A Tale of Sheep, Goats, Foxes and Dinosaurs

I’m writing this on 29th March 2017, and the only thing that we can be certain about for the next two years or more is that things will be uncertain. So what can you do to make the best of it, as a family, or a small business, and what can we do to help you?

Things have also changed radically in the court system. There are far fewer courts and fewer court staff, legal aid has disappeared, and procedure keeps changing. Litigants have to do a lot more work, yet the costs you can get back have been slashed. It is a new world.

And with a new landscape, like the earth after the asteroid, this is no place for dinosaurs. This piece is aimed at helping you pick the lawyers who will help you to survive. Sheep, goats and foxes survive – dinosaurs don’t – so how can you tell them apart?

The Sheep, the Goats, the Foxes and the Dinosaurs

The Sheep are big companies, the Government and its quangos, and the rich, and their lawyers. They can afford to carry on much as before and have hardly noticed a change.

The Goats are smaller businesses, landlords and tenants, and the rest of the population. They use Foxes to help them – smaller specialised lawyers and other agencies who adapt rapidly to change. They have noticed very significant increases in cost and in the time taken to deal with their legal cases. So they have to be canny and resourceful, and will be the heroes of this article.

The Dinosaurs used to be either Sheep or Goats, or their lawyers. They didn’t notice the change in the legal environment until it was too late, if at all, and so are trying to carry on as if nothing had changed, with disastrous consequences. They can’t cope with the changes and are infuriated with the way in which the Foxes run rings round them. The lawyers have gone out of business.

What to look for in a Fox

In the new world there are many new markers to help pick out those in the know:

  • They are light on their feet – ready to adapt to changes quickly. Just because they always did something one way doesn’t mean that it’s the best way now.
  • They keep up to date – there are frequent changes in the law and procedure, and in the court decisions that follow them. You have to be ahead of the crowd to win.
  • Winning matters – you want a lawyer who will win for you.
  • They keep an open mind – there are lots of different ways of doing things. If one way doesn’t work they pick another.
  • Payment by the hour is on the way out – clients much prefer fixed fees, or payment in stages, so they offer this when possible.
  • They know the shortcuts – nobody wants to go all the way to trial. They know how to get summary judgment, or get the defence struck out, or most importantly, a good offer.
  • They specialise – nobody knows everything well enough to be really good at it. And being really good matters.
  • They get it right first time – you can’t afford to do things twice.
  • They don’t carry passengers – they have a few experts plus a flexible team of contacts to call on when they need them. Why should you pay for all the extras that you don’t need?
  • They’re friendly – this is the key to being a small business. They get on well with their clients, with the courts, and with other lawyers. They don’t waste time with histrionics – they get to the point and get things done.
  • And they remember that they’re lawyers – they advise you, they do the business, but at the end of the day it’s your life, and your business, and they let you make the decisions and call the shots when it matters.

I can’t tell you everything. This is only a short article, and besides, I have a living to make, so come to me, and the Team, to learn more. But remember, this is the new reality. And if you ignore it you are likely to go the same way as the dinosaurs. Which is not a good idea, on the whole.

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More Changes for Landlords and Tenants – s21 Notices

One of the problems with the law, and especially with housing law, is that as soon as you have worked out what the law is in one particular corner, and how you have to act in order to comply with it, and have drafted the forms and prepared the advice, somebody comes along and changes it, and you have to start again, or at least revise things.
Well, this has happened with notices under s21 Housing Act 1988 following the coming into force of further parts of the Deregulation Act 2015 and some new regulations.

Things as they were

As you probably know, s21 HA provides a way of a landlord of an Assured Shorthold Tenancy – the most common kind of tenancy in the private rental market – to bring the tenancy to an end, basically by giving 2 months’ written notice. Provided this expired after the end of any fixed term (and originally at the end of any periodic tenancy period) then the landlord could bring possession proceedings and the Court had to make a possession order. There was no form of notice, and the procedure could go through the accelerated process, which meant that if you had got the paperwork right there wasn’t even a hearing, as the order was made on a paper application. This made it the most common way of ending a tenancy, as there was no argument about reasons or anything like that, and many thought that this guaranteed ability of landlords to bring tenancies to an end when they wanted was the one of the key things that set off the increase in private lettings.

The Changes

When tenants’ deposits had to be protected in 2007 the landlord had to enter the deposits into one of the approved schemes and give the tenants notice within a prescribed period (originally 14 days, but later changed to 30 days) and if they hadn’t done so (or couldn’t prove that they had done so) any s21 Notice was invalid. This encouraged landlords to comply, and after some considerable hiccups with the legislation (see here and here) this system now seems to be working satisfactorily.

