Joint MediationWhilst never coming across anyone who looks forward to a mediation, the part most dreaded is the staring across the table at “the opposition” and verbally presenting an opening statement. It is however a really good opportunity to explain the impact the dispute has had and to give context to the legal arguments that have often by this stage taken over.

Who provides the opening statement?

Usually it is the legal representative that provides the opening statement.  The Mediator will however give everyone present an opportunity to speak.  For some this can mean having to dig deep and step outside of their comfort zone in order to put into words exactly what the dispute has meant for them. The purpose of the opening statement is to be persuasive and it is useful to focus upon the points that will make the most impact on the other party.

When should the statement be prepared and what should it contain? 

The opening statement can be prepared beforehand and read out. Whilst there are no formal requirements as to its content, the following guidelines will lead to a statement that is effective:-

TIP: There is no need to repeat statements to reinforce them.  Reading a statement that is clear, structured and confident is highly effective in demonstrating your commitment and serious approach to the dispute.

TIP: If at all possible, avoid being defensive and attributing blame….that can be difficult.

What is the point of the opening statement? 

The opening statement itself enables everyone present to understand each other’s interests, aims, objectives and priorities.  It is also your opportunity to show how you will react in Court and whether a Judge would see you as a credible witness.  I have experienced a commercial mediation when a party sat staring at the table, giving no eye contact and relied solely on their Solicitor to deliver the opening statement.  It demonstrated that in Court, there was a strong likelihood that the individual would find giving evidence a challenge and when faced with an opponent that sat confidently delivering an open statement maintaining eye contact with everybody in the room there was a stark contrast which elevated an on paper weaker legal position to one of perceived strength.

The opening statement can set the tone for the entire It is correct that not every mediation needs to start with an opening statement but at some point it can be helpful for the parties to come together.  If you can take this first step and agree to a joint meeting with the Mediator, a mediation could often move forward much more quickly.

For further advice and assistance please contact our Private Client Team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk

Author: Sarah Canning, Head of Dispute Resolution

In accordance with the law of England and Wales, as soon as litigation is contemplated the Court rules require the parties to preserve evidence relevant to the dispute.

As methods of communication and document creation have become more varied over the years, the form of evidence has extended from paper documents and letters to all forms of electronic data which not only include email communication and reports but also messaging sent via Social Media platforms.

Failures to follow these steps and issue retention policies and notices to staff to preserve evidence in a company dispute, for example, could lead to costs consequences being imposed by a Court.

Requirements for preserving evidence in a company dispute

An outline of the requirements is set out below:

Your Solicitor will discuss with you the type of documents that are pertinent to your case and there is now an increasing emphasis upon the disclosure of such evidence at an earlier stage in the dispute resolution process.

For further advice and assistance please contact our Private Client Team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk

Construction contracts often include a clause providing for liquidated damages for delay. This requires the contractor to pay a rate of pre-agreed delayed damages called “liquidated damages” to the customer / employer in such circumstances as to when the contractor fails to achieve practical completion by the relevant completion date that has been stipulated in the contract.

The benefit of liquidated damages to the employer is that it does not require the employer to prove that losses claimed have actually been suffered providing that the rate of liquidated damages is not “unconscionable”.

Generally therefore in a construction contract, it has always been the case that the customer was entitled to recover liquidated damages for delay at the contractual rate up to the date when the contract is terminated and thereafter general damages. Perhaps not surprisingly, this area of law has been subject to extensive examination in the Courts.

The Court of Appeal in the case of Triple Point Technology, INC. –V-  PTT Public Company Limited [2019] EWCA  CIV 230 considered the position in detail: 

The Court has clarified the uncertainties in the matter by deciding that where a Contractor’s employment is terminated before the works have been completed, liquidated damages cannot be applied. Instead, the terminating customer must establish the actual losses arising from the delay and claim these losses as general damages. The Claimant is therefore required to prove that the losses claimed have actually been suffered. The Court found that this approach in these specific circumstances was more logical and consistent with the parties’ agreement to apply the ordinary rules for assessing damages for breach of contract.

