In our final blog in the series to celebrate our 10 year anniversary, we speak to Sarah Bazaraa. She joined Pannone LLP back in 2009 as a trainee solicitor and qualified to become part of the firm’s dispute resolution team, before rising through the ranks to Associate Partner in 2021.

“I think it says a lot about Pannone that there are so many ‘lifers’ who have been with the firm throughout our legal careers,” says Sarah.

We asked her a number of questions to find out what life has been like at Pannone over the last decade since the firm completed an MBO in 2014.

What made you want to join Pannone?

I did a vacation placement with the firm (too) many years ago when I was in my second year of university and was impressed by the quality of the work I experienced. I also found that there was a genuinely friendly and supportive atmosphere. I didn’t have to think twice when I was offered a training contract, and I jumped at the chance to be part of the firm post MBO.

How has that changed in the last decade?

The firm has gone from strength to strength in the last decade. We have longstanding relationships with clients we have worked with over the last 10 years, and continue to attract new and exciting businesses. We have also grown as a firm and attracted some really talented lawyers and support staff who have really embraced the culture of Pannone.

What was your first impression of the firm and the team on your first day?

I remember thinking that there was something special about the place. I still feel that all these years later.

What’s the best thing about working at Pannone?

I definitely think it is the people who make the firm. I am very lucky that over the years I have worked with exceptional and technically brilliant lawyers – many of whom have become some of my closest friends too.

What’s your favourite memory of working at Pannone?

I am not sure I can pick one! There are a few significant cases which I am proud to have worked on. When you live and breathe a case for a number of years and work as part of a client, barrister and Pannone team to secure a great outcome that is very rewarding. Also, the firm parties are always really good fun!

What’s the achievement you’re most proud of while working at the firm?

I am proud to have been part of the team that moved across as part of the MBO and to have contributed to making the firm what it is today.

Where do you see the North West business community 10 years from now?

There feels a real energy and innovation about the North West. There’s construction work everywhere you look, and the creative and technology sectors seem to be thriving. It has been amazing over the last year to see the streets of the Northern Quarter be transformed into Chanel’s runway, and organisations like Aviva Studios (Factory International) bringing something original to the arts. I am sure the North West business community will continue to stamp its mark over the next 10 years!

What would you like to see the firm achieve in the next 10 years?

Continuing to build on the values and foundations which have been established over the past 10.

Describe Pannone in one word.

Team.

Background

Arguably one of the most difficult stated aims in Labour’s New Deal for Working People was its move to ‘ban exploitative zero hour contracts.’

Whilst the term ‘zero hour contract’ has no strict legal definition (and certainly the use of casual labour with no guaranteed working hours is far from a new phenomenon), in recent years the increase in such arrangements under the ‘gig economy’ has led the term to becoming synonymous with the idea of unscrupulous employers taking advantage of vulnerable, low-income workers.

In a laudable attempt to try and slay this employment law dragon, the new Employment Rights Bill introduces a number of new concepts that it hopes will protect staff working under these types of arrangements.

It’s worth noting that the provisions do not currently apply to agency workers, but this is a matter for ongoing consultation.

Guaranteed working hours

The new law will create an obligation to offer workers contracts which include a set number of guaranteed hours which ‘reflect’ the hours they have actually worked over a specific reference period. This will mean employers will not be able to engage staff to work lots of hours without guaranteeing a proportion of those hours under a contract.

The right will apply to those workers who are working under a ‘zero hours’ arrangement or a low number of minimum guaranteed hours. The Government has yet to confirm what amounts to a worker with low guaranteed hours and where this threshold lies will have a huge impact on which arrangements will be affected.

The reference period over which a worker’s hours are calculated is likely to be 12 weeks based on the consultation documents to date but is yet to be confirmed. It’s also unclear how calculating subsequent reference periods will be dealt with.

The offer of guaranteed hours must also set out the pattern of days and times during which those guaranteed hours will be available, conceivably allowing workers to enjoy more predictable working patterns.

Any offers made must form a permanent change to the workers terms and conditions, unless specific exemptions apply. This includes where there is only a temporary need for the worker in question.

If a company fails to make offers to its workers when the right arises, those workers will be able to bring a tribunal claim and most commentators think that compensation will be based on the guaranteed hours that should have been offered.

There are real concerns that if the regulations are too complicated then they simply will not be used (much like the current shared parental leave provisions).

Reasonable notice of shifts

The law intends to make sure workers are given ‘reasonable’ notice, both of their shift patterns and changes to their shift patterns. A minimum notice period will be introduced though what will amount to ‘reasonable notice’ has yet to be defined. The law also starts with a presumption that if the required minimum notice is not given then any notice was not reasonable, unless the contrary is shown.

Where reasonable notice is not given, workers can bring a claim for compensation and such compensation will be the amount the tribunal considers just and equitable in all the circumstances to compensate the worker for any financial loss attributable to the unreasonable notice, subject to a cap (to be specified in regulations).

The level at which any compensation is capped is likely to have a material impact on whether companies will comply with the regulations or just choose to accept any additional financial burden for non-compliance.

Compensation for cancelled shifts

Closely linked to  the above, the law intends to make sure workers are given compensation if they have their shifts cancelled at ‘short notice.’ It also applies when shifts are moved or shortened.

How much compensation will be awarded and what amounts to ‘short notice’ is still to be defined. Most commentators best guess at what ‘short notice’ will be is 7 days and this is already the period set out as the minimum notice for when shifts are curtailed or altered rather than cancelled.

Where ‘short notice’ is given, workers can again bring a claim for compensation and such compensation will be the amount the tribunal considers just and equitable in all the circumstances. However, this will not exceed the amount of remuneration the worker would have been entitled to had they worked the original shift as planned. The regulations may specify different payment amounts depending on the length of notice given.

Conclusion

As ever, and in line with probably the majority of the changes under the Employment Rights Bill, the devil will be in the detail but certainly it won’t be long before employers who operate with more flexible workforces will have a lot more to think about. The changes are expected to be in force some time in 2026.

At the very least, those employers will need to review their current arrangements, consider how to implement more considered and more predictable shift planning, as well as potentially budgeting for additional operating costs.

If you’re a business and would like more information about this issue, please contact Stephen Mutch stephen.mutch@pannonecorporate.com

Published prior to this year’s general election, Labour’s Plan to Make Work Pay, made it clear that a Labour government wanted to strengthen trade union powers. With the publication of the Employment Rights Bill, we have a clearer understanding of the government’s proposed reforms. In this article we look at those changes that will be of most interest to employers.

Background

Prior to the election Labour stated that its aim was to “update trade union legislation so it is fit for a modern economy, removing unnecessary restrictions on trade union activity and ensuring industrial relations based around good faith negotiation and bargaining”.

The previous Conservative governments had introduced the Trade Union Act 2016, the Minimum Service Levels (Strikes) Act, and Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022. This legislation introduced a number of significant changes including:-

• minimum turnout requirements for industrial action ballots
• greater obligations on trade unions prior to industrial action
• time limits on the mandate ballots give for industrial action
• the ability of the government to make regulations providing for minimum service levels during strike action in “relevant services” e.g. railway services, NHS, and border security, and,
• removal of the prohibition on employment businesses supplying replacement workers to employers during industrial action.

In opposition Labour vowed to revoke this legislation. As it was, the removal of the prohibition on providing replacement workers during industrial action was found to be unlawful in 2023 so it was not necessary to revoke this legislation. However, whilst the new Bill removes the Minimum Service Levels (Strikes) Act in its entirety, it does not completely revoke the Trade Union Act 2016

Overview

In short it could be said that the proposed reforms in the Bill are designed to make it easier for trade unions to gain formal recognition in a workplace and generally make the regulatory environment more favourable to unions, make it easier for unions to conduct industrial action ballots and gain a mandate from members for industrial action, and to provide greater protection for employees involved in trade union activity or industrial action. Some of the reforms are more relevant to trade unions and outside the scope of this article but the key changes that will be of relevance to employers are:

• The Bill proposes changes that should make it easier for trade unions to gain access to workplaces and ultimately gain formal recognition within the workplace, by setting out a formal (and complicated) process for requesting access to a workplace.
• The Bill also strengthens the existing right to reasonable paid facility time for union representatives to carry out their duties, and requires employers to provide union representatives with reasonable access to facilities such as office and meeting space and internet/intranet access to enable them to carry out their duties or undergo training.
• A new statutory right for trade union equality representatives to take reasonable time off during working hours to carry out their equality related activities.
• The previous government had introduced a requirement that for a ballot to mandate industrial action there was a requirement that at least 50% of the eligible members must have voted. There was also an additional requirement that in “important public services” that in addition to the 50% turnout requirement, at least 40% of those entitled to vote must have voted in favour of industrial action. The Bill will revoke this requirement, meaning a simple majority of those that choose to vote in a ballot is required to approve industrial action.
• A reduction in the period of notice a trade union must give an employer of industrial action will be reduced from 14 to 7 days, which returns to the position prior to 1 March 2017.
• The ability of the Secretary of State to set minimum service levels for “relevant services” will be revoked.
• The Government intends to consult on simplifying the amount of information that unions are required to provide in industrial action notices.
• The Trade Unions Act 2016 provided that a mandate for industrial action following a ballot would automatically expire six months from the ballot date (or nine months if agreed by the union and employer). The Bill does not propose to repeal this provision but the Government is consulting on whether the time limit should be extended from six to 12 months.
• Prior to this year an employee was protected from dismissal for taking lawful industrial action but there was no protection against a detriment short of dismissal. Following a Supreme Court decision earlier this year this was found to be unlawful. As such the Bill inserts a new section that will provide employees with protection from detriment (short of dismissal) for taking industrial action.
• The Bill simplifies the rules which determine when a dismissal for taking industrial action will be unfair. These current rules depend on whether the industrial action was unofficial or official and, if official, whether it was protected or not. The Bill simplifies the rules meaning an employee will be automatically unfairly dismissed if the reason for their dismissal is that they took protected industrial action.

 Comment

A number of these changes take us back to the pre-2017 position and other changes are in line with arguments the unions and Labour have made for many years. However, the Bill will also revoke some of the more controversial changes made by recent Conservative governments.

When the changes come into force it is likely that trade unions will in the first instance use them to promote union membership within the workplace, with a view to gaining recognition. Formal recognition requires the employer to engage in collective bargaining with unions about pay and other terms of employment, which Labour sees as a positive step towards “increased cooperation between employers and unionised workers, leading to beneficial outcomes for the economy.”

If you’re a business and would like more information about this issue, please contact Michael McNally Michael.mcnally@pannonecorporate.com

In its pre-election manifesto, Labour’s Plan to Make Work Pay, Labour promised to review the parental leave system within the first year of government to ensure proper support for working families, and to make flexible working the default.  As a start, the Employment Rights Bill includes a number of provisions that expand the scope of existing family leave entitlements and entrench the right to request flexible working.

Bereavement Leave

Currently, only parents who lose a child aged under 18 have a statutory right to take bereavement leave.  The Bill builds on the existing statutory right to Parental Bereavement Leave by providing for a wider entitlement to Bereavement Leave.  This is described in the Government’s Factsheet as a “day one right to protected time off for employees to grieve the loss of a loved one.”

Details of who will be able to take this leave through their relationship to the deceased, and how the leave can be taken, will be opened up for consultation on draft regulations yet to be published.

Leave for losing a child will remain as the current period of two weeks whereas all other Bereavement Leave will be set as one week. Bereaved employees will be able to take leave at any time during the period of 56 days after the death.

Paternity Leave

As promised in the manifesto, paternity leave will become a day one right and may also be taken in addition to and following Shared Parental Leave.  In practice, that means employees will be able to give the required notice of their intention to take leave from their first day in a new job.

Unpaid Parental Leave

The right for an employee to take up to 18 weeks’ unpaid leave during the period up to their child’s 18^th birthday is very rarely used. This will however become a day one right under the Bill.

Flexible Working

Earlier this year, the right to request flexible working became a day one right, enabling employees to request changes to their working arrangements twice a year. Employers are required to handle requests in a “reasonable manner” and must only reject requests for one of eight specified reasons. The current framework allows for a broad interpretation of “reasonableness” provided one of the eight statutory grounds for rejection is met.

Labour’s pre-election promise that flexible working would become the “default” is reflected in the Employment Rights Bill, in the form of a more onerous obligation on employers to justify their rejection of a flexible working request.

Employers may still (and must only) reject requests for one or more of the eight statutory reasons however they will also need to explain why they consider it reasonable to refuse the request based on these grounds. Employers are essentially being asked to show their working out and provide contemporaneous justification for the refusal.

For example, if an employer refuses a flexible working request because it would lead to a “burden of additional costs,” the employer will need to explain the specific nature of those costs and why they consider those costs unreasonable in the context of their business.

The penalty for a breach of the flexible working provisions will remain unchanged at 8 weeks’ pay.

For more information about these issues, please contact Ciara Scanlon – ciara.scanlon@pannonecorporate.com

Before the election, Labour set out its stall as the party of equality, committed to building on the successes of previous Labour Governments to ensure that everyone thrives at work. The Employment Rights Bill marks the start of that commitment, containing a number of provisions aimed at promoting equality and preventing harassment in the workplace.

Preventing Sexual Harassment

Labour pledged to require employers to create and maintain workplaces and working conditions free from harassment and has made good on that pledge in the Bill.

The Worker Protection (Amendment of Equality Act 2010) Act 2023, which came into force a few days ago on 26 October, requires employers to take reasonable steps to prevent sexual harassment, and whilst the Equality and Human Rights Commission has published updated guidance to help with the new preventative duty, many employers are still in the process of assessing what “reasonable steps” might mean in their organisation.  The Bill makes one important change to the new preventative duty, namely that employers must take all reasonable steps to prevent harassment.

On the face of it, that is a massive ask for employers, and in fact the word “all” was taken out of the Worker Protection Act before it was brought into force for that very reason.  However, the Bill also provides that future regulations may specify the steps that will be regarded as “reasonable” for the purposes of the preventative duty, including carrying out assessments of a specified description; publishing plans or policies of a specified description; steps relating to the reporting of sexual harassment; and steps relating to the handling of complaints.  If, as seems likely, the beefed-up preventative duty is supported by a statutory list of “reasonable steps”, it may in fact be more straightforward for employers to comply.

Third Party Harassment

A more radical change to the Equality Act is the introduction of protection from third party harassment, although employers who have been in business for a long time may recall that third party harassment was covered by the Equality Act for a period of time until 2013 so this “new” protection is not entirely new.

Under the Bill, an employer must not permit a third party to harass one of its employees in the course of their employment. An employer will be taken to have permitted harassment if it failed to take all reasonable steps to prevent that harassment. For “third party” read customers, clients, service users, suppliers, contractors, agency workers, interns, volunteers and members of the public – anyone who is not an employee of the employer.

Helpfully, the current EHRC guidance makes it clear that taking reasonable steps to prevent sexual harassment includes sexual harassment from third parties, so employers should already be thinking about the risk to employees posed by third parties. However, the new protection will apply to all harassment, not just to sexual harassment, so employers will need to broaden the scope of their risk assessments to include the risks of any kind of third party harassment occurring in the course of employment.

Whistleblowing Protection

As a final step, the Bill introduces a new category of protected disclosure for the purposes of the whistleblowing legislation, namely the disclosure of information that tends to show that sexual harassment has occurred, is occurring or is likely to occur.  This doesn’t really add to the existing protection available to employees who report sexual harassment, but it will arguably make it clearer to employees that they have protection.

Protection for pregnant workers

In its policy paper published alongside the Bill, the Government says it will strengthen protections for pregnant workers, making it unlawful to dismiss them within 6 months of their return to work except in specific circumstances.  In fact, the Bill simply provides that the Secretary of State may, by regulations, make provision about dismissal (other than by reason of redundancy) during, or after, a protected period of pregnancy, so the detail for this policy is yet to come.

Equality Action Plans

The Bill sets out the option for future regulations that may require employers to develop and publish an “equality action plan”, setting out the steps they are taking in respect of gender equality and publishing specified information about gender equality in their workplace. Gender equality is defined as advancing equality of opportunity between male and female employees and includes addressing the gender pay gap and supporting employees going through the menopause. This reflects the commitment in Labour’s manifesto to introduce a requirement for large employers to produce Menopause Action Plans

Once implemented, this obligation will only impact private sector employers with 250 plus employees.

In the pipeline

The Government has also committed to publishing a draft Race and Disability Bill “during this parliamentary session”, which will extend the right to equal pay to cover ethnicity and disability and introduce mandatory ethnicity and disability pay reporting for employers with 250 or more employees, so watch this space!

For more information about these issues, please contact Fiona Hamor – fiona.hamor@pannonecorporate.com

In the latest blog in our 10 year anniversary series, we asked Real Estate partner, Garry King, ten questions to get his views on what makes Pannone what it is and what his ambitions are for the firm over the next decade.

When did you join Pannone?

I joined Pannone back in October 2018 as an associate partner, before being promoted to partner earlier this year.

What made you want to join Pannone?

Over the last 10 years, Pannone has built a strong commercial brand that is well known and respected across the country. To be part of that story was very appealing.

How has that evolved in the last decade?

There are many things about the firm that have remained the same over the last 10 years, such as its culture, values and the strength of its people. But the firm has also grown and become a stronger unit despite the trials and tribulations of the COVID-19 pandemic and the ever-changing commercial landscape. That in itself is testament to the unwavering foundations that it’s built on.

What was your first impression of the firm and the team on your first day?

As soon as I met the partners I knew that the firm was the perfect fit for me. It very much reminded me of the first law firm I trained at in London – a place that convinced me to qualify as a lawyer. You can’t beat a gut feeling!

What’s the best thing about working at Pannone?

Without a doubt, it’s got to be the people who I work with. The team has grown and developed enormously in recent years, but the collaborative and positive dynamic that exists between the teams has not altered. We’re a group of like-minded individuals who are all striving for the same aims, with our clients firmly in the centre of that.

What’s your favourite memory of working at Pannone?

It would have to be my first day at Pannone. It felt like I’d worked here for years, which is a very high compliment to make.

What’s the achievement you’re most proud of while working at the firm?

There are lots of things that we’re very proud of as a team, such as the clients we work with and the work we do for them, but becoming a partner at Pannone definitely ranks up there from a personal perspective.

Where do you see the North West business community 10 years from now?

Like Pannone, the North West economy has been on a positive growth trajectory thanks to the diverse range of businesses we have in the region, combined with their ambition and desire to innovate and push boundaries at every possible turn. I can only see that trend continuing over the next 10 years as the North West cement its position as the place to do business.

What would you like to see the firm achieve in the next 10 years?

We’ve laid an excellent foundation over the last decade which sets us up perfectly to become the leading mid-sized commercial law firm in the North West – but, most importantly, without losing what makes the firm unique and special, which is an unwavering ethos for caring about our people.

Describe Pannone in one word.

Dynamic.