This was encouraging – a self-enforcing piece of legislation – so the government has now imposed a number of additional requirements. For tenancies starting after 30th September 2015 a landlord also has to serve the tenants with:
• An energy performance certificate
• A gas safety certificate
• A copy of the current booklet “How to rent: the checklist for renting in England”
And if they don’t they can’t serve a s21 notice until they do. This only applies to new tenancies – not periodic  tenancies that come into force after that time on the expiry of a fixed term. Note however that it does apply to a contractual periodic tenancy, or a replacement tenancy which merely replaces a former tenancy of substantially the same premises and is between the same parties.

Do note that landlords also have to fit smoke and carbon-monoxide alarms on all residential lettings (smoke alarms on every storey and CO alarms in rooms with a solid-fuel stove) from 1st October or they can be fined. This covers ASTs and all lettings for up to 7 years, apart from those shared with the landlord’s family and a few others. But it doesn’t affect the ability to serve a s21 Notice.

More Changes

There is now a prescribed form of s21 Notice. Not very different to the one that was normally used before. But if you don’t use the new one for a letting starting after 30th September 2015 then it isn’t valid. And if you use the new form on an existing letting it is misleading, because the explanatory notes are incorrect, so it is best not to use it. Please note that the first version of the Regulations (which also cover the requirements on energy performance certificates etc) messed up the form of notice and it had to be corrected. This new version is the form to use.

s21 Notices banned in first four months

For ASTs starting after 30th September  the s21 notice cannot be served in the first 4 months of the tenancy, or, if it follows on from an earier tenancy of the same property, within 4 months of the start of the earlier tenancy. Court proceedings must be started within 6 months of the notice (in most cases). So the old tactic of serving a notice with the tenancy is over.

And the end of retaliatory evictions

Well, that’s the intention. Landlords got into the habit of threatening to serve a s21 Notice on any tenants who looked as if they might be difficult, for example by complaining about defects in the property which the landlord ought to repair – say a leaky roof. This was clearly a bad thing, and unfair to tenants, and so s33 Deregulation Act says that s21 Notices can’t be served within 6 months:
• After an improvement notice, or an emergency remedial action notice, under the Housing Act 2004 has been served by the Local Authority; or
• After a tenant has written to complain about conditions, the landlord didn’t give a relevant response within 14 days and the tenant complained to the LA, and the LA served a notice.

There is argument in the legal press about whether the “relevant response”, which ought to be how the landlord proposes to address the problem, and a reasonable timescale for doing so, matters, or if a notice can be served anyway. The advice must be to respond, because it may persuade the LA that nothing further needs to be done.

Whether this will work very well in practice isn’t clear as most LA housing officers are very pressed and can barely keep up with their workload at present, but it is a start. We shall see.

Finally

This is a very simplified view of complicated law, which only applies to England, as Wales and Scotland have their own legislation. There is a lot more information on the Nearly Legal blog, and a whole series of very useful pieces on Tessa Shepperson’s Landlord Law blog. But at least you now know these changes have been made, and can go off and look things up. Job done.

What’s in a Name? – the new Cohabitation Rights Bill

There was an article in The Times the other day (that I can’t link you with because of their paywall) that reported that 47% of a recent YouGov survey thought that unmarried couples had the same rights when they split up as married couples. Indeed 51% of the women in the survey thought this (as against only 42% of the men). And this is wrong – very wrong. Because they have hardly any rights when they split up, and those they have are difficult to enforce in an effective way.

If a married couple split up then the courts have very wide powers under the Matrimonial Causes Act 1973 to transfer assets between them, order one party to pay the other maintenance or to transfer pension entitlement, and also make orders in respect of any children. If one of them dies there are provisions to allow the survivor to claim reasonable financial provision from the estate under the Inheritance (Provision for Family and Dependents) Act 1975. Insurance policies usually allow for a surviving spouse to receive payment, and they inherit the bulk of the estate and have the right to administer the estate of their late partner under the Administration of Estates Acts, if there is no will.

Very little of this applies to an unmarried partner. The courts can declare what the parties rights in any property are, but can’t alter them. So if Lucy lives in Alex’s house, she won’t normally have any rights to a share of it, even if she has lived there for many years. Nor does she have any rights to a share of his income, or his pension, and if he dies without leaving a will in her favour his estate will go to his children, or parents or siblings and she will get nothing, unless she can persuade the court to award her maintenance under the Inheritance etc Act – which is much more limited than a widow’s rights, and depends on her proving that she was financially dependant.

It is of course a bit more complicated that this if Lucy contributed to the purchase price of the house, or was formally on the title as a joint owner, although even then things aren’t that clear, as the Supreme Court showed in the case of Jones v Kernott (see my piece on this here). She will have to struggle through the provisions of the Trusts of Land and Appointment of Trustees Act 1996 (“Tolata”) where ss 14 and 15 give the courts powers to regulate the actions of the trustees and declare the rights of the beneficiaries. But note that the power is only to declare the rights, not to alter them.

