what's in the news

Once again ‘the season to be merry’ is almost upon us and it’s time to plan the party!

However whether you are a business simply planning to entertain clients and contacts or, for example, an organisation planning a music festival or major event for the public next year the principle is the same – don’t forget to check your insurance cover!

The laws that impose duties upon organisers of events, especially from a liability perspective, are surprisingly wide. However, fortunately there is a wide range of insurance cover available and there needs to be as the implications if things go wrong can have a devastating effect upon businesses and those who run them. The critical consideration is to ensure that all potential risks are covered as far as possible.

By way of illustration if a member of the public attending your event were suffer serious injury or die in an accident caused by a failure of your employees or agents to safely erect temporary steps then the consequences could be far reaching. The same would apply if one of your employees suffered serious injury or died due to inadequate supervision or safety precautions taken during their work.

Following a serious accident the law enforcement agencies, which includes not only the Police but The Health & Safety Executive and the Environmental Health Officers of the local Authorities, would immediately commence investigations and could issue a prohibition notice closing the event if they suspected there was a likelihood of reoccurrence.

Further, if they suspected that there were breaches of Health & Safety law then criminal prosecutions could follow against the organisers of the event and/or against the directors or senior officers if their gross negligence caused the incident.

Successful prosecutions could lead to unlimited fines for the business and imprisonment for the individuals concerned together with very bad publicity which could have a devastating effect on the business.

In the event of a death then there would also have to be an Inquest at which the business may have to explain their actions.

In either event there would no doubt be a civil claim for damages either by the injured individual or, following a fatality, by the Estate on behalf of any dependents. 

In addition to needing insurance cover for liability risks there are a multitude of other prospective risks and related insurance coverage that should be considered by organisers and it is appropriate now to review some of the more common:

Property: cover for premises against damage, office contents, musical instruments, hired-in equipment, marquees, audio & visual equipment and plant, merchandise stock, CDs, and promotional materials.

Business Interruption: should there be fire, flood, power or a telecommunications failure, then BI insurance offers protection from income streams during physical and technological disruptions.

Employers’, Public and Product Liabilities: Employers liability insurance is of course compulsory and it should cover not only your own full time employees but part time contractors, volunteers and freelancers. Audiences will be covered by public liability insurance and food/drink and merchandise by product liability cover.

Financial: misappropriation, loss of cash, box office receipts, fees, subsistence expenses and merchandise.

Legal Expenses: provides cover for legal advice and representations of your company in health & safety issues, employment disputes, contract disputes and can provides an advisory service. This is often included in a ‘combined risk’ policy.

Professional Indemnity: provides cover against claims of negligence, breach of duty or mismanagement.

Cancellation Insurance
Cancellation cover replaces lost revenue and reimburses expenditure incurred from an event which is necessarily and unavoidably postponed, abandoned, cancelled, curtailed or relocated in circumstances beyond your control. For artist managers, it can also protect commission income streams for high-earning performers.

Cyber Liability Insurance
Your current insurance coverage may not protect against the special risks that accompany your activities into the online space. Cyber Liability cover can provide protection against the new risks that come with this continually developing technology. 

Directors liability
Increasing regulation is placing greater pressure on company directors & officers to perform meticulously. If a shareholder, employee or any other 3rd party thinks a director or officer has failed to exercise ‘due care’ in the running of a business claims can be made against them personally.

Safety planning for an event is outside the scope of this article but don’t forget:

Risk assessments for members of the public attending the event and employees working on it should always be carried out by a person deemed ‘competent’ under the requisite Regulations.

Being able to point to the existence of a risk management plan can be invaluable in the event of an unexpected incident. The plan may be a simple  document incorporating a communication plan should an incident occur.

Conclusion

Don’t forget that your risk exposure starts as soon as you sign a contract with the venue to host the event. Consider all of your risks when in the planning stage and the contractual liabilities that you will be liable for if things don’t go according to plan.
Accordingly, it is critical to regularly check the adequacy of your insurance coverage with your brokers. Ensure full descriptions of your actual and intended business everything are recorded in writing to your brokers and passed to your insurers so they can assess the risks and charge an appropriate premium that reflect the risks.

