About Giles

Giles is the founder and managing director of ContractStore. It was his idea to set up a company selling documents online and he has played a major part in the company's development. He is an English solicitor, with over thirty years' experience of drafting and negotiating commercial and construction contracts in the UK and overseas. Giles has long been convinced that there is a quicker and simpler approach to the delivery and supply of most contracts, and he is an active proponent of the use of plain English in legal documents. He specialises in the drafting of construction and engineering contracts and as well as contributing contracts to the ContractStore website, he is co-author of the JCT Constructing Excellence Contract and of 'Exporting Made Easy' with Simon Bedford.

A Guide to the Modern Slavery Act – Your Business could be affected

The question that many supporters of anti-trafficking movements are asking – does the new Modern Slavery Act (2015) go far enough and ensure that corporates do enough to maintain a transparent supply chain?
The new Modern Slavery Act (2015) will apply to all commercial organisations who carry on business or part of a business in the UK.
Regulations under the Act expected to be implemented in October 2015 will require those with turnover above a yet to be determined threshold to produce an annual statement for each financial year under the so-called ‘Transparency in supply chain provisions’.
Organisations are likely to have only until the end of the current financial year to produce their first statement. Current reports suggest that a threshold of around £36 – 40 million is likely.
The Government has indicated it will publish compliance guidance in the next few months.
The Act introduces two main offences
• servitude or forced labour
• arranging or facilitating the travel of another person with a view that a person is being exploited.
Section 54
• Section 54 of the Act will require every large business to publish an annual statement setting out the steps the business has taken during the year to ensure that slavery and human trafficking are not taking place in the business itself or in its supply chain. The statement must be published on the business’s website.

• The obligation to publish a statement applies to businesses which carry on any part of their business in the UK and which “supply goods or services” (essentially all trading companies and partnerships).

• The statement must be approved by the board of directors and signed by a director (in the case of companies), approved by the LLP members and signed by a designated member (in the case of LLPs), and signed by a general partner (in the
case of limited partnerships).

• Overseas conduct will be included and will be deemed as if the offence had
taken place in the UK.
Preparing the Statement
If a company is caught within threshold, the basic requirement is to produce a statement confirming:
• the steps taken to ensure that slavery and human trafficking are not taking place in your business or in any supply chain or
• that you have taken no steps to confirm the existence of slavery or trafficking. This approach may place a company’s ethical position into question and would probably not be perceived to be the popular stance.
The Act does not specify the exact steps that a business must take in relation to supply chain transparency, and there is no prescribed form of transparency statement. However, the Act suggests that the statement “may” include the following:
• brief description of your organisations business model and supply chain relationships
• your organisation’s policies relating to modern slavery including due diligence processes and the training available/provided for those in supply change management and the rest of the organisation
• the parts of the business and supply chain most at risk in the organisation and how the organisation evaluates and manages those risks
• relevant key performance indicators which would allow a reader to assess the effectiveness of the activity described in the statement.
Publication
The homepage of your website must contain:
1. a prominent link to the statement
2. the statement must be approved by the board and signed by a director
3. homepages of both the parent company and any subsidiaries websites
4. if the company does not have a website it must provide a copy of the statement within 30 days to anyone who requests it.
Application / Jurisdiction
• a company/partnership over a certain size
• supplies goods or services
• carries on a business or part of a business in the UK
Implications
The Act itself imposes no legally binding requirements to conduct due diligence on its supply chains. At present there is some flexibility surrounding the content of the statement as companies may find it difficult to compile all information and the Government has framed Section 54 in such a way as to leave it open to businesses to determine how best to comply
with its requirements, and how far they should go in identifying where any risks may lie (and how to tackle them). The Government has also made it clear that it expects each business to take a appropriate and proportionate approach based on the nature of its business and the industry sector.
What should companies be doing now?
Companies should assess whether you are caught by these requirements, for some this will be straight forward, however for others they will need to decide on an entity by entity basis once the turnover threshold is published. Companies may want to consider the following:
• start assessing current levels of information on your supply chains. The company will need to start engaging with your direct and indirect suppliers and set up due diligence systems to obtain reliable information
• draft and implement a policy on slavery and trafficking
• assess the need for training within the organisation and your supply chains on human rights compliance
• incorporate anti-slavery and trafficking obligations (and related policies) into procurement agreements, and require similar obligations to be incorporated into any sub-contracting arrangements
• consider the company’s supplier due diligence processes to incorporate procedures designed to identify modern slavery and trafficking risks.

Does this impose enough obligations on companies? At this time, it seems that any process that seeks to address trafficking and forced labour issues are to be welcomed.

