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The Government has recently announced details, set out in the Renters Reform Bill 2022 (“the Bill”), to end a landlord’s ability to terminate a residential tenancy on a ‘no fault’ basis. To do this, the Government will move all tenants who would previously have had an Assured Shorthold Tenancy to a single system of periodic tenancies.

The proposed changes are the biggest shake-up of the law governing Landlord and Tenant relationships for over 30 years.

Currently, a landlord can serve a tenant with an ‘s21 notice’ to bring their tenancy to an end, without having to give a reason. An s21 notice can only be served if a landlord has complied with a number of procedural requirements beforehand and is commonly referred to as the ‘no fault notice’.

The Government believes that the outlawing of the ‘no fault’ route to possession will offer tenants greater protection from alleged rogue landlords who seek to terminate tenancies without giving any reason. Government statistics state that 22% of those who moved last year did not end their tenancy by choice.

Recognising that landlords’ circumstances change, the Bill will also introduce new grounds for eviction for landlords who want to sell their property and/or move into the rental property. This ground cannot be used for the first six months of the tenancy (similar to how the current s21 procedure works).

New mandatory grounds for repeated serious arrears will also be introduced. This aims to help landlords who have tenants that pay off a small amount of arrears, keeping them under the mandatory repossession level of two months’ arrears (and thereby defeating the ability for the tenant to ‘play the system’).

Eviction will be mandatory where a tenant has been in at least two months’ rent arrears three times within the previous three years, regardless of the arrears balance at the possession hearing.

Under the s8 procedure, the notice period for the existing rent arrears eviction grounds will increase to four weeks and the mandatory threshold at two months’ arrears at the time of serving notice and hearing will remain unchanged. The reason being is to ensure that tenants have a reasonable opportunity to pay off arrears without losing their home.

The Bill will also allegedly introduce, amongst other things, a property portal to help landlords understand their obligations, give tenants performance information to hold their landlord to account, and help Local Authorities reduce poor practice. It will also be unlawful to apply a blanket ban on pets.

If you require assistance or advice on obtaining possession or a property, Talk to Tollers on 01604 258558 where our experienced Dispute Resolution team is on hand to provide you with the most up-to-date information and guidance.

More about how we can assist with all types of property disputes.

 

It is important to understand the options available to residential landlords who are looking at obtaining possession of properties let under an assured shorthold tenancy.

The procedure for obtaining possession of a property occupied by a tenant under an assured shorthold tenancy agreement is that a landlord must first provide their tenant with formal notice before commencing possession proceedings. A landlord must not attempt to evict a tenant without an order for possession, as this would be a wrongful eviction which is a criminal offence.

Tenants must be given either:

During the pandemic, the Government introduced emergency legislation that extended the timescales for the service of s8 and a s21 notices.

As of 1 October 2021, the majority of the restrictions imposed under the Coronavirus Act 2020 were lifted, and the notice periods required for s8 and s21 notices reverted to that of the pre-pandemic period.

For s21 notices, where the tenant is entitled to the statutory 2 months’ notice, the notice can be relied upon to commence possession proceedings for a period of 6 months beginning with the day it is given to the tenant.

For s8 notices, a landlord must provide a tenant with at least 2 weeks’ notice (this varies depending on the ground relied upon) and commence possession proceedings within 12 months from the day upon which the notice was given to the tenant.

Following the expiry of the relevant notice, possession proceedings can be commenced, however, it can take a number of months to obtain an order for possession.

Once the court has granted an order for possession, a warrant for possession must be applied for if the tenant continues to refuse to vacate the property. When a warrant for possession is granted, an eviction date will be scheduled by a County Court Bailiff.

If you require assistance or advice on obtaining possession of a property and the different notices…Talk to Tollers on 01604 258558, our experienced Dispute Resolution team is on hand to provide you with the most up-to-date information and guidance.

Adverse Possession enables someone in possession of land belonging to someone else to obtain title to the land provided certain criteria are satisfied, this person is often referred to as the squatter.

What must the squatter prove?

In the case of unregistered and registered land, the squatter will need to evidence that they:

Factual possession

The squatter must prove that for the requisite period of time, (details below) they had the required degree of physical control over the land in question.  The squatter, therefore, needs to demonstrate that they have exclusively dealt with the land in a manner which an owner occupying the land may have done.

