The SRA has been robustly targeting compliance with these Rules in recent months. Firms have fallen foul of the requirements, and it is fair to say that there was resistance from some to the provisions when introduced. That was evidenced by comments below the line in the legal press. In August 2021, the SRA reported as a news item that a dozen practices had been fined for repeatedly failing to display the correct information.
In summer 2021, the SRA wrote to the 8,000 firms not already checked out, requesting a signed declaration of adherence. The SRA has helpfully provided templates to make the task of compliance easier.
The climate appears to have settled. A potential client with a clear idea of how much their matter will cost is more likely to translate into a loyal client for years to come. Transparency enables firms to use their websites as a ‘word of mouth’ marketing tool, particularly when coupled with positive reviews. There are opportunities to present information in attractive ways to bolster a firm’s offering.
Rule 1 is directed at costs information on services for individuals and businesses, including residential conveyancing, probate, employment tribunals (employees and employers), and debt recovery to £100k (businesses only). Complaints information, including options to contact the Legal Ombudsman and the SRA, must be published prominently (Rule 2). The SRA’s ‘click through’ digital badge must also be published, as well as the firm’s SRA number (Rule 4).
The Rules also provide for information about those doing the work, key stages, and timescales to be included.
What happens if your firm chooses not to have a website? A brave decision nowadays! However, Rule 3.1 provides that the information required by Rules 1 and 2, costs and complaints, must be available on request. Be prepared for the SRA mystery shopper!
What could happen to your firm if it does not comply?
The SRA started handing out fines and rebukes to firms that were non-compliant in the summer of 2020. The most recent SRA decision in this area has just been published.
Recent SRA Decision
On 12 August 2021, the SRA imposed a ‘control of practice’ authorisation condition on ANB Law in Peterborough.
The SRA adjudicator’s decision followed a period of non-compliance since June 2021, when it is assumed that the firm came to the SRA’s attention.
The decision was stated by the adjudicator to have been made in the public interest because: there was a risk of non-compliance; the conduct was likely to be repeated; the conditions imposed addressed repetition of the conduct, and, interestingly, ‘there is no evidence to date that the firm’s conduct has caused any lasting significant harm to consumers or third parties’.
One wonders what that evidence might have been if it had existed. There’s a potential ‘level playing field’ argument to be made in terms of harm to third parties. Non-compliant firms might gain a potential competitive pricing advantage over compliant firms if allowed to remain non-compliant unrestrained by the SRA. Any advantage is limited if the SRA takes swift action and imposes conditions requiring compliance speedily.
The firm was required within 30 days to provide evidence to the SRA’s ‘reasonable satisfaction’ of compliance with Rule 1 (where the relevant services were supplied by the firm). Evidence regarding the publication of complaints information and the digital badge had to be provided within the same timeframe.
The story did not end there. On 16 November 2021, the SRA imposed a fine of £1,000 on the firm with a costs order of £300. The condition referenced above remained in place.
The SRA’s published decision provides context for the Rules. The Rules are directed ‘to ensure people have accurate and relevant information about a solicitor or firm when they are considering purchasing legal services. They are intended to help members of the public and small businesses make informed choices, improving competition in the legal market’.
Such decisions are generally published online. The reputational damage attached to getting this wrong is potentially significant.
How can RIAA Barker Gillette help?
Susan Humble, the Head of RIAA Barker Gillette’s Regulatory Department, was the CEO and Clerk of the Solicitors Disciplinary Tribunal for almost eight years. Susan and the RBG Regulatory team can help you with your regulatory problems, including compliance with the Transparency Rules. A chat with us will quickly help you to manage those regulatory worries once you have heard our clear and concise advice.
We are just an email or phone call away!
Note: This article is not legal advice; it provides information of general interest about current legal issues.
An NDA is a legal contract to protect and prevent the disclosure of confidential information, such as trade secrets, intellectual property or details of a dispute and settlement. Non-Disclosure Agreements may be a standalone document, but employment contracts and settlement agreements can also contain confidentiality clauses.
There is nothing wrong with the legitimate use of Non-Disclosure Agreements, but they can be subject to abuse, often to the detriment of an employee and their rights.