You should ensure you understand the nature and extent of the policy coverage, the policy exclusions and limitations such as whether legal advice cover is included for any enforcement authority investigation and /or prosecution before agreeing terms and paying the policy premium.

This article is only intended to provide a brief summary of some of the main insurances that organisers of an event should consider and discuss with their brokers.

If you would like any specific advice on the legal implications of holding an event, please contact Alan Davies, Defendant Insurance Partner and member of the Hospitality Sector or Nicola Kirk, Dispute Resolution Partner and Head of the Hospitality Sector.

Alan Davies
T: +44 (0)118 957 0300
E: alandavies@pitmans.com

Nicola Kirk
T: +44 (0)118 957 0226
E: nkirk@pitmans.com

For further information, please see:

Pitmans’ Hospitality Sector Services

Pitmans’ Dispute Resolution legal services

Pitmans’ Defendant Insurance legal services

In our business and private lives alike, we all rely on professional advice and expertise from many quarters.  We know that the right professionals add value to our businesses or protect them from risk. We use professionals we can trust, and often have a relationship built up over many years. Sometimes, however, we have a suspicion that we may have been let down. Our business may have lost money and we think an adviser may be to blame. If not examined, that suspicion will taint an important relationship and undermine its value to us.

People can be reluctant to look into such issues. This may be because of loyalty to the professional concerned, a sense of embarrassment at having let the situation develop or uncertainty as to whether the advice given, or action taken or not taken, really was inadequate. It is nonetheless important to assess the position. If there is nothing in your suspicion, you can rebuild your trust in the adviser. If it proves that there is a problem, you can objectively assess how to deal with it.

You are paying for a service. You are entitled to be happy that you are getting what you are paying for and should not be afraid of challenging advice or other professional input. Such challenges do not have to be adversarial. With the benefit of a careful prior assessment, very positive results can emerge from informal or formal complaints procedures or even mediation, which can lead to an outcome which is satisfactory to all parties without irreparably damaging the relationship. Professional indemnity insurers are increasingly open to early resolution of complaints and claims by mediation.

So what factors will be taken into account in assessing whether you are entitled to redress from a professional for failings in the service provided?

The basic requirements for a claim against a professional are:

1. a duty owed;
2. a breach of that duty;
3. loss caused by that breach.

Proving that the professional’s act or omission caused the loss suffered is a frequent stumbling block. 

A professional adviser may incur liability for breach of contract and/or beach of a duty of care owed in the tort of negligence. Less commonly, liability can arise from breach of fiduciary duty or breach of statutory duty. 

The first question to consider is what was the professional engaged to do? The starting point will be the contract – what has been agreed. The agreement need not be in writing. In some cases only part of it may have been written down. But the contract is likely to contain relevant terms (express or implied) and it is important to establish what these are. The precise ambit of the contractual obligations will depend on a number of factors including the experience of the client. 

One then looks at whether the professional has carried out their engagement properly or at all. Under section 13 of the Supply of Goods and Services Act (1982), in a contract for services, a professional acting in the course of business will be obliged to carry out the service “with reasonable care and skill”.  The client is entitled to rely on the professional to exercise the highest degree of care and skill which a competent professional would exercise in work of that kind.  This duty may be limited by contract, subject to the Unfair Contract Terms Act (1977) and any applicable professional rules. Level of experience is not relevant to the standard of care which is imposed although a special skill can raise the standard of care to be expected. 

A concurrent duty in the tort of negligence may (but will not always) exist. 

Establishing whether there is a cause of action in contract or tort can be important in that different limitation periods may apply to any claim.  The limitation period (after which claims may not be brought) is often longer in tort than in contract.  (As the effects of professional errors do not always reveal themselves immediately, checking the applicable limitation should be done as soon as possible.)

There are also differences in the measure of damages which can be recovered.  In contract, damages seek to put the injured party in the position he would have been in if the contract had been properly performed.  So for example the innocent party can seek to recover expected profits.  In tort, however, the injured party is to be put in the position he was in before the tort was committed, which will not include expected profits.