It is now an interesting position for contractors in similar situations. There is the potential for contractors facing a liquidated damages bill to elect to terminate the contract in a hope that any actual loss suffered by the customer/employer will be much less than the liquidated damages. It is quite likely as a result that there will need to be amendments to contracts to prevent liquidated damages clauses ceasing to apply should it prove necessary to terminate a contractors employment before completion of the works. As always, carefully consider your contracts before signing and seek advice if you believe there is likely to be a problem.

For further advice and assistance please contact our Private Client Team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk

Countrywide Estate Agents have been fined £215,000 for failing to register themselves under the Money Laundering Regulations 2017.

The fine was imposed by HMRC and has been the largest fine to date imposed on this basis, thus indicating the seriousness that regulators now approach those not complying with Money Laundering Regulations.

It has been long understood that the Property Market is targeted by the criminal fraternity keen to launder monies raised through crime. Estate Agents are therefore at the forefront of what the Minister for National Security and Economic Crime termed ’a crucial line of defence’.

It is understood that this Estate Agency had failed to ensure that policies, controls and procedures were in place and also failed to conduct Due Diligence required on customers which included verification of ID provided at the outset of a transaction and keeping proper records.

Estate Agents have been described as one of the weakest links in the Anti-Money Laundering Regime. Reports made by Estate Agents to the National Crime Agency have been only 0.1% of the reports filed, leading the Treasury Committee to believe that Agents were not taking their Anti-Money Laundering duties seriously.

It is clear that HMRC will continue to regulate this area stringently and any Agency not doing enough to comply with Anti-Money Laundering Legislation will face fines.

For further advice and assistance please contact our Private Client Team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk

 

Mediation has become a more familiar word in Dispute Resolution. In fact, it is now the case in England and Wales that as part of any formal Court proceedings, the Parties must consider Mediation and potentially face cost consequences irrespective of the outcome of the case if they have failed to do so. With the risk of costs, it is in all parties’ interests to have a clear understanding of Mediation as part of their dispute strategy.

So what is mediation?

An independent third party known as a Mediator facilitates discussions between those involved in the Dispute with the objective of its resolution.  The process itself is confidential, non-judgemental and the parties are free to leave at any time.

Why should I mediate?

Mediation has become increasingly popular because it offers the ability to save time and money by reaching an early Commercial Settlement, whilst preserving confidentiality for the Parties involved. The significant reduction in time spent by those involved can often be a hidden cost of Litigation. Having the ability to resolve a Dispute on flexible terms that a Court could not order can often be in both Parties’ interests.

Further, if the Dispute were to proceed to trial and one of the Parties, regardless of the outcome, had refused to Mediate then that Party will be at risk of facing a cost sanction from the trial Judge.

It is quite often the case that the Court will in fact place the Legal Proceedings on hold until after Mediation has been explored with the Judge actively encouraging all concerned to use this alternative means of Dispute Resolution to find a solution.

From the Court’s point of view, there are now very few Disputes that are not suitable for Mediation.

Is mediation a sign of weakness?

No. The Courts will not look kindly upon any party that fails to Mediate and as a result the Proposal and Agreement to Mediation is seen in this context. It is also a very sensible option for those seeking to agree Commercial Terms beyond the limited Court order.

The Mediation process itself is also confidential and takes place on a without prejudice basis. Not only does this mean that what is said at Mediation cannot be reported in Court, private sessions with the Mediator exploring the pros and cons of a particular argument are also confidential and not disclosed to the other party without specific consent.

How do we choose a mediator?

The Mediator does not make any decision in relation to the Dispute. The Mediator does however control the process and therefore it can be helpful to have someone with relevant experience although this is not essential.

A Mediator will not assess the rights and wrongs of a case and instead focuses solely on facilitating the Parties in reaching a resolution.

How does mediation work?