Inappropriate NDAs
One blatant abuse of Non-Disclosure Agreements is when an employee has raised complaints about unacceptable practices, discrimination, or harassment within the workplace and is paid compensation subject to an NDA. The NDA forbids the employee from disclosing any details of the complaint. You could say that the employee has been ‘bought off’ and the employer has ‘paid for their silence’ aka inappropriate use of an NDA. Employers cannot legitimately prevent an employee from being a whistleblower, assisting in a criminal investigation or reporting a crime to the police. Furthermore, NDAs and confidentiality clauses cannot prevent individuals from taking a matter to an employment tribunal.
NDAs should not be used to hide a pattern of behaviour that could endanger others, avoid addressing disputes or issues in the workplace, or mislead someone.
Misused NDAs in the workplace affect the employees’ rights and promote an undesirable workplace culture, buying the silence of employees who have suffered wrongdoing.
Changes as a result of NDA misuse
The Weinstein case highlighted the misuse of NDAs in the workplace. As a result, there has been a focus on ensuring the proper and legal use of NDAs. For example, in 2018, the Solicitors Regulatory Authority issued a warning notice on using NDAs; they must not prevent anyone from whistleblowing, reporting misconduct or cooperating with law enforcement agencies. In addition, NDAs should not deter individuals from talking to professionals or family members about complaints they’ve raised in the workplace.
In July 2019, the business minister announced that following a government consultation on confidentiality clauses in the workplace earlier that year, there are plans for new legislation to tackle the abuse of NDAs. The proposed reforms to NDAs and confidentiality clauses are a response to sexual harassment in the workplace. A key challenge for the government in producing new legislation is to balance public policy against individuals’ freedom to enter a contract.
What can employers do to promote the proper use of NDAs?
Improve employees’ access to legal advice. Employees may not understand the full legal ramifications of signing a confidentiality clause and the imbalance of power it may create.
Create and promote inclusive workplaces. Offer specific training. Management should lead by example in demonstrating and calling out inappropriate behaviours.
Consider the extent of a confidentiality clause in an employment contract, whether there is a clear need for the clause, the benefit for the employer, and its impact on the employee. Only include a confidentiality clause if it is required rather than as standard practice, and the scope of the clause should only extend to what is necessary.
Contact employment lawyer Karen Cole today to learn how and when to use an NDA.
Note: This article is not legal advice; it provides information of general interest about current legal issues.
In a landowner versus drones situation, the former can draw on the principle that the air space in the vertical column above his land is his to such height as is necessary for the ordinary use and enjoyment of his property. Entering that air space is a trespass and exposes the trespasser to a claim for damages and injunctive relief.
So, for example, it is commonplace for developers to negotiate a licence to enable the jibs of their cranes to go through the air space of an adjoining property owner to preclude a claim for trespass and the possibility of an injunction to impede building progress. A developer has to invest a lot before starting a building project and is unlikely to take a chance.
The stakes are usually much lower for someone interested in collecting images with a camera fitted to a drone. The imagery results are impressive, with drone cameras that can hover and zoom in for close-up results. A surveyor or journalist may be more gung ho about just going ahead with a one-off trespass. A one-off infringement is unlikely to generate litigation, save in egregious cases.
A landowner aggrieved by a drone flying through his air space can potentially claim under many heads. It is not only the law on trespass that may yield a claim; there is the tort of a private nuisance, the rights to data protection in the collected images, and claims for breach of privacy and confidentiality, depending on the circumstances.
Does this mean that investors in drone technology should give up in the face of powerful, long-held vested interests in land? History shows that landowners have to yield to advances in technology in the end. One can go back to the 19th century when the landed gentry fought the railways, to the 20th century when governments would compulsorily buy land needed for urban expansion and roadway infrastructure, and more recently to the imposition of telecommunication legislation which has transferred rooftop property rights to telecoms operators. The public interest generally prevails.
Some prescient commentators see a future distribution system where online sellers have district hubs or vertiports (on the top of buildings) where drones collect goods for transportation via air traffic channels to our homes. Of course, if establishing such systems is in the public interest, legislation will likely restrict private property rights, which may stand in the way of ‘progress’. But it should not be beyond the wit of those who rule us to preserve most of the private property rights mentioned above, and compromise is often the way forward.
Want to know your property rights? Call John Gillette today.
Note: This is not legal advice; it provides information of general interest about current legal issues.
‘Those are my principles, and if you don’t like them… well, I have others.’ The Christmas Quiz season is over, like turkey or mushroom risotto, so no prizes for guessing that Groucho Marx said this. The Solicitors Regulation Authority (SRA) has Principles, the SRA Principles 2019 (formerly, the SRA Principles 2011). If we solicitors don’t like them … well, tough because the SRA doesn’t, currently, have others. Principles are the benchmark against which our conduct (including that of those who work with and for us) is measured. What follows is a summary analysis of how the SRA Principles are applied in practice, studded with gems of cases along the way.