If the couple have children then there will be rights to apply for maintenance for the children, and they will inherit from their father in the normal way. And it is possible for Lucy to make an application for a capital sum under the Children Act to benefit the children, although hardly any applications are made (only 141 applications in the Central London Family Court in 2014) which must mean that it is less than overwhemingly attractive. But Lucy will still have very limited rights herself, and may end up with sordid squabbles about who bought the toaster, and if Alex did, was it bought as a gift for her, or was it intended to remain his, or was it bought for both of them? And then they go on to the fridge…

In a marriage (or indeed a Civil Partnership, whch is the same for virtually all purposes) the court can just transfer the toaster to Lucy and have done with it. Or not, if appropriate.  Actual ownership isn’t decisive.

So parties who are married have much better legal rights and much more effective ways of resolving any disputes if they need to do so. These rights are not perfect, and many husbands have argued they are biased in favour of wives and mothers, but they work in practice, and get tweaked from time to time.

Cohabitation Rights Bill

Now that more and more couples are living together without marriage all these problems become more and more important, especially as a much greater proportion of unmarried couples split up than married couples. There is a lot of pressure to give cohabitees at least some rights, if not all the rights of married couples, and Lord Marks of Henley-on-Thames introduced the CRB in the last parliament, and has now re-introduced it following the election, and it is working its way slowly through the House of Lords at present. The current version is here.

The Bill covers “cohabitants” who are living together as a couple and either

  1. have a child or
  2. have been living together for two years

and are not married to each other, but could be because they are not within the prohibited degrees of relationship (ie parent, grandparent, brother or sister, aunt or uncle, plus some complicated relationships involving children of former civil partners etc).

In such cases, if the relationship breaks down one party will be able to apply to the court for a “financial settlement order”, asking for lump sums, transfers of property, sharing of pensions and so on, very similar to the courts’ powers for a marriage. However, one important difference is that the court’s powers can only be triggered if satisfied that one party has retained a benefit, or the other party has an economic disadvantage as a result of a “qualifying contribution” made by the applicant, and that it is just and equitable to make an order, taking into account a check-list of factors. These include

  • the welfare of any children
  • income and earning abilities, and financial status of the parties
  • financial needs of the parties
  • (in some circumstances) the conduct of the parties.

A further difference is that parties will be able to sign agreements to opt-out of financial settlement orders, but only if they are both separately legally advised. Even then the court can set such an agreement aside if it considers that the agreement is “manifestly unfair” either because of the circumstances in which it was made, or any subsequent unforseen change in circumstances.

There are also provisions dealing with the deaths of the parties, rights on intestacy and other matters.

A Gold-Diggers’ Charter?

I have my doubts about how all this would work in practice, and in all fairness this is based on the first draft version of the bill, which may well be improved as it goes on. It has already provoked strong feelings on both sides. Some feel that it reflects reality in modern societies, and that it should go further in equating cohabitation and marriage. Others feel, however, that any rights are either going to be too weak to be effective, or will be exploited by members of short-term relationships, especially if they have children from earlier relationships already. “A gold-diggers’ charter” some say.

My Solution

I think they have both got the wrong end of the stick, and have a proposal which would make a real difference to cohabitation in future.

Parties intending to live together permanently should enter into a “cohabitaton agreement” which would give them significant enhanced rights. The agreement would not be compulsory but should be encouraged by say tax benefits and social pressure. After a time I would expect it to become normal and for people who did not do so to be a small minority.

The agreement could be fairly short, and merely require the parties to live together and look after each other to the exclusion of third parties. In order to make it more attractive and romantic you could include phrases about “in sickness and in health” and “to love and to cherish”.

The parties should make the agreement by saying the words out loud before some state official and in the presence of at least two independent witnesses. This way there could be no argument about whether they consented to it or not. They may give each other small gifts such as a ring. Then they would all sign a register.  Clearly this will need to be set up beforehand, and they will no doubt get their families and friends to attend. There may be some singing or at any rate music, and everybody will no doubt go off for a few drinks or even a full-scale party afterwards.

The basics would only cost a couple of hundred pounds, although if you wanted to pay more then nobody would stop you. Your parents may well chip in, and of course everybody would dress up. It may become fashionable or indeed standard for the woman to wear a fancy dress of a distinctive colour, and the man would wear a very smart suit which he may have to hire.

Afterwards the parties would have all the rights and privileges of a married couple. As indeed they would be.

You cannot be serious!

Well perhaps not. But I think a lot of people have overlooked the distinction between a marriage and the wedding. You don’t need a vast multi-thousand pound celebration to be married, but you do need to enter into some basic commitments if you are going to live together for the long term. Societies have had marriage for thousands of years and they can’t all be wrong. Perhaps the problem today is that we have the solution to the difficulties of cohabitation right in front of us and can’t see it.

But I’m a lawyer, not a politician, so all I can do is point out the facts, and leave it to others to make the changes.