The defence of contributory negligence is more widely available in tort claims than in contract claims.

Assessing the quantum of a claim can also pose interesting questions.  Many claims against professional involve a claim for a loss of a chance.

That the professional’s error caused the loss must be established in fact and in law. In law, this is often called “remoteness of loss”.  In contract a claimant can recover losses arising naturally from the breach or loss which was in the contemplation of the parties at the time the contract was made. In tort, the type of damage suffered must have been reasonably foreseeable at the time of the breach of duty.

A claimant cannot recover damages for any loss which could have been avoided by taking reasonable steps in mitigation. And in some cases the level of damages recoverable will effectively be capped by a restricted definition of the scope of a professional’s duty and the loss which can fall within it.

So if your analysis of duty, breach, causation and loss indicates that you may have real cause for concern, how should you proceed?  In general, if a professional has fallen below the standard of work expected, he or she will welcome the opportunity of explaining or making amends for any failings. You may wish to secure financial redress. The professional will normally be keen to continue to work for you and you may find you can use the opportunity to refresh and restate your relationship. Having conducted an objective assessment of your position, and having invited your professional to address the issues, you will be able to take an informed decision as to whether this is appropriate or whether it really is time to move on.

Pitmans has extensive experience in resolving professional liability issues by negotiation and mediation, as well as by proceedings where necessary. For examples of professional liability or further information, please visit our Dispute Resolution service page, or contact:

Sue O’Brien
Head of Dispute Resolution, Accredited mediator
T: 0118 957 0513
E: sobrien@pitmans.com

This is a complicated area of law and reliance should not be placed on this article to make decisions about particular issues. The article by its nature is brief and is not a comprehensive statement of the law.

Whilst revelations of the alleged scandalous behaviour at the News of the World are sure to rumble on for some time yet, the jilted journalists and other former employees of the newspaper will no doubt be keen to put the public relations disaster behind them and look to rebuild their careers.

However, the question for many of those individuals will be how they can recover from the reputational damage they might have suffered through their association with the disgraced tabloid icon. Staring down the barrel of a possible lengthy period of joblessness, what are the employment law ramifications that they should bear in mind?

Damages for stigmatisation

In the case of Malik v BCCI (1997), the House of Lords set an important precedent which allows employees to claim so-called “stigma” damages from their former employers where in that case the dishonest and corrupt conduct of the employer’s business adversely affects that employee’s future employment prospects. Such a claim may be justified on the basis that the damage has been caused by a breach of the implied term of mutual trust and confidence in the employment contract.

Should the allegations of wrongdoing at the News of the World be substantiated in the forthcoming police investigation and any subsequent public inquiry, the newspaper’s former employees may see this as a clear indication that the News of the World had acted in a manner which is in breach of the implied term of mutual trust and confidence and that has caused them a serious detriment in their efforts to secure new employment.

Collective Redundancy

The sudden cessation of business at the News of the World has meant the 200 or so former staff are now free to tend their gardens whilst being taken through the redundancy consultation process; the law states that where an employer proposes 100 or more redundancies at one establishment within a period of 90 days, it must collectively consult about these with appropriate representatives of the affected employees.

It is a requirement that the consultation must start “in good time” (i.e. before any proposals for dismissal have been finalised and allowing representatives to have a real opportunity to affect the decision).  Furthermore, consultation must be undertaken with a view to avoiding or reducing the number of dismissals and mitigating their consequences.

It is difficult to see how these obligations can be met by the newspaper’s owners with an open mind now that publication has ceased for good. This being the case, the employees may argue that the consultation process being followed is merely a sham and request that their representatives make a claim for a protective award of up to 90 days pay for all affected employees.

The Sun on Sunday – Does TUPE apply?

In the immediate aftermath of the News of the World closure, rumours abound that, like a phoenix from the flames, a “new” entity, the Sun on Sunday would step into the void. Indeed, it has been widely reported that the internet domain names thesunonsunday.co.uk and sunonsunday.co.uk were registered on 5 July 2011, just two days before the closure announcement.