What is a ‘Principle’? A quick ‘Google’ brings up 7,470,000,000 results. I like the Cambridge Dictionary’s suggestion of ‘a moral rule or standard of good behaviour’. This fits our purpose well. The SRA defines the term in its Principles 2019 as:
‘the fundamental tenets of ethical behaviour that we expect all those that we regulate to uphold.’
Back in the dark ages of 2011, the definition was longer and less prescriptive:
‘The Principles embody the key ethical requirements on firms and individuals who are involved in the provision of legal services. You should always have regard to the Principles and use them as your starting point when faced with an ethical dilemma.’
The status of the Principles has, it seems, been quietly upgraded from starting point when facing an ethical dilemma to fundamental tenet. It is essential to understand what the Principles are and how they can be broken when practising as a solicitor in 2022.
The word ‘ethical’ is emotionally charged. Look at the divergence of opinion on Insulate Britain. There is little doubt that the nine protestors jailed for breaking an injunction against illegally blockading traffic on the M25 believe that what they are doing is ethical in furtherance of their campaign on home insulation. Those who were unable to get to hospital appointments, drive their children to school, get help by ambulance, may disagree that the protestors are behaving ethically. ‘Ethical’ relates to human morals and human morals are deeply personal rather than ‘one size fits all’. Morals are fluid, especially when talking about our own as opposed to someone else’s. This can be seen in the move from fault to no-fault divorce, the treatment of women who kill when subjected to coercive control, and our views of MPs who have second jobs. When we get into the realm of ‘morals’, we are venturing outside the boundaries of professional conduct and into the realm of private conduct. We saw where that can lead in the High Court decision of Beckwith v Solicitors Regulation Authority about which much has been said and will not be repeated here. We are dealing with the expected standard of behaviour; what’s right and wrong. Such judgements inevitably involve the placing of our baggage on the table and are, therefore, nuanced, and subject to unconscious bias.
The SRA provides guidance on its website on the application of its Principles in situations where they conflict with each other:
‘Should the Principles come into conflict, those which safeguard the wider public interest (such as the rule of law, and public confidence in a trustworthy solicitors’ profession and a safe and effective market for regulated legal services) take precedence over an individual client’s interests. You should, where relevant, inform your client of the circumstances in which your duty to the Court and other professional obligations will outweigh your duty to them.’ (my emphasis).
Public interest trumps individual client interest. Informing a client of ‘circumstances’ does not necessarily mean that the client will remember receiving that information when the chips are down. Clients in most situations tend not to care overly about the public interest when making legal services distress purchases. That’s human nature; are any of us wholly altruistic? In regulatory language (albeit that some are coy about saying so), ‘clients’ are now ‘consumers of legal services’. Section 1 of the Legal Services Act 2007 sets out the regulatory objectives, including at 1(d) ‘protecting and promoting the interests of consumers’. The Legal Services Consumer Panel created by that same Act provides ‘independent advice to the Legal Services Board about the interests of legal services consumers’. The Legal Ombudsman refers to ‘consumers’ on its website. Consumers may not be willing to accept that the provider of a service owes a higher duty to anyone other than them. They who pay the piper etc. A synonym for ‘consumer’ is ‘customer’ and, as Mr Selfridge said back in 1909, ‘the customer is always right’.
The table below sets out the Principles as they are and as they were:
2019
2011
We must act:
We must:
1. in a way that upholds the constitutional principle of the rule of law, and the proper administration of justice
1. uphold the rule of law and the proper administration of justice
2. in a way that upholds public trust and confidence in the solicitors’ profession and in legal services provided by authorised persons
2. act with integrity
3. with independence
3. not allow our independence to be compromised
4. with honesty
4. act in the best interests of each client
5. with integrity
5. provide a proper standard of service to our clients
6. in a way that encourages equality, diversity and inclusion
6. behave in a way that maintains the trust the public places in us and in the provision of legal services
7. in the best interests of each client
7. comply with our legal and regulatory obligations and deal with our regulators and ombudsmen in an open, timely and co-operative manner
8. run our business or carry out our role in the business effectively and in accordance with proper governance and sound financial and risk management principles
9. run our business or carry out our role in the business in a way that encourages equality of opportunity and respect for diversity; and
10. protect client money and assets.
