an increase in companies using competitors’ trade marks in metadata and SEO strategies, in an attempt to compete directly with each other online.

Incorporated into copy or buried deep in code, these are often referred to as ‘invisible’ trade marks, creating a grey area when it comes to infringement.  As a relatively new ‘marketing’ tactic, the impact of using this approach for both parties involved is only now being fully understood and as it is still comparatively new, lawyers are now taking a closer look.

The background

Search engines use algorithms and will crawl and trawl web pages to find keywords to help with page rankings.  Incorporating invisible trademarks into page content can drive traffic to a site and in this case, Muzmatch had created individual landing pages for approximately 5,000 keywords relating to Muslim marriage or Muslim matchmaking, which then directed browsers to the organisation’s main page.

This approach proved an incredibly effective marketing tool for the business, with an estimated 32,770 searches of three specific URLs leading to 11,725 click-throughs to the landing pages on the Muzmatch website.

Other companies have also hidden trade marked keywords on their websites by adding them in the same colour text as the website background so they cannot be seen, or by making the font size so small that it looks like a simple black line until the user zooms in. While the end user is unlikely to see them, search engines will.

Another way for companies to use trade marks ‘invisibly’ is by incorporating them into metadata and metatags, which is information used by search engines to identify the content of a website.

Both of these strategies are employed by many businesses very successfully but it can also open opportunities up for legal action too.  Match.com’s central argument was that Muzmatch used the word ‘match’ in its SEO and metatags to boost web traffic and therefore piggyback off the Match.com name. The word ‘match’ unsurprisingly appears in multiple registered trade marks owned by Match.com.

What is the current law?

Current law does not explicitly cover specific use in a digital setting – so law makers are applying existing trade mark law to new situations.    As the law is not distinct to a digital setting, the facts of each potential case of possible infringement are absolutely key and, as businesses are finding out, there are a vast number of variables involved – such as the wording of the trade mark itself, the goods or services on offer, the consumer demographics, similarity of the mark which is actually registered to the one used, how it is used, and even the trading history and size of the parties involved. Muzmatch’s response argument was primarily based on the trade mark itself, claiming that they had used the word ‘match’ in a purely descriptive sense, yet they were still found to have infringed Match Group’s trade marks incorporating the word ‘match’.

While it is entirely possible (and common) to trade mark an everyday phrase or word, it is highly unlikely that any company could prevent it ever being used elsewhere – that would provide too wide a scope for protection. However, as Muzmatch had included the word ‘match’ in its SEO strategy it was decided that it was using it in such a way as to potentially confuse a customer into thinking Muzmatch was affiliated with match.com - and therefore infringed its trade mark.  Such a finding is more likely in circumstances such as this where the goods/services offered by the potential infringer are identical to those for which the trade mark is registered.

Muzmatch’s second argument revolved around concurrent trading history. As the business had been trading since 2011, it felt that there had been sufficient time for Match Group to bring a case during this period, if it truly believed infringement had taken place. There is precedent for the ‘honest concurrent use’ defence, which briefly provides that if two companies use the same or similar words or phrases concurrently for a sufficiently long period, that mark may have come to indicate the goods or services of either of those parties.  Either company may then be entitled to register the mark notwithstanding that the other company had also used the mark, and may be able to defend an infringement claim brought by the company. It was however ruled in this case that this defence did not apply to Muzmatch as Match Group had filed the trade mark in 1996, 15 years before Muzmatch was formed and started trading.  It was found that they were therefore technically infringing from the beginning of their trading.

How can companies mitigate the risk of this happening?

There are a number of ways that companies can minimise the chance of legal action when planning their SEO and metadata marketing strategies. If there is any possible chance of brand confusion, putting a disclaimer on the website clearly stating there is no affiliation can help to sway a judge in the business’ favour should a competitor accuse them of infringement. Beware – it must be used in good faith and if found to be buried in the small print or is difficult to find then this may be viewed by a court as deliberately obscuring it, allowing for confusion.

Companies should also consider consulting a legal specialist before deciding and embarking on a SEO marketing strategy. As mentioned there are many variables and seeking legal advice ensures the correct due diligence has been carried out from the beginning, for example checking or clearing the metatags and keywords to be used, ensuring they will not be infringing another company’s trade marks.

This case could be viewed as a David v Goliath style situation - larger companies, such as Match Group with more time and deeper pockets bringing action against possible smaller infringers, who may not have the resources to engage in a costly legal battle.

The term ‘ invisible’ trade marks is also slightly misleading as while they are hidden from a user, any analytics software can find them and any code can be found using an internet browser. Therefore ‘invisible’ is not be confused with invincible and businesses should proceed with caution.

We wait to see how the law surrounding trade marks evolves to fit the digital world of today. With current decisions in this area primarily based on case law, they are subject to change and are always fact specific, creating a distinct lack of certainty. Many past decisions have also been influenced by EU laws, which now of course become less relevant in the years following Brexit.

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