Following the highly publicised mass dismissal of P&O employees in early 2022, ‘fire and re-hire’ has become an emotive topic and Labour made it part of their manifesto pledge to end unscrupulous fire and rehire tactics and to strengthen collective redundancy rights. That pledge has been unequivocally fulfilled in the provisions of the Employment Rights Bill.

Fire and re-hire

Currently, employers are permitted to dismiss employees who refuse to agree to a change in their contract and offer them immediate re-engagement under a new contract to effect the change. Although uncommon, the threat of ‘fire and rehire’ can be a tactic used by employers to ensure employees agree to necessary changes in their contract.  Dismissals because of a refusal to agree to a change to terms will be fair for ‘some other substantial reason’ provided the employer can demonstrate they have a sound business reason for seeking to change the contract and they have followed a fair process, including consulting and considering alternative options.

The current approach is supported by a statutory Code of Practice, published in July this year, which sets out the minimum requirements for a fair process in these circumstances.

Reform

The Employment Rights Bill makes a significant change to this approach.  Where an employee is dismissed for failing to agree to a change in their contract, or if the employer dismisses an employee to replace or re-engage them on varied contractual terms, that dismissal will be treated as automatically unfair unless:

• the employer can evidence financial difficulties that were affecting, or were likely in the immediate future to affect, the viability of the business as a going concern
• the reason for making the change was to eliminate, prevent, significantly reduce or significantly mitigate the effect of those financial difficulties, and

• the need to make the change in contractual terms was unavoidable.

Even where the employer meets that test, an employment tribunal will still assess whether the dismissal was carried out fairly.  Relevant factors will include:

• whether the employer consulted with the employee, trade union or other employee representatives, and
• whether the employer offered the employee anything in return for agreeing to a variation to their contract.

Comment

The Bill imposes a high threshold on employers wishing to force through changes to contractual terms. Effectively, it will be unfair to dismiss in these circumstances unless the employer’s business is in dire financial straits.

It is worth noting that the new ‘automatically unfair’ reason covers not just employees who are dismissed because of a refusal to sign up to new terms,  but also employees who are dismissed and replaced with someone else who is willing to carry out the same or a substantially similar role on the varied terms.

Collective redundancies

When it comes to collective redundancy rights, the current position is that employers must inform and consult with trade unions or employee representatives if they propose to dismiss 20 or more employees because of redundancy at one establishment in a 90 day period.

The Employment Rights Bill removes the words “at one establishment” from the equation, meaning that employers who make a small number of redundancies at each of a number of sites or units, but where the total number of redundancies is 20 or more, will find themselves having to inform and consult about those redundancies where currently they don’t have to.

For more information about this, please contact Fiona Hamor: fiona.hamor@pannonecorporate.com

One of the most widely discussed Labour proposals before the election was to make the right not to be unfairly dismissed a “day one right” for employees. The Employment Rights Bill stands by this proposal, although it isn’t clear exactly what it will look like in practice. What is clear however is the impact it is likely to have for employers. Currently, only employees with at least two years’ continuous service can bring a claim for ‘ordinary’ unfair dismissal, so by making this a day one right, the Bill widens the pool of potential claimants significantly.

Overview

The headline in the Bill is the repeal of the two-year qualifying period needed to claim ‘ordinary’ unfair dismissal – employees will be able to bring an unfair dismissal claim from the first day of their employment.

Employees will not ordinarily be able to claim unfair dismissal before they have started work, unless the reason for dismissal:

• is one of the automatically unfair reasons currently listed in the Employment Rights Act, such as whistleblowing or trade union activities
• relates to their political opinions or affiliation, or
• is connected with their membership of one of the reserve armed forces.

The Government has always recognised the need for some sort of probationary period so employers can ensure that a job is a good fit for both the employee and the employer, and the Bill provides for an ‘initial period of employment’, during which dismissals may not be subject to the usual requirements of fairness if the reason for dismissal falls within a particular category, such as dismissal for capability, conduct, or some other substantial reason.

The Bill also provides for the repeal of the two-year qualifying period for the right to written reasons for dismissal. Employees will qualify for this right instead after the ‘initial period’.

The length of this ‘initial period’ and the detail of how employers can dismiss fairly during this period is not set out in the Bill but will follow in regulations yet to be published.  We do however have some idea of what the Government is proposing from the Factsheet that accompanies this part of the Bill. The Government proposes that for the first nine months of employment (described as a ‘statutory probationary period’), a lighter touch and less onerous process for businesses to fairly dismiss someone who is not right for the job will apply.

The length of the probationary period and how the lighter touch dismissal process will operate will be the subject of consultation in due course. Most commentators believe that some form of statutory dismissal process will be put in place during the probationary period, for example with a requirement for a meeting at which the employee has the right to be accompanied.

The consultation will also seek views about the unfair dismissal compensatory award regime for dismissals during the probationary period.

Comment

Even if employees can be fairly dismissed within the first nine months of employment by following a straightforward statutory process, they will still have the right to being a claim for unfair dismissal, however unmeritorious.  So, it will inevitably become more risky to dismiss employees with short-service, and we are likely to see an increase in unfair dismissal claims in the employment tribunal. The question is whether the increase in unmeritorious unfair dismissal claims will be offset by a decrease in unmeritorious claims for discrimination, whistleblowing and other automatic unfair dismissal claims – the sort of claims employees without unfair dismissal rights currently lodge with the employment tribunal.

The Government has confirmed that these changes will not be implemented before Autumn 2026. In the meantime, employers would be well advised to look at how they are managing probationary periods at the moment and consider whether recruitment and performance monitoring practices could be improved in order to ensure new recruits are the right fit for the business and the role.

If you’re a business and would like more information about this issue, please contact Lorna Croft – lorna.croft@pannonecorporate.com

Danielle Amor has just reached a major milestone at Pannone, after celebrating 10 years at the firm last month [September]. Her work anniversary mirrors that of the firm, having joined Pannone just a few months after the MBO completed on Valentine’s Day 2014.

“It was an exciting time to join Pannone and the firm felt very collaborative and supportive,” explains Danielle, who was impressed by the firm’s approach and reputation.

Danielle has seen first-hand how much the firm has changed in the last 10 years – all the while retaining the same culture through recruiting likeminded people and creating the right environment for those people to prosper and grow.

“Right from my first day, everyone was very friendly and relaxed,” says Danielle. “I knew I had made the right decision and quickly felt part of the team.”

Unsurprisingly, no two days are the same at Pannone. “One day I might be working on the settlement of a trade mark dispute, the next negotiating a software licensing agreement and the next advising a client on a data breach,” explains Danielle.

Advising on data has become a significant part of the commercial team’s practice in recent years, driven by the radical overhaul of data protection legislation in the UK in May 2018.

“The GDPR required most businesses to adopt new policies and procedures,” explains Danielle. “We were extremely busy during this period trying to get all our clients (and ourselves) up to speed with the new requirements. Looking back now, as a team I feel we handled the pressures really well and we have since become one of the leading firms advising on data in the North West.”

As key achievements go in the last 10 years, that is certainly up there for Danielle. But it’s also the smaller things that create lasting memories.

“In one meeting, a particularly remarkable client wrote us each a personalised poem which he read out at the end,” recalls Danielle. “I’m not sure what that says about the quality of our discussions during the meeting, but I certainly will never forget it!”

While Danielle agrees that Manchester has huge appeal and is a great place to live and work, she wouldn’t be averse to Pannone opening a remote working space in Hawaii! Jokes aside, she sees significant potential in the region over the coming 10 years.

“With the right investment in transport and infrastructure, Manchester can solidify its position as the UK’s biggest business hub outside of London, particularly for tech businesses and start-ups,” she says.

One thing is for sure, Pannone will be there to see how the region unfolds. As Danielle says, the firm is ‘steadfast’ and will long be an unwavering feature in the North West marketplace.

Top 10 tips for defending an employment tribunal claim

Employment tribunal claims are an occupational hazard for all employers. With the best will in the world its not always possible to prevent claims. So, what should an employer do to put itself in the best position to defend a claim…?

1. Prevention is better than cure. Take time to develop effective HR policies and processes, give your managers appropriate training, and develop a culture in which staff are treated fairly. Employers that do this best will usually have fewer claims.

2. If it is necessary to discipline or performance manage employees make sure the right managers are dealing with the process. If the matter ends up in tribunal it will be these managers who are called as witnesses on behalf of the business.

3. Tribunals like to see contemporaneous documentation.. Documentary evidence of what happened is likely to be more convincing than witness recollections.

4. Engage in the ACAS conciliation process. Prior to issuing a claim and during the claim itself ACAS will be available to help the parties settle a claim. Explore whether some agreed resolution is possible to avoid the cost, stress, and risk of having a contested hearing.

5. If your business receives an employment tribunal claim ensure you respond to the claim within the appropriate deadline. The claim will not go away by ignoring it.

6. Engage in the tribunal process. Comply with the tribunal directions and engage with other parties as appropriate.

7. Remember, an employment tribunal is a court of law!

8. Ideally, if your budget allows, you will be in a stronger position if you instruct lawyers to advise and represent you.

9. Be realistic. Understanding the risks and appreciating that tribunal outcomes can be hard to predict will make it easier to manage expectations. It can also help the business make clear and commercial decisions.

10. If you are a witness in a hearing ensure you are well prepared. Giving evidence can be tough so preparing well and knowing the case will make it that bit less stressful!

At Pannone we have significant experience in supporting clients in defending tribunal claims from early advice through to representation at the hearing. If we can be of any help or you have any questions do not hesitate to let us know.

For more information about how Pannone can support your business through HR Plus – a fixed fee employment law and HR support service – contact michael.mcnally@pannonecorporate.com or click here

A positive duty for employers to prevent sexual harassment

With effect from 26 October 2024 employers have a positive duty to prevent sexual harassment in the workplace. Here we take a brief look at what this will mean for employers…

•  The legislation will introduce a positive duty on employers to take reasonable steps to prevent sexual harassment of their employees. This duty is anticipatory meaning an employer should not wait for a problem to arise before taking action.
• The duty is a continuing one meaning employers must monitor, review and refresh the steps they take regularly.

• Tribunals will be able to uplift compensation by up to 25% where an employer is found to have breached this duty.

• The Equality and Human Rights Commission have recently published guidance on steps employers will be expected to take. Here at Pannone we have developed a Toolkit to help employers comply with their obligation.

• A key aspect of the new duty will be the need to carry out risk assessments. An employer is unlikely to be able to comply with the duty if it has failed to carry out a risk assessment.

• Employers should take steps to ensure they have up to date policies and procedures.

• Employers must ensure employees receive frequent training on equality, diversity and inclusion.

• Steps should also be taken to encourage employees to raise complaints about harassment and be confident those complaints will be taken seriously.

For more information about how Pannone can support your business through HR Plus – a fixed fee employment law and HR support service – email stephen.mutch@pannonecorporate.com or click here

How to get managers to ‘buy-in’ to the HR process

A common problem HR experience is getting managers to ‘buy in’ to the HR process. Some managers see HR issues as something others should deal with. If you are responsible for HR in your organisation what  can you do to get manager ‘buy in’?

• Make the business aware of just how costly and stressful it can be to get it wrong. Very few managers look forward to the prospect of appearing as a witness in an employment tribunal!

• Ensure managers are aware that they could be personally named in a discrimination or whistleblowing claim and could therefore be personally liable.  

• Give managers the challenge of dealing with HR issues and push back if they try to avoid it. 

• Encourage managers to see HR policies and best practice as a management tool. Better use of these tools will lead to staff retention, boost employee engagement and get enhanced productivity from their employees.

• Promote the commercial benefits of getting the HR process right. Good HR practices promote diversity within the workplace and have been proven to help SME’s grow their business.

For more information about how Pannone can support your business through HR Plus – a fixed fee employment law and HR support service – contact michael.mcnally@pannonecorporate.com or click here

Baby on board….

What are the things an employer needs to know about making an employee on maternity leave redundant….?

• Firstly, it’s possible. There’s a common misconception you can’t dismiss someone simply because they’re on maternity leave. This is untrue; it is perfectly lawful to dismiss someone whilst on maternity leave. It just needs to be considered very carefully.

• It is unlawful to select an employee on maternity leave redundancy simply because they will already be absent for a prolonged period and vice versa (i.e. not selecting someone because they are already absent).

• Be careful not to use selection criteria, such as attendance records or sales figures, that might be distorted by an employee’s absence on maternity leave.

• Be careful that any consultation process accommodates a pregnant employee’s absence from the office – offer remote meetings, or meetings at a neutral location or even their home.

• Any redundancy payments are based on their original pay and not any reduced level of maternity pay.

• Be careful of overcompensating – even a national law firm got in wrong by overcompensating how a pregnant employee was dealt with in a redundancy situation. The other employees successfully sued their employer on the basis she had been given unlawfully preferential treatment.

• In a rare example of lawful positive discrimination, employees on maternity leave who are ‘at risk’ of redundancy must be given first refusal on any suitable alternative roles – even ahead of other ‘at risk’ employees.

Careful advice is always needed when dealing with employees on maternity to avoid expensive and time-consuming legal challenges.

For more information about how Pannone can support your business through HR Plus – a fixed fee employment law and HR support service – email stephen.mutch@pannonecorporate.com or click here

I’ve hired a liar….!!

What are the things employers need to know when they discover that someone has been dishonest during the recruitment process….?

• If the lie is sufficiently serious, a dismissal for gross misconduct (i.e. without notice) is possible.

• However, if the employee has yet to start work, your safest option can be to dismiss with notice. Usefully only the part of the notice period that falls after their intended start date (if any) needs to be paid.

• Contracts of employment should always make it clear what notice period applies during the period before they start the job. This is because the shorter notice period that is stated to apply during their probation might not apply to the period before they actually start. 

• Lying about your qualifications to get a job can amount to a criminal offence.

• Any emails or messages exchanged about a candidate may well have to be provided to that candidate if they request them.

• Be very wary of asking an employee if they have brough previous employment claims. It may create an assumption that’s why you’ve not hired them – and that would be unlawful.

• Not disclosing a disability or a medical condition will almost never count as dishonesty. The onus is an employer to find out about a candidate’s medical issues and even then, only when it directly relates to their job duties. Employers should always avoid asking sweeping questions about a candidate’s health.

• Neither does not disclosing a pregnancy!

A well thought-out and considered recruitment process is essential for avoiding expensive and time-consuming legal challenges.

For more information about how Pannone can support your business through HR Plus – a fixed fee employment law and HR support service – contact michael.mcnally@pannonecorporate.com or click here

Simon Fitzgerald has been a mainstay at Pannone in all its guises since 2002. As a Debt Recovery Executive, Simon has seen the firm grow and develop considerably, joining 22 years ago on the back of a ‘fantastic opportunity’ to be part of Pannone along with a team of four other people.

Simon’s route in law is not too dissimilar to that of an apprenticeship – working on the job while gaining qualifications at night school; Ilex (Legal Executive) was his destination of choice after finishing his A-Levels.

Over more than two decades, Simon has built up a strong bond with the team around him.

“I spend the better part of my life with the people at Pannone and they are all wonderful,” admits Simon. “Our team, in particular, is like a family – dysfunctional – but a family all the same!”

Every day in the Debt Recovery team is the ‘same type of different’, according to Simon, but he loves that no two days are the same. “Even at 52, my ambition is to keep improving on what I already know,” he admits. “It’s true what they say, every day is a school day!”

While Simon jokes that he should’ve been a mechanic rather than going into law, given how much his last car service cost, he’s definitely very much part of the team at Pannone. A philosophy he truly buys into.

“As a profession, we always need to promote the ‘team effort – one goal’ ethic,” he explains. “It’s important to work collaboratively with clients so it doesn’t turn into a    ‘them and us’ relationship.”

The team/family ethos is as important to Simon in work as it is out of work, with his children, grandchildren and family taking up much of his free time – not to mention his love of Manchester City!

“The order of priority changes on a daily basis,” jokes Simon! However, there’s no doubt about his priority at work after more than two decades at Pannone.

Pannone Corporate has appointed a new Head of Finance to its Manchester team, as part of ambitious growth plans.

Sarah-Jane Roper joins the law firm from the University of Manchester. As Head of Finance, she was responsible for three cultural institutions, Manchester Museum, Whitworth Art Gallery and Jodrell Bank Centre for Engagement, as well as Manchester University Press. Prior to that, she worked in internal audit across 12 universities for 10 years.

The chartered accountant, who’s been a ICAEW Fellow for more than 10 years, brings vast and varied experience to the role, including financial management, audit, compliance and taxation, as well as significant expertise in finance business partnering. At Pannone, she will work across the firm with responsibility for financial control, reporting and financial planning.

Paul Jonson, senior partner at Pannone, said: “Appointing someone of Sarah’s calibre is a major coup for Pannone. Her financial expertise and in-depth knowledge of the regional landscape will be hugely important to us as we enter the next phase of growth.

“We’re delighted to have her onboard and we are confident that with her vast experience she will bring a fresh perspective to the firm that will challenge us and help us to drive change.”

Sarah’s appointment follows a trio of hires earlier this month. Emma Haymes joined the law firm as a senior associate in the dispute resolution team. She was joined by Sophie Adshead, who was appointed as an associate in the corporate team. Burak Demir completed the trio of appointments, joining as a solicitor in the real estate litigation team.

Sarah said: “Pannone is at an exciting stage in its growth journey, attracting real talent to create a strong team ethos, which strongly resonated with me.

“After leaving a role within a large organisation, I was really attracted by the opportunity to take on responsibility for the full remit of Pannone’s finance department, while also continuing with the finance business partnering aspect of the role that I enjoy so much. I’m very much looking forward to getting stuck in!”

This year’s Chambers 2025 rankings have been published, with Pannone once again featuring strongly – both for individual lawyers and teams.

The Chambers publication follows an equally as impressive recognition in the Legal 500, which was announced earlier this month [link to story].

Highlights from this year’s annual Chambers 2025 rankings include:

• The Corporate team maintaining their Band One ranking for the third successive year
• The IP and Media team maintaining their Band Two ranking
• The Litigation team making it eight years in a row as a Band Three ranked team
• Other Band Three teams, include: IT, Real Estate Litigation and Real Estate, with eight teams ranked in total
• Individually, Tom Hall (Corporate) and Paul Jonson (Dispute Resolution) have been ranked in Band One, with Jonson featuring as an Eminent Practitioner. In Band Two, Mark Winthorpe (Corporate) and Amy Chandler (IT) feature, with Tim Hamilton (Corporate), Amy Chandler (IP), Gemma Staples (Real Estate Litigation), Daniel Clarke (Restructuring and Insolvency), David Walton (Health & Safety), David Brown ( Dispute Resolution), Martin Pennington (Dispute Resolution), Fiona Hamor (Employment), Jack Harrington (Employment), Melanie McGuirk ( IP), Bill Dunkerley (Regulatory) and Gareth Birch (Real Estate) also ranked
• In total, Pannone has 17 individually ranked lawyers, up from 12 in last year’s rankings, with Arshnoor Amershi (Corporate) ranked as ‘Up and Coming’ and Sarah Bazaraa (IP and Media) featured as an ‘Associate to Watch’.