There are now 7 where there used to be 10 Principles. The Principles are supplemented by ‘Codes of Conduct’ for Solicitors and Firms. Where allegations are made by the SRA, they are likely to plead breaches of Principles and Codes.
Some context is provided on the SRA’s website, in the ‘Introduction to the SRA’s Enforcement Strategy’. One point on the website is that we must search hard to find what we want. Useful information is hidden under layers of web pages. SRA: must do better! The Introduction states that:
‘Our SRA Principles and Codes of Conduct aim to drive high professional standards. Through them we seek to give a clear message to the public, regulated individuals and firms about what regulation stands for and what a competent and an ethical legal profession looks like.
We work in the public interest, protecting consumers, setting and enforcing high professional standards, and supporting access to affordable legal services, the rule of law and the administration of justice.
Our regulation therefore seeks to:
ensure a strong, competitive, and highly effective legal market
ensure a focus on quality and client care
promote a culture in which ethical values and behaviours are embedded.’ (my emphasis)
There is inevitable tension between the expectations of consumers buying a service, protection of those same consumers, affordable legal services, and high professional standards. This tension is exacerbated by what follows next in the Introduction (and remember this is about enforcement, or rather ‘the act of compelling observance of or compliance with a law, rule, or obligation’):
‘In doing so, we will not second guess the approach [solicitors and firms] take or the way in which [solicitors and firms] choose to comply. We do, however, require all those we regulate to be familiar with our standards, explanatory guidance, and the law and regulation governing their work, and to be able to explain and justify their decisions and actions.’ (my emphasis)
Please look again at the Principles 2019 listed above. If the SRA dropped by for a cuppa and biscuit, would you be able to ‘explain and justify’ your decisions and actions? In every case, on your Anti-Money Laundering policies, procedures and controls, in respect of your firm and accounts management, your supervision of employees, the transparency of your published costs information, the operation of your complaints procedure? You might be providing that explanation some time down the line, and the requirement to justify is likely to be prompted by an adverse event e.g. a consumer complaint to the Legal Ombudsman or direct to the SRA. The sand will not be deep enough for your head to hide itself. And regrets? By then, you may have a few. What we are talking about here is not the dishonest solicitor. They remain few and far between. We are talking about the usual, average solicitor with a busy practice (because if it’s not busy no money will be made) serving the local community, doing work for less than its full value or pro bono, and finding opportunities to see the spouse and kids and the lockdown dog occasionally (time for eating, sleeping, and comfort breaks optional).
There is a paucity of published decisions citing the 2019 Principles. This makes sense. Conduct after the 2019 Principles came into effect on 25 November 2019 will, no doubt, be under current investigation or moving slowly through the disciplinary process, save for the most obvious such as conviction cases.
Take a look at examples from recent internal SRA and external Solicitors Disciplinary Tribunals (SDT).
Principle 1
This Principle has its own guidance on the SRA website. Reference is made to the words of Lord Bingham in his book ‘The Rule of Law’ published in 2010 who stated:
“The core of the existing principle is…that all persons and authorities within the state, whether public or private, should be bound by and entitled to the benefit of laws publicly and prospectively promulgated and publicly administered in the courts.”
The SRA interprets Lord Bingham’s words by describing the rule of law as a principle that the law is of equal application put into effect by individuals and organisations, including “emanations of the State”, and through activities engaging the justice system. Sounds good. Catchy!
The SRA references criminal convictions as, possibly but not necessarily, engaging Principle 1. ‘Any behaviour which indicates a serious disregard for the principle that the law applies equally to all, is likely to be a breach of Principle 1.’ Interestingly, my research indicates that Principle 2 ‘public trust’ is more generally pleaded by the SRA in conviction cases.
Examples of possible breaches of Principle 1 provided by the SRA include:
Knowingly facilitating organised people trafficking
Involvement in money laundering
Misleading the court
Failure to comply with the lawful exercise of investigative powers e.g. failing to provide a specimen of breath where it is lawfully required
Failure to report a criminal conviction or regulatory breach to the SRA – remember that only serious breaches are to be reported, but how do we define ‘serious’?
Principle 2
This Principle is the ‘catch-all’ (if that’s not too disrespectful) and is pleaded in many cases. It is, indeed, ubiquitous, a legal Bake Off celebrity, if you will.