The period of ownership needs to be 10 or 12 years depending on whether the period in occupation ends before 13 October 2003 and whether the land is registered or not.

Intention to possess

The squatter must demonstrate that during the required period of occupation they had the required intention to possess the land in their own name and on their own behalf.

To the extent legally permitted and possible, the required intention to possess must be to exclusion of all others.

Application process

The facts and matters in dispute will be relevant to deciding whether to make an application to the Land Registry or the Court.

If the application to the Land Registry is contested, (and there is a process to be followed once an application by a squatter is received), the Land Registry will refer the matter to the Lands Tribunal to determine.

Getting your case in order with the required evidence is fundamental to any application by any squatter succeeding or being defended.  Tollers have a team of experts who can quickly assess the merits of any claim and advise on the application process whether it be on behalf of the squatter or landowner opposing the application.

Adverse possession is a complex issue, if you would like to speak to a member of our Dispute Resolution team…Talk to Tollers on 01604 258558 and our team will be happy to discuss your claim further.

The Government’s guide regarding Adverse Possession.

There has been a huge amount of commentary on the impact of Covid-19 on commercial contracts since the outset of lockdown including discussions in relation to the application and enforcement of force majeure clauses and the frustration of contracts.

As lockdown restrictions are eased and businesses open up again boards need to consider whether the performance of contracts which were previously suspended due to force majeure must be resumed. If this does not happen the other party is likely to consider what options it has in relation to enforcement of the contract or even possibly termination.

In May the Cabinet Office issued Guidance on responsible contractual behaviour in the performance and enforcement of contracts impacted by the Covid-19 emergency.

This new guidance sets out guidance and recommendations for responsible and fair contractual behaviour in the current climate in an attempt to avoid potential disputes and business should have regard to this. The guidance stresses that good contractual behaviour is important both for jobs and for economic recovery.

So what is meant by fair and responsible contractual behaviour?

  1. Being reasonable and proportionate in responding to issues relating to contractual performance and enforcing contracts; and
  2. Acting in a spirit of cooperation with a view to achieving a practical, just and equitable outcome having regard to the impact on the other party, the availability of financial resources, the protection of public health and the national interest.

The government is strongly encouraging parties to seek to resolve disputes responsibly through the use of negotiation, mediation and other alternative dispute resolution strategies.

This guidance is not law but parties to a contract must consider the impact of the guidance when disputes arise and consideration should be given to how to move forwards. It is not clear at this stage if the courts will take into account whether or not parties have taken the guidance into account but the guidance should be seen as a commercial deterrent to unreasonable behaviour.

For further information about the guidance… talk to Tollers on 01604 258558 and speak to the contracts specialists in our commercial contracts or dispute resolution teams, who will be happy to assist.

https://www.tollers.co.uk/dispute-resolution/

https://www.tollers.co.uk/commercial-law/

Earlier this year Skansen Interior Limited (Skansen), a small interior design company, was found guilty under section 7 of the Bribery Act 2010 for failing to prevent bribery. This is the first UK contested case where the defendant had tried to rely on the “adequate procedures” defence against the charge of failing to prevent bribery. Until now, there has been limited guidance available to businesses as to what constitutes “adequate procedures”.

The background to the case is that during a tender process for refurbishment contracts worth in total £6 million, Skansen made two payments to a senior employee within the customer’s tender team. In exchange, Skansen received an advantage and won the tender. A third payment was discovered and stopped by Skansen’s management who reported the matter for investigation. Despite Skansen’s co-operation, it was prosecuted for failing to prevent bribery.

One of the arguments Skansen’s lawyers put forward in defence was that the size of Skansen’s business (being less than 30 employees) meant that sophisticated anti-bribery controls were not necessary. The jury disagreed and Skansen was convicted. The only penalty available in this case was an absolute discharge due to the fact that Skansen was a dormant company with no assets at the time of trial. Many will interpret the decision to prosecute Skansen on this basis as a clear message that even small businesses must still comply with the Bribery Act.

During due diligence and warranty negotiations in merger and acquisition deals, we often hear that the target company couldn’t possibly be involved in bribery and that bribery considerations are irrelevant. This case illustrates that bribery can occur in all sorts of companies, including SMEs and owner-managed businesses and must be considered seriously.