So, what do our clients say about us?

Corporate: “The team at Pannone were experienced, with the intellectual horsepower to be able to deconstruct the complexity and guide us through their solutions. They go head to head with the big firms and can hold their own.”

Employment: “They exhibit a remarkable aptitude for dissecting issues, giving diverse perspectives and devising innovative solutions. Each member brings a unique set of skills and experiences to the table.”

Litigation: “Pannone takes the time to understand the key points of the matter, which means that in complex areas they rapidly develop a deep understanding of the issues to provide appropriate advice.”

IT: “They have their finger on the pulse and have a lot of relevant experience to draw upon.”

IP: “Pannone has a hard-working and dedicated team at all levels, from partner through to associates, who are intellectually rigorous and sensitive to clients’ priorities.”

Commenting on this year’s results, senior partner Paul Jonson said: “On the back of our success in the Legal 500 rankings, it’s fantastic to see such a strong showing in Chambers – both across teams and for individuals.

“The feedback we get from clients reflects the hard work and dedication of the team, as they continue to deliver innovative, responsive and commercially-minded solutions that demonstrate a deep understanding of our clients’ needs and the challenges that they face.”

Chambers and Partners identifies the best law firms globally, from multi-nationals to boutiques, based on independent research and analysis of feedback from clients, peers and the wider market.

Chambers produces annual global rankings of teams and individuals according to their area of specialism. They take into account: client service; technical legal ability; depth of team; commercial vision and business understanding; diligence and value for money.

Pannone has been a member of PLG International Lawyers for over 30 years, providing the firm with access to a professional network of lawyers from across the world, spanning 30 countries.

For the last three years, the organisation has held an annual event aimed at the next generation of lawyers – the YPLG Academy. Last month, lawyers under 35 from across Europe came together for a week-long conference to hear from experts from multiple disciplines, as well as forge strong relationships with their peers – professional bonds that will prove invaluable in years to come, not only to them as individuals, but to the firms they represent.

This year, it was the turn of corporate solicitor,  Catherine Ossai, who travelled to Lisbon for YPLG 2024. The Pannone lawyer was joined by 14 other legal professionals from Spain, Poland, Italy, France, Turkey, the Netherlands, Germany and Belgium – all at the same stage in their career and all eager to learn.

During the week-long academy event, held at the Catolica Global School of Law in Lisbon, delegates attended lectures hosted by different PLG partners and external speakers, covering a range of topics, including soft skills, public speaking, negotiation, legal English, crypto regulation and AI.

“The AI session was so interesting,” explained Catherine. “To hear and understand from someone who’s done a deep dive of the subject matter, and how AI can help the legal profession on a day-to-day basis, was really fascinating.”

While the lectures gave each of the 14 young lawyers an insight into core and emerging topics in the sector, it was the relationship building that was equally as important.

“It was lovely to hear about their experiences as junior lawyers in their respective countries and what it means to them to be part of the PLG network,” explained Catherine. “Making strong contacts and creating long-lasting friendships was one of the biggest takeaways from the academy. The idea is you grow together as lawyers within the PLG network. I feel very lucky to have been picked to represent Pannone at the event.”

YPLG also included teambuilding, which involved the young lawyers getting to grips with surfing. However, a real highlight was the welcome dinner on the first evening of the five-day event.

“It was a real highlight to be able to get to know everyone properly on the first night, after a day packed with lectures,” said Catherine. “It was a perfect way to cement our growing friendships and find out more about our shared interests. It really set the tone for the rest of the trip. After all, it’s friendships like these that ultimately make a working relationship better.”

This year’s Legal 500 rankings have been published and, once again, Pannone Corporate has excelled in the annual listings. In total, 17 lawyers feature in Legal 500 UK commentary for their excellent contribution to their respective practices. This includes:

• Three ‘Hall of Fame’ lawyers
• 11 ‘leading individuals’, and
• Three ‘next generation’ partners.

 The firm’s practice areas also continue to rank highly amongst those within the profession. Pannone has top tier practice areas in TMT: Intellectual Property; TMT: Media and Entertainment and Private Client: Contentious Trusts and Probate. A further six practices areas are ranked in the second tie and recommended in the listings. These cover:

• Corporate and commercial
• Dispute resolution: commercial litigation
• Dispute resolution: debt recovery
• Employment
• Health & safety
• TMT: IT and telecoms.

Paul Jonson, senior partner at Pannone Corporate, commented: “Every year the team continues to excel in the Legal 500 rankings, demonstrating the strength and depth within the firm across multiple legal disciplines.

“Not only do we have an increasing number of outstanding individuals, who are highlighted across the Hall of Fame, Leading Individuals, and Next Generation rankings, but collectively the team has shown the importance of delivering a high quality, client-focused service that places commerciality, professionalism, hard work and that human touch, at the heart of everything we do. Congratulations to everyone on another outstanding year and a big “thank you” to our clients and contacts.”

Standout comments include:

“What sets Pannone Corporate apart is their unique blend of professionalism with a personable touch.”

“Pannone Corporate has a ‘quality niche team with strong regional profile’.”

 “The ‘very hands-on team’ at Pannone Corporate handles a wide range of corporate matters, including joint ventures, supply and procurement of goods and distribution.”

“The commercial property team at Pannone Corporate ‘acts with the utmost level of professionalism’ when assisting its lucrative client base.”

“Pannone Corporate is well-known for its strong focus on the hospitality, tech and IT, and fashion retail sectors.”

“Praised by clients for its ‘expertise and commitment‘, the group at Pannone Corporate handles a myriad of mandates.”

“The team is highly skilled, knowledgeable, and confident in their work . Their ability to communicate effectively and empathetically with me was outstanding.”

“Pannone was first class from start to finish. They gave me honest and fair advice and definitely attempted to think outside of the usual to come up with an approach that could yield the desired goals.”

 “The team are adept at truly understanding your business and any commercial nuances. They consistently provide advice that is of the highest standard, comprehensive and in a very timely manner. It has been an absolute pleasure to work with the team, you feel totally supported, every step of the way.”

“Strength in depth and a partner led approach. Very responsive, pragmatic business advice which addresses commercial requirements of the client with more focus than most. Good cross collaboration with other departments within the firm to provide legal services.”

“All associated with Pannone have an excellent attitude built on professionalism and are very approachable within their own fields.”

“I have been working with Pannone Corporate LLP for nearly a decade, and they have been an instrumental partner in my business endeavours. Their guidance is pivotal, a testament to their expertise and commitment.”

The Legal 500 analyses the capabilities of law firms across the world, with a comprehensive research programme revised and updated every year to bring the most up-to-date vision of the global legal market. The Legal 500 assesses the strengths of law firms in over 150 jurisdictions.

The future of one of Manchester’s oldest pubs has been secured, following a long-running legal battle with brewing giant, Heineken.

The Briton’s Protection, which is one of only three surviving city centre buildings to have stood near the site of the Peterloo Massacre, has been locked in a legal dispute over its application for a new tenancy. This follows a decision by Punch – a subsidiary of Heineken – not to renew the tenant’s lease in 2021.

The two sides have now come to a ‘positive resolution’, ending the legal battle and securing the future of the iconic pub. Pannone Corporate acted on behalf of BP Leisure Limited, owned by Frank Walsh and Mark West, providing litigation support to the pub’s owners in its bid to renew the pub’s lease.

Pannone’s Real Estate Litigation team was led by partner, Gemma Staples, with support from Jack Taylor (solicitor) and Jiho Yu (paralegal).

Gemma Staples commented: “The Briton’s Protection is a Manchester institution, with genuine historical status. BP Leisure has worked tirelessly over the last three years to secure the pub’s future. Pannone is delighted to have worked alongside them to reach an amicable agreement with Punch.

Mark West added: “This is very much a David and Goliath moment for the Manchester pub and demonstrates the value that institutions such as The Briton’s Protection bring to the regional leisure and hospitality scene.”

Calls for a ‘Hillsborough Law’ and increased accountability of public servants have been voiced for many years.  However, despite a number of independent inquiries and investigations, litigation and even draft legislation being prepared, progress towards a statutory duty has been slow.

When Andy Burnham, then MP for Leigh, proposed a statutory duty of candour for public authorities back in 2017, he no doubt hoped that progress might now have been made.

His draft Public Authority (Accountability) Bill (also known as Hillsborough Law), prompted by his involvement with the Hillsborough families, would have required public authorities to be open, transparent and honest and to admit responsibility following public disaster and mass casualty incidents, potentially even before court proceedings had been intimated.

That Bill was put on hold following the snap General Election in May 2017, and the recent Conservative government stepped back from introducing a statutory duty, establishing instead the Hillsborough Charter.

However, the King’s Speech has confirmed that the current Labour government intends to proceed with the introduction onto the statute books of a Hillsborough Law. At his first Labour Party conference as Prime Minister, Sir Kier Starmer, also promised that a ‘Hillsborough law’ will be introduced in Parliament before the next anniversary of the 1989 football stadium tragedy in April 2025.

What will Hillsborough Law say?

There is currently no draft legislation before Parliament, but it is likely that any future wording will closely mirror the above-mentioned Public Authority (Accountability) Bill. That draft legislation proposed establishing a statutory duty of candour, requiring public authorities, public servants and officials to:

• act at all times in the public interest and with transparency, candour and frankness, and to detail the measures taken to further to these objectives in a published Code of Ethics;
• assist court proceedings, official inquiries and investigations where their own acts or omissions are (or may be) relevant; and
• disclose information which may change the scope of any proceedings, inquiry or investigation.

The draft Bill proposed that ‘public authority’ be given the wide-ranging and inclusive definition: “any national or local government department… institution or agency engaged in functions of a public nature… [this] includes entities with a private structure but which are majority owned by public funds.”

To ensure compliance with the proposed duties, it was suggested that new offences be created for failure to discharge the duty, punishable by a fine and/ or custodial sentence.

Offences would also be committed by public servants, if they intentionally or recklessly misled the general public, the media or proceedings. In addition to an organisation’s offending, individuals would also be liable if by their acts or omissions they hindered their authority’s compliance with its the duty.

Parity of funding

Hillsborough Law also suggests that bereaved families and ‘core participants’ at inquiries and inquests be entitled to publicly-funded legal assistance and representation at the same level, or in proportion to, the resources available to the public authority, to ensure a parity of arms.

What could this achieve?

When introducing the initial draft of what is now the Hillsborough Law back in 2017, Andy Burnham summarised the motivation as “simple”:

“It [is]…to protect other families from going through what the Hillsborough families went through and from a similar miscarriage of justice. It empowers victims to secure disclosure of crucial information and prevent public authorities from lying to them or hiding the truth by making that an imprisonable offence… it creates a level legal playing field at inquests for bereaved families so that finally inquests become what they should always be – a vehicle to get to the truth.”

Hurdles to implementation

However laudable the aims may be of seeking to level the playing field between bereaved families and well-funded public authorities during investigations into mass casualty events, there are serious and fundamental procedural questions which need to be addressed before for any such duty can achieve its intended objective.

Primarily, it remains unclear exactly what is intended by ‘candour’ other than a general duty to be open and honest. In any event there is an inherent tension with a potential defendant’s right to silence: where someone asserts that right, they are unlikely to be guilty of lacking candour – and to hold otherwise would fundamentally undermine well established principles of criminal justice. However, the idea that any assertion of the right of silence should be subject to third party scrutiny or assessment of reasonableness is seismic to say the least.

Another difficulty is that until draft legislation is available for comment, proposals for a Hillsborough Law leaves open to interpretation the definition of a public tragedy. The answer may be that the public will know a tragedy when they see one, but the definition cannot simply be determined by the number of people injured or who have died. To set any such arbitrary distinction risks severe unfairness and injustice.  In addition, any pledge in terms of activation of an emergency plan and deployment of resources to support the bereaved is perhaps only a restatement of the current emergency services framework and is not really an extension of the existing procedures already in place.

The proposal to extend legal assistance to bereaved families is likely to receive widespread support. However, the very significant cuts to the legal aid budget in recent years and continuing austerity generally begs the question: where will the money come from?

Interestingly, the 2017 Bill proposed a limit on the legal spend of public authorities in responding to inquests and inquiries, the logic being that the requirement for them to ‘come clean’ at the outset will reduce the length of investigations and thereby ensure costs savings for all. Any such limits may however fetter the ability of public authorities to fully and properly articulate their case when responding to investigations.

Also, it is often extremely difficult at the outset of an inquiry or inquest to estimate the overall costs that may be incurred. Were a cap to be introduced in responding to any such proceedings, the basis for this would need to be carefully considered, to ensure that all parties are capable of achieving full and proper advice and representation.

In addition, of the organisations which have to date voluntarily accepted responsibility in the immediate aftermath of adverse incidents, there has been little acknowledgement of their acceptance or explicit reduction in fine imposed.

Whilst there may be a very strong moral imperative for public servants to be open and honest following tragedies, absent a ‘stick’ with which to enforce compliance and punish breach, there remains a question as to how compliance will – or even can – be enforced.

However, there does not appear to be any comparable or tangible ‘carrot.’ In the absence of an acknowledged benefit or (financial) incentive for being candid, a potential defendant to further investigation is likely to consider themselves caught between a rock and a hard place.

Conclusion

Whilst it now appears that progress will be made towards establishing a statutory Hillsborough Law, which will be welcomed by many and may be seen as going some way towards addressing the concerns and queries raised by the families following that disaster and subsequent litigation, there are equally fundamental questions and clarifications which are required to be openly debated before any proposed legislation can be enacted.

The law does not operate in a vacuum and were the Hillsborough Law to be enacted in the terms previously suggested in 2017, this would cause significant tension within the criminal justice system and simply could not be imposed unilaterally without detailed and considered consideration of parallel issues which would be naturally flow from the proposals.

If Hillsborough Law is to become a reality then there needs to be careful consideration of the potential, but significant, implications to ensure that there is genuinely fairness to all parties concerned.

Tom Hall is a self-professed ‘day oner’ – part of a core who joined Pannone pre-MBO in 2014. His career began at the ‘old Pannone’ in September 2004, when he started a training contract in the business crime team. Twenty years on, Tom is a partner in the corporate team and has become an integral part of the firm.

If there’s a consistent thread that runs through Pannone, in terms of its people, there also remains a consistency in approach, which is as strong today as it was ten years ago when the MBO completed – a moment that Tom admits really ‘galvanised’ the firm.

“For our 10 year anniversary in February 2024, we looked back at the original core values and principles that were put in place when the firm was founded in 2014,” Tom explains. “Despite them being drafted over a decade earlier, those core values remain a word-for-word representation of what the firm is and stands for today. If we can say the same in February 2034 then we will have done very well.”

The same can be said for the North West business community, which Tom believes is still the same, despite the huge changes in the region in the last 10 years. “The business community remains close-knit, plain-speaking and has the energy and desire to make things happen, rather than waiting for others to do it for us,” says Tom. “I don’t see that changing.”

As a ‘well-known and well-regarded’ law firm, Tom agrees that the best thing about Pannone is its people.

“Nothing makes me prouder than seeing lawyers who have started as trainees or paralegals in the team rise through the ranks, lead their own transactions and win their own work,” he explains. “We are very lucky to have some brilliant people in the team who have been fundamental to its growth and reputation over the years. Watching them in full flow on all party calls gives me a warm glow inside.

“We’re also very fortunate to support a wide range of national and international clients, across every sector you can think of,” Tom adds. “I love going to see clients at their place of business, having a look around and finding out what makes them tick. I always come away from those meetings feeling inspired and/or with some food for thought about how we can improve or refine our own business.”

Over 20 years, Tom has seen first-hand how the firm has improved and refined its proposition, with many favourite moments, including the call at 8pm on Valentine’s Day 2014 to confirm the Pannone Corporate buyout had completed when ‘wild scenes ensued’! Aside from those celebrations, it’s the strong partnerships that have been built over the last 10 years that stand out for Tom.

“My involvement with PLG International Lawyers, our firm’s international network, has probably been the aspect of the role that I have enjoyed the most over the last decade,” says Tom. “PLG has opened the door to some fantastic global clients and transactions, and I have made lifelong relationships with many of the outstanding lawyers involved.”

And, as a people-centric business, relationships are everything.

Pannone Corporate advised staffing specialists, G2V Recruitment Group on its move to 3 Hardman Square office building in Spinningfields, as its new Manchester base.

Pannone real estate partner James Wynne led the deal which saw the business sign a new 10-year lease of the 12,300 sq ft space at 3 Hardman Square, Spinningfields. Andrew Cowell at OBI also acted as property agent for G2V Recruitment Group in the deal.

Ryan Woods, Divisional Director, Vivid Resourcing (G2V Group), said: “We are looking forward to joining the dynamic community at 3 Hardman Square, in the heart of Spinningfields. Vivid Resourcing create exceptional career opportunities and are committed to investing in our people. We feel establishing our new Manchester office in the heart of Spinningfields is a perfect location to grow, while attracting and retaining highly capable staff, further solidifying our position at the forefront of the recruitment sector. It’s an exciting time for our people who will enjoy a vibrant workplace.”

James Wynne at Pannone Corporate added: “G2V is an excellent recruitment business with big growth ambitions. The new space will underpin its future success and it’s fantastic to have played a part in this journey. It’s also encouraging to see entrepreneurial businesses continue to invest in high-quality space in the region and we’re pleased to work with other North West agents and advisers on the deal.”

CBRE and Colliers act as leasing agents for Royal London Asset Management on 3 Hardman Square.

Care Quality Commission (CQC) inspections have fallen to their second lowest level in almost 10 years, as the day-to-day regulatory function of the public body continues to lag behind pre-pandemic activity.

According to new data, physical inspections by the CQC have dropped from a peak of almost 23,000 in 2016, to just less than 8,000 in 2023 – a marginal increase on 2020 figures, which showed that 7,711 inspections were carried out during the height of the COVID-19 pandemic.

Of the 107 inspections with an overall rating of ‘Requires Improvement’ or ‘Inadequate’, only four have resulted in completed and published full Quality Statement reviews.

The fall in inspections also coincides with the commencement of the CQC’s new operating model, which may account for some of the reduction.

Bill Dunkerley, regulatory associate partner at Pannone Corporate, which conducted the annual research under the Freedom of Information Act, commented: “Despite the fanfare and extensive publications to promote its introduction, the CQC’s new regulatory model has had something of an inauspicious start.

“The regulator was hopeful that its new approach would enable it to be more dynamic in its assessment of services, and permit more contemporaneous data collection to take place. Far from becoming a more proactive, dynamic and responsive agency, as the data shows, the CQC is becoming more sedentary in its approach.”

The research shows that despite an increase in the number of concerns being received by the CQC, the total number of regulatory actions taken by the Commission has fallen year-on-year and currently sits at around half of pre-lockdown levels (10,618 in 2019; 5,783 in 2023). Although there was a clear drop-off in the number of regulatory actions in 2020, figures have remained consistently low since then, compared with upwards of 15,000 each year in the period following the CQC’s receipt of enhanced powers in 2015.

