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This article was first published by Institute of Hospitality in October 2012, and is reproduced by kind permission.

Introduction

Legionnaire’s disease is an uncommon but potentially fatal illness caused by a bacterium called Legionella pneumophila. The disease is contracted by inhalation of water droplets or spray-mists contaminated by Legionella. According to the United Kingdom’s National Health Service (NHS), Legionnaires’ disease is “three times more common in men than women (68.1% cases on average are male) and it mostly affects people who are over fifty years old”. People are more susceptible to the disease if they are current smokers, former smokers or have had problems with their lungs. It is not caused by drinking contaminated water and it does not spread from person to person.

The majority of cases reported are usually isolated but sometimes outbreaks can occur. A recent outbreak in Stoke-on-Trent infected nineteen people all of whom were aged from their late forties to their mid seventies. Of the nineteen people infected, one person died. The NHS estimate that in England and Wales, 10-15% of people who contract Legionnaires’ disease will die from the condition.

Legionnaires’ may not develop until 2-14 days after exposure, therefore, it is very important to be aware of the disease’s symptoms which may include:

• High temperature
• Cough
• Muscle pains (myalgia)
• Headache
• Pneumonia
• Very occasionally diarrhoea and signs of mental confusion

Although the NHS confirms that there were “345 reported cases of Legionnaires’ disease in England and Wales in 2009, which resulted in 43 deaths”, the number of cases may be higher because many cases of pneumonia might not be tested for the disease.

The duty of care

Employers, building owners and occupiers need to be aware of the dangers and possible criminal and civil proceedings which could result from an outbreak of Legionnaires’ disease. Recent high profile incidents in the UK have occurred in Edinburgh (an estimated 100 cases), Barrow-in-Furness and Hereford.

Further afield, an outbreak in Chicago in 2012 resulted in fatalities arising from alleged exposure at a JW Marriott Hotel. Whilst the cause is still under investigation, reports suggest a decorative hotel fountain may be the source of the Legionella.

Purpose-built water systems are often the culprit when exposure to Legionella occurs because the water is warm enough – usually between 20°C and 45°C – to encourage bacterial growth. This growth of bacteria is also often found in bodies of stagnant water such as those stuck in shower pipes. It is therefore important for water to be kept flowing.

Does your hospitality business include any of the following water systems which could harbour Legionella? If so, there are measures that must be taken to avert the risk of Legionnaires’ disease.

• Spa baths, hot tubs, whirlpool baths and spas
• Hot & cold water systems including cisterns, water heaters and storage tanks
• Turkish baths and saunas
• Ornamental fountains, particularly indoor fountains
• Humidifiers and humidified food displays
• Cooling towers
• Evaporative condensers
• Air conditioning systems
• Water used for domestic purposes in buildings such as hotels or care homes

Responsibility of duty holders

Under general health and safety law, duty holders are obligated to consider risk from Legionella that may affect staff or members of the public and take suitable precautions. The Health and Safety Executive (HSE) states that, as an employer or person in control of premises (for example, owners and landlords), it is necessary to:

• Identify and assess sources of risk through risk assessment;
• Prepare a scheme (or course of action) for preventing or controlling the risk;
• Implement and manage the scheme – appointing a person to be responsible;
• Keep records and check that what has been done is effective; and
• If appropriate, notify the local authority that there is a cooling tower on site.
• Have a written scheme to outline how the risk from Legionella is be to controlled which should include:
• An up-to-date plan or schematic diagram of the system;
• Details of the person responsible for carrying out assessment and managing its implementation;
• Instructions on the safe and correct operation of the system;
• Details of the control methods and precautions to be used;
• Types and frequency of checks that will be carried out. (Source: HSE)

Case in point

In 2011, after the death of a guest in 2008, a golf and leisure resort near Dundee, Scotland, was fined £120,000 for failing to control the Legionella bacteria in their hot tubs and water systems. The resort’s Managing Director had wrongly assumed that the bacteria thrive in dead pipe work or old systems only; he thought that because his equipment was new and in constant use, there would be no risk. The Company had incorrectly believed that because it had followed the manufacturer-supplied guidelines it had met Health and Safety obligations.

The investigating officers found that the resort had failed to carry out suitable and sufficient risk assessments; it had inadequate control measures for monitoring the temperature of its water systems; it had failed to sufficiently clean its shower heads; and had not appointed an appropriately trained ‘responsible person’ to take operational responsibility for meeting these standards. This is a cautionary illustration of the maxim: ignorance of the law is not a defence against it!

