LSB publishes final referral fees decision

The Legal Services Board has today said that it would no longer seek to prescribe precise measures meaning that law firms and others would have to achieve greater transparency over referral arrangements by posting details on their websites.

Crucially, and after a lengthy investigation by the Legal Service Boards "Legal Services Consumer Panel", it was concluded that there was not enough evidence for an outright ban on referral fees.

It still seems likely that there will be a push towards greater transparency.

Article taken from: Link to Article taken from the LawGazette

Exploring Business Growth Through Franchising Seminar

Date: 9th June 2011

Time: 2.00 - 4.30 pm followed by light refreshments and networking

Venue: Hallmark Solicitors, 158/159 High Street, Hull, HU1 1NQ


One of the UK's most respected franchise consultants, Tony Urwin, Regional Director and Senior Consultant at the Franchise Development Services is our guest speaker. He has guided the development of over sixty franchises worldwide and advised over two hundred business on sustainable national and international franchise business development. An ardent advocate of equitable relationship development, Tony has built an enviable career steering global companies for long term growth. He will be covering:


* The three ways to franchise any business

* The importance of the Evaluation Analysis

* The Franchise Development Plan

* Estimated time scales and budget requirements

For booking details call: Jessica Cross on 01482 616 616

Kind regards

Franchise Seminar - Exploring Business Growth Through Franchsing

On Thursday the 9th June 2011 when as part of Business Week 2011, we will be presenting a seminar: Exploring Business Growth Through Franchising from 2.00 and 4.30 followed by networking and refreshments.

Many businesses have found that the effective and well managed use of resources of motivated franchisees combined with their own know-how, systems and experience represents unparrelled opportunity for growth. In this seminar, we will provide an introduction to the concept of franchising and discuss the legal aspects of franchising as well steps on how to avoid the pitfalls through secure documentation and optimum business structures.

Call us on 01482 616 616 or email: enquiries@hallmarksolicitors.co.uk for booking details.

£100 Million Franchise Investment Fund

Hallmark Solicitors are excited to inform our clients and contacts of recent developments in the Franchising Sector.

Both Natwest & Lloyds TSB have launched a new £100 million investment fund to help new franchises.

This new fund is expected to create up to 1,800 new franchise businesses and 24,000 new jobs in the UK.

This funding will make life easier for new franchises in the UK by providing between £25,000 and £500,000 per company.

It goes without saying that this is a good time to consider franchising your business or becoming a franchise owner.

Why Franchise your Business

If you already own a business franchising can be an excellent strategy.

Through franchising many businesses have found that they are able to compete more effectively in the market place by harnessing the resources and enthusiasm of motivated franchisees. Many of these businesses have managed to go on to become market names.

It must however, be pointed out that the road to effectively and ethically franchising should seldom be travelled alone. A number of questions must be asked and answered.

Amongst others are the question of Legal requirements and documentation of a franchising business, such as:

• Legal Structure
• Protection of Intellectual Property
• Protection of the Principal Business
• Documentation governing the relationship between the Franchisor and Franchisees

How we can help

At Hallmark we have many years experience in assisting both franchisors and franchisees to develop suitable strategies to ensure long term success and allow them to commerce operations secure in the knowledge that all legal aspects of their ventures have been professionally and successfully resolved.

If you are thinking of franchising your business or thinking of buying into a franchise, then please get in touch to see if we can help.

Hallmark Solicitors

Terms & Conditions - a Sword & a Shield

Regardless of the main thrust of your business, it is always advisable to have in place contracts between yourself, your suppliers and customers. Even if you fail to write down the terms of your deal, it must not be assumed that there is no contract at all. Usually a binding contract will exist but the terms of it will be left open and be determined by a complex system of legal rules. And whilst you cannot avoid these statutory obligations altogether, it is crucial that you not only have your terms and conditions clearly set out but that they adequately define how you want the contract to be implemented. This can assist you in efficiently enforcing its terms with minimum cost, not to mention helping your business maintain a healthy cash flow, which is the life blood of any business.

However, all too often, Directors neglect to pay adequate attention to their company's terms and conditions of business. Many times this aspect of the business comes into focus only when a problem has arisen. What some business owners fail to realise is that a company's terms and conditons of business can be both a sword and a shield to weather these straitened economic conditions.

A LESSON TO US ALL

A recent court of appeal decision in Rooney and Anor v CSE Bournemouth Ltd (t/a CSE Citation Centre)¹ highlights the importance of having clearly defined terms and conditions of business and of introducing them into negotiations as early as possible.

In the case the Appellant Company (C) appealed against a decision that its standard terms and conditions of engagement were not incorporated into its work order form.

The first respondent was the registered owner of an aircraft that had been leased to a third party company (E). The aircraft was maintained by C under a maintenance support contract. Under the contractual arrangements, C's practice was for the maintenance work to be defined on a work order form.