However there are no criminal or financial penalties for non-compliance and that is an area that should be reconsidered. In order to safeguard and ensure that companies comply with the Act and comply properly and ethically, there should be some element of financial penalty. Notwithstanding the lack of penalty, any company that is deemed not to be adhering to the Act may suffer detriment from a reputation perspective and this in itself may be enough of an incentive for both companies that fall within the threshold and those that don’t to comply with Section 54 properly.

New Public Procurement Regulations come into effect on 26 February 2015.

Under the Europe-wide public procurement directives, contracts above a certain value have to be open to competition and publicly advertised when they are being awarded by central government, local authorities and a wide range of public bodies.  The effect of these directives is to open up the award of contracts to competition across the European Union – any company based in the EU can bid.

The new Public Contracts Regulations 2015 in the UK are extensive and adopt the  simplified, modernised approach of the European Commission.

Among the changes are:

 New opportunities for SMEs to bid for public sector work: in the case of central government, contracts with a value of £10,000 or more should be advertised on the Contracts Finder website, with a threshold of £25,000 in the case of local authorities and housing associations

• Modification of existing contracts without the need for advertising a new contract is now stated more clearly than before.  Additional work or services is allowed where a change of contractor cannot be made for economic or technical reasons or where the change would cause significant inconvenience or substantial duplication of costs for the contracting authority. Modification is also permissible where the value of the change is below 10% of the initial contract value in the case of service and supply contracts or 15% for works contracts

• Grounds for refusing an award to a contractor include any bidder who has “shown significant or persistent deficiencies in the performance of a substantive requirement under a prior public contract”.  Any bidder who has been convicted of conspiracy, corruption, bribery and a range of other offences must not be awarded a contract.

• Payment terms – public sector contracts must provide for payment within not more than 30 days from receipt of a valid invoice.
The Public Contracts Regulations 2015 can be found here:
http://www.legislation.gov.uk/uksi/2015/102/contents/made

A useful summary of the new regs can be found here.

New Law to Help Self Builders moves forward

A Government bill to help enable more people to build their own homes has passed its final stage in the House of Commons. It has all party support and goes to the House of Lords this week.

The purpose of the Self Build and Custom Housebuilding Bill – the brainchild of South Norfolk MP Richard Bacon – is to make it easier for an individual or a group of individuals to obtain land in order to build a house to live in. It places a duty on local councils to keep a register of people who wish to build their own home and who are actively seeking to acquire serviced plots of land in the local authority’s area. The Bill then requires each local council to take account of its ‘self build register’ when exercising the functions of planning, housing, regeneration and the disposal of land.

In Laying the Foundations: a Housing Strategy for England (2011), the Government set out plans to enable more people to build or commission their own home – there is an aspiration to double the size of the self-build market, creating up to 100,000 additional self-build homes over the next decade. Various measures have been introduced to ease the path for those wanting to build their own home including (repayable) funding; an exemption from the Community Infrastructure Levy; amendments to planning guidance; and improved access to public sector land.

Our thanks to NACSBA , the National Custom & Self Build Association, for this information.

Self Builders get a Section 106 boost from the Government

Until now, self-builders in the UK have faced the risk of an expensive levy payable to the local authority as a contribution to the local community, in return for getting planning permission.  This levy has now been abolished for people building their own homes and they will now be exempt from these payments to local authorities, the Communities Secretary Eric Pickles announced recently. The exemption comes into force immediately and could affect hundreds of self builders currently going through the planning process.
Eric Pickles said: “This will also be a massive boost to the self build and custom build sector. Overnight in many parts of England, it will be cheaper to build an extension, a family annex or just build your own home.”
Section 106 Agreements are designed to provide financial benefits for the local community from the granting of planning permission and have traditionally been used to extract incentives from developers. They may take the form of new playgrounds, road crossings and even schools, depending on the size of the development. In recent years, however, NaCSBA reports that many one-off self-builders have found that local authorities are demanding a payment under a 106 agreement before granting planning approval — often in the £1,000s. In one case a self builder was charged £140,000 (in Dorset) to build their own home. The call to exempt self builders from Section 106 campaigned for jointly by NaCSBA and Homebuilding & Renovating.

ContractStore has contract templates for selfbuilders available for downloading at this link http://www.contractstore.com/homebuilder including free guidance.

ContractStore teams up with Artquest to offer contract templates for artists

ArtQuestContractStore is delighted to announce a partnering arrangement with Artquest. This is mainly intended to help artists who need contract documents to support them in their work.