In addition, the use of warning notices has dropped significantly, from a peak figure of just over 1,500 during 2015 to less than 600 in 2023. Despite a flurry of prosecutions over the last few years, the annual figures also show that prosecutions are decreasing rapidly. There are currently 121 open criminal investigations concerning specific incidents or unregistered providers.

Dunkerley added: “To be an effective regulator going forwards, and one with real teeth, the CQC has to combine its new inspection and assessment framework with meaningful regulatory activity. Whilst to date, the CQC could have been seen to be relatively proactive – undertaking inspections of providers at fairly reasonable intervals – an inherent danger within its ‘data-driven’ approach is that this may result in it becoming reactive, as recent data perhaps tends to indicate.

“At the end of the day, the CQC’s new regulatory model does not change its investigatory and enforcement powers. The latest figures suggest that either the CQC is becoming less active, or is achieving compliance by providers without the need to resort to use of its enforcement powers.”

In the latest in our 10 year anniversary blog series, Ten in 10, we speak to the man who keeps the IT engine running at Pannone – Steve Elderfield.

Steve joined what was the ‘old’ Pannone is 2006 as a Senior IT Support Technician, before moving across to Pannone Corporate following the firm’s MBO in 2014, becoming IT Manager. Ten years on, he continues to play an integral role in the firm as IT & Facilities Manager. “Pannone offered a great opportunity to continue my journey in IT which I couldn’t turn down and I’ve never looked back,” admits Steve.

Like many people in the firm, his role has evolved significantly in the last 10 years. “What started out as just the IT Manager, has grown into much more,” explains Steve. “I have taken on more roles and responsibilities along the way, covering various different areas of our IT and the building.”

While his role has developed in the last decade, there’s one thing that hasn’t changed from the day he started and that’s the people and work culture. “Everyone was very friendly and welcoming on my first day, which gave me a real sense of acceptance and made the working environment that much more enjoyable,” says Steve. “I recall feeling like I was part of something special and through the years I developed a lot of friendships in the firm.”

There have been a number of highlights and key achievements for Steve since he joined, including his own personal development and gaining the trust and responsibilities that comes with the role, while also seeing and being part of the firm grow into what it is today. But one particular highlight was the move to the Chapel, which Pannone proudly calls home. “Although the move was very challenging to manage at the time,” admits Steve. “It was also very exciting to be a part of.”

He’s not only proud of Pannone and its achievements in the last 10 years, but also how the North West business community has grown during that time. “It’s been flourishing over the last 10 years, bringing more people to the city,” says Steve. “In the next 10 years, I can only see the North West becoming one of the great business hubs, alongside London which, in turn, will boost the economy and generate more work for firm’s such as ours.”

The use of the word ‘our’ feels very deliberate. Steve has a strong connection with the firm and carries real aspirations for more expansion and growth, but it’s how he describes Pannone that tells the true story of his relationship with the firm – “If I had to describe Pannone in one word, it would be ‘family’.”

Commercial entities will, at some time or other, be faced with the termination of a contract they are a party to. Despite the parties’ best intentions at the outset of a contract, circumstances may change, whether through a change in the economy; rising cost of materials; an unforeseen situation whereby one party is unable to perform its obligations under the contract; or the effect of a global pandemic. In such circumstances, termination of the contract may become a consideration, whether for convenience or for breach.

Often the position on termination is more nuanced than might at first appear to be the case. This means careful consideration should be given to a number of issues, including:

1. is termination the right option and are there any alternative outcomes available?
2. whether a party is in fact able to terminate under the contract terms;
3. the practical and procedural steps that will need to be followed in accordance with the contract; and
4. the effects of termination.

Meaning of termination

Termination of a contract is where the contract is brought to an end, such that the parties are released from their continuing obligations effective from the termination date. Termination does not undo the contract and the contract will still be enforceable by both parties in respect of any historic rights or obligations which have accrued prior to the termination date. There are also often terms that will survive termination, for example, post-termination restrictive covenants and/or terms relating to misuse of confidential information. However, the future performance of obligations under the contract will cease on termination.

Entitlement to terminate

The starting point when considering termination is the terms of the contract itself. It may be possible to terminate for convenience, by either party giving notice in the required format and with the specified notice period.

If a party is looking to terminate based on the other party’s alleged breach of the contract, it is important to note that not every breach of a contract gives an entitlement to terminate. Often in commercial contracts, certain events will be specified as being a material breach which give rise to the ability to terminate, for example, the insolvency of the other party.

In the absence of any express termination provisions within the contact relating to breach, it is necessary to consider whether the breach committed entitles the innocent party to terminate. In doing so, it is necessary to consider whether the breached term is a condition, which will enable a party to terminate for breach, a warranty or an intermediate term.

A condition is a fundamental term of the contract, going to the heart of it, and a breach of which will enable the innocent party to terminate the contract and claim damages. Generally, a breach of a condition is not capable of remedy, for example, the main purpose of the contract has not been performed.

By way of contrast, a warranty does not go to the root of the contract and therefore if a warranty term is breached, this will not entitle the aggrieved party to terminate, but their remedy will be limited to damages for any loss suffered; the contract will continue.

There are other terms, which when breached, the remedy for which will depend on the nature and effect of the breach at the time it happens. In this sense the position following the breach will be fact specific and may give rise to an entitlement to terminate.

In the heat of the moment, it may be difficult for commercial parties to ascertain whether the affected term is a such that it gives rise to an entitlement to terminate the contract. Whilst parties will often seek to label a term as a ‘condition’ when looking to terminate a contract, whether or not a term actually is a condition will often require closer consideration. It is therefore often sensible, before taking the decision to terminate a contract, to seek independent legal advice as to your position.

Giving notice

Before taking any steps to terminate the contract, it is necessary to reconsider the specific terms around termination and the necessary steps that must be taken to ensure the termination is effective. Accordingly, it is necessary to have regard to:

• whether the party in breach must first be given a chance to cure a breach of contract;

• the time period within which notice can be given – commercially drafted contracts will often include provisions which preclude the termination of the contract where the innocent party has unduly delayed in exercising their rights under the contract, i.e. they will be taken to have affirmed the breach if the contract has not been terminated within the prescribed period;

• the content of the notice – if terminating for breach, it will be important when giving notice of the termination to clearly set out the grounds for termination, including details of the breach and with reference to the contract terms;

• another consideration on giving notice to terminate, including for convenience, is where a contract is subject to automatic renewal terms, it will be necessary for the party wishing to terminate the contract to consider the period of notice which it is required, so as to avoid the situation whereby the contract is automatically renewed for another period; and
• the means of communicating notice – it will be necessary to consider:

• who can give notice;
• the form of the notice required, i.e. is there a requirement for the notice to be in writing?
• the means of delivering the notice, i.e. is there a requirement for notice to be sent by email to a specified individual and/or by recorded delivery post, and/or by personal service?
• when the notice will be deemed delivered.

Effect of a failure to properly terminate

If a party elects to terminate a contract without sufficient grounds or fails to do so in accordance with the prescribed procedures, it will not be sufficient to terminate the contract and the act of purported termination can itself be a repudiatory breach of the contract entitling the other party to terminate the contract and sue for damages. This is why it is often advisable to seek professional advice when considering the termination of a commercial contract.

Alternatives to termination

By terminating a contract, you are effectively terminating, or at the very least potentially prejudicing, any ongoing business relationship with the other party. In addition, there may be reasons not to terminate a contract if there has been a breach, for example, if you are due to receive payments from the other party and there are no concerns as to their solvency.

Whilst circumstances may allow for termination of a contract, this does not mean it is always the most appropriate course of action to take. If the parties want or need to salvage their ongoing business relationship, other alternatives can be considered, including:

1. the renegotiation of the contract terms and a variation of the contract itself to reflect a change in circumstances; and
2. if an alternative remedy is available and/or if there are any prescribed procedures within the contract in the event of a dispute, for example, arbitration or mediation.

All in all, the termination of commercial contracts should not be rushed, and it is important to ensure that sufficient thought and consideration is given to the position before taking any steps. Seeking advice as to the position and exploring the commercial implications of taking such a step is important, before moving forward to terminate.

If you would like to discuss this blog, please contact Jonny Scholes on 07824 435665 or by email to jonny.scholes@pannonecorporate.com

Manchester law firm Pannone Corporate has strengthened its team with the appointment of four legal professionals.

Helen Fyles joins the firm as an associate partner in the insolvency and restructuring team, previously having worked at Knights plc and Mills & Reeve LLP. Helen will support partner Daniel Clarke in helping to develop and grow the team, bringing over 20 years’ experience advising all stakeholders in the insolvency process, particularly insolvency practitioners in their capacity as liquidators, administrators and trustees in bankruptcy. Helen also has particular expertise in insolvency investigations and pursuing delinquent directors.

Helen is joined at the firm by Jessica Boswell, who has been appointed as an associate in the dispute resolution team. Joining from JMW, Jessica will assist the team across a wide range of disputes covering general commercial contracts and professional negligence. She brings experience in breach of contract claims, misrepresentation issues and disputes with insurers in both an individual and business capacity.

Imogen Eastwood has been appointed as a solicitor in the commercial team. Joining from Deloitte LLP, Imogen will be responsible for advising clients on a wide range of commercial agreements across various sectors, ranging from trading agreements through to major projects.

Bradley Davies completes the current round of appointments, joining Pannone as a solicitor in the dispute resolution team. Bradley will support the team in advising on a wide range of areas, including real estate litigation, disputes concerning general commercial contracts, estates and trusts, intellectual property, IT and professional negligence.

Paul Jonson, senior partner at Pannone, said: “As a firm, we’re committed to hiring and investing in the brightest talent – people who possess technical excellence but also emotional intelligence.

“We recognise the value they can bring to the firm in helping us to deliver a personal, collaborative and client-focused service. I’m confident Helen, Jessica, Imogen and Bradley will be a real asset in our commercial, insolvency and dispute resolution teams as we look to build on our success in our tenth year of business.”

The General Election is just around the corner and is expected to bring a changing of the guard, with Labour firm favourites to take over the post.

A change in government would bring a change in approach, and while the manifestos are light on the detail, they do give us an indication of where possible reforms may come.

Labour has pitched itself as the party that will ‘make work pay’ for working people, in a bid to improve both living standards for those in employment and economic growth. This includes stimulating more funding for training, skills and technology, to help make the UK more efficient and increase productivity levels – something we currently lag behind on compared to our international peers.

An important dynamic in the productivity debate is how workforces function and the legislation that sits around them. So what could we see from a Labour government when it comes to employment law and HR? Let’s look at the detail.

Zero hour contracts

Labour’s plan to ‘make work pay’ includes ending “one-sided” flexibility by banning “exploitive” zero-hour contracts and providing a baseline level of security and predictability for all jobs.

The party believes that too many working people face insecurity when it comes to their working hours, bearing all the risk and being unable to plan and live well. However, the inclusion of the word “exploitive” suggests that Labour has moved away from its earlier pledge for an outright ban on zero-hours contracts.

Under Labour’s proposals, everyone will have the right to have a contract which reflects the number of hours typically worked by reference to a 12-week period.  Workers will also be entitled to receive reasonable notice of any change in shifts or working time, whilst also receiving compensation (proportionate to the notice given) for any cancelled shifts. Anti-avoidance measures will be implemented where necessary to protect the integrity of these policies.

The plans will not prevent workers from the right to be paid overtime rates, nor will it prevent employers from offering fixed-term contracts such as seasonal work.

Basic day one rights

Labour has indicated that it wishes to address what it sees as the unfairness of the current system that requires employees to have two years’ continuous service* before they can bring a claim of ordinary unfair dismissal. The party believes this is an arbitrary requirement which is preventing people from changing jobs and enjoying the resultant wage increases that often accompany such moves, and preventing employers from being able to hire the best candidates.

The length of service required for employees to bring a claim of ordinary unfair dismissal has fluctuated since its inception as a right in 1971. The current requirement of two years’ service was introduced by the Conservative government in 2012 (the requirement remains 12 months in Northern Ireland).

An unintended consequence of the two-year bar has been a rise in the number of discrimination claims brought by employees seeking to find a remedy for the termination of their employment in its early stages. It will be interesting to see if such claims reduce if the right of unfair dismissal becomes available from day one.

Labour has assured employers that they will still be able to operate probationary periods, although how this will work in practice is not yet clear. Commentators have speculated that perhaps dismissals within an employee’s probationary period will be deemed fair so long as a set process is followed.

*While we wait for the outcome of the election, it is worth flagging a point that often catches employers out. Where an employee is dismissed with immediate effect and paid in lieu of notice, the statutory minimum notice period of one week is added on to the dismissal date, meaning that employees dismissed after 103 weeks (one week less than 2 years) can still claim unfair dismissal.

Discrimination, equal pay, and the menopause

Labour’s ‘New Deal for Working People’ plan also includes proposals to promote equality, by tackling the gender pay gap and providing support in the workplace for those going through the menopause.

Large firms will be required to develop, publish and implement action plans to close the gender pay gap. Similarly, employers with more than 250 employees will be required to publish information about ethnicity and disability pay gaps.

There is also a commitment to re-instate the ability for equal pay claimants to draw on comparators in other organisations, where workers’ terms and conditions can be attributed to a single source, and to put a stop to employers outsourcing services to avoid paying equal pay. Labour plans to implement a regulatory and enforcement unit for equal pay with involvement from trade unions.

In relation to the menopause, businesses with more than 250 employees will be required to produce Menopause Action Plans, setting out how they will support employees going through the menopause. For smaller employers, Labour will produce and publish guidance on measures relating to uniform, temperature, flexible working and how employers should record menopause related leave and absence.

Right to switch off

To address what it describes as the ‘inadvertent blurring of the lines’ between work and home life caused by the change in working practices following the pandemic, Labour has committed to bringing in a ‘right to switch off’.

This isn’t a new concept. We can look to a number of European countries which have already given employees some form of right to disconnect, including Ireland. A voluntary code of practice statesthat employees should not be required to carry out work outside normal working hours regularly and should not be penalised for refusing to do so. The code also sets out that employees must respect their colleagues by avoiding work-related contact outside of normal working hours.

Labour’s proposal indicates that it will follow a model similar to that adopted in Ireland, ‘giving workers and employers the opportunity to have constructive conversations and work together on bespoke workplace policies or contractual terms that benefit both parties.’ It seems most likely at this stage that a code of practice will be introduced which can be taken into account by employment tribunals on liability and compensation, but does not in itself create a standalone claim, much like the current Code of Practice on Disciplinary and Grievance Procedures.

Working in partnership with trade unions

Unsurprisingly, one of the areas of employment law that a new Labour government would address is industrial relations.

Its stated aim is to bring in a new era of partnership that sees employers, unions and government working together in co-operation and through negotiation, rather than what it describes as ‘the Conservatives’ scorched earth approach to industrial relations.’

As a starting point, Labour would repeal the trade union legislation brought in by Conservative governments over the past 14 years, specifically, the Trade Union Act 2016, the Minimum Service Levels (Strikes) Bill and the Conduct of Employment Agencies and Employment Businesses (Amendment) Regulations 2022.  In particular, repeal of the Trade Union Act 2016 would potentially remove the requirement for at least 50% of all eligible members to vote in a ballot for industrial action in addition to a majority vote in favour, and reinstate the previous minimum period of seven rather than the current 14 days’ notice of strike action.

Referring to the disruption caused by strike action over the past two years, Labour believes its proposals will remove the barriers that currently make it harder for unions to engage in the bargaining and negotiation that settles disputes, and put the UK in line with high-growth economies that benefit from a more co-operative industrial relations culture.

A matter of time

If the polls are right and we have a new Labour government on 5 July, we expect the employment landscape to change quite quickly. Labour has committed to implementing its new its deal for working people within the first 100 days in government.  Over the coming months, it’s essential that businesses keep a watchful eye over a changing landscape to ensure their policies and procedures keep up with the changes.

If you’d like to discuss this blog in more detail, contact Fiona Hamor.

Photo credit: Chrisdorney

Following our AI in the Workplace event last month (May), our guest speaker, Dr Richard Whittle, University Fellow, University of Salford Business School, takes a closer look at AI and the future of work, looking at the uncertainty that exists, as well as the potential. Read more here…

AI and the Future of Work: A landscape of uncertainty

I doubt it is an exaggeration to say that virtually every time you look at the news, your socials or LinkedIn you see another story about Artificial Intelligence (AI). The subject is everywhere and headlines range between an AI utopia of less work and increased productivity, and the AI dystopia of science fiction nightmares. The AI of today is a long way from either extreme; however, it is fast becoming a feature of modern work and life.

You are hearing about AI everywhere you turn, as over the last 18months or so – in waves of increasing sophistication – a new type of AI is producing human realistic outputs in a manner which is both highly accessible and relatively inexpensive. Text, code, images and more can be produced quickly, cheaply and by anyone.

This is Generative AI (GAI) and we will talk more about this later. We will be mostly talking about ChatGPT which many of you will have heard about and may be using, but I should note impartially that there are other models with similar capabilities.

In order to get to grips with the implications of this new technology we must briefly mention the history of AI, this helps us to think about what this technology actually means for us and put the hype into context.

A Brief History of AI: Booms, Busts, and the Path to Today

The journey of AI is a fascinating tale of ambition and unpredictability. Since its inception in the 1950s, AI has experienced periods of significant hype, known as AI booms, followed by phases of disillusionment and stagnation, termed AI winters. These cycles were characterised by overpromises and unmet expectations, as researchers and technologists grappled with the complexities of replicating human intelligence.

This latest boom is marked by tangible breakthroughs that have brought AI out of the lab and into everyday applications, from chatbots to creative content generation. However, history teaches us to approach these advancements with a balanced perspective, mindful of both the potential and the limitations of AI. In recent years, we’ve witnessed a resurgence in AI, fuelled by advancements in machine learning, deep learning, and, notably, generative AI. Here I will borrow a definition from the Turing Institute’s fascinating Generative AI lecture series.

Generative = Create new content.

AI = Automatically with a computer program.

I tend to be cynical of ‘this time is different’ positions, however the accessibility and quality of generated output means that economies, markets and institutions will need to adapt to the ease at which some outputs can now be produced as well as consider the implications of these tools on processes and products. For me, the best way to think about this is in terms of radical uncertainty.

Radical Uncertainty in the Age of AI

The rapid development of AI technologies has plunged us into an era of radical uncertainty. The Resolution Foundation consider that AI “is unknowable in a way that rules out even envisaging some of the possible outcomes, and provides no sensible basis for attaching probabilities to any of them”. Unlike the risks we encounter in traditional scenarios, where probabilities can be assessed and managed, the impacts of AI on the future of work are far more elusive. This radical uncertainty stems from our inability to foresee the full scope of AI’s influence on job markets, economic structures, and societal norms. In short, how do we plan for something we cannot imagine?