Life as a Litigator in 2014/15

In another life I am on the Council of the Warwickshire Law Society, and I thought that you may like to see the report that I prepared for their recent AGM. I was told that it looked a bit too gloomy, and that may be right. But I think that I end up in the right directions. What do you think? – leave a comment below, or tweet me at @CoventryMan.


 

2014/15

Life as a litigator is getting harder and harder. And the coming year looks like it could be worse than the year just past, which was, shall we say, challenging.

While preparing this report I looked back at my February 2014 effort and I see that it recorded a succession of blows, including case management, the Mitchell case (strict compliance with court orders essential), the increase in litigants in person, the Superstrike case (AST landlords must give information on deposits twice), and the loss of a number of local firms. All pretty discouraging stuff. So I ended up hoping for a slowing in the rate of change in order to let us adapt.

Well, we didn’t get that. We have had continued and accelerating change, and this seems likely to continue, regardless of who gets in to No 10 in May.

IN THE COURTS

From April 2014 the County Courts have all been amalgamated into one County Court, so Coventry County Court has become The County Court at Coventry. In practice it has the same hearing centres that were there previously, but the procedure for closing or moving them has suddenly become a lot easier. Already all money claims are issued in Salford, and one wonders how long it will be before all the other claims follow. Or the trial centres reduce yet further. My Family colleagues are already facing the prospect of having to go to Nottingham for hearings, and we will surely not be left alone.

If of course we still have hearings at all – you may have heard the apparently serious suggestion recently that all civil cases for less than £25,000 that could not be resolved by telephone mediation should be dealt with by judges by way of internet decisions, normally without any sort of hearing, and without the intervention of lawyers at any stage.

This of course supposes that people will continue to litigate. All of you must have heard of the proposed increases in court issue fees that are intended to take effect in April. These will stay much the same up to a (small) claim for £10,000, but will then rise to 5% of the amount in question, so a claim for £40,000 that currently costs £610 will shoot up to £2,000 and a claim for £150,000 from £1,115 to £7,500. Claims over £200,000 will cost £10,000 to issue. There will be other fees including potentially increased trial fees as well. And funding costs can’t be recovered by the client any more even if they win.

The Government states that 90% of all claims will be entirely unaffected by this (no doubt correctly as the vast bulk of claims by number are indeed small debt-collecting claims) and that court fees are a relatively small part of the total cost of a case. However, they are a cost that has to be paid for up front in non-refundable cash, and this will significantly increase the cost of disbursements for even a moderate personal injury claim. One wonders if there will be a similar reaction to the introduction of Employment Tribunal fees a few years ago, when the number issued fell by some 80% after the introduction – probably not as court actions tend to involve more money anyway, but it is sure to have some effect. We shall have to wait and see.

IS THERE ANY GOOD NEWS?

Well the Mitchell case (see above) has been superseded by the much more sensible Denton case, which allows the courts to balance the errors against the interests of justice as a whole. And Superstrike is being overruled by a section in the Deregulation Bill which is due to be approved by the House of Lords on 4th March and so should be passed before the General Election.

In the larger world, Scotland hasn’t drifted off into the North Sea, the new Distance Selling Regulations which apply to solicitors who see people away from their offices aren’t as frightful as they first appeared to be, and if everything goes pop the frightening case of Raithatha v Williamson, which said that a Trustee in Bankruptcy could potentially seize the whole of a pension pot after the pension revisions in April 2015 has met the equally authoritative case of Horton v Henry, which said that he could not. So we all may have some future

BUT WHAT DO WE DO?

We can’t go on the way we have done before because things are radically different. 1,061 solicitors firms closed in the year up to November 2014, out of 10,312. It could be yours.

I’ve thought a lot about this sort of thing over the last few years, and written a number of pieces in my Coventry View blog, most recently telling everybody to be a Sheep if you could, or failing that a Goat, but not in any event a Dinosaur. It seemed a good idea at the time, and involved being Light on Your Feet, Keeping Up to Date, Winning, Knowing the Shortcuts, and Remembering that you are a Lawyer, among other things. I think it’s worth reading for yourselves – but then I would.

Whatever you do, though, have a plan. Nobody owes us a living. Politicians hate lawyers because they have discovered that it is much easier to attack lawyers than the public, and without the lawyers the public can’t in practice enforce the rights that they have. Why abolish the right to claim against the NHS for clinical negligence if you can just make it too expensive to do so, or can arrange things so that your nearest solicitor is in Bradford? So they will carry on doing so, regardless of the result in May.

Litigation matters because it is the sharp end where clients enforce their rights. Our colleagues grant them rights in the contract or the will. If they can’t enforce these rights they are worthless, so this is where we come in. Our colleagues are useless without us. And if we are good at it we can make a good living and enjoy the work as well. A win/win situation.