To mark the occasion, together we have developed a Consignment Agreement for use by artists when sending their work to a gallery for exhibition and sale.

Quentin Matsys (1456/1466–1530) - The Yorck Project: 10.000 Meisterwerke der Malerei. DVD-ROM, 2002. ISBN 3936122202. Distributed by DIRECTMEDIA Publishing GmbH.

Art and law join together in our new agreement with Artquest. Quentin Massys’ Portrait of a Lawyer c. 1510.  Distributed by DIRECTMEDIA Publishing GmbH.

 

The Artist Consignment Agreement (document A246 in the ContractStore catalogue), is available as a free download for a limited period.

Also, Artquest subscribers can benefit from a 15% discount on all ContractStore templates. These include a Design Agreement, a Model Release Form, and Art Gallery – Artist Agreement among the 250 contract templates for sale from our website.

Christmas – a season of goodwill, but beware you don’t fall foul of the law when organising a Christmas party

Christmas is the season of goodwill.  But Christmas parties have been known to result in disputes over sexual harassment and in today’s multicultural society  there is even a possible risk of complaints about religious discrimination according to our employment lawyer, Philippa Wood.

So, why not send a few minutes reading her article on whether celebrating Christmas could present a risk for an employer.

You can find the article here: http://www.keystonelaw.co.uk/other/keynotes/2014/12/does-celebrating-xmas-open-yourself-up-to-religious-discrimination-claims/

 

Online Legal Services are “less intimidating, cheaper, quicker and more convenient”

It is good to see a positive report on the benefits of online services such as those offered by ContractStore.  The report entitled “2020 Legal Services – How Regulators Should Prepare for the Future” has reviewed the various offerings online that enable consumers (and businesses) to benefit from the new technology and to obtain a cost-effective solution to some of their problems.  The Legal Services Consumer Panel that issued the report advises the Legal Services Board, the ‘super-regulator’ of legal services in England.

According to the report, their survey data shows strong consumer demand for online services: 47% of consumers polled said online delivery is important to them.

As technology makes legal services simpler to use, involve less effort and cheaper to buy, more people are likely to carry out the sorts of tasks – like writing a will or arranging a power of attorney – which currently they either prefer to put off or cannot afford to do.  The various online services offer many benefits. Among other things, “they may be less intimidating, cheaper, quicker and more convenient.’”

“Self-Lawyering”

‘Self-lawyering’ (sic) is expected to increase as consumers seek alternatives to lawyers through technology enabled DIY solutions. This will enable some consumers to complete common legal tasks without the need to engage a lawyer, or with minimal supervision by a lawyer.

As the report says, historically, lawyers have been a conservative profession which has successfully resisted change.  It is therefore encouraging to see the Legal Services panel acknowledging the beneficial impact for users of the new marketplace when the report says that  “in overall terms, there would seem good grounds for being optimistic about the future. Market liberalisation, technology and other forces should produce innovative and cheaper services that can benefit all consumers and widen access to groups currently excluded from the market.”

Concerns About Regulation

However they do have concerns at the unregulated nature of the online legal market. So they want to encourage and facilitate initiatives to raise standards and extend access to redress in unregulated markets while “continuing to press for modernisation of the wider regulatory framework in the longer term.”

There is something of anomaly in the regulatory framework at present: on the one hand, to practise as a solicitor you first have to train, qualify, be registered with the Solicitors Regulatory Authority and comply with the SRA Code of Conduct and Accounts rules.  But the ‘regulated activities’ which only solicitors can perform are very few – essentially court litigation, handling probate and some property transactions.  As a result, the internet has enabled the proliferation of a wide range of legal or quasi-legal services which are not subject to any professional control and can be provided by people without any training in the law.

Quality Legal Documents

At ContractStore, we have taken steps to ensure that our services meet high professional standards.  All our documents are prepared by qualified, experienced lawyers and we are a founder member of APOD, the Association of Publishers of Online Legal Documents which itself has a Code of Practice that members have to sign up to.

The full report can be found here –  http://www.legalservicesconsumerpanel.org.uk/publications/research_and_reports/documents/2020consumerchallenge.pdf

 

Fine of £300,000 for sending spam is overturned on appeal.

A £300,000 penalty issued by the Information Commissioner (ICO) against a Mr Niebel   for sending unwanted text messages ‘on an industrial scale’ has been cancelled on appeal.

Hundreds of thousands of messages were sent from hundreds of unregistered sim cards seeking out potential claims for mis-selling of PPI loans or for accidents.  And there was no evidence to show that he made any effort to make sure that the recipients consented or that he retained any record of consents. He did not even  bother to register with the ICO under the Data Protection Act (DPA) as a controller of data.