This work order form contained the statement: 'Terms and Conditions available on request'.

During a flight the aircraft suffered damage as a result of negligent work carried out by C. The first respondent argued in court that stating on a work order form 'Terms and Conditions available on request' was not sufficient for it to form a part of the contract. The judge held that C’s terms and conditions were not incorporated because they conveyed no more than that there were terms and conditions available, and they did not purport to incorporate any particular terms and conditions into a contract.

C subsequently appealed the decision; arguing that the judge failed to look at the commercial context and realities in which the work order form and the statement ('Terms and Conditions available on request') was made.

In the Court of Appeal it was found that the judge had erred in his finding that the words used could not be said to incorporate C's standard conditions of trading. It was held that the test was whether reasonable people would have understood the words used as referring to contractual terms upon which C had agreed to do the work on the aircraft. In a business context it would be odd if a contractually binding order such as a work order form contained no commercial terms. The work order form was a contractual document and as such activated the work and the nature of the work to be done.

Although C eventually obtained judgement it was at huge expense of time and money which may have been avoided. It is therefore pertinent that you ensure that your terms of business are in compliance with the law, clearly defined and that they are introduced at an early stage in negotiations (and not just at the invoice stage).

A SMALL PRICE TO PAY

Although the decision in this case may provide some comfort to businesses in that common sense will eventually prevail. It shows the enormous cost which could have been avoided by fully incorporating standard terms and conditions of business at the pre-contract stage of business negotiations.

The incorporation of standard terms and conditions of trading at the outset of the business transaction remains the surest way to ensure that it forms part of the contract. It is just as important to ensure that these terms and conditions are up to date and specifically tailored to your business operations. It is advisable that you have your company’s terms and conditions reviewed annually by a specialist commercial lawyer and certainly each time a new product or service is added to your current offering. Equally as important is to ensure that sales staff are properly trained and all other staff are alert to the importance of the businesses terms and conditions.

PREVENTION IS BETTER THAN THE CURE

Sound legal advise acted upon in a timely manner can save you and your business avoidable problems and exorbitant cost in the long run.

This article is not intended to be a full statement of the law and must not be relied upon in the place of specific legal advice.

1Facts of this case were taken from1 the Law Society Gazette 24.06.10 Practice Section.

Chancel Repair Liability

Under the Chancel Repairs Act 1932 a Parochial Church Council (PCC) has the power to claim for costs and contributions towards the expense of repairing the church chancel. Some figures estimate that up to one third of PCCs may be entitled to recover chancel repairs from persons who own all or part of lands that would have historically been owned by the parish. In the event that the owner fails to pay then a PCC can enforce the demand through the courts as shown in the case of Aston Cantlow v. Wallbanks Case [2003].

In this case Mr & Mrs Wallbank inherited a farm holding which was within the PCCs boundary. When they inherited the property they also inherited the Chancel repair liabilities by succession. This is because the obligation to contribute towards the costs of repair of the chancel currently passes to a buyer automatically with the affected land, regardless of whether or not the seller of the land knows of the liability. Thus, when Church (Chancel) was in need of repairs the PCC requested that the Wallbanks pay for the expenditure associated with doing so. The Wallbanks chose to dispute their liability, and ultimately lost their case being ordered to pay somewhere in the region of £200,000 towards repairs plus legal expenses.

Unsurprisingly ever since the Act has been widely criticised as unfair and there has been many calls for it to be abolished.

However, this is not a simple case of the church being greedy; each PCC has a legal and fiscal obligation to seek costs from a person who is legally obliged to pay. In fact, in some cases this may even be a requirement before a church can ask for help with repair costs from Lottery funding or English Heritage.

The problem is that there is no single register of chancel repair liability that a potential purchaser can refer to when buying a property. Meaning that even finding out your liability risk can be extremely difficult. Despite the fact that it is possible to carry out ‘chancel check’ searches as part of your pre-contract investigations of the land. These searches are not property specific and will simply determine whether the property is located in a parish where it continues to be possible to enforce chancel repair liability.

Purchasers can take practical steps, such as, checking the state of repair of the church chancel and if they are aware of any potential liability trying to negotiate the purchase price down or set aside a sum for any liabilities that may arise. In short though, there is no absolute way to protect against liability for chancel repairs. The risk can be mitigated in various ways but if a purchaser has real concerns then insurance may be their only option.

However, under the power of the Land Registration Act 2002, the situation will change from the 13th October 2013.

The Church of England has until this date to register all land liable for chancel repairs. Thereafter chancel repair liability will only bind new owners of registered land if it is protected by an entry in the land register and should therefore no longer be an overriding interest. This would mean that if there was no Notice on the Land Register, a buyer would acquire the affected land free of liability. Thankfully though chancel repair searches will become obsolete for purchasers. It is worthwhile noting that until a sale of the property occurs after that date the current owner of affected land will remain liable.