Buyers (and their lenders) are likely to be more cautious to this risk now and accordingly will carry out enhanced due diligence and demand stronger contractual protections. On the other hand, sellers should consider these issues carefully and review their anti-bribery procedures and documents.

Talk to Tollers!

Tollers are able to advise you on the risks associated with the Act and how best to tackle these risks in the context of an M&A deal.

Please contact either Craig Harrison on 01908 306937 and craig.harrison@tollers.co.uk or Ryan Chia on 01908 306948 and ryan.chia@tollers.co.uk.

The Consumer Rights Act 2015 (“the Act”) came into force on 1 October 2015 and applies to contracts between “Traders” and “Consumers”.

Section 2 of the Act defines a Trader as “a person acting for purposes relating to that person’s trade, business, craft or profession, whether acting personally or through another person acting in the trader’s name or on the trader’s behalf”.

Consumer is defined as “an individual acting for purposes that are wholly or mainly outside that individual’s trade, business, craft or profession”.

This article focuses on the key points traders need to be aware of when contracting with consumers for the sale of goods after 1 October 2015 and where the goods are not of satisfactory quality or fit for purpose.

Right to reject faulty goods

Prior to the Act coming into force, there was a great deal of debate as to what was a reasonable time for the purposes of establishing whether a consumer still had the right to reject faulty goods and in particular whether that right had been lost due to the consumer having been deemed to have accepted the goods.

The Act seeks to clarify this issue by creating a new short term right to reject within 30 days (“the 30 Day Period”). Assuming that the consumer can prove that the goods are faulty, they can reject the goods and claim a full refund within the 30 Day Period. The 30 Day Period runs from when ownership of the goods passed or in the case of goods on hire purchase, when possession of the goods is transferred to the consumer.

The 30 Day Period is clearly not likely to be appropriate for purchases of goods which have a life expectancy of less than 30 days. In such circumstances the short term right to reject will be determined by when the goods in question would reasonably be expected to perish.

Consumers can elect or allow the trader to carry out repairs or replace faulty goods within the 30 Day Period. In such circumstances, the clock, for the purposes of calculating the 30 Day Period stops until the goods have been replaced or returned.

There is however no requirement for the consumer to allow the trader an opportunity to carry out a replacement or repair to faulty goods within the 30 Day Period before exercising the right to reject.

Traders cannot exclude the 30 Day Period and the period only lapses due to the expiration of time.

Repair/replacement of faulty goods and final right to reject or secure a reduction in price    

If a fault is identified within 6 months of delivery, it is assumed that the fault existed at the time of delivery. It is for the trader to rebut this assumption.

Within 6 months of delivery a consumer can, if it is possible, choose to have the faulty goods repaired or replaced. If the fault is not resolved the consumer can claim final rejection or a reduction to the purchase price. Save for sales of motor vehicles, traders will now be unable to make a deduction for the use of the goods that the consumer has had within the first 6 months following delivery.

Traders will now only have one opportunity under the Act to replace or repair faulty goods. A consumer, can still if he wishes, allow the trader further opportunities to replace or rectify defective goods but is not required to do so. Further opportunities do not prevent the consumer from exercising their right should it become necessary to reject the goods or require a price reduction.

Tollers Dispute Resolution team have handled numerous consumer disputes. If you require any assistance in this area please do not hesitate to contact Tristan Benson on 01536 276498

Introduction

Litigation is an inherently uncertain and risky process. It is easy to start but more difficult to bring to an end without going to trial. By following the steps set out below, disputes should be easier to avoid and to manage.            

1. Read and understand your commercial contracts before signing

Parties tend to focus on the commercial terms such as price, quantity and delivery dates. However, careful note should be taken of the termination provisions, whether there is a process for resolving disputes and (if contracting with an overseas party), the governing law of the contract and which courts will have jurisdiction. In my experience, these provisions only come to light after a dispute has arisen, by which time the parties are bound by whatever is written in the contract.

2. Have a full set of Terms and Conditions and do all you can to ensure that they apply to your contracts

There is no point having a comprehensive set of Terms and Conditions if they do not form part of the contract. Take care to understand how the “Battle of Forms” works so that you can organise your paperwork to ensure that, as far as possible, your Terms and Conditions apply.

3. Understand the legal status of the other party

Your customers and suppliers may be private individuals working as sole traders, limited companies, limited liability partnerships or traditional partnerships. The options for pursuing a claim will, to some extent, be dependent on the legal status of your opponent and its asset position.