Predicting the exact trajectory of AI’s impact on work is challenging. Will AI lead to massive job displacement or create new categories of employment? How will different sectors adapt to the integration of AI? These questions remain open-ended, and our current understanding provides only a glimpse into the possible futures shaped by AI.

Uncertainty is a better way to think about AI, rather than to think about it in terms of risk. Risk is knowable, we can put likelihood and chances onto outcomes, uncertainty doesn’t allow us the luxury of that.

Organisations, policy makers and individuals need to attempt to turn uncertainty into risk in order to plan for ‘the age of AI’. This will allow people to take appropriate risk with incorporating Artificial Intelligence.

You will note that I said appropriate rather than low risk, the potential reward and disruption of AI is great, and purposely low risk adoption may not be possible. The challenge with AI is that its rapid evolution and diverse applications introduce unprecedented levels of uncertainty. Acknowledging this uncertainty is the first step toward developing strategies that can adapt to the unpredictable nature of AI’s future.

As organisations contemplate the integration of AI, they face a paradoxical dilemma: incorporating AI carries inherent risks, yet failing to adopt AI is equally perilous. Embracing AI could lead to operational efficiencies, innovative products, and competitive advantages. However, it also brings challenges such as job displacement, ethical concerns, and security vulnerabilities.  Not embracing AI may however lead to falling behind competitors and consumer expectations.

Disruption in the World of Work

Generative AI is poised to be particularly disruptive in various sectors. In creative industries, AI tools can generate content, design graphics, and even compose music, challenging traditional roles and workflows. In finance, AI algorithms are streamlining processes, analysing vast datasets, and making real-time decisions that previously required human intervention. Digital twins allow us to test new products costlessly and AI product development means the cost of a business trying new things may be virtually nil.

These new technologies generate questions around skills, investment, work and more broadly what type of economy do we want and what will we end up with?

AI could automate repetitive and mundane tasks, allowing humans to focus on more creative, strategic, and interpersonal roles. This shift will necessitate significant upskilling and reskilling of the workforce. Education and training systems must evolve to prepare individuals for jobs in the age of AI, emphasising skills that can be completed by AI rather than compete with it.

Currently though, Generative AI, by automating creative knowledge tasks, is challenging this more traditional view of the role of AI. As X user @AuthorJMac succinctly puts it “I want AI to do my laundry and dishes so that I can do art and writing, not for AI to do my art and writing so that I can do my laundry and dishes.”

Picture credit: gorodenkoff

Nearly a decade on from joining Pannone Corporate, Danielle Amor talks about her career, her passion for seeing clients get the outcome they deserve, her love of coffee, and the growing influence of Artificial Intelligence (AI) in the legal sector.

Tell us a little about your career before joining Pannone

I studied law at Durham, then took the LPC at Oxford before starting a two year training contract at an international law firm in London, which included six months working at ITV in the Rights and Business Affairs team. I worked there for about seven years before making the move back up north.

My first role in Manchester was in-house at Manchester United working on the then-record sponsorship deal with adidas, before moving back into private practice at Pannone. When I joined, the firm had only been formed a few months before, so it was a really exciting time to be starting.

In her current role as a director in the commercial team, Danielle advises on commercial contracts, intellectual property and data protection compliance, with a broad range of specialism across the experienced team covering retail, fashion, manufacturing, hospitality, media, IT and industrial services. It was that talent and expertise that attracted her to Pannone. I was drawn to the mix of excellent lawyers and high quality work.

Despite a few wobbles along the way when she considered packing it all in ‘for a life of wanderlust’,  Danielle remains committed to the profession and what can be achieved. I am really irked by injustice! I enjoy seeing clients achieve the outcome they deserve, particularly when they have been in a dispute and I am instructed to draft the settlement terms.

Danielle is also passionate about the important role lawyers have to play in a world that is already changing with the increasing use of technology, particularly AI. I can see why businesses might turn to AI for drafting contracts and legal letters when they don’t always receive the practical, commercial advice they need from legal advisors. However, the nuances and subtleties that the majority of our drafting requires, cannot be replicated by AI as it stands. This reinforces why we need to continue to keep our advice concise, relevant and responsive to our clients’ needs.

So what does a typical day look like? I prefer being in the office, so I usually get in around 9am after dropping the kids off at school and nursery. A lot of my work involves drafting long agreements, so there is a lot of time spent in front of a screen. We have regular team catch-ups and training sessions in the diary and most client meetings tend to be via Teams. I also try and go for a walk at lunchtime and get a coffee from Mancoco to power me through the afternoon.

Coffee is a clear favourite of Danielle’s. When asked what she would be doing if she didn’t have a career in law, she responded: I have always quite fancied running my own café selling coffee and cake.

What’s more, if Danielle was managing partner for the day, the first thing she would do is install a coffee machine!

Outside of work, Danielle is kept busy by her three young children and a springer spaniel! We enjoy getting out into the nearby countryside and back to my home town of Blackpool whenever the weather allows. I also enjoy baking birthday cakes (for the kids, not the dog!) and yoga to de-stress.

Pannone Corporate has been crowned Corporate/Commercial Team of the Year at the 15^th annual Manchester Legal Awards.

The firm was recognised at the regional awards, which aim to reward the wide range of skills and talent across the North West legal sector.

The Pannone team beat off stiff competition, including well known international firms, to clinch the prestigious award at an event that was launched by Manchester Law Society in 2010. The 21 categories cover all areas of law, with organisation, team and individual awards.

Mark Winthorpe, Corporate Partner at Pannone Corporate, commented: “What an achievement by the team! After such a standout year, it’s fantastic to see our team being chosen as winners by a panel of 18 esteemed judges, who recognised the stellar work that we have carried out over the last 12 months.

“The Manchester Legal Awards is a real showcase of the legal talent that exists across the North West, so to be a part of that is a real honour for both our team and the firm!”

Exclusion clauses are among the most important clauses within commercial contracts. When a dispute arises, the parties may first turn to the exclusion clauses to assess their respective exposure or any protections from liability.

Exclusion clauses are contractual terms which can either exclude or restrict a party’s exposure to a legal obligation or liability. For instance, exclusion clauses could protect a contracting party from:

• Liability for defects in goods: e.g. “The seller shall not be liable for any defects in the goods after they have been delivered and accepted by the buyer”.
• Liability for non-performance due to specified events: e.g. “The agency shall not be liable for any failure to provide services due to government actions”.
• Liability for the loss of data: e.g. “The service provider shall not be liable for any loss or corruption of data stored on its servers”.

Why are exclusion clauses useful?

Exclusion clauses are useful because they provide a mechanism for parties to manage and allocate risk. They provide predictability and clarity regarding liability and risk management.

By incorporating exclusion clauses into a contract, parties can allocate risk in a manner which is suitable to them. This could involve an equitable sharing of risk or an allocation of risk that reflects the contractual realties of the parties and their respective ability to manage contractual risks.

Controls on Exclusion Clauses:

To be considered enforceable, exclusion clauses must meet certain legal requirements. These requirements are intended to promote fairness and are based on both common law principles and statutory regulations. They are as follows:

1. Incorporation: An exclusion clause can be successfully incorporated into a contract through signature, notice or a consistent course of dealing.

2. Construction: There are two main principles the courts will consider:

• Main Purpose: If an exclusion clause defeats the main purpose of the contract, it may be rendered ineffective. This ensures that exclusion clauses cannot completely undermine the fundamental obligations of the contract.

• Ambiguity: Any ambiguity in the clause will be construed against the party relying on it. This ensures that the party seeking to exclude liability must do so in clear terms.

3. Unfair Contract Terms Act 1977: UCTA applies a reasonableness test to exclusion clauses, particularly in consumer contracts and those involving liability for negligence. This legislation seeks to ensure that exclusion clauses are fair and reasonable in the context of the contract.

Implications for Businesses: Drafting and Allocation of Risk Strategies

While exclusion clauses are a powerful tool that allow parties to limit their exposure to risk when engaging in contractual undertakings, it is advisable that lawyers are engaged at the drafting stage to ensure that the term a party seeks to rely upon does not become void if disputed in court.

Key considerations include:

• Clarity and Precision: Draft exclusion clauses in clear and unambiguous terms.
• Enforcement: Ensure that the clause complies with applicable laws and regulations, such as the Unfair Contract Terms Act 1977.

• Negotiation: Clearly express intentions in the contract and ensure that all parties understand the terms to which they have agreed. This is especially important in “battle of the forms” scenarios, where conflicting standard terms and conditions may exist.

Further Considerations for Effective Risk Management

• Scenario Planning: To test the effectiveness of exclusion clauses, apply them to a variety of hypothetical scenarios. For example, simulate a data breach incident to determine whether the clause adequately limits liability.

• Integration with insurance policies: Insurance combined with exclusion clauses can improve risk management and provide additional protection for businesses. For example, businesses can use insurance policies to cover risks that are not covered by the contract. Exclusion clauses, on the other hand, can be used to close any gaps in risk coverage if an insurance policy excludes certain types of damages. By strategically combining insurance and exclusion clauses, businesses can fortify their risk management strategies and safeguard against unforeseen liabilities.

Conclusion

Exclusion clauses are critical for effective risk management in contracts. Their enforceability and effectiveness depend on clear and precise drafting, legal expertise, and thorough negotiation. By employing the strategies discussed in this article, businesses can better navigate contractual relationships, allocate risks appropriately, and safeguard their interests in a dynamic and evolving marketplace.

What’s next…

Our next blog post in this series will examine the issues to consider and pitfalls which can arise when terminating contracts.

If you would like to discuss this blog, please contact Paul Jonson on 07737 571147 or by email to paul.jonson@pannonecorporate.com.

Radhika Das joined Pannone in July 2018 as a Paralegal from a well-known HR services provider. In the last six years, Radhika has progressed to become an Associate in the firm’s employment team.

Radhika began her career at Pannone mid-way through its 10-year journey at which point it was clear what set it apart from other firms. “I was aware of the Pannone name and that it is well respected in the industry,” she says. “When I joined, the firm had been going for four years post-MBO and I felt it was an exciting time to join.”

In that time, a lot has changed at Pannone, with the employment team, in particular, growing to eight lawyers – a team that has plenty of experience behind it. “I received a team sheet on my first day which had the details of my team members, including the years they qualified,” explains Radhika. “I remember being impressed by the experience in the team and that some of them qualified in the 1990s!”

But it’s the team approach that Radhika values the most about the firm. “It sounds cliché but the people really are the best thing about Pannone, definitely,” she says. “Even though we operate a hybrid model, the office is always busy on any given day, and I think that is because everyone here genuinely enjoys working with their colleagues.”

The last six years have thrown up some real highlights for Radhika, including helping to plan the firm Christmas party in 2019. “It was the best work Christmas party I have been to, even if I do say so myself!”

She certainly has a lot to be proud of. “I joined the firm as a Paralegal,” she explains. “I qualified as a Legal Executive in 2021, I went back to University in 2022 to do my LPC part-time whilst continuing to work, and I finally cross-qualified as a Solicitor in 2023. I took the more scenic route to qualification, but I would not change a thing.”

While the firm has undoubtedly grown and developed during her time at Pannone, so too has the business community that sits around it. So what of the next 10 years?

“The North West business community is already growing rapidly and I can only envisage that this will continue over the next 10 years to level up with the South,” she says.

“In terms of the firm, I would like Pannone to continue investing in its people and talent and to carry on supporting alternative routes to qualification. Without that support, I wouldn’t be where I am today,” she adds.

It’s hardly surprising that when asked to sum up Pannone in one word, the first that springs to Radhika’s mind is ‘talent’.

The insolvency and debt teams at Pannone Corporate have featured highly in the latest Insolvencies and Companies List, according to the latest Solomonic Year in Review.

The teams ranked second in the top insolvency law firm list, based on the volume of claims issued in 2023. Collectively, 260 claims were issued by Pannone Corporate, ahead of the likes of Irwin Mitchell, Shoosmiths and Weightmans.

Daniel Clarke, insolvency and restructuring partner at Pannone, commented: “Given the current economic climate and the challenges facing businesses across England and Wales, it’s unsurprising to see such high volumes of claims going through the High Courts, with the Pannone teams contributing significantly to those claims numbers.”

Paul Jagger,  Head of Debt Recovery at Pannone, added: “We have invested in experienced and fresh talent to strengthen our proposition in both teams. This, coupled with our bespoke case management system, allows us to be perfectly placed to deal with high volume petitions, achieving excellent results for our clients.”

The annual High Court commercial litigation data report looks at key trends and analytics on the claims issued in the civil courts of England and Wales over a 12 month period.

In 2023, more than 7,500 claims were issued, with an 86% increase in insurance-related claims driven by aircraft leasing and Covid-related disputes.

The report states that ‘geopolitical, pandemic and economic events loomed large over English High Court litigation in 2023’, with winding up petitions continuing to drift upwards through most of the year, peaking in September.

English law upholds the principle of contractual autonomy, granting parties the freedom to negotiate and establish terms tailored to their specific needs and objectives. Contractual certainty is business critical in order to clearly delineate duties and obligations and to provide recourse for an innocent party in the event of a breach.

For contracting parties, it is important to note that contractual autonomy is not absolute and operates within legal frameworks aimed at ensuring fairness and equity in contractual relationships. This article explores the limitations designed to prevent abuse and safeguard parties from unfair or oppressive clauses.

Understanding Penalty Clauses

A contractual term that specifies predetermined consequences for a breach of contract is known as a “liquidated damages” clause. The purpose of this type of clause is not to punish the breaching party but rather to estimate, in a reasonable and realistic manner, the likely losses that would result from the breach. Importantly, the pre-estimate must be made at the time the contract was made (Clydebank Engineering v. Castaneda). This should not be confused with a penalty clause, which imposes excessive financial penalties to deter breaches and can be unenforceable if challenged in court.

The complexity of distinguishing between these two types of clauses often leads to legal challenges, with courts examining the true nature of the clause and the context of its inclusion in the contract. Factors that can be considered include the rationale behind the clause, the bargaining power of the parties, and whether the sum stipulated is excessively high or unconscionable.

Understanding whether or not a clause may amount to a penalty clause could have costly consequences. If a clause is deemed to amount to a penalty clause, it could be struck out as unenforceable.

Evolution of the Test for Penalty Clauses

The legal framework surrounding penalty clauses in UK law has significantly evolved, especially following key judicial decisions that have reshaped their assessment and enforceability.

Historical Perspective:

Historically, the assessment of penalty clauses revolved around the concept of exorbitance in relation to common law damages. In Dunlop Pneumatic Tyre Co Ltd v. New Garage & Motor Co Ltd [1915], the court held that a clause would be considered a penalty if it was not a genuine pre-estimate of costs or sought to impose a detriment on a party out of proportion to the innocent party’s legitimate interest in enforcing the contract.

Shifts in the legal test:

In recent years, the UK courts have moved away from the strict prohibition of penalty clauses. The Supreme Court judgment in Cavendish Square Holding BV v. Talal El Makdessi and ParkingEye Limited v. Beavis [2015] noted that the Dunlop test had taken on the status of a “quasi-statutory code”, which was never the intention.

Lords Neuberger, Sumption and Carnwath took a more nuanced stance, emphasising that the rule on penalty clauses does not permit the courts in every instance to review the fairness of a contractual term when parties can be said to have equal bargaining power. Instead, the focus will be on whether the term in question is a primary or a secondary obligation.

Key principles when assessing penalty clauses:

• Primary vs. secondary obligations: A primary obligation refers to an obligation that arises independently of a breach of contract, while a secondary obligation is triggered by a breach. The Supreme Court emphasised that the penalty rule applies only to secondary obligations. This distinction is crucial in determining the enforceability of penalty clauses, as primary obligations are not subject to the penalty rule.
• Legitimate interest and proportionality: The court highlighted the importance of assessing the legitimate interest in enforcement of the clause in question. The penalty rule will not be engaged if the clause serves a legitimate commercial purpose and is proportionate to the interest being protected. This requires courts to consider the context and commercial rationale behind the clause when determining its enforceability.
• Unconscionability or exorbitance: Even if a clause constitutes a secondary obligation, it may still be enforceable if it is not unconscionable or exorbitant in relation to the legitimate interest which is served by the clause. The courts will assess whether the clause imposes a penalty that is disproportionate to the loss suffered or the legitimate interest being protected. This requires a contextual analysis that considers the specific circumstances of the case.

The following can act as a checklist when considering whether or not a clause is likely to fall foul of the law of penalties:

In the well-established ruling of Parking Eye, an £85 parking fine for a 56 minute overstay was held not to be a penalty clause because the fine was considered not to be out of proportion to the legitimate interest which was served in managing the maximum parking stay for the retail outlets, their customers and the wider public.

Implications for Businesses: Drafting Strategies

The recent refinements in the test for penalty clauses have significant implications for businesses engaged in contractual negotiations and drafting. Understanding these implications is essential for businesses to ensure compliance with legal requirements while safeguarding their interests.

Key considerations include:

• Clarity and Precision: Where possible, contracts should clearly delineate between primary and secondary obligations to avoid ambiguity and potential disputes over enforceability.
• Commercial Justification: Breach clauses should be supported by legitimate commercial justifications that demonstrate their necessity and proportionality to the legitimate interests being protected.
• Avoiding Unconscionability: Businesses should refrain from including breach clauses that are unconscionable or exorbitant in relation to the loss suffered or the legitimate interest being protected.
• Consideration of Context: Drafters must consider the specific circumstances and commercial context of the contract when drafting breach clauses to ensure they align with the parties’ intentions and expectations.

What’s next…

Our next blog post in this series will examine exclusion clauses and unfair terms, another category of contractual terms which could be scrutinised by the courts.

If you would like to discuss this blog, please contact Sarah Bazaraa on 07920 237599 or by email to sarah.bazaraa@pannonecorporate.com

Arshnoor Amershi has been crowned Corporate Rising Star of the Year at the 2024 Legal 500 Northern Powerhouse Awards.

The Associate Partner at Manchester law firm, Pannone Corporate, was one of 49 winners at the annual event in Leeds, with nearly 400 people shortlisted across 25 categories.

Arshnoor, who recently co-led the corporate team on the sale of the MIDEL and MIVOLT businesses to Shell plc, commented: “I’m still absolutely speechless! To win the Corporate Rising Star of the Year Award is a real privilege and testament to the incredible team at Pannone, our fantastic clients, and everyone who has supported me along my journey.”

The Legal 500 Northern Powerhouse Awards recognise the array of legal talent across the North, North West, North East and Yorkshire & the Humber, celebrating their achievements over the past year. This is the second year the awards have been held, following last year’s inaugural event in Manchester.

Based on The Legal 500’s market-leading independent research for the annual directory, winners are selected by a judging team spearheaded by The Legal 500 UK editor Georgina Stanley, with the support of a 40-strong team of in-house and freelance researchers.