The process itself is very flexible and will depend upon the circumstances and the Mediator’s style.

In summary though, the Parties agree a Mediator, a date and the location for the Mediation. There will usually be a room per party and a room in which all parties can meet together.

Mediations often start with each party setting out to the other in a roundtable meeting their main arguments. A Mediator may facilitate discussion at this point or then invite the Parties to settle into their private rooms in order to explore their positions further.

It is important that those who were able to make the decisions on the case are present and Lawyers can also attend. When the Parties are in their own private room, this stage in the Mediation process can be called a Caucus. A Mediator works between the two rooms assisting each Party in considering the risks and costs as well as the pros and strengths of their claim. At this stage there is no set structure and the Mediator may invite Individuals to meet together to discuss aspects of the Dispute and to clarify facts or may simply continue working between the Parties in their separate rooms.

If an Agreement is reached, a Settlement Agreement is drafted and signed by the Parties before they leave.

Mediation condenses what is a very long Litigation process. It is however a Commercial Process which enables the Parties to explore many different aspects of the Dispute, which would not be considered if the matter where to go to Court. As a result, it can be a long day and requires the Parties to remain open-minded throughout as well as prepared to commit their time and energy to finding a solution.

What happens if no agreement is reached?

Discussions between the Parties can continue after the Mediation ends and often it is found that if an Agreement cannot be reached on the day, the issues that have been explored enable the Parties to conclude their Dispute within a matter of weeks after their Mediation. Both Parties will have protected their position on costs by being willing to explore Mediation and may also have learned valuable information about their case and indeed the other side that could assist them in finding the best possible Settlement.

What will mediation cost?

The cost of a Mediation can often depend upon the value of the Dispute, the fees of the Mediator and also the cost of any venue. The costs are split equally between the Parties.

Whether you believe you have a strong or weak case, Mediation can be a very useful means of resolving a Dispute quickly and cost effectively.  Even with a successful case, the costs of Litigation are rarely recoverable in full and limiting this exposure can be beneficial financially, as well as reducing the input of time for all concerned.

For further advice and assistance please contact our Private Client Team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk

Entering into a Franchise Agreement is an exciting time. The promise of what is ahead with commercial returns for both the Franchisor and Franchisee lead both parties to enter into the relationship on an understandably enthusiastic basis.  From such a positive start, dynamics can however change as the business relationship unfolds with disputes surrounding the following areas high on the agenda:-

The Franchise Agreements

As with any business there are always risks.  Taking on a Franchise is like any other business and whilst it may be of benefit to have the brand awareness of an established business model to seek a head start, there can still be challenges. Franchising itself is not regulated in the UK and as a result there are no regulations to guide both parties meaning that any company can set up as a Franchisor.

The most common type of Franchise dispute is one of misrepresentation. This arises when the Franchisee alleges that the Franchisor provided misleading information to encourage the Franchisee to enter into the Franchise Agreement.  The Franchisee has to show that in entering into the Franchise Agreement, they relied upon statements of fact presented to them by the Franchisor, which later proved to be untrue or was not a view that could be reasonably upheld. Perhaps understandably in this category, most claims tend to focus on financial projections relating to the financial returns of operating the business and its running costs and expenses.

The Franchise Agreement itself is often drafted in a way to favour the Franchisor with many obligations falling on the Franchisee including Personal Liability if the franchise does not deliver on certain performance criteria. Ensuring that the Franchise Agreement has been properly drafted and that the parties are aware of their own rights and obligations is critical as it will enable everyone to work together and co-operate with each other effectively and efficiently.

Preparing well in advance for managing a franchise will assist the Franchisor to support this new extension of its existing business. The program of engaging with the start-up Franchise from the outset through to being established part of the Franchise Group is important and can head off any potential areas of conflict. This means ensuring that the right levels of support and training are in place.

Handling disputes

The majority of Franchise Agreements will include a clause as to how disputes between the parties should be handled. This is the first port of call if the communication between the parties to reach an understanding and commercial solution has not been successful.