Distance Selling Regulations on Steroids

The Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 (2013 No 3134)

Now as I’ve said before, you’re a bright and well-informed bunch, and have no doubt heard about the Distance Selling Regulations (Consumer Protection (Distance Selling) Regulations 2000)  which covered Distance Selling – basically selling things to people without meeting them, normally by internet or mail order. You may also have heard about the Cancellation of Contracts Regulations (Cancellation of Contracts made in a Consumer’s Home or Place of Work etc Regulations 2008) which really don’t need much explanation once you’ve read the title.

Well, you can (shortly) forget them, because from 13th June 2014 they have both been replaced by the regulations listed above, which I will call the CCR.

Now this isn’t some neat consolidating exercise, that just bundles the two sets of Regs into a new one. That would be far too easy. The CCR make important amendments to them, and adds in some new stuff too. And, most importantly, they apply to ALL contracts made between traders and consumers, in both cases as defined in the CCR, apart from the exempted transactions, which I’ll mention below. This includes transactions made face-to-face in your office or shop, and because of  the definitions some of these face-to-face transactions are treated as if they were made off-site, in a consumer’s home etc and have cancellation rights. So it matters to most of us one way or another.

I will concentrate in this piece on how this affect professional services, especially for solicitors, as it’s an area of particular interest to me. But I may come back and cover more of it later if the muse takes me.

I apologise if this isn’t one of my most engaging pieces, although I have tried my best. However, it is one of my most important, as it might affect my own income, and that of most other lawyers.

Please note that I haven’t always used the full definitions etc in order to make this more readable. If it matters, read the CCR. And remember this is journalism, not legal advice. If you want to know more, the Law Society have produced a very helpful Practice Note.

The exemptions

The main exemptions are set out in r6 and include many of the usual suspects – gambling, banking & financial services, conveyancing, letting residential property, construction of new buildings, delivery rounds, package holidays, timeshares etc vending machines and automatic commercial premises (the mind boggles, but I assume this is car-parks and the like). There is also exemption for certain things to do with telephones (which you will have to read of you want to know more) and for goods sold by way of execution. And there are also exemptions from some of the obligations in certain circumstances – eg there is no right to cancel for  medicinal products prescribed by a health care professional (not just Doctors, it seems). If this all matters to you you will have to read the CCR for the details.

The important point however is that the vast bulk of services provided by most professionals,  including lawyers, to consumers, will be covered, and all those of us who thought that because we saw people in our offices we could ignore all this rubbish will have to think again.

 Definitions

Trader – person acting for purposes relating to that person’s trade, business, craft or profession. This includes acting through agents/employees, and actions not exclusively for the trade etc.

Consumer – individual acting for purposes wholly or mainly outside that person’s trade, business craft or profession. So can’t be a company or partnership, but may include  transactions by sole-traders outside their trading field – eg personal tax advice.

There are lots more, mainly in r5, which are worth looking at. But some of them are so important that they need a section of their own.

On-Premises, Off-Premises and Distance Contracts

On-Premises Contracts – any contract between a trader and a consumer that is not a distance contract nor an off-premises contract. So read on.

Off-Premises Contracts – contracts that are either

  • made face-to-face off the trader’s premises.
  • where the consumer made an offer face-to-face off the trader’s premises.
  • made immediately after the trader had addressed the consumer face-to-face off the trader’s premises, and whether made on the premises or by distance communications.
  • during an excursion organised by the trader to promote his goods or services.

Note that the consumer’s offer may have been made some time previously – I’d like you to prepare my will – OK I’ll make you an appointment and we can discuss this at the office when I return from holiday. And how soon is “immediately” for the next scenario? Clearly  if you meet a client at court and ask them to come back to the office with you to discuss their problem this counts. What if they come in next week? And what is an “excursion”? Would a visit to a client in hospital count?

An awful lot of transactions that would naturally be considered as on-premises contracts may turn out not to be – especially if there is a series of discussions leading up to signed instructions. And it matters – see below.

Distance Contracts – made under “an organised distance sales or service-provision scheme”, without any meetings up to the point when the contract is made.

Note that the portion in quotes isn’t defined. It clearly covers tele-sales and mail-order, and orders via the internet. Does it include a client who gives instructions entirely by letter and telephone, or by email? Quite probably, but we don’t know.

Why this matters

Part 2 of the CCR sets out different sorts of information that the trader must provide to the consumer before the consumer is bound by the contract. The information is set out in Schedule 1 for on-premises contracts, and Schedule 2 for off-premises and distance contracts. So if you don’t give the consumer the info in Sch 2 because you think it’s an on-premises contract and you’re wrong then they aren’t bound by it, and this can be serious. Not only can’t you sue them for the price, but you may have to repay them any money paid up front. They probably have a right to cancel the contract at no cost to them. And it may even be a criminal offence – more details in Right to Cancel below.