On 17 November 2021, the SRA published an internal decision involving a frying pan. Solicitor Mr Bains was on holiday in Bangor in October 2020. He struck a member of the public around the head with said pan during an argument. The person on the receiving end did not want to press charges. Mr Bains was, however, duly charged with public order offences. He pleaded guilty a month later and was fined £1,760 and ordered to pay victim surcharge and costs. He reported the conviction to the SRA the same day. He admitted that, by reason of his conduct and his conviction, he was in breach of Principle 2. Mr Bains accepted a rebuke, publication of the Regulatory Settlement Agreement with the SRA, and costs of £600. By adopting this approach, he no doubt avoided an SDT hearing where the sanction may have been more robust and the costs certainly higher.
17 November 2021 was a busy publication day for the SRA, a KPI busting rush! Mr Emerson, a partner in a firm, was found by the SRA to have attempted (by way of a draft settlement agreement) to prevent an individual and a company from making disclosures to HMRC, in breach of Principle 2. He also accepted a rebuke and costs of £600. Two very different cases with the same outcome.
Drink-driving convictions seemingly fall under the Principle 2 heading and are subject to separate SRA detailed guidance. There has been a positive move by the SRA away from referring drink-driving cases to the SDT over the last 4 years. In the most recently published SRA decision, Miss Salunke collided with a roundabout sign whilst under the influence (over twice the legal limit). Cornwall Magistrates Court imposed a 20-month disqualification from driving, to be reduced by 20 weeks on completion of a certain course, plus a fine of £1,380 together with the usual victim surcharge and costs. The conviction was reported to the SRA the same day. Under a Regulatory Settlement Agreement, the solicitor accepted a fine of £1,100, publication of the decision and costs of £300. The decision itself sets out in detail the basis upon which the fine was calculated and is worth a read.
In its detailed guidance on Principle 2, the SRA refers to conduct outside of practice. The guidance does not appear to have been updated since the Beckwith decision. I think it should be. My eye was drawn to this paragraph:
‘We do not expect everyone to conform to a perfect ideal of behaviour outside of practice. The threshold for us taking action relating to conduct in personal relationships is high but may well be crossed by unlawful or abusive behaviour.
For example, the exaggeration of personal attributes on a dating website is not a regulatory matter. But we will consider some conduct, for example using a false identity, as serious in this context as in any other.’
I wonder how many solicitors are dreaming about the Principles when drafting their online dating profiles? How do we define ‘personal attributes’? Could exaggeration of a personal attribute equate to using a false identity? Metaphysical stuff!
Principle 3
Breach of Principle 3 is most likely to come up in conflict cases. The 2011 version makes an appearance in the SDT case of Hetherington [12175-2021]. The SDT judgment is endorsed to indicate that some part of the decision is subject to appeal. The case involves client investment in parking spaces and storage pods, a ‘You and Yours’ favourite. ‘Own interest’ conflict in breach of Principle 3 was alleged, namely that the solicitors preferred their own interests over those of their clients. There is an absolute prohibition against acting in ‘own interest’ conflict cases. The specific allegation was that referrals and fee income were put above the interests of clients when advising on transactional risk. The SDT found the allegations proved. Dishonesty was also found, with the result that the solicitors were struck off with a joint and several costs order of an eye-watering £98,000. How did those costs happen!
Principle 4
The Principles 2019 specifically reference honesty (in contrast to the 2011 version). Solicitor dishonesty cases will almost always be heard at the SDT which is the only entity, currently, with the power to strike off, enshrined in the Solicitors Act 1974.
Principle 5
The concept of ‘integrity’ has troubled many regulators over the years. In solicitor cases be mindful of the words of Lord Justice Jackson in Wingate and Evans v SRA and SRA v Malins:
‘Integrity is a useful shorthand to express the higher standards which society expects from professional persons and which the professions expect from their own members … [Professionals] are required to live up to their own professional standards … Integrity connotes adherence to the ethical standards of one’s own profession”.
In SRA v Holdaway, the concept was pleaded under Principle 2 (2011). It was alleged, amongst other things, that Ms Holdaway failed to act with integrity (when not practising as a solicitor) by falsely stating in a job interview that she was employed by her previous firm with a one month notice period. It was also alleged that she had provided false information about her previous employment to an employment agency. Dishonesty was alleged (as is common in integrity cases). Ms Holdaway had been dismissed by her previous employer. The SDT found the allegations proved on the Wingate test. Dishonesty was found proved and Ms Holdaway struck off (in absence of appearance).
