Spring 2005

In this issue

Professional Negligence: expert advice for claimants

Meade King News

Adjudication & Consumers

Employment Round-Up

FMB Bath

Copyright ownership

Living Wills

Rent Reviews in Commercial Leases

Councils must observe own prosecution policy

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Professional Negligence: expert advice for claimants

The volume of professional negligence claims has increased rapidly in recent times. Fuelled by:

• the compensation culture which looks for professionals to blame when things go wrong
• a diminishing respect for professional status
• an increasing demand for greater specialisation and service provision claims are undoubtedly on the increase.

Not every mistake made by a professional gives rise to a claim for compensation. Sometimes the mistake does not cause loss; on other occasions the error will not be so grave as to create an entitlement to damages.

The broad test to be applied is whether the mistake is one which a reasonably competent professional should have made and whether it has caused the client any financial disadvantage.

Generally for a claimant in professional negligence to succeed he or she has to establish:

• the existence of a duty of care on the part of the professional. That does not necessarily mean the claimant is a client of the professional. There must however be a close relationship between the two
• the breach of that duty
• the existence of a loss
• causation i.e. that the breach of duty has caused the loss

At present the market in dealing with professional negligence claims is imbalanced. Professional indemnity insurers restrict the size of their panels and use solicitors who are highly specialised and experienced. The claimant market remains diffuse. There is a broad range of solicitors acting for claimants. Some are highly experienced and well qualified; others are not. The quality ranges from the specialist whose caseload may consist entirely or substantially of negligence work to the High Street practitioner who may only deal with 2-3 cases a year.

With that in mind, the Professional Negligence Lawyers Association has been established with a view to creating a core team of truly specialist professional negligence lawyers acting for claimants. It is anticipated that the association will arrange for information to be shared amongst members, negotiate with counsel for cases to be reviewed on a Conditional Fee (no win, no fee) basis, represent members in seeking to negotiate changes to the relevant protocols to ensure that claims are dealt with quicker and more effectively and generally improve the quality of representation given to claimants.

For more information contact Adam Chivers on 0117 926 4121 or at He is a professional negligence specialist and a regional committee member of the Professional Negligence Lawyers Association.

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Meade King News

Partnership news

We are delighted to announce the promotion of associate Julie Scott to partnership on 1st May 2005. Julie has 11 years experience in commercial property work and joined the firm 3 years ago to specialise in retail (both landlord & tenant and development) and secured lending work. Julie has had great success both with existing clients of the team and in expanding the client base, winning new clients in the banking, property development and licensed trade sectors. Julie's appointment brings the number of commercial property partners in the firm to 4 and reflects our commitment to expansion in one of our core areas of expertise. We wish Julie well for a rewarding partnership with us.

Other staff news

We are very pleased to welcome two further recruits to the firm. Paralegal Samantha Piper has joined our busy private client team to provide support to partner Richard Boulding and assistant Vanessa Eyre.

Trainee David Francetti has begun a training contract with our litigation and construction team. David is unusual as a trainee, having already spent 2 years with a commercial firm in Paris. David's appointment brings the number of current trainees to 3 reflecting our longer-term strategy for growth in key areas.

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Adjudication & Consumers

A recent County Court case has considered the claim of an adjudicator pursuing one of the parties to the adjudication for the recovery of his fees. The decision has highlighted issues to be aware of when contracting with or adjudicating against a consumer

A "consumer" for these purposes, means someone who is acting for purposes which are outside his trade, business or profession.

In all contracts involving business transactions with individuals, the Unfair Terms in Consumer Contracts Regulations 1999 impose certain constraints upon the contract terms. The purpose of the Regulations is to promote fairness between parties who will normally be contracting from unequal bargaining positions.

Under the regulations, any standard term (i.e. one which has not been individually negotiated) shall be treated as unfair and therefore unenforceable if, contrary to the requirement of good faith, it brings about a significant imbalance between the rights and obligations of the consumer. Such standard terms are often sent to consumers in circumstances where there is no realistic opportunity for negotiation.

The question for the judge in this case was whether the incorporation of an adjudication clause (and within that clause a liability for payment of the adjudicator's costs) was unfair. It was certainly a standard clause prepared in advance and not individually negotiated. Was it unfair and therefore unenforceable?

The judge decided that the clause was not unfair because it did not prevent the consumer from taking other legal action or exercising any other remedy. In other words, it did not provide for an exclusive forum for determining issues arising between the parties. It followed that the adjudicator was able to recover his fees.

The contract in this case was one between a contractor and a residential occupier. Such contracts are normally excluded from "construction contracts" for the purposes of adjudication, but there are, as we know, more and more builders (and householders for that matter) who wish to see more formal terms and conditions within the contract for work.