The information for On-Premises Contracts

This information is only needed in so far as it isn’t apparent from the context. For example if you are working in an office with Bloggs & Co Solicitors on the door, you can take it that the client knows your business’s name. And there is an exemption for “day-to-day transactions entered into immediately” although this is not defined. Presumably a barber would be exempt, as would be most transactions in shops. And administering an oath.

The info which must be given “in a clear and comprehensible manner”

  • the main characteristics of the goods or services – ie what you are supplying
  • the trader’s identity (eg trading name) address and telephone number – you have to give your telephone number to all clients whether they ask for it or not.
  • the price, or if this can’t be calculated in advance, how it is calculated.
  • any delivery charges.
  • arrangements for payment, delivery and the time involved.
  • the trader’s complaints handling policy.
  • in sales contracts, confirmation that the trader must supply goods in accordance with the contract.
  • any after-sales service or guarantees.
  • how to terminate the contract.

There are extra requirements if there is digital content.

There is nothing particularly unexpected here, but it does mean the end of the single-visit-and-no-paperwork transaction. You will always have to supply the information which would normally be set out in any client care letter or business agreement, and may as well do so  that way, although it would be possible to set all this out in notices and leaflets, or indeed orally. But remember that these things can be difficult to prove later.

The big danger is the extra information that has to be given to off-premises contracts, and which may be missed if you don’t realise that you are dealing with one at the time. The safest course is to provide all that as well.

The information for Off-Premises Contracts

More comprehensive. Includes all the information needed for an On-Premises contract plus:

  • any fax or email addresses.
  • if trader is acting on behalf of another trader, the other trader’s details.
  • the other trader’s business address if different.
  • details of cost per billing period or any monthly charges .
  • details of any increased phone or other communication charges.
  • where a right to cancel exists, details in accordance with regl 27-38.
  • cost of returning any goods if cancellation.
  • if there is no right to cancel, information about this, or how it has been lost.
  • details of any codes of conduct and how copies may be obtained.
  • any minimum duration for the contract
  • any deposits required or other financial guarantees to be paid by the consumer
  • where applicable, any technical requirements or compatibility problems for digital content
  • any relevant  out of court complaints schemes and how to access them

Much of this won’t apply for a legal business. But the cancellation rights may, and are set out below. And if they do then you must give the consumer a prescribed cancellation form. All this information and a copy of the signed contract (or confirmation of its terms) must be given to the consumer on paper, or another durable medium” (eg email) if the consumer agrees, before any services are provided under the contract. And the burden is on the trader to prove that they did all this, in any dispute with the consumer.

The Right to Cancel

This generally applies to all Off-Premises and Distance Contracts, although there are a number of exceptions, such as medicinal products, products trading on financial markets, and a number of exceptions relating to goods, repairs, auctions, holidays and so on. The only relevant one for a (cheap) lawyer is that there is an exception for transactions when the total to be paid by the consumer does not exceed £42 (or the current equivalent to €50).

Otherwise the consumer has a right  under r29 to cancel any distance or off-premises contract, without giving any reason, at no basic cost to the consumer at all, apart from some delivery charges, or when the consumer requests early supply. The cancellation period starts when the contract is made and normally runs for the next 14 days  ie 15 days including the day of the contract (an increase from the 7 days previously). However, the period is extended until 14 days after the cancellation information is supplied, or 12 months  and 14 days after the contract if sooner.

To cancel, the consumer has to give the trader “a clear statement setting out the decision to cancel the contract”. This does not have to be in writing, but as it is for the consumer to prove that they gave it clearly the best option. It doesn’t have to be on the form supplied by the trader but it can be. And if it is sent it only has to be sent within the cancellation period – it can arrive later.

Once the contract is cancelled all obligations come to an end and the trader has to return all monies paid by the consumer within 14 days. Any ancillary contracts are ended too. Any goods have to be returned or collected, and there are complicated provisions for the cost of this. More relevantly, nothing need be paid for any services supplied in the cancellation period unless

  • the consumer has requested the trader to do so beforehand in a durable medium, and
  • the consumer has been informed that they would have to pay the reasonable cost of this, and
  • the consumer has been given proper notice of their right to cancel.

The amount must be a proportionate part of the total cost, and the right to cancel is only lost if the service has been fully supplied and the consumer has been informed that this would happen.

It is a nightmare. Fortunately Schedule 3 consists of an approved form of notice giving details of the right to cancel, and the prescribed cancellation notice  which can be adapted and completed and given to the consumer, although the information can be provided elsewhere if you want to take the risk.

If this isn’t bad enough, failing to give the consumer details of all the cancellation rights on an off-premises contract is a criminal offence under r19 punishable with a fine of up to £5,000, both on the trader and any individuals concerned, including directors of corporate bodies.

Distance Contracts

I won’t go through these in detail as anybody who is intending to do serious business in this way will have to read the words in the CCR and the guidance very carefully anyway, and the rest of you will just get confused, or bored.