Principle 6
The SRA has provided guidance on obligations under this Principle. That guidance is detailed. In short, solicitors and firms are expected to comply with The Equality Act 2010 and encourage equality of opportunity and respect for diversity. The SRA also expects inclusion in our approach to everything we do. The concepts are described in shorthand as EDI. There is a lack of published SRA-specific case law in this area. This is an important consideration for us all. The SRA’s guidance focuses on the wisdom of having in place:
Development and implementation of an EDI policy statement for our workforce
Monitoring and analysis of the diversity of our staff and clients
Recruitment policies to attract a diverse workforce
Encouragement of EDI by senior leadership
I expect to see more cases pleading breach of Principle 6 in the next 12 to 18 months.
Principle 7
A recent example of a breach of Principle 4 (2011) (Principle 7 (2019)) appears in the Agreed Outcome approved by the SDT in SRA v Ali. It was said by the SRA, admitted by Ms Ali, and accepted by the SDT, that Ms Ali had failed to advise her commercially unsophisticated client on obligations under a commercial lease and to carry out proper due diligence which had an impact on the quality of her advice. This was found, unsurprisingly, to be a failure to act in client best interests. It was agreed that Ms Ali should be fined £10,000 and pay costs of £35,000.
There is a fine line between breach of Principle 7 and negligence. This can make for some interesting arguments in such cases. It is not the SDT’s job to decide whether a solicitor has been negligent.
What I hope for 2022 is that this article has encouraged you to delve more deeply into the SRA Principles. Knowing what they are and how to comply with them is akin to eating your 5 or 10 a day, engaging in vigorous exercise and experimenting with dry January. Professionally nourishing and a stimulating intellectual workout. Enjoy!
On 15 January 2021, the Supreme Court handed down its judgment in FCA v Arch Insurance, a test case concerning the recoverability of losses suffered by businesses under business interruption insurance policies during the lockdown caused by the Covid-19 pandemic. The Supreme Court’s decision ruled in favour of the policyholders relying on business interruption insurance policies.
Legal developments
The FCA brought the test case seeking clarity over some business interruption insurance policies’ wording concerning the Covid-19 pandemic claims by policyholders.
The business interruption insurance wording in Arch Insurance’s policies required the outbreak of a notifiable disease to have happened on the insured premises or within a defined proximity, for example, a 25-mile radius. However, the insurers argued that since the lockdown was a national measure to contain the COVID-19 virus, the business interruption would still have happened even if no COVID-19 cases had occurred within the insured premises or defined proximity.
Insurers relied on the “but for” test of causation. For example, would the loss of business still have happened but for the occurrence of a COVID-19 case in the insured premise or geographical radius?
The Supreme Court rejected the insurers’ argument explaining that the “but for” test was inadequate in this case; there are situations, such as the COVID-19 pandemic, where an insuring clause may respond to many related but uninsured events.
The Supreme Court offered a legal limitation to cause-in-fact or “but for” by reiterating the principle of proximate causation. Every single case of COVID-19 in the country qualified as a proximate cause of loss because each case equally contributed to the national lockdown. Therefore, Any COVID-19 case in the radius of the business was as causative as those outside it. Thus, the causation element was satisfied if there was a single COVID-19 case in the radius of a business.
Positive news for policyholders?
The FCA estimates that approximately 370,000 policyholders are affected by the judgment of the test case. For some of these policyholders, the impact of the judgment has already been positive in terms of financial recovery. The FCA has confirmed that insurers have made £1bn pay-outs to small businesses following the Supreme Court’s decision. However, the delay in recovering any losses, months following the businesses’ closure during the lockdown, means that the difficulties faced by these businesses have not faded.
In addition, many businesses are battling over their claims with insurers who argue that the Supreme Court’s decision does not bind them.
One of the biggest concerns for policyholders is that their arguments for business interruption insurance losses are based on contractual interpretation, which requires court involvement to resolve.
It takes a real-life case to breathe life into the law, especially one as dry as Data Protection flavoured with just a dash of Land Law. And for spicing up our lives, we should give thanks for the case of Mary Fairhurst v Jon Woodard.
How many people consider the Data Protection Act 2018 before installing security cameras. Jon Woodard, an audio-visual technician, living in Thame Oxfordshire, did not when installing cameras around his home, including a Ring Doorbell on his front door and two security cameras whose fields went outside the boundaries of his property. All three devices picked up sound and visuals, and he could watch and listen to recordings of his neighbours and other passers-by on his iPhone. His intention was to prevent crime.