Legislation & codes

The following UK legislation outlines the responsibilities of businesses in maintaining safe premises for staff and the public:

• The Control of Substances, Hazardous to Health Regulations 1999 (COSHH)
• The Management of Health and Safety at Work Regulations 1999
• Health and Safety At Work Act 1974
• The Reporting of Injuries, Diseases and Dangerous Occurrences Regulations 1995 (RIDDOR)
• The Notification of Cooling Towers and Evaporative Condensers Regulations 1992
• Corporate Manslaughter and Corporate Homicide Act 2007
• HSE: Approved Code of Practice & Guidance (L8)

Penalties for breach

Legionnaire’s disease is a high-profile issue that attracts harsh penalties. The HSE is very active in this area and maintains a Register of Prosecutions, which can be found here.

On conviction, fines have ranged from hundreds to hundreds of thousands of pounds. Additionally, the implications of any deaths that arise from a duty holder’s breach have become more acute for businesses since the Corporate Manslaughter and Corporate Homicide 2007 Act (CMCHA) came into force in February 2009. All businesses should note that sentencing guidelines indicate that fines are assessed by reference to annual turnover and severity of the case, which could be measured in millions of pounds. The latest fine was for £480,000 plus prosecution costs of £84,000.

Whilst individuals cannot be prosecuted under the CMCHA, directors and managers can still be fined and even imprisoned under Health and Safety legislation, or under common law if a fatality has occurred as a result of an individual’s gross negligence. In addition to criminal responsibility duty holders could also face substantial claims for damages in civil proceedings in respect of injuries and deaths arising
from their negligence or breach of statutory duties.

Prevention and Control of Legionnaires’ Disease

Risks from Legionella in water systems can be controlled through careful planning, a risk management policy and accompanying document, competent staff and attention to proper control strategies.

The UK’s Health & Safety Executive (HSE) provides extensive information regarding the prevention of Legionnaire’s. The HSE confirms that, when dealing with designers, manufacturers, water treatment companies and suppliers of equipment, it is essential to make sure that equipment for water services is designed and manufactured properly to ensure the water systems can be maintained and cleaned easily. Consideration should always be given to the type of water system needed – for example: using a cooling tower with a dry air cooled system offers less risk than using a wet cooling tower.

If using chemical cleaning products or services for water treatment check with the supplier to ensure that these are effective at controlling Legionella and that they can be used safely by housekeeping and maintenance staff. The regular cleaning, maintenance and treatment schedules applied based on manufacturers’ recommendations should ensure good hygiene and avoid the growth of bacteria.

To maintain water services, checks should include:

• Ensuring that the release of water spray is properly controlled
• Avoiding water temperatures and conditions that encourage Legionella
• Ensuring that water cannot stagnate anywhere in the system by keeping pipe lengths as short as possible or by removing redundant pipe work
• Avoidance of materials that encourage the growth of Legionella
• Keeping the system and water in it clean
• Treatments of water to either kill Legionella or limit its ability to grow

A Code of Conduct for service providers is available from the HSE if employing contractors to undertake any work relating to water service systems.

In the Case of an Outbreak

In the UK, local authorities have special plans for dealing with major outbreaks of infectious disease. Outbreaks are usually investigated by an ‘Outbreak Control Team’, whose purpose is to protect public health and prevent further infection. The HSE or local authority Environmental Health Department may also be involved in investigating compliance with health and safety legislation.

To obtain further support regarding preventing or addressing the risk of Legionnaires’ and Legionella, the Further Resources section offers links to detailed guidance.

This guide was prepared by Alan Davies, Partner at Pitmans LLP the Thames Valley’s leading law firm, with a specialist Hospitality team that deliver expert legal advice direct to the sector. For further information on this article, please contact:

Alan Davies
Partner, Pitmans LLP
T: 0118 957 0300
E: alandavies@pitmans.com

Further Resources

Chartered Institution of Building Services Engineers (CIBSE)
www.cibse.org

Controlling legionella in nursing and residential care homes (2009). HSE
www.hse.gov.uk/pubns/indg253.pdf

European Legionnaires’ Disease Surveillance Network (ELDSNet) – carries out surveillance of Legionnaires’ disease in EU Member States, Iceland and Norway.
www.escmid.org/research-projects/study-groups/legionella-infections/

Health and Safety Executive (HSE) UK website for Legionnaires’ disease
www.hse.gov.uk/legionnaires/

Information for Owners and Managers of Hotels and Other Accommodation Sites: Minimising the Risk. The European Working Group for Legionella Infections (January 2010). HPA.
www.hpa.org.uk/webc/HPAwebFile/HPAweb_C/1274089027886

Legionnaires’ disease: A brief guide for duty holders (2012). HSE.
www.hse.gov.uk/pubns/indg458.htm