However, briefly, the trader has to provide the same information as for an Off-Premises  contract, adapted for distance/electronic mediums. This includes any “Accept” button being labelled “ORDER WITH OBLIGATION TO PAY”  “or a corresponding unambiguous formulation”. And again the burden is in the trader to prove that they have complied with all this.

Other Provisions

Just in case this wasn’t enough, the government took the opportunity of tacking on some amendments to the law on the delivery of goods to consumers, (within 30 days unless otherwise agreed) and the passing of risk on sales of goods to consumers (on delivery to consumer, or their own delivery service) in rr42 & 43. Plus some more provisions on inertia selling, additional payments under a contract (consent needed and a pre-ticked box won’t do) and prohibiting telephone help lines at premium rates – rr39-41.

Will it do any good?

Well, it will be good for paper manufacturers, and the likes of Brother, Canon, Epsom and HP. Clients will have lots more information, some of which will be useful to them. Some of the sharper practices will be banned, and some of the worst operators will be dragged up to the level of the better ones. But there will be more box-ticking and things to trip over, and I have my doubts on how much good this does in the end. We’ll have to see.

What do we do now?

We need to look at our way of working and not just our terms of business.

  • Consider your clients. Are they ALL businesses, and attending for business purposes? What about the will for the MD, or the tax advice for the partner?
  • Do you always see any consumers in the office and never elsewhere? Or discuss things with them elsewhere and ask them to come in?
  • What about the consumers who live at a distance and who you don’t see at all, but handle by email/post/Skype/phone?

Unless you are certain that all your consumers are going to enter into On-Premises contracts then you need to get lots of paperwork organised and supply it at the appropriate time. You are going to have to get used to the right to cancel and not starting work until the paperwork is in order and the client has requested you to do so in writing. You may choose to treat all clients as being off-premises consumers for safety, or rigorously divide them up into the different sorts. But you need to start NOW as you have 10 days left as I write this.

There is useful advice from the Law Society as mentioned above (here’s the link again) and two helpful and comprehensive pieces by Kerry Underwood here and here. There are many more out there so look at some of them because it’s very important.

And the Regulations apply for all contracts entered into on or after 13th June 2014.

 

UPDATE – for details of a case on the old regulations see here.

 

What is the Best? Judging the Judges.

Sir John Thomas has been announced as  the new Lord Chief Justice, taking over from Lord Judge in October. He will undoubtedly be an excellent appointment – intelligent, experienced, clear, decisive – but despite this there has been widespread comment that he is a white middle-aged man, and as such should have been passed over in favour of Lady Justice Hallett (a woman), or a suitable candidate from the BME community. There was similar comment when Lady Hale failed to be appointed President of the Supreme Court, missing out to Lord Neuberger.

Much the same points are raised when judges are appointed in the lower courts, or when QCs are picked. Why are there so many white middle-aged men? Should we balance things up a bit?

This brings up a number of interesting questions. The first is whether the selection is unfair because the process is biased against other candidates. Once upon a time when selection was based on the tap on the shoulder this was almost certainly the case. Now, when the process is full of “person specifications” and structured interviews and so on it is much less likely, and although still possible, I think that most observers would say that, by and large, the best candidates are selected.

So the second question is whether this is because inadequate numbers of suitably qualified other candidates apply. The answer is almost certainly yes. The reason is historical. Candidates for the judiciary are generally in their fifties, having spent many years building up the experience and knowledge that the post requires. Sir John Thomas is 65, and Lady Hallett 63, reflecting the elevated level of the post. They would have entered the profession in the early 1970s, when virtually all barristers and indeed most solicitors were white men. I remember how unusual it was to appear before a female judge when I started my career in the late 1970s, and can only recall Elizabeth Butler-Sloss, who sat as a Registrar in the Family Division. It has taken many years for women, and for members of the ethnic communities, to take their places as lawyers. The reason for this is something for another day. But the result has been that while there are almost equal numbers of men and women joining the profession now, there are still only 5 female members of the Court of Appeal (out of 38). It takes time for the candidates to work through, and only now are the numbers getting at all representative. In the next appointment of 4 members, to replace forthcoming retirements, there will be 2 men and 2 women. In the lower judiciary things are much more even, with virtually equal appointments of male and female District Judges. But a significant inequality remains at the top.

Moving on from there some people ask what can be done to even things up. Are there aspects of a legal career and judicial preparation that are discouraging for a woman or somebody from a minority community? Can these be changed? Is child-care an issue? Or discrimination? Is it more difficult to get a tenancy as a barrister, or a partnership as a solicitor? And should there be a quota for future appointments? How long should the present unsatisfactory balance be allowed to remain?