Paul Jonson, senior partner at Pannone, said: “Huge congratulations to Arshnoor! This award is truly deserved and highlights the dedication and passion she has shown, while building an excellent reputation in the corporate finance market across the North.”

I was one of the founding partners who set up Pannone Corporate in 2014. We effectively performed an MBO of the commercial part of Pannone LLP – a top 50 law firm at the time. I joined Pannone LLP in 2004 as a partner, having worked at a regional law firm and two international law firms prior to that. I am now the firm’s senior partner – a role that I really enjoy, having been the managing partner when we formed ten years ago.

When the opportunity arose for a new firm to be created from the commercial teams at Pannone LLP, I knew it could work. I saw it as the “ best of both”,  in the sense that we were creating something completely new but with people and clients who had worked together for many years, in some cases almost 30 years.

Reassuringly familiar, but refreshingly different was always how I saw it. I believed that if our clients could see we were going to support them in the same way they had come to expect, with the same team of people, then they would give us a chance!  Even with this conviction I was still nervous – setting up a new law firm isn’t usually what you do, at least not back in 2014. There was a huge amount of work to be done by everyone involved to get us to the starting line. From the autumn of 2013 to February 2014, it was pretty much a non-stop adrenaline rush.

The firm today is both similar and very different to where we started. We have retained the vast majority of the clients we started off with, and many of the people who took the leap of faith with us are happily still here. We have also added many more new clients and team members since 2014, so it looks and feels different to 2014, while still retaining the strong culture that we started with.

The best thing
The best thing about my job is the daily interaction with our clients and team. I consider myself a people person and l like few things better in life than meeting clients (new or long established) and discussing their business, challenges, and opportunities.

Standout moments
My favourite memory of the last ten years? That is a difficult question. The launch party is definitely up there! I would also include every new client win, every tender success, and every time someone chooses to join us to spend part of their career with us. The legal profession is ultimately a people business, and we genuinely have a great group of people at Pannone which comes across to clients on a daily basis.

The achievement I am most proud of is helping to create a sustainable, profitable law firm that is able to offer its staff a supportive, engaging, and collegiate working environment. We are a stronger firm now than when we started off 10 years ago and that is down to our people and clients.

What also makes me proud is that so many clients, including household names such as boohoo, DHL, Iceland, and New Balance to name only a few, have placed their trust in us.

The future

I see the North West business community going from strength to strength in the next ten years, building on the incredible achievements during the last ten. With a change of government looking very likely in the next six months and a genuine commitment to more devolved powers to the region (amongst others) as a consequence of a new administration, it looks a promising outlook for our region.

For our firm, I see the next ten years as growth years. We have invested heavily in IT in the last 12 months and our new infrastructure puts us in a good place from which to grow – adding more people and more clients. We have never sought growth for the sake of it – we have always sought sustainable, profitable growth. I genuinely cannot see why more clients in the region and beyond would not want to see what we have to offer!

One word

If I had to describe us in one word – ambitious.

Contracts form the cornerstone of business relationships. Having clarity as to the terms parties are bound by in a contract is paramount to business efficacy. Such terms and their interpretation are also vital when it comes to disputes arising within contractual relationships.

Navigating the complexities of contractual interpretation and understanding when and how terms may be implied into a contract by the courts may seem daunting. This article looks at the established principles of English law that apply to interpreting contracts and how the approach taken by the courts is designed to provide clarity and certainty to contractual arrangements.

Interpretation of Contracts

The interpretation of contracts is an essential aspect of contract law: ensuring that parties understand the rights and obligations outlined within the agreement. When disputes arise, the court’s primary objective is to ascertain the intention of the parties based on the language used in the contract. In doing so, the court considers various factors, including:

Literal Meaning:

The starting point for interpreting a contract is the literal meaning of the words used.  Each term is given its ordinary and natural meaning. In essence, if it is clear and obvious within the contract as to what the wording means, the court will not override these provisions even if, on its face, the contract may not make commercial sense.

‘… the question is what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean’… so said Lord Hoffman in the case of Chartbrook Ltd v Persimmon Homes [2009] AC 1101

This approach has been reiterated in a recent case in the High Court: Dooba Developments Ltd v MacLagan Investments Ltd [2016] EWHC 2944 (Ch). In Dooba it was held that where the meaning of words in a contract is clear and unambiguous, it is not necessary to consider commercial common sense or the intent of the parties. The literal meaning of the words will take effect.

Whole contractual approach:

Another approach the courts adopt is to interpret individual clauses in a manner that is consistent with the overall purpose and intent of the contract. In this respect, the contract is to be viewed as a whole, rather than focusing on one particular term and/or phrase.

Context

Where the words used in a contract are less clear and/or have an air of ambiguity about them, the courts will examine the contract as a whole and consider the surrounding circumstances and context in which it was formed. It is considered that this holistic approach helps to uncover the true intention of the parties.

Although the court will not deviate from the text within the document, it can look at the wider context and background information available to the parties when the document was first made. This is an objective test.

For example, the parties’ past dealings or course of conduct may provide insight into their intentions, especially when interpreting ambiguous terms.

Implied Terms

In addition to the express terms explicitly stated within a contract, English law recognises the existence of implied terms. Implied terms are obligations that are not expressly stated in a contract but are nonetheless deemed to be part of the contractual agreement. These terms can be implied in three main ways:

1. Statutory Implication: Certain terms may be implied into contracts by statute, such as the Sale of Goods Act 1979, which implies terms regarding the quality and fitness for purpose of goods sold in the course of business.
2. Custom and Trade Usage: Implied terms may arise from established customs or trade usage within a particular industry. These customary practices become inherent to contracts within that industry.
3. Common Law: Implied terms may also arise through common law, where the court determines that certain terms are necessary to give business efficacy to the contract or to reflect the presumed intentions of the parties.

Implied terms play a crucial role in filling gaps within contracts and ensuring fairness and reasonableness in contractual relationships. Generally, however, terms will not be implied by the courts if the contract terms are clear and unambiguous, and their literal meaning can be applied objectively.

Seeking Clarity and Certainty

For businesses navigating the intricacies of contract interpretation and implied terms, seeking professional legal advice is essential. A skilled solicitor can provide invaluable guidance in drafting, interpreting, and enforcing contractual agreements, minimising the risk of disputes and providing clarity and certainty to business transactions. It is vital that parties are clear on what they intend to contract for, which in turn will allow those drafting the contract to ensure that it accurately reflects that intention.

In conclusion, understanding the principles of contract interpretation and implied terms is vital for businesses seeking to enter into clear and enforceable agreements. By adhering to established legal principles and seeking expert advice when necessary, businesses can mitigate risks, foster successful commercial relationships and avoid costly and time consuming disputes.

Ultimately it should also be remembered that clarity in contracts leads to certainty in business.

In the final piece in our series commenting on Manchester’s aims to achieve net zero by 2038, we look to the future and offer our predictions as to some of the key environmental issues for businesses going forwards.

Manchester’s objectives – and the UK as a whole – are clear, as are the opportunities for businesses to cooperate and participate in achieving net zero. As we have highlighted in our previous blogs, businesses can no longer shy away from their environmental impact, and must integrate ‘green’ issues and how they consider them in their day-to-day operations.

But what does this mean in practice?

Whilst environmental impact is not a new concern for businesses, unlike in the past, in the next few years the promotion of environmental objectives will be placed onto at least an equal footing and importance as other daily business concerns.

Appreciation of environmental impact

As we have highlighted in previous blogs in this series, there are many ways in which businesses can help contribute to Manchester’s goals.

All of these measures however require businesses to evaluate their environmental footprint, and then to take measures to address specific issues arising. For example, we have previously touched upon cycle to work schemes and onsite EV charging. Whilst not necessarily applicable to every business, these are perhaps obvious areas for businesses to consider if they can reduce their carbon impact.

Likewise, our blog series has also commented on the potential to retrofit the built environment. There are a number of potentially ‘easy wins’ in this regard, in terms of upgrading insulation and heating systems, but there are cost consequences.

We recommend that businesses take the time now to consider all aspects of their operations, and assess where and how measures can be taken to contribute to the net zero aims. It would be advantageous for businesses to undertake this task now, before they are compelled to do so, in order to best position themselves going forwards in light of expected growth in this area.

Lengthier due diligence exercises

As environmental awareness increases, and local and national drives to achieve net zero pick up pace, we anticipate that this will be reflected in more protracted and complicated due diligence exercises.

We have touched upon some of the relevant concerns within this series, but the net result will require businesses to consider additional matters when considering purchases and acquisitions. For example, where new build commercial properties are constructed with the benefit of on-site energy generation, issues of licensing, regulatory requirements and health and safety will need be incorporated into enquiries. The consequence of considering such additional matters will be to increase the cost of, and time required to complete, legal due diligence.

Cultural change

It is accepted that net zero cannot be achieved overnight, and will require a concerted and consistent approach across all sectors. That being said, change needs to start somewhere and may for many businesses require a cultural change and significant revision to their current operating procedures.

Such changes can only flow from the top of an organisation, and the active promotion and furtherance of environmental aims cannot be seen or treated as a simple tick-box exercise. The achievement of net zero will require a new mindset and a genuine prioritisation of the objectives to be achieved.

Solid foundation for environmental claims

In contributing to the region’s net zero aims, businesses may want to promote their own environmental credentials – either by way of encouragement of others, or to promote the steps they are taking. However, organisations must remain mindful that any ‘green’ claims they publish about themselves must be accurate and not misleading. Recent years have seen an almost overnight increase in the number of ‘greenwashing’ claims, and the Competition and Markets Authority is actively investigating claims of sustainability.

In order to avoid falling foul of these novel causes of action and litigation, businesses need to be conscious of the way in which they publicise their net zero actions and, where necessary, have in the background clear data to demonstrate the validity of their claims – for example, in terms of their environmental sustainability or net zero achievements.

Increasing importance of ESG scores

Environmental, social and governance scores have existed for many years, although historically they have been used by financial institutions to benchmark their performance against competitors and assess likelihood of default by a business.

The last few years has seen a rapid increase in their prevalence, across all sectors, and we predict that they will only play an ever more central role over the coming years. Not only does the EU Corporate Sustainability Reporting Directive serve to mandate the inclusion of ESG scores within companies’ annual reporting processes, but this information will also likely play an increasingly seismic role in M&A deals, and is already being seen as a key influencer in investment decisions:. Investors will require clear and unambiguous confirmation that their investments have verifiable ‘green’ credentials.

Carbon accountability

Han-in-hand with the increase in ESG scores, we anticipate that the next few years will see an increasing awareness, and benchmarking, of carbon accountability. Manchester has already provided information as to how much carbon its net zero measures have saved, and we consider it is only a matter of time before similar information is volunteered by other sectors.

To date, these scores have mainly been used by aviation companies to provide information as to the carbon impact of individual flights, but we anticipate their spread into construction, hospitality and retail.

As worldwide efforts to achieve net zero increase, and consumers become more alive to their own environmental impact, carbon scores will likely become increasingly omnipresent and a key driver of consumer behaviour. It may be the case that carbon limits are in time placed on businesses, and potentially individuals, as further drivers of change. For example, similar initiatives have been introduced by some banks which have already started to offer card accounts with an in-built carbon tracker.

In time, it may be the case that retail goods, and other purchases, are provided with an individual ESG/ carbon accountability score in much the same way that energy efficiency ratings currently attach to white goods.  We therefore recommend again that business look now at where their main carbon spend is occurring, and what measures may be available to address and reduce this.

War on plastic

Although our series has not focussed on the war on plastic, Manchester’s actions towards net zero are taking place against the national background of this issue. The government has stated its desire to avoid all avoidable waste by 2042, and recent years have seen the prohibition on sales of certain items, such as single-use plastic cutlery, and the introduction of the plastic bag charge.

Businesses are not immune to these measures and have been equally affected by the Plastic Packaging Tax and extended producer responsibilities, both of which serve to impose waste management cost obligations on businesses for the packaging they generate and handle.  Whilst the purpose of these regulations is to encourage and incentivise durability, repairability and recycling, and move away from disposal as the default option at a product’s end of life, the additional costs generated are almost certainly going to be passed on throughout the supply chain.

As part of the suggested internal review and assessment identified at the start of this piece, businesses need to start considering now whether any of their produced items can be redesigned using environmentally friendly components, or re-packaged in a way that supports environmental targets.

What does the future hold?

Absent of a crystal ball, no one can predict with certainty what tomorrow may bring, but so far as the achievement of net zero and climate action are concerned, the route is clear: preservation of the environment is to be promoted.

We suggested at the outset that businesses may want to consider now (before they are obliged to do so) what their environmental footprint is and how they may be able to reduce this so as to contribute not only to their immediate community, but also the wider objectives stated by Manchester and central government.

Whilst this will almost certainly result in immediate costs being incurred, these perhaps pale into insignificance given the greater good to be achieved.

Photo: Sakorn Sukkasemsakorn

As part of our 10th anniversary celebrations, we wanted to speak to people across the firm – from those who were here at the beginning of our journey, to those who have joined us in recent years – to get their views on what makes Pannone what it is, and how the legal and Greater Manchester landscape has changed during that time.

In the first of a 10 blog series, we speak to partner, David Walton. He joined the Health, Safety and Regulatory team in March 2023, having worked in the legal sector for 32 years. During that time, he worked alongside Bill Dunkerley, Associate Partner at Pannone, who convinced him that he should come and speak to the firm when, at the end of 2022, he was exploring his vocational future.

“As a former business owner and practicing lawyer, I was in the enviable position of having a good insight into what the final years of my professional working life could and should look like and, upon meeting the senior leadership team at Pannone Corporate, I realised very quickly that I had found what I was searching for.

“I already knew the Pannone Corporate brand symbolised legal acumen and professionalism; lawyers practicing at the top of their game. That was confirmed very soon after joining the firm. However, what equally attracted me to Pannone and, what was confirmed when my feet hit the ground, was the sense of team spirit, bonding and trust that permeates through all parts of the practice. Management styles can differ greatly and are central to a firm’s success. The management style adopted across Pannone (transparent, fair, and one that rewards team players working towards a common goal), is one that I have always tried to emulate myself. Pannone is made up of honest, decent people who care in equal measure about their clients and about each other. In many ways it is an “old school approach”, but, ironically, in 2024, it’s completely in line with what a modern workplace should look like.

“It’s exactly one year since I stepped through the door to start my first day. I expected the transition from a firm I’d worked in for over 30 years, to a firm in which I knew very few people, to be challenging – particularly in light of my age! In truth, it has been rewarding, rather than challenging. I’ve been made to feel welcome by everyone I’ve met and the sense of team and comradeship is constantly in evidence. I’ve embraced bringing my area of specialism and contacts into a full-service commercial law firm and enjoyed working alongside the firm’s myriad of specialists. Bill and I have a vision for the HSR team, which is fully supported and which we are driven to deliver.

“The North West is continuing to grow and present itself as a realistic alternative hub to London. It’s entrepreneurs and internationally recognised sports teams enhance that reputation and, naturally, it is building a legal community to match. Pannone, a relatively small practice in terms of numbers, already punches above its weight in that North West arena. However, my reason for joining is to help those visionary founding partners, and those who have subsequently joined, to expand upon what has evolved and become even more of a player in the North West legal scene.

“If I had to think of one word that sums up Pannone it would be “trustworthy”. If I had to think of a second, it would be “team”!

In a trade mark battle of the supermarket giants, Tesco has lost its appeal against a decision that it infringed Lidl’s logo. The supermarket will now have to drop its blue and yellow logo used to promote its Clubcard loyalty scheme, with the subsequent rebrand reportedly set to cost Tesco up to £8 million.

So what did the Court of Appeal rule?

• Tesco’s appeal against the finding of passing off against it was dismissed. The Court of Appeal accepted the High Court’s finding that a substantial number of consumers would be misled into thinking that Tesco’s Clubcard prices were the same or lower than Lidl’s prices for equivalent goods.
• Tesco’s appeal against the finding of trade mark infringement was also dismissed. The Court of Appeal found that Tesco’s campaign caused a change in consumer economic behaviour and caused detriment to Lidl. In particular, Tesco’s logo had been successful in slowing the switch from Tesco to Lidl that was otherwise occurring. Lidl also felt obliged to invest in corrective advertising to promote its lower prices compared to Clubcard prices.
• However, Tesco’s appeal against the finding of copyright infringement was successful. The Court of Appeal held that although Tesco had copied the visual concept of a blue square surrounding a yellow circle that is all it had done, and this was not sufficient to amount to copyright infringement.

What does the ruling tell us?

The case shows how difficult it is to appeal a decision of a lower court. The Court of Appeal would only have been entitled to intervene if findings of facts were rationally insupportable, or if the High Court judge had made an error in law or principle. Although the Court of Appeal found aspects of the High Court’s judgment “surprising”, it was mindful that the High Court had the benefit of being immersed in the evidence, whereas the Court of Appeal is only asked to consider selected parts of the written record.

Although Tesco could look to further appeal to the Supreme Court it is understood the supermarket has accepted the Court of Appeal’s ruling.

To read more about the case, and gain insight on what businesses need to consider when designing logos and where the line is drawn between misrepresentation and inspiration, take a look at our recent Retail Law Update here: https://lnkd.in/evN8YtPm

Photo: The Tesco Clubcard Prices design and the Lidl logo. Composite: Rex/Reuters

In our penultimate article on Manchester’s intention to become a zero carbon city by 2038, we consider this week the built environment, the measures available to help contribute to objectives, and the implications for those involved in the management and/ or transaction of real estate.

Manchester’s Climate Change Framework estimates that housing, and the built environment generally, may contribute up to 30% of the city’s total carbon emissions. Real estate is therefore considered to be a key driver in efforts to achieve carbon neutrality, with buildings being categorised as ‘net zero’ if they have no net carbon emissions during either their construction or operation.

However, the obstacles to overcome to achieve this objective are two-fold: not only is it necessary to remedy defects or environmentally prejudicial characteristics within existing stock, which includes those premises constructed before there was the current awareness of climate change; but in addition, net zero requires that those buildings yet to be designed or constructed also contribute to the target to be achieved.

What has Manchester done to date?

Despite the enormity of the task at hand, numerous retrofitting measures are commonly available, for example: installation and upgrade to energy-efficient lighting; high efficiency boilers; installation of double-glazing; and cavity wall insulation.

Although these measures may not be considered individually onerous or overly time-consuming, wholesale retrofitting of existing stock is not without cost. To meet its net zero aims, Manchester estimates that around 84,000 properties will require retrofitting, at an anticipated cost of between £25,000 to £30,000 per property. With only limited funding available for retrofitting, the question remains: where is the money going to come from?

In addition, current plans to retrofit real estate portfolios do not operate in a vacuum and take place against the continued introduction and implementation of the Building Safety Act. That Act, supported by secondary legislation, prescribes and mandates new regulatory obligations in respect of building safety and fire management provision. Building safety is paramount, but those involved in the design of new builds will need to consider how best to balance the achievement of net zero and carbon neutrality whilst also ensuring the total safety of a building throughout its lifetime.