Some commentators have suggested that such circumstances could lead to the former News of the World staff TUPE’ing across to the new publication. However, we understand that News Group Newspapers Limited employs the Sun and the News of the World staff. If News Group Newspapers Limited employed The Sun on Sunday staff then TUPE is irrelevant. If the employer of the News of the World staff was different to the employer of the new Sun on Sunday newspaper and key elements of the economic entity of the News of the World transfer then TUPE is a possibility.

If News Group Newspapers Limited employ The Sun and the News of the World staff, that is relevant to the question of whether the News of the World’s employees are, in the legal sense, redundant. This is because, if, at the time the News of the World was shut down, it was already known by News Group Newspapers Limited that it would shortly commence publication of the Sun on Sunday it would be difficult for the company to argue that there had been a decrease in the need of it for employees. Such circumstances could give rise to claims that the potentially fair reason for dismissal of redundancy does not apply and the News of the World staff were therefore unfairly dismissed.

Whether or not the News of the World staff are technically redundant will be an interesting talking point for employment lawyers, but the eventual answer is unlikely to provide the affected individuals with much comfort. Over the next few weeks and months the parliamentary select committee, public inquiry and criminal investigations are likely to take centre stage in the media but we will continue to keep a focussed eye on the employment tribunal to see how these issues are resolved.

For more information on the article please contact our employment team:

Mark Symons
+44 (0) 118 957 0340
msymons@pitmans.com

Richard Devall
+44 (0) 118 957 0602
rdevall@pitmans.com

Jamie Lynch
+44 (0) 118 957 0506
jlynch@pitmans.com

This article appeared in the Estates Gazette in 11 July 2011.

One of the starkest, and ongoing, effects of the economic downturn on the property sector has been the creation of a two-tier market. In residential, commercial, leisure or even agricultural space, the flight to quality has seen prime assets rise in value over the past 18 months, while secondary properties have languished stubbornly close to their 2009 lows.

Such a two-tier effect has also established itself within the market for residential development sites. Well-located sites that are suitable for high-end residential development (limited, except in a few cases, to the south-east of England) command values far beyond plots that are suitable for only high-density housing focused towards first-time buyers.

The contracts for such land purchases are usually conditional on planning permission being secured, if not already in place, which typically takes upwards of 18 months. As a result, many developers in 2008 and early 2009 found themselves in a situation where they had entered into contracts that were conditional on obtaining planning permission, having agreed to pay top dollar for a site that was no longer economical to develop.

Delaying tactics

These situations became common, with developers desperately searching for ways to extricate themselves from their agreements. They used a number of delaying tactics, such as arguing that planning permissions obtained were not satisfactory or trying to avoid obtaining planning by invoking extensions to the contract to delay the time at which payment was required in the hope that values would recover. Another tactic was for work on securing planning permission to grind to a virtual halt.

Of course, the converse was true for sellers with option agreements where prices were linked to open market values. In those circumstances, it was the sellers that tried to prevent planning permission being granted, which would have enabled developers to exercise the option at prices below sellers’ expectations.

So how does the situation look in 2011? The experiences of the past two years and the uncertain future while spending cuts take place has made developers nervous about entering into contracts at prices that may drop by the time planning permission has been obtained.

The nature of the ongoing two-tier market in residential development means that the vast majority of secondary locations are unsold, while prime plots are being sold at prices that sometimes reach pre-credit crunch prices.

At the root of this situation lies the time needed to secure planning permission and the subsequent time before any return can be made. With a fresh site, planning approval takes at least 18 months and construction another year. This means that a developer will not be able to sell its property until two-and-a-half years after it first purchased the land.

As a consequence, developers prefer to enter into option agreements, since this gives them absolute control as to whether they proceed. If such an agreement is not acceptable to the seller, developers will want as much “wriggle room” as possible in their conditional contract.

Some developers look to negotiate the inclusion of a right to rescind after planning permission has been obtained, enabling the developer to reassess the viability at that stage and decide whether it wants to proceed. The benefit for the owner is that it is able to use the plans and drawings contained in the planning permission at no cost.