Others ask however whether this is a real issue. If the selection process is fair, and we appoint the best candidates, then in due course we will reach a better balance, if not equality. It may take years, but the alternative is to appoint a candidate who is rated as inferior to the best, solely because of their race or gender. Is that right? Isn’t it degrading and insulting to those appointed, and indeed to all women and minorities appointed, who will look as if they have only got there because of a quota? And won’t the public suffer because second-rate candidates are being put on the bench for “PC” reasons?

Against that you may say that although the Supreme Court and Court of Appeal, and the judiciary generally are not appointed to represent the public in any precise way, such as having the same mix of political views as the electorate hold, they do represent the public, and the state, in a more general way, and if a significant part of the population is unrepresented, or severely under-represented, then this says to parts of the community that they don’t count, and that matters. Furthermore, it removes certain areas of expertise and knowledge from the bench, which is less effective as a result.

This article isn’t going to produce the answer to these difficult questions. The purpose is to make it clear that the questions are difficult, and that simple solutions don’t work. The best solution is probably a combination of nudging, mentoring, and time. It isn’t something that can be changed overnight. And nor should it. We do after all want the best. Whatever that is.

A Time to Look Back

This is traditionally the time to look back, and wondering around the net you see no end of reviews of the year, forecasts for 2012, lists of the top 10 cases, or bloggers, or lawyers and so on.  I have resisted doing a review myself on the grounds that

  • I have only been writing Coventry View since June and that this isn’t long enough to count
  • everybody has done it and I’ll just be repeating things
  • if you do it properly it’s a lot of work.

However, there doesn’t seem to be much happening in the housing area which I’m trying to cover here, and so a review it has to be.

But I won’t just cover a year.

I came to Coventry as a solicitor in 1983, some 29 years ago. In those days County Courts could generally only handle claims for up to £5,000, and anything else went to the High Court. Small claims were less than £1,000. Most possession claims were dealt with by a Circuit Judge in open court, although if you had a big house you may have to go to a High Court Judge in Birmingham, because there was a rateable value limit (I forget how much) which meant using a barrister.

Trials were exciting because you didn’t know who the other side’s witnesses were, let alone what they might say. And although there was a lot less paperwork cases could take years to come to trial.

Against that you knew all your local lawyers.Virtually no litigation could be dealt with by post, and you often had to go off to some obscure court to do a 5 minute application.   Solicitors handled their own cases either personally, or via the barrister that they used for everything. The District Judges (then called Registrars) were a powerful and idiosyncratic bunch, who you fell out with at your peril. The County Court Judges were people you regularly came across in trials, applications and so on. They knew the local advocates, and marked their cards if they were less than professional. And there was Legal Aid that would give you a decent living if you were reasonably efficient.

Things have changed beyond all recognition. I won’t bore you with the details, as most of you will know the changes. Some of the changes have been for the better – the “cards on the table” attitude and the speeding up of cases are the most obvious. But not everything is an improvement. What brought things home to me was the closure of Warwick County Court, and its Crown Court, earlier in the year. The Magistrates Court closed some years ago. This means that for the first time since Saxon times, Warwick has no local court of any kind. Justice is becoming distant.

Warwick, in all fairness, isn’t that big  and it couldn’t really justify a court apart from the history. But it’s just a sign of the future.

In Coventry (which is 15 times bigger) all money claims for the local court are already sent off to a processing centre in Salford for issue. At the moment you post them to Coventry who send them on for you, but this is set to change in 2012. Possession claims are issued centrally (PCOL) though you can still send them to the courts for the time being.  I understand that the plan is that before long the local court offices will close entirely and all cases will be handled in 2 or 3 national processing centres, with local Hearing Centres, staffed with ushers and Judiciary only. Everything else will be dealt with in the processing centres. No local orders, no staff with any knowledge of cases, just a place to have hearings. And in Warwickshire there are now only 3 hearing centres, against the 7-8 when I came.

Now as a solicitor this is something that I can cope with. I can pester people at the end of an email or over the phone quite effectively, and if something is important enough I am sure I will find a way to get it sorted out. But how will the thousands of litigants in person cope? With the virtual abolition of civil Legal Aid and the loss of litigation practices from many regional towns far more people have resorted to DIY lawyering. In the family law field it has resulted in serious delay and problems, and this will clearly spread.  At least up to now they have been able to discuss things over a counter in their local court with staff who know procedure and even some of the law. This will be ending shortly. What will replace it?

Law is a practical service, allowing people to understand and enforce their rights. It isn’t just a pleasant way for lawyers to earn a living. People with problems need local advice and local determination when advice is not enough. First most of the advice has been taken away – the loss of Legal Aid and closure of advice centres. Secondly procedure has become so prescriptive, with pre-action protocols, early disclosure, early exchange of witness statements and so on that even quite ordinary claims become beyond the pocket of  anyone other than large businesses, and the seriously rich. And now the hearings are going to be miles away, with no local connection.

This isn’t progress. How is this making things better for the public? Hasn’t somebody, somewhere, lost the plot?