What about future builds?

A significant proportion of the real estate infrastructure which is expected to exist in 2038, being Manchester’s deadline to achieve net zero status, is yet to be designed and constructed. Therefore, there also needs to be consideration as to how these future builds will help towards reaching that goal. This requires consideration not only of how those buildings will operate once in occupation, but also how embodied carbon (being the carbon contained within construction and civils materials) will be either managed or off-set. This will require a full review of all aspects of a supply chain to ensure that materials are genuinely carbon neutral in their production.

We have already touched upon some of the measures which can be introduced to an in-occupation building to help limit climate change, but in addition to domestic measures, designers may wish to consider the introduction of on-site renewable heat and electricity generation, such as photovoltaic sensors, as well as district heat networks.

The UK Green Building Council’s framework definition of net zero carbon buildings recommends that onsite renewable energy sources should be prioritised and should be pursued by building developers, owners and occupiers, where feasible. Not only is it anticipated that the presence of such measures may increase a building’s value, but it will also concurrently reduce pressure on the national grid.

What are the practical implications?

Implicit in all of the foregoing is that a building’s Energy Performance Certificate (‘EPC’) is going to become an increasingly important document over the coming years. Whilst they are already central to many transactions, we anticipate that their contents will be subject to additional review and transactional discussions. For example, going forwards, it is likely that EPCs will need to be carefully scrutinised during transactions, with the buyer working to achieve full understanding as to when the EPC will expire, whether any measures can be taken to improve the rating and if they have been appropriately registered.

In parallel, we anticipate that corporate due diligence, to the extent it involves real estate transfers, will also become more protracted. For example, there will need to be careful consideration as to whether retrofitting is necessary, who is to be responsible for this and whether any such revisions are permitted within the lease in place. In addition, where on-site energy generation is available, owners and occupiers will need to be mindful of the ownership of the generating plant, as well as apportionment of the additional regulatory burdens which accompany the generation of energy.

In respect of this specific example, where building designers and/ or owners wish to benefit from the cost-savings associated with on-site heat and electricity generation, they also need to consider whether such use is permitted in terms of relevant planning authorities, as well as the possible health and safety considerations which may arise from its operation.

Conclusion

Whilst the move towards net zero is a laudable aim, the consequences for real estate are significant: the scale, extent and cost of retrofitting existing properties is sizeable, but in addition there are also numerous opportunities for the sector to take the driving hand in bringing about real change.

Our final commentary piece next week will bring together recent articles, together with our predictions going forwards for what net zero will mean for both Manchester and the country as a whole.

In the third of our series of blogs commenting on Greater Manchester Combined Authority’s intention to become net zero, we look this week at efforts being made to help influence and ‘nudge’ behaviour towards achieving the objectives.

Whilst any form of encouragement or guidance seeking to unilaterally change an individual’s behaviour could be interpreted as having somewhat sinister overtones, the Council is eager to be seen as leading by example and has already modified its own operations in this regard.  

For example, Greater Manchester has appointed a number of Neighbourhood Climate Change Offices, to help empower communities to take local-level action and to help build climate resilience, including encouraging cycle to work schemes, turning down heating, and turning off electrical appliances when not in use. 

Can behavioural change impact net zero?

Changes in behaviour and pervading culture will not come overnight but, equally, they have to start somewhere. Greater Manchester is not alone in seeking to achieve net zero, with central government also having made a similar commitment to achieve 100% reduction of greenhouse gas emissions by 2050, compared with 1990 levels. 

However, responsibility does not rest solely with government and as the Climate Change Committee’s 2021 progress report to Parliament suggested, public engagement – and individual actions – are key enablers for achieving net zero, with the actions taken by consumer, workers, households and businesses being central to achieving the net zero objectives. 

That report went further and suggested that behavioural change can play a role in almost two-thirds of emission reductions, through adoption of low-carbon technologies, such as electric vehicles and increased use of green public transport.

How is behavioural change to be achieved?

In its net zero strategy, published in October 2021, central government stated that public engagement plays a significant role in driving green choices. At that time the government set out its approach to support green choices, which was underpinned by six core principles. Whilst these were developed primarily with the public in mind, it is accepted that they may apply equally to businesses. The six principles are: 

1. minimise the ‘ask’ by sending clear regulatory signals;
2. make the green choice the easiest;
3. make the green choice affordable;
4. empower people and businesses to make their own choice;
5. motivate and build public acceptability for major changes; and
6. present a clear vision of how we will get to net zero and what the role of people and business will be.

As the Energy Minister, Greg Hands MP, accepted to the House of Lords Environment and Climate Change Committee, it is not the business of government to force behavioural change on individuals, but rather it is the government’s role to, “encourage, incentivise and enable,” moves towards the objectives to be achieved.

In other words, far from imposing unilaterally mandated changes on individuals, what the government seeks to encourage is that individuals take ownership of their own environmental impact, and in turn contribute to local, national and global objectives.

A government survey has found that 85% of people are either concerned or very concerned about climate change and willing to do something about it in their own lives. However, any such actions must be affordable, accessible and achievable without any significant detriment to the individual. Any measures implemented must also be equitable for all. 

For example, a report published by the Cambridge Sustainability Commission in April 2021 evidenced that between 1990 and 2015, nearly half of the growth in global emissions was due to the richest 10%, with the wealthiest 5% alone contributing over a third. That report suggested that policymakers target the ‘polluter elite’ to make changes to their lifestyles, such as imposing levies on high emissions technologies and long-haul flights.

By contrast, one universally-accessible solution introduced by Greater Manchester is the introduction of 50 zero emission buses as part of the authority-controlled ‘bee network,’ with an additional 50 vehicles being delivered in March 2024. An additional 250 vehicles are expected to be delivered over the next three years.  It is estimated that the adoption of zero emission buses will reduce carbon emissions by 1.1 million tonnes.  This is a resource which is available equally to all, yet which is likely to serve to help shape behaviour by encouraging use of green public transport.

What we expect to see over the coming years, following on from government-led schemes and enabling legislation, is an increasing awareness by consumers as to the environmental impact their actions and the products they buy may have. This in turn is likely to result in further behavioural changes, including the gradual transition towards a circular economy and continued war on plastic.

Conclusion

George Eustice MP, when Secretary of State for the Environment, stated that:

Behaviour change is quite integral to many parts of government policy, but to tackle these complex environmental challenges is a shared endeavour. We all have a shared responsibility, and many of the policies we have are partly about government having a role in regulation to make certain choices easier, so that the public can make the changes we want them to make to get better environmental outcomes.

Although at first blush one may view the idea of subtle influences to behaviour and nudging as slightly sinister acts by those in positions of power, the objectives to be achieved are broadly to be welcomed, and it is clear that local actions by individuals will cumulatively bring about significant changes. 

That being said, questions do remain as to by whom, and on what basis, those individual objectives are to be determined, as well as the global (as opposed to local) impact actions will actually have, especially if other countries and agencies are not pursuing identical goals. For individual behavioural changes to have a meaningful impact, there does need to be a unified approach, which may be difficult to achieve.

Those concerns aside, the takeaway message is clear and there are low-cost steps that everyone can take on a daily basis to act in a less wasteful, and more environmentally-friendly, manner.  

Next week we will look at the built environment and how real estate initiatives may be able to help contribute to Manchester’s net zero aims.

Photo credit: cagkansayin

The various provisions of the Building Safety Act 2022 continue to be implemented and come into force.  Whilst there has already been a significant volume of commentary and analysis regarding the genesis of the Act, and the various additional duties created, what impact will the Act actually have on a day-to-day basis for those who undertake work on, and are responsible for, the management and operation of the built environment?

Who is caught by the Act?

The Act is of relevance to all those involved in the entire lifespan of buildings, from design and planning through to construction and ongoing occupation, with a particular emphasis on those involved in the management of buildings which are deemed to be ‘higher risk’ (being over 18m in height and which contain at least two residential units).

One of the key criticisms flowing from the independent review which was undertaken following the Grenfell Tower tragedy was that there was generally no accountability or continuity of oversight relating to the built environment. The review’s impression was that the existing duties were seen as a ‘race to the bottom’, with those responsible for each stage of a building’s lifespan operating in a silo and without reference to those who may be involved at later stages of a building’s management.

The Building Safety Act seeks to do away with this attitude and creates what is referred to as a golden thread of information, which persists throughout a building’s lifetime, to ensure that crucial information is preserved and accessible to those who require it.  Contractors will need to be proactive in this regard, and will be expected to positively contribute to this core repository.

Central to the Act’s objectives is the creation of the new statutory role of ‘accountable person,’ which, in a nutshell, will attach to those who are in any way responsible for the management of building safety risks. In practical terms this means that those who are responsible for the repair and ongoing safety in higher risk properties will be fixed with additional duties.  Whilst many of the obligations are perhaps a matter of common sense and may duplicate existing best practice, the Act now places these on a statutory footing, with consequences for non-compliance.

What does this mean in practice?

The nature of regulatory compliance is that it only ever tends to increase in volume and the Building Safety Act is no exception in this regard.

Once fully embedded, the Act is likely to lead to:

1. Increased administrative burden

There will be an increase in the administrative burden by those involved with the management of higher risk buildings, especially those who are deemed to be an accountable person (‘AP’).

For example, an AP, or where there is more than one AP in respect of a building, the Principal AP, must:

• ensure that a building caught by the Act is appropriately registered with the Building Safety Regulator before it is occupied
• assess the safety risks and provision in respect of the parts of the building for which they are responsible, both on occupation and at regular intervals thereafter, as well as at any time when there is reason to suspect that the existing assessment is no longer valid.
• take reasonable steps to prevent a safety risk from materialising and reduce the severity of any incident resulting from such a risk
• apply for a Building Assessment Certificate for a registered building within 28 days of being asked to do so by the Building Safety Regulator
• prepare of a safety case report for their building
• report certain information about building safety risks in occupied high risk buildings to the Building Safety Regulator; and
• prepare a strategy for promoting the participation of residents in building safety decisions.

Whilst these duties are not in themselves novel, in that they mirror similar obligations under existing health and safety and fire safety legislation, their discharge is now compulsory in respect of building safety management.

An initial impact assessment undertaken prior to enactment of the Act estimated that costs associated with the additional management duties may be in the region of nearly £3 billion over the first decade, with estimated annual costs associated with maintenance of the Golden Thread being in the region of £600 million.

1. Emphasis on cooperation

Effective implementation of the Building Safety Act will require significant cooperation and coordination between those involved in building safety.

For example, one area where there is likely to be overlap is in respect of fire safety.  Definitions as to whom the relevant duties attach differ slightly between the Act and Fire Safety Order, and in practice the roles may be undertaken by the same or distinct persons. In any event there needs to be a clear delineation and understanding between all parties as to who is responsible for which aspects of a building’s occupation and how information will be shared between them.

The duties imposed by the Fire Safety Order have themselves been expanded, with external walls and fire doors to individual flats now being included within the definition of communal areas, and thereby falling within the responsibility of the Responsible Person to include in the building’s fire risk assessment.

• Contractual implications

Given all of the above, and the importance of the objectives to be achieved, it is crucial that the new prescriptive regime is adequately reflected within contractual documentation. For example, those who work on buildings but who may not be the AP, should revisit their contractual documentation to ensure that it is compliant with the new statutory apportionment of responsibilities. Parties need to be mindful that they do not inadvertently, by their contractual terms or actions generally, assume responsibility.

It may also be prudent for those involved in the maintenance of higher risk buildings to include express confirmation that any works undertaken will not affect building safety or emergency plans.

Pending the introduction of updated standard form contracts, all contractors should seek express and unambiguous clarification as to how the Act will impact their work, and clear understanding as to apportionment of relevant responsibility.

Such apportionment of roles is not novel in itself, and has been required for many years as a result of the Construction (Design and Management) Regulations, but clear delineation of roles will help all to understand the scope and extent of their responsibilities and how these contribute to the overall objectives to be achieved. Unlike those Regulations, however, the new golden thread requires much more information to be provided, with the emphasis on recording and sharing that information rather than simply maintaining a hard copy.

1. Delays

Whilst ensuring continuity of knowledge and safety, the Act is liable to result in delays to construction projects, whilst relevant approvals and registrations are awaited. In the event of any such delay, or rejection of approval, parties will need to make provision as to who is liable for any consequential costs, cash flow issues and supply chain issues.

1. Construction products

The Act intends that all construction products made available on the UK market should be regulated, and the Building Safety Regulator has extensive powers in this regard, including to require construction products to be safe and to create a statutory list of ‘safety critical’ construction products.

The Act also introduces new liabilities on materials producers for defective products, which will operate in addition to existing product safety regimes.

All those involved in the supply and use of construction products will need to be mindful of any relevant decisions or categorisations of products, and take steps to ensure that any products falling foul are not used on site.

Enforcement

All of the above obligations, duties and requirements are to be overseen by the Building Safety Regulator, which has been endowed with criminal investigatory and enforcement powers in the event of breach by a dutyholder.

It has been estimated that the costs of enforcement could be in excess of £12 million, with costs associated with reviews and appeals serving to increase that figure.

There has been significant criticism of the Building Safety Regulator to date and whether it becomes a Regulator with real teeth or not remains to be seen.

Conclusion

Whilst the maintenance and promotion of building safety is to be welcomed, all those who are involved in the design, construction, management or maintenance of the built environment must understand their specific role, and by extension what additional responsibilities they may have.

Although there has been criticism as to the length of time it has taken the Building Safety Act to come fully into force since the Grenfell Tower fire in 2017, and residual questions remain as to how the additional funding will be sourced, the direction of travel is clear and businesses need to be alive to how they will be impacted and the practical consequences for them.

In the second of our series focusing on Manchester’s aim to become a zero carbon city region, we take a look at transport and travel. It is well accepted that transport is the largest contributor to greenhouse gas emissions, contributing just less than a quarter of all UK domestic emissions in 2020. Emissions from cars and taxis account for more than half of this figure.

Greater Manchester is not alone in facing a significant challenge, but it has clear objectives in response, which mirror those being pursued at a national level.  For example, in the Department for Transport publication ‘Decarbonising Transport: Setting the Challenge,’ the UK Government has set itself an ambitious target of zero emissions across all modes of transport by 2050. The publication anticipates achievement being attained through a combination of facilitating the transition to large-scale use of zero-emission vehicles, and supported by the implementation of a meaningful and effective refuelling infrastructure, including the installation of 300,000 public charge points by 2030.

How does Manchester hope to achieve its aims?

Within its own operations, the Council has committed itself to reducing direct emissions by replacing its fleet with electric vehicles, and hopes to reduce its emissions by between 35%- 45% by 2025.

The city region is eager to encourage sustainable and accessible travel options across its boroughs but beyond its own activities, the wholesale uptake of zero-emission vehicles faces a number of significant logistical hurdles. For example, electric vehicles require somewhere to re-charge and whilst for many it is possible for their vehicles to be charged at home overnight, within Manchester approximately 60% of homes do not have access to off-street parking.

For those who do not have access to home charging, their only option will be to access the public network. Pending the development of improved battery technology and mileage, the fundamental difficulty of availability of charging stations is not easily overcome.

To meet objectives it is expected that by 2030 there may need to be upwards of 3,000 additional public charge points within the Manchester region. Manchester has published the EV Charging Infrastructure Strategy which sets out its role in providing more charge points, but the Council is reluctant to install on-street charge points as these can:

“cause obstructions to pavements and street clutter, and we do not support the use of cables crossing the pavement to charge vehicles at the roadside… as these can cause trip hazards.”

Recent figures indicate that Manchester is perhaps some way behind other regions in the UK in this regard, with around 24 charging points per 100,000 population, compared with the UK average of 42 per 100,000.

Although there is no statutory duty to provide public charge points, Manchester is looking at opportunities within council-owned car parks to expand the public network for residents and businesses, and within the last few months there have been announcements to construct charging ‘oases’ within the city to address some of these concerns. However, replicating the service provided by petrol stations is not without some hindrance. Whilst there are a number of different charging systems available, with varying recharge speed from a few minutes up to several hours, were Manchester to be successful in its aim then it will need to ensure that re-charging is able to take place on demand and within a reasonable period of time.

Central Government plans to ban the sale of new petrol and diesel cars by 2030 are well under way, but by contrast the uptake of electric vehicles remains sluggish. For example, by the end of March 2022 there were still less than 2,000 plug-in cars registered in Manchester, equating with around only 1% of the total number of cars registered. This is below the UK average of 2.4%.  Whilst the transition will not happen overnight, to enable individuals to move freely, efficiently and at low-cost, whilst also being environmentally friendly, there needs to be a viable alternative to current combustion engines.

Hydrogen is being considered as an alternative fuel source although the enabling technology still requires refinement and, in addition, there are very obvious safety risks arising from the storage and use of this fuel. Current plans for hydrogen fuel appear to be restricted to the haulage sector, and do not extend to domestic and residential travel. Therefore, this is not something which will necessarily help to achieve objectives in the shorter term.

Barriers to implementation

The aims are laudable and are to be welcomed.  However, despite their increasing presence, electric vehicles are far from the predominant mode of transport and the impact of the Government’s intended ban on the sale of fossil fuel vehicles will not be fully appreciated for many decades yet. Likewise, the transition to a net zero transport network is likely to be many years away.  The fact that success will not be achieved overnight is not a reason for the objectives not to be pursued in the interim, but implementation must be mindful of the very real logistical problems that need to be overcome.

There are also concerns as to how ‘green’ electric vehicles actually are, and the level of ‘carbon debt’ created during their manufacture. For example, at present not only are electric vehicles generally more expensive to buy, but their production requires the input of significant volumes of fossil fuels. In addition, questions remain as to how electric vehicles, specifically their batteries, are to be stored and disposed of at end of life.

The electricity required to power electric vehicles also needs to be sourced from within the national grid, and the mass charging of vehicles at peak times is likely to put a strain on the system. Although wind and solar and renewable energy sources are currently active within the network, the proportion of energy generated by them is not only intermittent but also lags far behind the energy generated through fossil fuel usage.

What can businesses do to assist?

There are no statutory requirements at present for businesses to contribute to net zero through assisting and enabling a greener transport network.  Whilst grants are available, the transition to green and sustainable alternative fuels remains a costly option, which is also accompanied by logistical issues and numerous other considerations.

That being said, the objectives have been stated loud and clear and, in order to position themselves, businesses may want to consider the feasibility of alternative fuel and transport. For example, car share and cycle to work schemes may be one option, but it is accepted that these may not always be possible or practicable depending on the nature of the work undertaken by an organisation.

Alternatively, business may wish to consider providing electrical charge points and, for those involved in the haulage sector, it may be worthwhile exploring the availability and applicability of hydrogen to their operations, despite technology realistically still being a few years away from wholesale adoption.

As corporate ESG scores increase in importance, especially following the implementation of various sustainability reporting requirements, businesses would be well advised to give careful consideration to actively implementing ‘green’ measures within their day to day operations, including in respect of their transport and travel needs.