Legionnaires’ disease: Essential information for providers of residential accommodation (2003). HSE.
www.hse.gov.uk/pubns/indg376.pdf

Legionnaires’ Disease HPA & HSE Guidance: Management of Spa Pools: Controlling the risk of Infection (Section 1) and (Section 2). HPA
www.hpa.org.uk/Publications/InfectiousDiseases/InfectionControl/0603ManagementofSpaPoolsControllingRisksofInfection/

Legionnaires’ disease: The control of legionella bacteria in water systems. Approved Code of Practice and guidance (2012). HSE. www.hse.gov.uk/pubns/priced/l8.pdf

Legionella Control Association
www.conduct.org.uk

Managing health and safety in swimming pools (2003). HSE.
www.hse.gov.uk/pubns/books/hsg179.htm

Water Management Society
www.wmsoc.org.uk

DISCLAIMER
This brief is intended as a guide only. While the information it contains is believed to be correct, it is not a substitute for appropriate professional advice. The Institute of Hospitality can take no responsibility for action taken solely on the basis of this information.

Re-published from the Pitmans Times 2012

Franchising presents new opportunities for growth according to Pitmans Partner Tim Clark. Tim, who works out of both the firm’s Reading and City of London offices, says that franchising offers real growth potential in an otherwise challenging British High Street.

Tim says: ‘For those looking to build existing brands by accelerating store openings or for independent companies looking at taking a larger single franchise opportunity, this is an area that has genuine potential on the High Street. Businesses should be realistic about growth, but at the moment this is one of the few areas where there is still unrealised potential.’

Major High Street chains such as Mothercare are currently looking at moving towards a franchise model in order to reduce central costs, thus helping to open up the market. Overseas brands also continue to view the UK High Street with interest particularly in the QSR – quick service restaurant – sector.

Tim adds: ‘At Pitmans we are ideally placed to assist any business in looking at the franchising model, whether setting up a master franchise or building a portfolio of franchised outlets. From real estate and IP to employment and corporate work, we are a one-stop shop for anyone looking to grow and expand their business this way.’

Tim Clark
Partner
T: 0118 957 0264
E: tclark@pitmans.com

Re-published from the Pitmans Times 2012

Sally Britton and Philip James report on how retailers have adapted to the rise of online shopping – and how some haven’t.

What is a retailer? A huge department store that dominates the High Street, or someone like Amazon? The truth is both are retailers – one a traditional bricks and mortar kind, the other existing only online, although obviously supplied by large warehouses up and down the country and an enormous supply chain.

And while some brands, like retail giant John Lewis, happily exist both on and offline , some brands, like Primark, have chosen not to offer an online retail portal, instead concentrating on getting footfall into stores. Tesco and the big four supermarkets have made huge investments in online shopping and home delivery in order to bridge the two worlds. Others such as Net a Porter have focussed specifically on an online concierge model to meet the needs of those who either don’t have time to take to the streets or who can’t wait till Saturday.

And brands can fall into two camps, those that do online and those that do not. However, this is perhaps too simplistic. For instance, some brands with luxury portfolios such as Richemont and Saville Row, such as tailors H. Huntsman & Sons, may favour tradition and are therefore appear cautious to develop a digital offering. It is fair to say that most brands need to ensure they are extending their digital presence and presenting something different in terms of delivery, price or choice over their High Street offering. However, this doesn’t necessarily mean an online retail store. It could be a Facebook page or Twitter following, or, alternatively, some form of endorsement or sponsorship deal with a celebrity that allows a brand to influence. Even if a brand doesn’t feel an online presence fits with its brand, it should be aware all the more of how to restrict its suppliers, ambassadors and employees from damaging its online reputation.

An online strategy is no longer an afterthought – it must sit at the heart of all business planning and customer service, whether you are a big retailer or small. And while it may cost a huge amount to build a new store, it may not be as expensive as you may think to develop a digital retail channel.

• Brands contribute £15bn annually to the UK Economy
• UK e-retail sales reached £68.2bn in 2011, with 16% growth in 2011, and are forecast to grow a further 13% in 2012
• E-retail now accounts for 17% of total retail sales in the UK
• The digital commerce market provides employment for over 730,000 people in the UK
• UK sales via mobile devices have grown by almost 5% in just two years
• More than one billion parcels are shipped from online purchases each year in the UK

Pitmans acts for a wide variety of retailers, brands and designers, including the British Fashion Council.

Sally Britton
Partner
T: 0207 634 4623
E: sbritton@pitmans.com

Philip James
Partner
T: 0207 634 4655
E: pjames@pitmans.com

Re-published from the Pitmans Times 2012

Denise Fawcett looks at how retailers can build a successful future out of current market conditions.