It is therefore not uncommon now to see an adjudication clause incorporated into a residential occupier's written contract.

The warning for the contractor is this: If you want standard terms and conditions incorporated into contracts by reference then you must be careful to explain all the terms you are proposing to use particularly if they have the appearance of limiting a consumer's rights.

For further information please contact Phil Burbidge on 0117 926 4121 or

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Employment Round-Up

TUPE regulations

The Pensions Act 2004 includes a requirement that gives greater protection to members of occupational pension schemes on a transfer of a business. Previously the TUPE Regulations did not apply to pension rights. The new Regulation requires that employees who were members of an occupational pension scheme before a TUPE transfer will be entitled to have a scheme provided by the transferee employer. However, there is no obligation on the new employer to match the type or value of the scheme. There is some protection for the employee in making it a requirement that the employer, where contributions were previously paid, should continue to make contributions up to a defined level.

New Regulations containing extensive clarification of TUPE have been published in draft and are expected to come into force in October 2005. They clarify the law relating to transfer related dismissals and in particular the Regulations relating to service provision changes, i.e. the application of TUPE where there is nothing more than a change of a service without employees or any business structure transferring.

Discrimination law

The Government has published plans to combine the existing Commissions dealing with race, disability and equal opportunities into one overall Commission for Equality & Human Rights. The new Commission will have a duty to take steps to remove discrimination in employment. At the same time there is to be a root and branch review of discrimination and inequality in the employment field. The new Commission will start from October 2007.

Age discrimination

It had been thought that the Government might abolish the mandatory retirement age of sixty-five. There is an obligation under EC Law to introduce regulations relating to age discrimination by October 2006. Draft legislation has been put forward which does not go as far as abolishing a mandatory retirement age. Instead, it proposes a right on the part of an employee passed retirement age to request to continue working. The employer will be obliged to give that request reasonable consideration, and it is likely that it will work in a similar way to the Regulations relating to flexible working with employees with family responsibilities. No date is yet set but legislation should be in force by October 2006.

For further information on employment issues please contact Nicola Hughes on 0117 926 4121 or

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FMB Bath

Construction partner Phil Burbidge and employment solicitor Nicola Hughes took up an invitation to speak to the Bath Division of the Federation of Master Builders in March 2005. The Branch Meeting of the Division took place at the Menzies Hotel in Bath

Phil presented on the ever-evolving adjudication procedure used for dispute resolution in construction contracts and a comparison between this and other forms of dispute resolution.

Nicky held listeners' attention with a frank explanation of the recent changes affecting both disciplinary and grievance procedures and how employers should react to the new legislation.

Should information be required on either topic or on construction or employment issues generally, please contact either Phil at or Nicky at

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Copyright ownership

A recent decision of the Court of Appeal concerning the manufacturers of Dr Marten's boots has underlined the care that businesses need to take when commissioning any creative work.

The Copyright Designs and Patents Act 1988 provides that where creative work is carried out by an employee for his or her employer then the first owner of copyright in that work will be the employer not the employee. However, much creative work is outsourced to specialist agencies by business. Design work carried out by a self-employed designer or a design agency will belong to that third party and there would be no automatic assignment or deemed assignment to the business which commissioned the work. Without clear express terms or a contract, the courts would need to be asked to determine whether such an assignment should be implied.

In the Dr Marten's case, the manufacturer did eventually succeed in its claim for a compulsory assignment of copyright in the designs that had been created as part of the contract by a self-employed designer, but only after lengthy litigation culminating in a hearing at the Court of Appeal. The designer argued that while Dr Marten's had the right to use the designs for the purpose for which they had been originally prepared, Dr Marten's did not own the design, so were not permitted to reuse the design for other purposes without making further payment to him. The designer further argued that if he had intended to allow Dr Marten's unrestricted use of the design he would have charged more for it in the first place.

The moral of this story is to ensure that, wherever creative work is outsourced, there is a clear contract, which addresses ownership of copyright so that disputes do not subsequently arise. This does not necessarily mean that a fresh contract is required for every piece of work as a single overriding consultancy agreement between a business and the designer can assign not only copyright in work that has been done but also assign future copyright in work that has yet to be created. A simple contract addressing this issue and referred to in all purchase orders would be sufficient to create certainty for all parties concerned.

For further information on this or any other commercial contract issues, please contact James Hawkins on 0117 926 4121 or

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Living Wills

A Living Will is an advance directive made by a person who has mental capacity. It is a formal document which lets doctors know what treatment is acceptable to the person who has made a Living Will. The present position is that under Common Law, a patient's advance refusal of treatment is already binding on doctors.