Mediation can be part of that process or other facilitated face-to-face meetings if both parties are represented by Solicitors and their direct communications have been unsuccessful. Litigation can of course lead to an assessed outcome however not without often a lengthy and expensive Court process.  Many Court cases can take over a year if they exceed a small claims limit of £10,000 which makes mediation and its ability to resolve a dispute within a day at much less cost an attractive alternative.

Franklins Solicitors LLP have years of experience in franchise disputes.

Just a handful of examples are set out below:-

Following the assessment of each legal position, we assisted the parties decide upon their resolution strategy and represented their interests. Occasionally it was necessary to take court action although in most cases the matters were settled following negotiation.

For further advice and assistance please contact our Private Client Team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk

The Supreme Court has overturned the decision of the Court of Appeal and found that an Oral Agreement between an Estate Agent and the Seller of a property was enforceable even though it did not expressly specify the event that triggered the Sellers obligation to pay commission to the Agent.

The case was called Wells vs. Devani. 

Mr Wells was a property developer and having developed a block of flats, he was finding them difficult to sell. He was introduced to Mr Devani.  Mr Devani was an Estate Agent and during the course of a telephone conversation, Mr Devani explained that his commission was 2% plus the VAT. Beyond those brief terms, no further discussion took place regarding the circumstances in which the 2% plus VAT would be charged or fall due.

Mr Devani introduced a purchaser to Mr Wells.  The purchaser went on to buy the flats at which stage Mr Wells refused to pay Mr Devani any commission. Mr Devani issued Court proceedings to recover his 2% plus VAT of the purchase price.

In the first instance, the Judge decided with Mr Devani by implying a term on payment. It was held that the commission should be paid.

The case was appealed and the Court of Appeal found for Mr Wells on the basis that there was an ‘incomplete bargain’ which resulted in there being no binding contract into which the term i.e. when payment was due, could be implied.

The case was moved to the Supreme Court.

The Supreme Court considered previous case law and commented that:

“The Courts are reluctant to find an agreement is too vague or uncertain to be enforced where it is found that the parties had the intention of being contractually bound and have acted on their agreement. “

It was felt that the actions and words of the parties showed an intent and as a result there was no need to imply a term into such an Agreement which had been the route taken by the Judge in the first instance.  The Supreme Court continued that whilst the parties had not specifically discussed the exact trigger event that gave rise to the payment of commission, the natural understanding of the position was that payment would be due on completion.

The Supreme Court further considered that a term would only be implied where it was necessary to give a contract business efficacy or it would be so obvious that it colloquially went without saying.  As a result, the Supreme Court held that the obligation to pay commission on completion was all that was required to give the agreement between Wells and Devani business efficacy.

Each case is determined on its own specific set of circumstances.  In this particular matter, the Court finally held that there was no uncertainty in this particular situation.  Common sense prevailed. This does not however mean that every oral contract will now be binding.  The best is always to ensure your contract is in writing and the terms are clear.

For further advice and assistance please contact our Private Client Team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk

Both homeowners and tenants will now be able to have access to a complaints scheme when things go wrong.

This is the first such scheme for private lettings and requires all private landlords to join the housing redress scheme. There will be a fine of up to £5000 for any private landlord failing to join the scheme.

The objective is to offer protection to all tenants and ensure that regardless of your accommodation type, there is a recourse and means of addressing issues quickly and cost effectively when things go wrong.

What will the service cover?

The scheme is due to cover a wide range of disputes to include problems with structure as well as repairs and maintenance. It will provide a single housing complaints service for all residents regardless of whether they own or rent their home with the aim of making it easier for everyone to resolve disputes as and when they arise.

In addition, the government has also repeated its commitment to establish a New Homes Ombudsman to ensure that developers are forced to take account of any issues arising in their new build properties. Development will have to belong to the organisation by 2021 and a failure to do so will prohibit the developer from participating in the Help to Buy Scheme supporting new home owners find their way onto the property ladder.