Under the regulations in place since 26 May 2011 the ICO can impose fines of up to £500,000.   But the regulations say the contravention must be serious. It must also be “of a kind likely to cause substantial damage or substantial distress”.

The fine imposed by the ICO covered messages sent before and after these new regulations came into effect. In fact only 286 of the messages were sent after 26 May, a tiny proportion of the total.

In his judgement, Judge NJ Warren said that the effect of the contravention was likely to be widespread irritation but not widespread distress. “Given the scale of the contravention, there is the possibility of some distress in very unusual circumstances but we cannot construct a logical likelihood of substantial distress as a result of the contravention. We conclude that the contravention is not of a kind likely to cause substantial distress. “ So he cancelled the penalty notice.

Even if it does not cause distress, spamming is still illegal and you need to be sure to obey the rules if you want to send out marketing material.  Direct email marketing to consumers is acceptable if the sender has “obtained the contact details of the recipient of that electronic mail in the course of the sale or negotiations for the sale of a product or service to that recipient”, where the marketing is for “similar products and services only” and providing the recipient can easily unsubscribe  so as to refuse the use of their contact details for that marketing in future.

Are your Website Terms of Business ready for the new Consumer Regulations?

New regulations concerning the sale of goods and services to consumers come into effect in June. The great majority of businesses selling goods or services online as well as door step and other “off-premises” sales will be affected.

The Consumer Contracts (Information, Cancellation and Additional Payments) Regulations 2013 come into effect on 13 June 2014. They replace the existing the Distance Selling Regulations and the Doorstep Regulations.

Although many of the existing regulations will continue, they have been updated in various ways and there are a number of changes that you will need to make to your terms and conditions.

So, be prepared to update your Terms of Business for online sales on your website as well as for off-premises sales. And remember, these Regulations apply to the sale of services as well as goods.

ContractStore’s Terms & Conditions for online sale of goods  (document A179) have been updated and are available to buy and download from our website.

Here are some of the key points in the new Regulations:

 Information     Lots of information must be given by the trader to the consumer before the contract is made.  This pre-contract information will be treated as information forming part of the contract. If this information is not provided, the consumer may not be bound by the contract.

Schedule 2 of the regulations details 24 separate bits of information to be provided. These include:

  • the main characteristics of the goods or services
  • the identity of the trader and his address and contact details
  • if the trader is selling on behalf of someone else, the address and identity of that other trader is also needed
  • the total price of the goods or services including taxes or, if this cannot be calculated in advance, an explanation of how it will be calculated
  • where applicable, any additional delivery charges or  other costs
  • where the contract is open ended or the consumer is paying a subscription, the total monthly or other regular payments
  • arrangements for payment, delivery, performance and timing
  • where there is a cancellation right, details concerning this
  • when applicable, the terms of any after sales service
  • the duration of the contract and if this is open ended, the conditions for terminating and the minimum contract period, if there is one.

Making the Contract.   In the case of online business, the information items in italics above are the minimum that the trader must provide ‘in a clear and prominent manner’ before the consumer places an order.

Also the website must have wording that ensures the consumer, when placing an order, explicitly acknowledges the obligation to pay for the goods or services being ordered.

Unless the trader complies with these requirements, the consumer is not bound by the contract..

Once an order is placed, the trader must confirm the contract within a reasonable time and before the delivery of goods or start of services.  email confirmation is acceptable.

Sales by Phone.  Anyone making a phone call to get a contract must at the beginning of the conversation identify the trader’s identity, the purpose of the call and the identity of any third party on whose behalf the call is being made.   

Delivery.     The contract will automatically contain an implied term requiring retailers to deliver goods and services without delay and in any event within 30 days from the contract date

 Risk.   Until goods come into the physical possession of the consumer, risk of loss or damage remains with the trader. This will not apply if the consumer arranges transportation with a carrier who has not been recommended by the trader.

Cancellation Rights.  Consumers will have 14 days in which to cancel a contract. This period replaces the existing period of 7 working days.  The 14 day period starts the day after the contract is made in the case of a service contract or contract for the supply of digital content online.

In the case of goods, the cancellation period ends at the end of 14 days after the day on which the last of the goods came into the physical possession of the consumer (or someone identified by him – e.g. the person to whom a gift is being delivered).

The Regulations contain a model cancellation form and consumers should be given the option to use this, but any clear statement of cancellation will be effective provided it is given within the 14 day period.