At the end of last year the Mental Capacity Bill made its way through the House of Commons and is expected to become law later this year. The Bill itself had a rocky passage through the Commons, due to concerns that it might legalise euthanasia. The political argument centred around the question of medical treatment and in what circumstances such treatment could be withdrawn.

Frank Field, the former Labour Minister, summarised the problem in some people's eyes when he said 'We should not strive officiously to keep people alive when they are dying. But what we don't want to do is to bop people off when they have got quite a lot of life in front of them'.

What the Mental Capacity Bill does is to give Living Wills a statutory basis. The Act endeavours to make clear how Living Wills operate. In particular, someone can appoint a nominee to make medical decisions for them when they are no longer mentally capable, including authorising or refusing treatment on behalf of the patient. In order to fulfil the requirements under the Mental Capacity Bill, Living Wills must be written, signed and witnessed to comply with the law.

When treating a patient, if a doctor has any concerns about the validity of a Living Will then it will be referred to the Court, and there is a presumption that, in the event of there being a doubt as to the patient's intentions, then it should be resolved in favour of preserving life.

People are living longer these days and more and more clients are expressing an interest in making Living Wills.

For further information please contact Richard Boulding or Vanessa Eyre on 0117 926 4121 or e-mail them at or

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Rent Reviews in Commercial Leases

The Court decides who can activate the Review

Whilst the Government continues to consider proposals to reform upwards only rent reviews in commercial leases - including their outright abolition - a new case has thrown light on interpretation of rent reviews where the rent can go down as well as up.

Hemmingway Realty Limited v Cloth Workers Co. 2005 was decided on 8 March. A tenant sought judgement in its dispute with the landlord over the rent review provisions in the lease.

The lease provided that the rent was to be reviewed on specified dates at 7-yearly intervals throughout the lease period. Only the landlord was to be able to initiate the rent review but at review the rent was to change to market level whether that was above or below the rent the tenant had been paying. The tenant wanted a particular review to take place as it felt it was paying too high a rent. The landlord wanted to avoid a rent review for the same reason!

The Court decided that where a lease clearly provided that the right to review the rent was exercisable by the landlord alone, the absence of the more usual "upwards only" rent review formula was insufficient to allow the Court to construe the lease as allowing the tenant to exercise the rent review mechanism.

The inflated rent under the lease was set many years ago at a time of higher market rent levels. The Court's decision means that the tenant will have to continue to pay the inflated rent until the landlord decides to initiate the rent review. Of course there is no incentive for the landlord to do so until it believes the market rent exceeds the rent the tenant is paying.

Landlords and tenants should be aware that an "open" rent review clause under which the rent can increase or decrease does not in itself provide certainty that a rent review will take place. Careful consideration must be given when drafting the lease to state clearly who can initiate rent reviews.

For further information please contact Edward Langford on 0117 926 4121 or

Councils must observe own prosecution policy

In a most interesting case, the Court of Appeal has quashed a conviction for supplying goods with a false trade description contrary to Section 1 Trade Descriptions Act 1968, on the grounds that the defendant was right to argue that the prosecution was an abuse of process by his local authority.

Mr Glyn Adaway, trading as Quality Direct, contracted to supply and install a conservatory. On completion, the householder found that the conservatory had not been constructed of the particular grade of toughened glass specified in the contract. Mr Adaway accepted his error, and offered to replace the glass or compensate the homeowner. The homeowner declined the offers to compensate and referred his complaint to Wokingham District Council Trading Standards Department.

Mr Adaway, admitting throughout that he had erred in the matter of the glass, attempted unsuccessfully to rely on the statutory defence that he had taken all reasonable precautions and exercised all due diligence. He also applied for the proceedings to be stayed as an abuse of process. This was refused, and he was duly convicted in the Crown Court.

Mr Adaway appealed to the Court of Criminal Appeal arguing that although the offence could technically be made out against him from the undisputed facts, none of the criteria specified in the Council's own prosecution policy had been established to justify the prosecution, and in the circumstances the Crown Court Judge should have concluded that the prosecution was oppressive and therefore wrong, and should have ordered the proceedings to be stayed.

The Appeal Court Judges agreed with Mr Adaway. There was no behaviour by Quality Direct which would have justified a prosecution being issued based on the criteria specified in the policy document, such as fraudulent intent or previous complaints, and the Crown Court Judge should have concluded that the prosecution was oppressive. Mr Adaway's conviction was quashed.

This judgment is of great interest to any defendant facing local authority prosecution and is likely to give many investigating officers pause for thought in the future.

For further information on all regulatory issues, please contact Judith Kelly on 0117 926 4121 or

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Whilst every effort has been made to ensure accuracy, information contained in the Orchard may not be comprehensive and should not be acted upon without professional advice.