With high profile casualties still visible on the High Street, mid-market brands need to boost their offering and explore additional revenue generation through online and other marketing activities and consider diversification.

The market has become increasingly polarised with top-end brands doing well and value-based retailers also performing strongly. Yet in the UK we still have an over proliferation of mid-market brands which do not do enough to stand out from the competition around them. And in today’s market that’s bad news.

Some retailers have chosen to develop sub-brands in order to cover all bases (the big four supermarket’s premium and low cost own-label ranges are the prize example of this) but not everyone can do it. The focus then needs to come down to core activities such as customer and store experience, style and value. All retailers can concentrate on these aspects whoever they are.

Ensuring goods are of the very best quality or represent real value for money sounds like basic stuff but some mid tier retailers have still not quite got this figured out. They are the ones who will face a very uncertain future as they continue to lose market share to their competitors. Regular sales and cut-price deals are not always the answer since this can devalue a brand. Brands that market themselves as cool and exclusive can also become the victim of their own popularity when they become accessible to all.

Big shopping centres continue to do well as people also look for choice and convenience, which traditional High Streets sometimes lack. But as in any marketplace, those who get the basics right will continue to be successful. Customers want to know where they stand. They don’t want surprises or to be let down by brands that say one thing but deliver something else. Keep things simple, focus on what the brand is supposed to stand for and make sure it delivers what it promises.

Denise Fawcett
Partner
T: 0207 634 4642
E: dfawcett@pitmans.com

AIM-listed retail ERP (enterprise retail planning) and EFT (electronic funds transfer) software solutions specialist to the fashion sector, Prologic plc, has been sold to a company with the same ultimate controlling shareholder as US-based Versata Enterprises, Inc. The transaction delivered shareholders a 46% premium over the share price prior to the announcement of the Offer.

Established over 25 years ago, the Berkhamsted, Hertfordshire based retail ERP/EFT firm which provides integrated merchandising, warehousing, distribution, allocation, sourcing and point of sale into one single central database, boasts an impressive client portfolio including leading fashion labels Ted Baker, Paul Smith, T.M. Lewin and Fat Face. Prologic also built strategic alliances and partnerships with Oracle Corporation, Hewlett Packard and many others.

Prologic joins Versata’s corporate family of 22 enterprise software companies acquired over the past five years. With a global presence covering 45 countries, Versata solves the most complex business problems for the world’s largest organizations. West Hill acted as financial advisor to ESWC and Atlas Technology Group introduced ESWC to Prologic and acts as a financial advisor to the Versata corporate family.

Stephanie Perry, Corporate Partner at Pitmans LLP has a long-standing relationship with Prologic’s management team. Pitmans had previously supported the Prologic management team through an MBO in 1999 and their later admission to AIM in 2004.   Pitmans were therefore the logical appointment to support the Company through its proposed strategic review announced in late 2011.

The Board of Prologic Plc unanimously approved a bid by ESWC on 29 March 2012, and this was subsequently declared wholly unconditional following 98.7% shareholder acceptances on 24 April 2012.

Commenting on the transaction, Tom Fischer, Chief Executive of Prologic said: “We were delighted with Pitmans’ diligence and expertise which enabled us to complete this transaction more quickly and efficiently than we had anticipated.

Of the deal, Fischer commented “The Prologic Board is pleased to have agreed terms with ESWC on an Offer which represents an attractive premium to both current and recent market prices, particularly given the current difficult macroeconomic climate and the challenges being faced in the retail sector in general.” He continued “Prologic’s business is expected to benefit both financially and commercially.”

Stephanie Perry commented that: “We are delighted for Prologic and have had the pleasure of working alongside their management to see them grow, develop, float and now be acquired by an affiliate of a very large and successful US-based IT specialist.”

Pitmans’ team consisted of Corporate Partner Stephanie Perry and Corporate Solicitor Carolyn Butler.

Leading law firm Pitmans is delighted to have assisted restaurant operator Zing Leisure Ltd in its acquisition of three restaurants from Burger King including flagship stores at Leicester Square and Queensway in central London.

Burger King were represented by their in-house team led by Debbie Waddell and by Clarke Wilmott.

Pitmans team comprised Tim Clark, who advised on franchising, Sally Sharp who advised on the acquisition of the premises and Philip Weaver who dealt with the asset purchase agreement.

Tim Clark comments: “Pitmans were delighted to assist Zing Leisure in their acquisition of three restaurants from Burger King. These flagship stores are situated in London’s consumer catering hubs and both deliver whopping footfall. It is illustrative of the astute commercial acumen that Zing Leisure possess in running their business that they have purchased these stores. ”