If the trader does not spell out the consumer’s cancellation rights, then the consumer has the right to cancel the contract at any time within 12 months. It is also an offence, punishable by a fine.

Refunds.   If the consumer cancels the contract and returns the goods, the trader must make a full refund within 14 days.  This includes the basic cost of delivery if the consumer paid for the goods to be delivered to him. Where there is no delivery of goods, the refund must be within 14 days after the trader is informed of the cancellation.

If the value of the goods has been reduced by the consumer’s handling, the trader can deduct an appropriate amount from the refund.

Return of Goods.  The trader is responsible for collecting the goods if:

  • he has offered to collect them or
  • the goods were delivered to the consumer’s home and they cannot, by their nature, normally be returned by post.

In other cases, the consumer is responsible for sending the goods back to the address specified by the trader. The consumer is responsible for the cost of returning goods unless either the trader has agreed to meet those costs or he failed to tell the consumer about the consumer bearing the cost in the information provided at the beginning.

Services in Cancellation Period.   The trader must not start services within the cancellation period unless he is asked to by the consumer. If services are then performed in full, the consumer’s cancellation right is lost. If services are partly performed and the consumer cancels within the 14 day period, the trader is entitled to payment on a proportionate basis for those services.

Supply of Digital Content.    Where there is a contract online for the supply of digital content, the trader should not supply the content before the end of the cancellation period unless the consumer has given express consent for early delivery and the consumer has acknowledged that the right to cancel the contract will not apply.  So, if you are selling downloads of music or maps, you need wording to ensure that the consumer agree to waive his cancellation rights as he goes through the buying process on your website.

Helpline Charges.    If it trader operates a helpline, this must not involve the consumer in phone charges above the basic rate. If it does, the trader is obliged to refund the extra cost to the consumer.

 Excluded Contracts.   These Regulations do not apply to certain contracts including: financial services and insurance; leases of property and contracts for the sale of land; contracts for construction of new buildings or conversion of existing buildings.

 Exclusion of Cancellation Rights.   The right to cancel a contract does not apply in some circumstances including:

  • goods that are tailor-made for the consumer or personalised in some other way;
  • goods that are liable to deteriorate or expire rapidly, such as fresh food;
  • goods or services where the price is dependent on fluctuations in the financial markets;
  • newspapers and magazines;
  • sealed goods which, after delivery, are unsealed and are no longer suitable for  return due to health or hygiene reasons – e.g. underwear;
  • audio or computer software that is supplied sealed and then unsealed after delivery;
  • goods that become inseparably mixed after delivery – e.g. sand mixed with cement.

For ContractStore’s template Terms of Business for the Sale of Goods Online click here

For more detailed information, the Regulations are available online and are quite easy to read.  Also there is Guidance published by the Department of Business Innovation & Skills.

 

 

Consumer takes Bank to the Supreme Court and wins

The case of Durkin v. DSG Retail that was decided in the Supreme Court last week has the elements of a David and Goliath battle – in this case a consumer winning against a bank.

In 1998 Mr Durkin bought a laptop computer from PC World in Aberdeen. He wanted an internal modem and made this clear to the salesman. He paid a £50 deposit and signed a credit agreement for the balance of £1449 with HFC Bank. When he got home he found that there was no internal modem so he returned the laptop to the shop the next day when he asked for the return of his deposit and cancellation of the credit agreement. The shop refused.

Because Mr Durkin did not pay any money to the credit company, HFC, and they refused to cancel their agreement, they issued a default notice and indicated to the credit reference agencies that Mr Durkin was in default.  As a result, he found he could not get credit elsewhere. In 2004 he brought proceedings claiming £250,000 damages from HFC for negligence in claiming that he had defaulted on a contract which he was entitled to cancel. The court awarded him a total of nearly £120,000 which included £8000 for injury to his credit status and £102, 000 on the loss of a capital gain on a Spanish property on which he had been unable to pay a deposit because of his poor credit rating.

HFC won when they appealed against this decision in Scotland but on 25 March the Supreme Court in London unanimously held that Mr Durkin was entitled to rescind the credit agreement and validly did so. They made it clear that the purpose of a credit agreement of this type is to finance a transaction between the consumer and the supplier. Mr Durkin was entitled to cancel the purchase because the laptop was not what he required and in consequence he was excused from obligations under the credit agreement.

The original award of £8000 for damages to credit was upheld although Mr Durkin’s attempt to have the damages for loss of a capital gain on his Spanish property was not.

This case is an important one in linking the consumer’s rights under supply agreement with those under a related credit agreement.

For the full report http://www.supremecourt.uk/current-cases/case_2012_0135.html