It is likely that this legislation will lead to a large increase in demands made by the church, as they seek to enforce liabilities before the deadline.

Potential buyers, tenants and landowners need to be aware that the value of the property subject to a chancel repair notice could be seriously affected.

Until 2013 we will continue to carry out Chancel Repair Liability searches for our conveyancing clients to establish whether or not the property they are intending to buy lies within the boundaries of a PCC. If it does, then we will advise on the purchase of appropriate insurance against the risk of a liability coming to light.

TOM HERD, LLB (Hons)
Legal Advisor
Hallmark Solicitors


Tel: (01482) 616 616
Web: www.hallmarksolicitors.co.uk
Email: tom.herd@hallmarksolicitors.co.uk

© Hallmark Legal Services Ltd 2010
This publication provides general information only and does not constitute legal advice or seek to be an exhaustive statement of the law. Specific legal advice on any matters raised in this publications should be obtained.

Buying or Selling a Business?

There are complex legal issues involved in a business sale and purchase of any size or complexity and it pays to get expert advise from expert business lawyers.

At Hallmark Solicitors we specialise in the sale and purchase of businesses, assets and shares. We regularly handle high value and large scale sales, mergers and acquisitions in many sectors, but particularly in the manufacturing and engineering, IT and transport sectors but also in the hospitality sector including hotel & leisure, licensed premises as well as smaller independent shops and retail outfits

We and possess years of solid experience in Commercial Property transactions which is likely to form an integral part of your business transfer. We provide a complete service to ensure that you are adequately protected and that there will be no nasty surprises.

We will draft and advise you on:

- Sale & Purchase Agreement                         

- Non Disclosure Agreements
- Legal & Operational Due Diligence                
- Novation Agreements

- Warranties & Indemnities
- Exclusivity Agreements

 

We will also assist you in ensuring that your business fully complies with the Transfer of Undertaking Protection of Employment (TUPE) Regulations and deal with the transfer of licences and permits relevant to your business.

We offer a flexible fee structure so that our clients. As a result our clients enjoy first rate corporate and commercial legal services delivered with outstanding client care without it costing the earth. Our approach has always been and continues to be to understand our clients objectives which in turn enables us to tailor our services towards their specific requirements.

Call us today on 0845 6 808 251 to discuss your requirements.

Hallmark Solicitors

Sub-Division: Property Investors Beware!

Converting or sub-dividing a single freehold building into two or more self-contained units is becoming ever more popular particularly in the current economic climate.

We have noticed that as a consequence of the depressed property market, many landlords and investors have realised that there are several advantages to dividing a freehold house into several units. A process known as sub-division.

The main advantage of splitting the title in this way is that the combined value of the individual units is often far greater than the original value of the freehold itself. This allows investors to maximise the value that can be realised from a property by way of sale or re-mortgage. 

However, this process can create problems for the inexperienced and for those unaware of the legal consequences. In particular the majority of Lenders frown upon single freehold units being created without a proper scheme of maintenance which is clearly set out in corresponding leases. This defeats the object of sub-division.

Ensuring Good & Marketable Title(s)

In this situation a specialist property solicitor will be required to draw up new leases for the units. They will ensure that the new leases comply with all legal stipulations, such as those contained in the Council of Mortgage Lenders Handbook (Part I). These state:

“The property must have all necessary rights of support, protection, and entry for repair as well as a scheme of enforceable covenants that are also such that the subsequent buyers are required to enter into covenants in identical form”

In other words each self-contained unit should have a lease which complies with the lenders requirements which fully sets out the rights and obligations of the tenant and landlord. This is the only way a property investor can ensure that the title is good and marketable.

The leases created will lay out the contractual obligations of both the landlord and tenant. This will include the leaseholders obligations and any restrictions and conditions regarding the use of the premises. They will set out the landlords obligations which could be to maintain the structure of the property, as well as any common areas and to put in place appropriate buildings insurance. As such it is imperative that the leases are drafted correctly. It is therefore important to seek appropriate legal advice at an early stage to avoid problems arising at a crucial stage in the transaction.

Our Expertise

At Hallmark Solicitors we aim to ensure that the leases we draft adequately protect our client’s interests, and that demarcated lines of responsibility and liability are established between the parties. Therefore when questions arise each party knows their rights and obligations.

We are highly experienced in advising in Property Development matters and Commercial Property Transactions and advise clients across Yorkshire and the Humber. Our philosophical perspective is that prevention is better than the cure. Sound legal advise acted upon in a timely manner can save landlords running into avoidable problems and exorbitant cost in the long run.

TOM HERD, LLB (Hons)

Legal Advisor

Hallmark Solicitors