The contract can also be drafted to give the developer as much flexibility as possible. For example, the definition of what is an acceptable planning permission should contain an acceptable minimum square footage so that, if planning can only be obtained for a smaller area, the developer would be able to rescind.

In addition, the definition of an onerous condition should include a maximum limit for section 106 contributions. If the contributions exceed that amount, the developer can decide whether it wants to proceed.

It is, however, essential that such contracts contain the right to waive the conditions so that even if they are onerous, the developer can proceed notwithstanding such conditions are not satisfied.

In a property market that remains risk-averse, such sites remove a significant amount of the risk faced by developers: housebuilders know exactly where they stand on the planning front, and are also building homes to sell in 12 months’ time. However, as one would expect, these sites command the best prices.

Reasonable endeavours

One final point to note is obligations imposed on developers in contracts outlining one party’s responsibility to secure planning approval. With the deal not becoming unconditional until planning consent has been gained, the term “reasonable endeavours” is often used to describe the extent of the developer’s obligations in obtaining permission. The difficulty, or the benefit as the case may be, in defining “reasonable endeavours” is that there is a significant amount of leeway in determining this obligation.

Two other similar phrases are used. It is usual to resist an obligation to use “best endeavours” as this imposes too strong an obligation. However, care should also be taken to try to avoid an obligation to use “all reasonable endeavours” as some cases have held that this obligation can be close to “best” and implies that every reasonable possibility has been exhausted before this obligation is satisfied.

The lesson is simple: for a party to have wriggle room, or stop the opposite party having too much, it is essential to define what is required. Failure to do so could prove costly.

If you would like to know more information about this article, then please contact either Sue O’Brien or Andrew Davies.

Courtesy of Oxford Mediation

The Court of Appeal, in its February 2011 judgment in the case of Rolf –v- De Guerin has taken the opportunity to reiterate that the conduct of parties during litigation, and in particular a refusal to mediate or attempt other forms of alternative dispute resolution, will have a significant impact on the costs award at the end of a case.  The well known 2002 case of Dunnett –v- Railtrack Plc established that a party who refused to mediate, even if successful in litigation, may not be awarded costs.  This was clarified somewhat in 2004 in Halsey –v- Milton Keynes NHS Trust which set out the factors which a Court should take into consideration in deciding whether or not a party had unreasonably refused to mitigate.  The non-exhaustive list of considerations included whether a case was intrinsically unsuitable for mediation (very few cases would fall into this category), the merits of the case and in particular did a party reasonably believe it had a water-tight case, other attempts to settle, whether costs of mediating would be disproportionate, whether it would cause delay to the trial and the prospects of success of the mediation.

Bearing these factors in mind, in Rolf –v- De Guerin, one party’s refusal to mediate had a significant impact on the costs recovery following trial.  In this dispute which concerned the building of a garage and loft, the householder obtained a judgment for a mere £2,500 against a claim which, at its highest, was put at £92,515.  Although the householder, a Mrs Rolf, had thus succeeded in her claim, she in fact recovered a very small proportion of the amount claimed and had failed on a number of her main allegations. Based on these and other factors, in this case costs did not “follow the event” as is common – the trial judge awarded costs to the unsuccessful defendant.  

Mrs Rolf appealed to the Court of Appeal. In her favour, she was able to show that she had expressed a genuine willingness to settle and had been prepared to attempt mediation at various stages. The building contractor had rebuffed all these overtures until 6 days before trial which, in the circumstances of this case, was found by the Court of Appeal as having been too late.  

The Court of Appeal held that the builder’s reasons for refusing mediation did not hold water.  His reasons were that by mediating he would have had to accept liability, he felt a key witness for Mrs Rolf had to be seen by a judge at trial and in any event, he wanted his day in Court.

The Court of Appeal held that the spurned offers to enter into settlement negotiations or mediation were unreasonable and found that they “ought to bear materially on the outcome of the Court’s discretion”.  In substitution for the order made by the judge at first instance, the Court of Appeal made “no order as to costs”.  