4. Take personal guarantees if possible

It can often come as an unpleasant shock when dealing with a limited company to find that the company is a shell with no material assets. Whilst commercial realities obviously apply, if you are concerned that the other party may not be able to meet its liabilities, you should at least consider asking for personal guarantees from the company’s directors or another third party. If the directors have a personal interest in the transaction, they are less likely simply to put the company into liquidation and walk away.

5. Manage communications with the other party

Once a dispute arises, it is sensible to challenge communications through a nominated individual within your organisation. This avoids the risk of adverse disclosure to the other side from, say another employee who does not have the full picture. It also ensures that you approach the dispute in a consistent and coherent manner.

6. Preserve all types of evidence

The facts and matters to which the dispute relates may have arisen many years before the claim is pursued. The longer the time period, the greater the risk that evidence will be lost. This can easily occur by the accidental deletion of backup data and the disposal of obsolete equipment such as laptops and servers. Employees may also leave the organisation and take with them electronic equipment containing evidence such as text and emails.

7. Check insurance and funding

Long running litigation is inevitably expensive. Your costs may, however, be covered by insurance policies which you hold either of a household or commercial nature. If so, it is important to make a claim on the policy as soon as possible after the dispute has arisen. Where funds are not available to finance a claim, funding from a third party may be an option, albeit the funder will take a share of the damages in return for their financial contribution. The risk of having to pay the other side’s legal costs can also be dealt with via what is known as After The Event (ATE) insurance.

8. Be clear as to your commercial objective

Pursuing a claim as a matter of principle is an expensive luxury. Before embarking on litigation, you should be clear not only as to the overall cost and risk involved but what you are aiming to achieve in terms of an acceptable financial settlement or other remedy. With the assistance of your legal team, you should cost out the worst and best case scenarios and always be as objective and realistic as possible.

9. Always keep in mind a commercial settlement

Claims settle at various stages. Efforts should always be made to settle a claim before legal proceedings are even issued. However, sometimes it is necessary to serve a Claim Form to demonstrate that you are serious about the claim. Courts now routinely stay legal proceedings at an early stage to give the parties an opportunity to negotiate. A review of the position should also be taken after disclosure of documents and exchange of witness statements to ascertain whether a window of opportunity for settlement is available. In considering what is an acceptable settlement, you should factor in not only the merits and value of the claim but also the fact that you will only recover about 70% of your legal costs even if you win and you will not recover the value of the management time which will need to be devoted to dealing with the case.

10. Understand and embrace the benefits of mediation

Mediation is an entirely without prejudice process where the parties share the cost of a meeting with a neutral mediator. This is now a widely accepted dispute resolution method and actively encouraged by the Courts. There is a significant benefit to having a neutral mediator present who can say things to each party which do not sit well when coming directly from the other side. The process also allows for a more flexible settlement as opposed to the all or nothing outcome of a trial. Around 75% of mediations result in a settlement on the day of mediation or shortly thereafter.

Many of the above points are simple, common sense but it is surprising how often they can be overlooked in the heat of a dispute. If you would like any further information on our approach to dispute resolution please contact Tristan Benson.

In practice, many people are not aware of the key differences between these three forms of resolving disputes, even though they may have contractually agreed to follow a specified method in the event of a dispute arising.

Mediation

Mediation is becoming the most common method of alternative dispute resolution. This involves appointing a neutral, independent trained mediator.

Mediation is entirely voluntary and conducted on a “without prejudice” basis.  This simply means that the parties cannot refer to matters discussed during the mediation in any future Court litigation. 

Often the mediator will gather the parties together at the start of the day so as to allow each party to set out its position.  The parties then split into separate rooms with the mediator going between the rooms to try and narrow the issues in dispute with the ultimate view of achieving a settlement.  The intervention of an independent mediator can sometimes help the parties to take a step back from the litigation and consider matters from a more objective prospective.  This can help in facilitating a settlement of even the most contested disputes.

Parties tend to engage in mediation after the formal Statements of Case in Court proceedings have been served.  This means that the expense of preparing a case for trial such as dealing with disclosure, witness evidence and the trial itself can be avoided if the case settles at mediation.