In his enthusiasm for his inventiveness, he showed his neighbour a video of the captured data on his iPhone. The neighbour, a scientist, Dr Mary Fairhurst, was horrified and distressed so much by the knowledge he could pick up her comings and goings and conversations that, after failing to persuade him to compromise, she moved out of the home which she’d lived in for more than twenty years. The situation escalated after uncivil text messages on the part of Mr Woodard. As a result, Dr Fairhurst issued court proceedings claiming Mr Woodard had breached her Data Protection rights.
Mr Woodard argued that his camera collection of data and its processing was necessary to prevent crime, which was accepted as a legitimate interest. The question for the Judge was whether Dr Fairhurst’s right to privacy trumped this.
Helpfully the Judge distinguished between the audio and visual recordings. She found that the audio recordings were collected unlawfully on all three devices. The legitimate aim of preventing crime could be achieved without audio (or by an instrument whose microphone had a much more limited range than Mr Woodard’s devices, including the Ring Doorbell).
On visual data collected by the Ring Doorbell, the Judge found that Dr Fairhurst’s data was only likely to be collected incidentally as she walked past Mr Woodard’s front door. On balance, his crime prevention interest for visual data on that device did not override her right to privacy.
Mr Woodard’s other two devices collected visual and audio data outside the boundaries of his home. The Judge found that the claimed interest of crime prevention was not strong enough to outweigh the right to privacy of Dr Fairhurst. Accordingly, she found that Mr Woodard breached the Data Protection Act. Dr Fairhurst would be entitled to damages and injunctive relief (a remedy that restrains a party from doing certain acts or requires a party to act in a certain way).
The lesson to be learnt is that installing and using these security devices turns one into a data controller for Data Protection purposes. Still, it is also a helpful reminder that we should all strive to be good neighbours, even when challenging.
Compromises must occur so children can spend the Christmas holidays with both parents. Often, there can be disagreements about who the children should spend Christmas Day with. However, parents have equal status in the eyes of the law, and as such, the best outcome for children is for them to spend equal time with each party at Christmas.
This arrangement can become more complex when one wishes to take the children abroad. Ideally, they must obtain the other parent’s consent, which is mandatory for certain countries. And bear in mind additional measures imposed by the Covid-19 pandemic.
It is crucial to try and agree on arrangements as early as possible so the court can make decisions in time for Christmas if required. Where no agreement stands between parents, legal advice should be sought to seek an agreement or court order permitting travel.
Family solicitor Pippa Marshall is a member of Resolution and is committed to assisting clients in bringing their disputes to an amicable conclusion in a non-confrontational way.
For further advice and information, contact Pippa Marshall today.
Note: This article is not legal advice; it provides information of general interest about current legal issues.
Commercial parties must ensure that any exclusions or limitations on liability comply with the “reasonableness test” found in the Unfair Contract Terms Act 1977 (UCTA), as well as common law.
The reasonableness test
To be valid, liability clauses must be “fair and reasonable” under Section 11 of UCTA.
The guidelines for determining what is “fair and reasonable” are set out in Schedule 2 of UCTA, which provides that a contract term is more likely to be deemed reasonable:
if both parties are commercial parties of roughly equal bargaining power;
if the customer received an inducement to agree to the term or, in accepting it, had the opportunity of entering into a similar contract with another party without a similar term;
if the customer knew or ought to have known of the existence and the extent of the term based on any previous course of dealing or custom of the trade;
where the exclusion is based on a condition not being complied with, if it is reasonable to expect that compliance with that condition would be practicable;
if goods have been made or adapted to the individual needs of the customer.
Guidance points for drafting an exclusion clause
Ensure your clause satisfies the reasonableness test.
Under common law, liability clauses must be included in the contract to be valid, and it must have been reasonably brought to the other party’s attention. A particularly onerous or unclear exclusion clause should be made visible instead of hidden away within terms and conditions.
The words used in the clause must be clear and precise so that the other party can understand its scope. An ambiguous clause is likely to fail the reasonableness test as the court cannot tell from the contract what the parties’ intentions were in relation to the risk. Separate and precise clauses should be used, as blanket clauses are less likely to be found reasonable.
Make sure the liability is excludable in the first place. The following areas of liability cannot be excluded;
liability for death or personal injury resulting from negligence;
liability for breach of contract – unless it is found to be reasonable, for example, under a force majeure clause.
The importance of meeting the reasonableness test
If the clause does not comply with UCTA or the guidance points above, it is likely that the liability clause will not be valid, and liability for the risk will not be limited.