For further information regarding Pitmans Mediation services, please contact:

Sue O’Brien
sobrien@pitmans.com
+44 (0) 118 957 0513

Reporting the decision of the European Court of Human Rights in Strasbourg today, as they rejected Max Mosley’s attempt to impose a “pre-notification” obligation on journalists who are planning to run a story infringing a person’s privacy, most of the press are describing it as a victory for free speech.

It goes without saying, of course, that free speech is important. The ability to report on any subject without fear of censorship or stifling is something which is rightly regarded as a mark of a free, open and progressive society. The fact is, though, that free speech is not, and has never been, an absolute right. Untrue statements made in a manner calculated to harm a person’s reputation are for example subject to the laws of defamation. Similarly, laws exist to restrict the making of statements likely to inflame religious hatred, or incite violence.

Under the Human Rights legislation applied by the Strasbourg Court, and incorporated into domestic law by the 1998 Human Rights Act, free speech is simply one of a range of rights to be protected, sitting alongside other equally important rights such as the right to privacy (or more properly, the right to respect for one’s private and family life, home and correspondence). Both the right to freedom of expression and the right to privacy are expressly permitted to be curtailed in a variety of circumstances ranging from matters of national security to the consideration of the rights and reputations of others.

The balancing exercise between these competing rights is something that the Courts undertake every time they have to consider a case involving privacy issues and the press. It is the exercise that the Courts undertook in determining that the News of the World’s story about Max Mosley represented an unwarranted intrusion into matters of which he had a reasonable expectation of privacy, and served no wider public interest. Mr Mosley was awarded damages and costs, but he has made the very valid point that nothing can restore the private life he had before the story broke. It is difficult to see that a Court undertaking that balancing exercise prior to publication would have come to a different conclusion, but of course the difference in timing would have made all the difference in the world to Mr Mosley and his family.

In this sense, privacy is a different right to the reputational rights protected by libel law. Publication of an untrue statement can be just as harmful to a reputation, but the subsequent publication of an apology or correction will in the majority of cases serve to extinguish, or at least greatly reduce, the harm done by the original publication. Where privacy is infringed, the essential facts on which the story is based are probably true, and once in the public domain they cannot be expunged. Is it really so unreasonable to suggest that in those specific circumstances, the Courts ought to have an opportunity to weigh the merits of the story against the invasion of privacy that is proposed, before the genie is irretrievably let out of the bottle?

Will Richmond-Coggan is a Solicitor-Advocate in the Dispute Resolution department, whose specialisms include defamation and media disputes, including privacy issues.  Will can be contacted on 0118 957 0369 or email wrcoggan@pitmans.com

In this country we are fortunate to be served by a judiciary which is both robustly independent and academically able. Most judges run their courts well and deal with matters before them expeditiously.

Given the volume and complexity of the issues heard by our courts, it is inevitable that it can take several weeks after a trial or hearing for judgment to be given. But when does proper time for consideration and drafting of a judgment turn into unacceptable delay and when might that delay interfere with the quality of justice?

This question was considered lately by the Court of Appeal in Bond v. Dunster Properties Ltd & Others. In this case, a business dispute between a father and son, the judge had taken 22 months from the trial to give his judgment. The father lost the case and appealed to the Court of Appeal on the basis that the extraordinary delay on the part of the judge had led to errors. The Court of Appeal held that findings of fact were not automatically to be set aside because of delay – it is necessary to ask whether the judge was plainly wrong – but if it can be shown that the judge’s recollection has been adversely affected by the delay, a retrial can be ordered. (In this particular case, the appeal was unsuccessful.)

It is generally acknowledged that delays, particularly when unexplained and where there is no apology, can be a denial of justice, leaving the parties in uncertainty and undermining confidence in the court’s judgment. Further, Article 6 of the Human Rights Act requires that judgments be delivered within a reasonable time. The Court of Appeal explained that what is reasonable will depend on the complexity of the legal issues, the volume and nature of evidence and other factors including the involvement of children, or litigants with terminal illnesses or other grounds of urgency. It recommended that delays beyond a reasonable period should be explained by letter or e mail to the litigants.