The Housing Complaints Resolution Service will be set up with input from across the sector.

What should you do now:-

If a landlord:

If a developer:

For further advice and assistance please contact our Private Client Team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk

An injunction is a Court Order which stops a company or person doing something specific. It might be something that they have already done that must be rectified or are about to do and you wish to prevent it happening. The party breaching an injunction can be held in contempt of Court and in some circumstances this may lead to imprisonment. Injunctions are therefore powerful tools to protect your business and are not granted lightly.

When can I seek an injunction?

An injunction can be brought any time before or after Court proceedings have begun. The injunction would be granted if the matter is urgent or if it is necessary in the interests of justice. It would be in the interests of justice if, for example, there is a real risk that funds will be dissipated or evidence destroyed.

What does a Court take into account?

There must a basis for a claim to persuade a court that an injunction is appropriate. It is essential to show that your legal rights have been impinged or are likely to be undermined by the other party.

Injunctions are not guaranteed. They are awarded only at the court’s discretion.

Any delay in applying for an injunction may reduce the prospects of being successful and the applicant must have acted appropriately throughout, in what is known in the legal profession as going to Court with “clean hands”.

There has to be more than an award of damages required to remedy the issues at the heart of the dispute for a Court to grant an injunction. If financial n would be an adequate remedy, an injunction is unlikely to be granted.

Injunctions can be obtained “on notice” or “without notice”. This means that either the other side is aware of the application or not told until afterwards. The court will only grant an injunction without the other party represented, in other words on an “ex parte” basis, if there are good grounds for not telling that party about the action.

If an injunction is granted, the court will generally set a date for a further hearing with all parties present and the interim injunction will only last until the date of that hearing. It may however be that the interim injunction lasts through to a full hearing or trial of the issues but on the basis that the party subject to the injunction can apply to the Court to vary or discharge the undertaking.

What are the consequences for the applicant in applying for an injunction?

Injunctions carry consequences for the party applying to the Court and requesting an injunction.

Before granting an interim injunction, the Court will require the applicant to provide the other party with a cross undertaking in damages. This is written into the Court’s Order.

This means that the applicant gives an undertaking to compensate the other party for any harm that the injunction may cause if the Court should decide at a later date that the injunction should not have been granted or should be discharged.

A cross undertaking can lead to substantial damages and therefore it is vital that there is good cause to apply for an injunction.

In addition to cross undertakings, the Court may also require the party applying for the injunction to make a monetary deposit by way of security for costs. A sum of money is paid into the Court’s bank account and held by the Court. These sums are returned to the applicant if the injunction and subsequent claim is successful and, if not, are paid to the respondent party if they are found to have suffered a loss or costs as a result of the court proceedings.

Costs

There are a number of factors impacting upon the level of costs. These include:

Injunctions can be expensive and time-consuming. Your legal team will want to work closely with you and quickly, especially as time is of the essence and a court will consider whether there has been any delay in bringing the proceedings when making its decision. It is important to have all supporting evidence ready and to be as accessible as possible so your legal advisers can clarify any information required and present your case with all the supporting evidence.

For further advice and assistance please contact our Private Client Team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk

Unlike other forms of dispute resolution, a mediator does not decide a case.

Office meetingIt is for the parties involved to agree their own resolution. The parties are responsible for the terms of any agreement and it is their choice as to whether or not the matter is concluded at the mediation. The mediation is conducted on a “without prejudice” basis and any agreement reached is non-binding until such a time as both parties sign a settlement agreement.

The mediator is at hand to facilitate the mediation process and provides a crucial link between the parties at this time.

The role of the mediator is unique being completely neutral and impartial. This neutrality gives both parties the opportunity to consider their claims in a confidential environment knowing that what is discussed will not be passed on to the other side without their express consent.

In summary, the mediator is:-

For further advice and assistance please contact our Private Client Team on 01604 828282 / 01908 660966 or email info@franklins-sols.co.uk