It has traditionally been the practice of the court that the burden of proof is on the party seeking to rely on the liability clause, and any doubt in relation to a clause seeking to limit or exclude liability will be decided against the party who wishes to rely on it.
Speak to Victoria Holland today to review your commercial contracts and ensure that your liability clauses are reasonable and valid.
Note: This article is not legal advice; it provides information of general interest about current legal issues.
In one of the few cases to consider the impact of the pandemic on company contracts to date, the High Court has ruled that a force majeure event took place when a Drain Doctor franchisee needed to self-isolate due to the risk of Covid-19 on his vulnerable child.
A force majeure clause in a contract can excuse one or both parties from their obligations without being liable for any failure to perform if acts, events or circumstances occur which are beyond their control, such as a natural disaster or a state of war.
In the case of Dwyer (UK) Franchising Ltd v Fredbar Ltd & Bartlett, the franchise agreement contained a clause for suspension during any period that either party was prevented or hindered from complying with their obligations by any cause designated as force majeure by the franchisor.
When Fredbar (franchisee) asked to invoke the clause as work levels were reduced and he needed to self-isolate, Dwyer (UK) (franchisor) argued that plumbing services could still be provided during the lockdown and a drop in demand was insufficient grounds for force majeure. When the franchisee terminated the agreement, arguing Dwyer (UK) had failed to meet its obligations, the company retaliated by initiating legal action, claiming damages.
In assessing the case, the High Court drew on what is known as the Braganza duty from the 2015 case of Braganaza v BP Shipping, which saw the Supreme Court rule that a unilateral power to call a force majeure event must be exercised ‘honestly, in good faith and genuinely’.
In this case, the judge ruled that Dwyer (UK) breached the Braganza duty in refusing to agree to force majeure, as they had failed to consider all the relevant factors. These extended beyond the general situation regarding plumbing services during the pandemic and included the importance of family welfare and the franchisee’s need to isolate to protect his son, who was in a vulnerable category for Covid purposes.
“The ruling reflects the specific facts of this case and the wording of the force majeure clause. But while the wording of Drain Doctor’s clause was not typical, it is an interesting outcome for anyone currently pursuing action on these grounds in relation to the pandemic. However, each case will hang on individual circumstances and the wording of the particular contract concerned.
The past year has taken us all into unchartered territory, demonstrating how the unexpected can, and does, happen. It is therefore even more important than ever before to have well-drafted contracts, as having clear terms in place can make all the difference. And because the concept of force majeure is derived from civil law, and not fully recognised under English common law, it should always be fully and clearly defined in a contract.”
James McMullan proposes five tips for helping sole traders prepare their businesses and estates for life after death.
Treat succession planning as a process rather than a one-off
Sole traders need to create a succession plan for their business and personal affairs. Could a staff member fill their shoes if they died? If yes, why not start training them today? Or consider entering into a partnership with them. In this case, you would need to create a partnership agreement, which, amongst other things, sets out what would happen to the business if one of you were to die or lose capacity. Sole traders must obtain specialist legal advice before entering into a partnership agreement to ensure it’s tailored to their needs.
Include your business in your will
When a sole trader dies, their entire business forms part of their estate, and they can decide who will inherit it under the terms of their will. If they do not make a will, their business will pass to someone under the intestacy rules, and their business could then fall into the hands of somebody who does not have a business mind.
Think about who to appoint as your executor(s)
Sole traders should appoint someone with the skill set to run their business, even if only for a limited time. Their executor(s) should understand the business and retain and realise its true value before it is passed on to any successor or beneficiary or sold.
Make a list of your assets – and keep it up to date!
Sole traders should make a business assets and liabilities list and keep it up to date with their will. If they update it every year, it will help their executor(s) to administer their estate more efficiently. It is important to consider any digital assets a sole trader may own and include them in a schedule of assets and liabilities.
Put a Lasting Power of Attorney in place
Death is not the only reason you may not be able to work or manage your affairs. Illnesses such as Alzheimer’s and dementia are on the rise. If you are temporarily or permanently incapacitated and therefore unable to work, a personal and business affairs Lasting Power of Attorney (LPA) will allow a sole trader to appoint someone to continue running their business or, if necessary, sell it while it still has value. You must consider making an LPA to cover this possibility.
If you are a sole trader, why not give private client partner James McMullana call today to discuss your options?
Note: This article is not legal advice; it provides information of general interest about current legal issues.
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