The Court encourages parties to engage in mediation and a failure to engage in settlement discussions without a justifiable reason can lead to costs consequences even if the offending party is ultimately successful at trial

Arbitration

Arbitration is in private as opposed to being in public.  An impartial professional is instructed to make a decision on the dispute.  This in turn means that it can be quicker for cases to be resolved. However the arbitrator’s time is paid for by the parties unlike a Judge.

There are also limited grounds to appeal the arbitrator’s decision and the arbitrator has the power to order costs. 

The parties have to agree to arbitration. It is therefore often found in international overseas contracts as it allows the parties to agree a neutral venue and mechanism for dispute resolution at the outset. 

Adjudication

Adjudication is widely recognised as being a “pay now argue later” mechanism for resolving disputes.  Adjudication is most often used for resolving construction disputes as the parties to a construction contract cannot contract out of it.

Whilst it can be extended, the adjudication is generally a 28 day procedure which is started by a party serving a Notice.  There are strict limits to comply with when dealing with an adjudication.

Generally an adjudicator has no power to award costs unless the parties have otherwise agreed. 

Adjudication awards are enforced by the Courts. The idea behind adjudication proceedings is that it is designed to protect cash flow for businesses by preventing one party from withholding payments for significant periods of time.  Adjudication however, does not finally dispose of the matter.

The adjudicator’s decision often last until practical completion, at which point it can be arbitrated or litigated if not accepted.  Generally, adjudication is appropriate for dealing with claims relating to:-

The above is merely a brief summary of the main differences between adjudication, arbitration and mediation. Should you require further advice on choosing which of the above methods is most appropriate to your dispute then please do not hesitate to get in contact with the Tollers Team and in particular Tristan Benson on 01536 278498.

Mediation is the most common. This involves employing a professionally trained neutral mediator. The parties meet on a without prejudice basis and the mediator explores whether a consensus can be found.

The Courts promote mediation.  Proceedings are commonly stayed for the opportunity to mediate. This tends to make parties more amenable to mediation as they can agree to it without looking weak. Mediation is a flexible process with early settlement bringing considerable time and costs savings.

Another process is submission to a private tribunal, consisting of representatives from each party with an independent chairman hearing submission. The Chairman then makes a ruling which can be binding or non-binding.  Alternatively, an independent expert may provide a neutral evaluation – often used in technical disputes.

Many industry sectors have an Ombudsman to hear complaints and order compensation. This offers a low cost, less formal and speedier resolution than litigation.

For example the Financial Ombudsman handles complaints by consumers and businesses with turnovers of less than €2million and 10 employees relating to financial services disputes. It is designed for use without assistance from lawyers. However, in our experience, clients still benefit from legal assistance.  The maximum compensation is £150,000.

Many industries, such as the energy sector, have dedicated dispute resolution services. The Energy Ombudsman hears complaints from domestic customers and small businesses in relation to disputes over energy usage. However, the maximum compensation is only £10,000.

Professionals, such as lawyers, have professional bodies where complaints can be heard. Other industries may offer informal dispute resolution services through their trade bodies.

In summary, there are many ways to pursue a claim without going to Court. However claimants need to understand the limits of each body’s jurisdiction, particularly the amount of compensation which can be awarded. For more information, please contact Tristan Benson on 01908 306934.

Looking back over the course of the last few years, I am struck by how few times I have actually been to Court.  Whilst we have had a full case load, very few of these have ended in front of a Judge.  This shows how other dispute resolution processes are becoming increasingly accepted and commonplace.

Perhaps the most common ADR process is mediation.  This involves employing a professionally trained and neutral mediator.  The parties meet on a without prejudice basis and the mediator shuttles back and forth to explore whether a consensus can be found.  We have participated in more mediations year on year and have achieved many positive settlements for our clients.

The Courts are actively promoting mediation.  It is now common for legal proceedings to be stayed after the exchange of formal Court pleadings for at least one month to give the parties an opportunity to mediate.  The fact that a stay is initiated by the Court tends to make parties more amenable to mediation as they can agree to mediation without looking weak.

Mediation is a far more flexible process than litigation.  It allows the parties to reach a mutually acceptable compromise as opposed to the ‘winner takes all’ result of a trial.  An early settlement brings an obvious saving in time and costs. Overall, we are seeing an increasing number of cases being resolved through mediation rather than at Court.

In summary, mediation is a viable and now commonplace alternative to pursuing a claim without going to trial. For more information, please contact Tollers 01908 306934.

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