The 1998 case of Goose v Wilson Sandiford had already made clear that delays of the Bond v Dunster kind should not happen. In the circumstances, the Master of the Rolls now intends to look into whether procedures need to be introduced to prevent this type of problem arising again.

Sue O’Brien
sobrien@pitmans.com
+44 (0) 118 957 0513

Improved Rights for Unsecured Creditors of Insolvent Companies

Under the Third Parties (Rights Against Insurers) Act (1930), there have long existed provisions which, provided certain hurdles can be overcome, enable parties who have a claim against an insolvent insured party to make a recovery direct from the insurance policy, rather than simply ranking with other unsecured creditors in the insolvency.  The hurdles under the 1930 Act in practice deterred claimants from making claims because it was not always easy or possible to get information about the extent of insurance (and therefore decide whether any costs outlay was likely to be worthwhile).  In addition claimants faced the expense of having to restore a defunct company to the Register in order for it to bring or defend legal proceedings. 

The new Act aims to bring the 1930 Act up to date and improve the rights of third parties whilst reducing litigation, expense and delay.  Under section 1 a third party will be able to bring proceedings directly against an insurer to establish both the liability of the insured party and the potential liability of the insurer.  If a third party has reason to believe that an insolvent insured has incurred a liability to him, he may request information from anyone who might have knowledge of the insurance as to the identity of the insurer, the terms of the insurance, any limits of liability and whether there are any fixed charges which would apply to any sums paid out.  This information has to be provided within 28 days.  In the past it has been difficult to obtain such information but now people such as brokers, former employees and others authorised to hold policy information can be approached and are bound to answer.

The rights which can be enforced by a third party are no greater than those which the insured itself would have had.  Accordingly, the insurers can defend themselves under the insurance policy if they believe they are entitled to do so.  So whilst the claimant will be in no better position than the insured would have been, he will certainly be stealing a march on other unsecured creditors. 

The Act was expected to come into force in April 2011, but at the time of writing a date is still awaited.

For further information please visit Pitmans’ Dispute Resolution website or contact:

Sue O’Brien
sobrien@pitmans.com
+44 (0) 118 957 0513

What impact will the Bribery Act 2010 have on your business? What are the penalties connected with the Equality Act 2011? How do you achieve compliance and best practice for your property?

Are you up to date with current legislation? Looking for a swift update on key areas? Read the rest of this entry »

The Court of Appeal, in its February 2011 judgment in the case of Rolf –v- De Guerin has taken the opportunity to reiterate that the conduct of parties during litigation, and in particular a refusal to mediate or attempt other forms of alternative dispute resolution, will have a significant impact on the costs award at the end of a case.

In this dispute which concerned the building of a garage and loft, the householder obtained a judgment for a mere £2,500 against a claim which, at its highest, was put at £92,515.  Although the householder, a Mrs Rolf, had thus succeeded in her claim, she in fact recovered a very small proportion of the amount claimed and had failed on a number of her main allegations. Based on these and other factors, in this case costs did not “follow the event” as is common – the trial judge awarded costs to the unsuccessful defendant. 

Mrs Rolf appealed to the Court of Appeal. In her favour, she was able to show that she had expressed a genuine willingness to settle and had been prepared to attempt mediation at various stages. The building contractor had rebuffed all these overtures until 6 days before trial which, in the circumstances of this case, was found by the Court of Appeal as having been too late. 

The Court of Appeal held that the builder’s reasons for refusing mediation did not hold water.  His reasons were that by mediating he would have had to accept liability, he felt a key witness for Mrs Rolf had to be seen by a judge at trial and in any event, he wanted his day in Court.

The Court of Appeal held that the spurned offers to enter into settlement negotiations or mediation were unreasonable and found that they “ought to bear materially on the outcome of the Court’s discretion”.  In substitution for the order made by the judge at first instance, the Court of Appeal made “no order as to costs”. 

For further information relating to Pitmans Dispute Resolution team, please contact:

Sue O’Brien
Partner, Head of Dispute Resolution
+44 (0) 118 957 0513
sobrien@pitmans.com