Such changes will not come overnight, and will require a concerted effort to achieve them, as well as behavioural and cultural change.

Our next commentary piece will consider how behaviour may be influenced and shaped to assist the transition to green technology. To read our first blog in the series, visit https://pannonecorporate.com/manchesters-move-towards-net-zero/

The ‘battle of the forms’ is a phrase which is used to describe the common scenario in which contracting parties compete to ensure their standard terms and conditions apply.

In the second of our six-part blog series about commercial contracts we look at the practical ways businesses can ensure their terms and conditions are incorporated into their business dealings, and who is likely to come up trumps in the battle of the forms.

The traditional approach

In the first blog in this series we considered what it takes to form a legally binding contract and examined what is meant by an offer and an acceptance (Commercial contracts: a practical guide for businesses – Pannone Corporate). When considering which contract terms apply, these principles again become important as the court will examine whether there has been an offer to contract on specific terms which has been unequivocally accepted.

This traditional approach can give rise to two contrasting examples:

• where a supplier sends its standard terms of business and those terms are accepted by the customer, either expressly or by conduct in continuing to deal with the supplier on those terms, the supplier’s terms will govern the contract.
• where a supplier sends its standard terms of business and a customer responds with its own standard terms of business, the customer has in that case rejected the supplier’s terms and introduced a counter-offer to contract on its terms. The court will then be looking to see whether the supplier accepts the customer’s terms whether expressly or by its conduct.

Where competing terms of business are at play, the court will be looking at the chronology of when offers were sent and the behaviour of the parties in determining the point at which a set of terms has been accepted.

Last shot fired

More often than not, the last set of contractual terms presented without any objections being raised will be deemed as accepted. This is often referred to as the “last shot”.

For example, where a customer places an order on the basis of its standard terms and the supplier responds with its own standard terms, if the customer then proceeds to place the order and accept delivery then the last contractual terms fired will be deemed to govern the relationship (in this case the supplier’s terms).

A misfired shot

A risk for parties is failing to adequately bring terms to another party’s attention.

Standard terms and conditions must be readily available to the other party if they are to be capable of being accepted. If a document is sent by email with terms and conditions on the reverse, those terms must also be emailed if they are to be relied on.

Similarly, if documents are sent with a link to website terms and conditions, the link should be a live link through which the contractual terms can be accessed.

The court will look at all the facts of a case to determine whether or not terms and conditions have sufficiently been brought to another’s attention.

Course of dealing

The last shot fired doctrine can be displaced where the correspondence between the parties or their conduct shows that they intended to contract on some other terms. The court will examine all the evidence in the case to determine the prevailing terms.

For example, where there has been a framework agreement entered into in relation to the terms governing future supplies then a last shot fired may not succeed in overriding that framework. Similarly, where there has been a course of dealing between parties pursuant to one party’s terms then it may be difficult to displace that by shooting across competing terms, without something more.

The wording of a party’s terms may also help to guard against the last shot fired principle. In the case of TRW Ltd v Panasonic Industry Europe Gmbh (2022), the last shot doctrine was not accepted. Instead, the judge concluded that the first set of terms sent (being the seller, Panasonic) applied. Panasonic’s general conditions protected it from falling victim to the “last shot” doctrine, as it disapplied any conditions of TRW that diverged from its own terms, and the parties continued to deal with one another on that basis.

Practical Implications

Losing out in the battle of the forms can have commercially catastrophic consequences for contracting parties. It is therefore important that businesses consider their systems and processes when entering into new contracts to ensure they are legally and commercially protected through the governing terms. In practical terms, businesses should consider:

• including reference to standard terms and conditions on all pre-contract documents, to try to ensure they fire the last shot.
• negotiating and agreeing the contractual terms which will govern relations. This avoids any ambiguity as to whose terms apply.
• requiring parties to sign contractual terms so that it is clear that terms have been accepted.
• whether there has been an earlier framework agreement or a course of dealing which may be regarded as taking priority.
• training staff on the risks that contractual terms presented could be found to be incorporated by conduct. Failure to review and understand these terms could mean that a business could find itself bound by another’s standard terms.
• ensuring its terms and conditions are well drafted in order to provide protection against the last shot, as in the Panasonic example.
• making sure that terms are sufficiently brought to another’s attention. If terms are printed on the reverse of documents being sent electronically, make sure the terms are also sent. If being sent via a website link, make sure this directs to a live copy of the terms and conditions.

Finally, if parties do not in fact intend to be bound by contractual terms until a formal document is signed, or further terms are agreed, they should mark all negotiations, correspondence and draft agreements as being ‘subject to contract’ to avoid inadvertently being bound to draft terms.

If you would like to discuss this blog, please contact Sarah Bazaraa on 07920 237599 or by email to sarah.bazaraa@pannonecorporate.com

Facts of the case

Gabriela Rodriguez worked as a cleaner at the offices of Devonshires Solicitors for two years, via contractor Total Clean. She claims she was sacked last year after Devonshires complained that leftover sandwiches were not being returned. She admits eating a £1.50 leftover tuna sandwich, which she thought would be thrown away. Ms Rodriguez is part of United Voices of the World union (UVW), which claims that cleaners (most of whom are migrant workers) are “routinely dismissed on trivial and […] discriminatory grounds. Many describe feeling like the dirt they clean.”

UVW claims Devonshires would not have complained about Ms Rodriguez if she was not a Latin American with limited English. She has brought claims for unfair dismissal and direct race discrimination against Total Clean, and direct and/or indirect race discrimination against Devonshires Solicitors. Devonshires deny that they made any complaint about Ms Rodriguez and Total Clean maintains that it followed a proper process before dismissing her.

Takeaways

It is difficult to comment on the rights or wrongs of the case without having more detail about what exactly happened. However, it would seem the rules that applied to Ms Rodriguez may not have been clear enough. Many employees would not consider eating a sandwich they believe will otherwise be thrown away as dishonest.  If it counts as dishonesty in your organisation, you should make that clear.

It remains to be seen whether Ms Rodriguez will succeed with her claims or if the matter will even reach a full hearing in the tribunal – but it is certainly one to keep an eye on!

Over the coming weeks, we will take a closer look at Manchester’s concerted aim to become net zero. We will cover each area of the city’s focus and look at how businesses can play their part in achieving ambitious sustainability targets.

Let’s start at the beginning. Greater Manchester has long been at the forefront of urban decarbonization, and its drive towards net zero continues at pace. The city launched its first plan for collective climate action in 2009, which in turn led to the establishment of the Manchester Climate Change Agency and Partnership.

The measures have had a positive impact and the city was able to achieve a demonstrable reduction of 54% in its carb emissions between 2010 and 2020.

However, the city is not one to rest on its laurels and considered that further reductions were possible, especially in light of national and global aims relating to climate change. Notwithstanding its own significant achievements, Manchester declared a climate emergency in July 2019 and committed itself to halving again its carbon emissions within the next five years.

The city does not operate in isolation and accepts that its own direct carbon emissions make up only around 2% of the city’s total. However, the authority does have power and influence over a range of administrative and infrastructure matters, which it is hoped in turn will themselves contribute to the objectives to be achieved.

What is Manchester doing to achieve net zero?

The city has publicly stated the view that, “everyone has a part to play,” in limiting the effects of climate change and has set out its intentions to achieve net zero carbon in its Strategic Outline Business Plan. The Plan, which is bolstered by bespoke climate action plans for each of the authority’s 32 wards, lists a number of arguments in favour of the move, including establishing the city – and North West as a whole – as a leader in clean energy, which it is hoped in turn will attract private sector investment and help deliver wider social benefits, such as reducing fuel poverty.

The Council has identified 48 actions which can be taken – by itself and the city as a whole – to help focus minds, which can be summarised under the following broad topics:

1. Buildings and energy
2. Transport and travel
3. Reducing consumption-based emissions
4. Carbon storage and sequestration
5. Emissions savings.

What objectives are being pursued?

Taking each category in turn:

1. Buildings and energy

The Manchester urban area, and city centre in particular, is a significant estate and magnet for the use of utilities and energy. It is therefore a prime candidate for savings, in terms of the existing built environment as well as future energy usage. For example, the Council has already stated its commitment to reduce CO2 emissions from its estate and streetlighting by 50% by 2025, and a further 50% by 2030, to be achieved through a programme of retrofitting and local energy generation, including solar farms.

That being said, decarbonisation of the built environment is no easy feat and requires consideration at both the new build and retrofit stages of a building’s life.

In respect of future construction, the Council has produced a Buildings and Energy Strategy for its estate and has produced a Manchester Build Standard for future developments.

The above goes hand-in-hand with the retrofit of existing premises, which includes considerations as broad as the provision of (and energy supply to) heating alternatives, installation of energy-efficient fixtures and fittings, increasing thermal comfort and lowering energy bills.

Going forwards, all developments within the Manchester area will need to be mindful of the city’s drive towards net zero, and will have to incorporate sustainable concepts and energy efficiency into their construction proposals, including energy generation and usage. Not only has the Council declared that it will give additional weighting to environmental credentials in future tenders, but companies themselves are becoming more alive to the importance of ESG scores, which are featuring more prominently in pre-contract discussions.

1. Transport and travel

There is a balance to be struck between improving liveability and ensuring access into the city centre and other areas within the authority’s control through low-cost public transport, and ensuring that such travel and opportunities are provided on solid environmentally friendly credentials.

In connection with its own vehicles, the Council is replacing its fleet with electric vehicles and charging infrastructure, which is estimated will save around 900 tonnes of carbon annually (c.£9.8 million). The move towards electric vehicles is a huge logistical exercise, which will be decades in the transition, but is nonetheless one the Council is eager to pursue.

As laudable as the aim is, there are clear logistical hurdles in the way. For example, not only are there immediate and significant financial costs associated with the decarbonisation of travel, but the technology remains very much in its infancy and at developmental stage. Additionally, were these obstacles to be overcome, there are planning and spatial issues arising in connection with the installation of electric charging points. It remains to be seen what volume of energy generation will be required to realise the objectives, which leads to the question as to how that energy is to be produced in the most cost-effective and environmentally friendly way to allow green travel to remain a viable alternative.

Whilst there is ongoing discussion around the possible use of hydrogen as an alternative fuel source, to date these exchanges have focussed on haulage and logistics as opposed to domestic travel. Despite its relative cleanliness, the use of hydrogen does come with its own significant risk factors.

1. Reducing consumption-based emissions

There are a number of measures being taken, at both local and national level, to reduce consumption-based emissions and those arising from supply chains generally. For example, mirroring measures taken by central government, Manchester has indicated its intention to phase out single-use plastics and other non-recyclable products.

The last few years have seen an increasing behavioural and cultural shift towards the circular economy, and away from the take-make-use mentality. The national government has stated its desire to avoid all avoidable waste by 2042 and although this objective will not be achieved overnight, regulations are already in force working towards this aim, such as the successful introduction of the plastic carrier bag charge in 2015, and the prohibition on sale and supply of plastic straws and single-use cutlery.

In addition, the UK has recently seen the introduction of the Plastic Packaging Tax and Extended Producer Responsibility regulations, both of which serve to impose waste management cost obligations on businesses for the packaging they generate and handle.  Whilst the purpose of these regulations is to encourage and incentivise durability, repairability and recycling, and move away from disposal as the default option at a product’s end of life, the additional costs generated are almost certainly going to be passed on throughout the supply chain.

Businesses need to start considering now whether any of their produced items can be redesigned using environmentally friendly components, or re-packaged in a way that supports environmental targets.

1. Carbon storage and sequestration

Manchester is eager to promote carbon storage solutions, and has introduced a Green and Blue Infrastructure Strategy which includes an intelligence-led approach to tree and hedge planting.

To date, over 7,000 trees have been planted, as well as five community orchards, with the aim of not only increasing the aesthetic attractiveness of the urban area, but also to best position the city ahead if expected future climate changes. 

1. Influencing behaviour

The Council is eager to be seen as leading by example and, in turn, influence the behaviour of others. For example, to date it has embedded zero carbon as a priority into its Service Plans, has appointed three Neighbourhood Climate Change Officers, and has arranged both private and public lobbying of the GM Pension Fund to divest from investment in fossil fuels.

That being said, change will not come overnight and there also needs to be a degree of consensus and agreement as to how and in what way cultural changes are expected to occur. There is already discussion within the UK, as well as other countries, regarding the implementation of ’15 minute cities,’ programmable digital currency and, at its extreme, social credit scores. These are highly overt ways of compelling an expected behaviour, but are likely to meet resistance in the event of their unilateral imposition.

At this stage, the Council encourages individuals to take responsible actions – which can also be replicated across businesses – including:

• Repair and recycling of items, rather than replacement;
• Avoiding the use of single-use plastics;
• Increased use of public transport;
• Installation of energy-efficient utilities; and
• Re-wilding and increasing greenery.

Conclusion

The Combined Authority states that it ‘takes climate change seriously,’ and the objectives it seeks to achieve are to be welcomed. The decarbonisation objectives are not simply to meet Government guidelines, but are also intended to provide a framework for others to follow and to improve the lives of those living and working within Manchester.

However laudable the objectives are – at both a local and national level – they are not without their real and significant obstacles, which do need to be addressed before the aims can be fully realised.  Certainly, the objectives cannot be achieved overnight, in isolation, nor by one city alone. That is not to say that the aims should not be pursued, but they do require a considered and coordinated approach across numerous authorities.

Although many of the details as to the future landscape and specific actions expected of both businesses and individuals remain to be confirmed, the direction of travel is clear.

In the absence of a statutory compulsion to do so, we recommend that businesses undertake an internal review of their systems, production methods and environmental impact as soon as possible, to identify areas where more could perhaps be done. This process will help to position organisations in the most favourable position for further environmental regulations, which are undoubtedly on the horizon, and will also help work towards those collective aims intended to be achieved by the Combined Authority.

In our next blog in the series, we will cover the issue of transport and travel.

Picture: The Tower of Light – Manchester’s low-carbon energy centre (credit: Philip Openshaw)

Pannone Corporate has advised APRIL Group, the leading wholesale insurance broker in France and Europe, on the cross-border acquisition of Lexham Insurance, a specialist two-wheeler insurance broker.

Lexham was established in 1999 and has since become a leading provider of moped, scooter and motorcycle insurance in the UK.

The acquisition reinforces APRIL’s ambition to expand its international footprint in specialist personal property and casualty (P&C) niche insurance, such as two-wheeler insurance, building on its presence in France and Spain. As part of the deal, Lexham CEO, James Miller, will continue to lead the business with his team.

Pannone’s corporate team included partner Tom Hall who co-led the deal with director Andrew Walsh, with further support from Belinda Cheung and Georgina Bligh-Smith.

Hall said: “This is a fantastic deal to kick the year off with – one that demonstrates the continued appetite of overseas investors and trade buyers, seeking to scale their operations internationally through strategic buy and build opportunities.

“APRIL has built up an excellent reputation in the European two-wheeler insurance sector and the acquisition of Lexham Insurance marks an important step in expanding its presence in the UK market.”

APRIL has a network of over 15,000 partner brokers internationally. With 2,400 employees, the company provides health and personal protection insurance, loan insurance, international health insurance (iPMI), property and casualty niche insurance and savings in investment products.

Marc-André Dupont, Head of APRIL Group property and casualty division, said: “We share Lexham’s passion for customer service and its recognised expertise in network management. With James Miller, who will continue to lead Lexham, we have begun to identify synergies that will enable us to create value across Europe.”

Lexham Insurance offers in excess of 20 different insurance products, including quad insurance, car insurance for motorcyclists, motorhome and camper, as well as motor trade and commercial insurance. It employs 200 employees across three UK offices.

Other advisors on the deal were:

• Charles Pétré and Olivier Cœnon of Caurus Partners (buy-side: corporate finance)
• Jenny Pape at Azets (buy-side: tax and structuring)
• Josh Bates at O’Connors (buy-side: regulatory)
• Osborne Clarke (sellers – legal )
• Grant Thornton (sellers – corporate finance).

Photo credit: Milos Muller

In the first of a six-part blog series from Pannone’s dispute resolution team, we take a closer look at commercial contracts, focusing at those elements which give rise to the risk of disputes, and how best to navigate those challenges.

Parties may believe that they are embroiled in a contract dispute, but the first question for the court will be “is there a legally binding contract in the first place?” In this blog, we examine the requirements for the formation of a legally binding and enforceable contract.

The five requirements for a legally binding contract

A contract gives rise to legally enforceable rights, obligations and remedies. It’s therefore important to consider whether or not a legally binding contract has been formed.

It’s not necessary for a contract to be documented in order to be legally binding. A contract can be formed whether made in writing or verbally.

However, there are five key requirements which must be present to form a legally binding agreement. These are:

1. an offer
2. acceptance
3. consideration
4. a mutual intention to create legal relations
5. certainty of terms.

Let’s take a closer look at each of these.

1          Offer

What is an offer?

An offer is defined as “an expression of willingness to contract, made with the intention that it shall become binding upon the person making it, as soon as it is accepted by the person whom it is addressed”. In other words, an offer is a promise made to enter into a contract.

When is an offer not an offer?

It’s important to distinguish between an offer to contract from what is commonly known as an ‘invitation to treat’. Parties need to consider whether the proposal which is made is intended to give rise to a legally binding contract (an offer), or whether it’s made with the intention of entering into negotiations (an invitation to treat). An example commonly given for an invitation to treat are goods displayed in a shop window. An invitation to treat will not amount to an offer to contract.

Can an offer be withdrawn?

An offer can be withdrawn before acceptance has taken place. This can happen in a number of ways. For example, an offer may give a deadline for acceptance. If the offer expires, the offer may not be capable of acceptance. If there’s no specific deadline for acceptance, the courts deem the offer to remain open for a reasonable amount of time. A ‘reasonable amount of time’ will depend on the particular circumstances of the case.

2          Acceptance

When is a contract formed?

A contract is typically formed, and therefore becomes legally binding, at the point of acceptance. Acceptance is the final confirmation that the terms of an offer are agreed. Acknowledging receipt of an offer will not constitute an acceptance. Instead, acceptance should clearly signal an intention to be bound by the terms of the offer. When assessing this, the court will apply the reasonable person test, i.e. would a reasonable person standing in the shoes of the person making an offer find that there is a clear intention to accept the terms of the offer and subsequently form the contract.

Acceptance of an offer can also be demonstrated by way of conduct which evidences an intention to accept the offer.

Is it an acceptance or is it a counteroffer?

In order for an acceptance to give rise to a binding contract, it’s important that the specific terms of the offer have been accepted. If alternative terms are proposed, this will not amount to an acceptance of the offer, but will instead amount to a counteroffer. A counteroffer amounts to a rejection of the original offer so that no contract exists. Querying something, or seeking clarification about the terms of the offer, will not, however, amount to a counteroffer.

3          Consideration

What is consideration?

The requirement for consideration is in essence the principle that you cannot get something for nothing. It’s centres on the idea that a party cannot enforce a promise unless it has given or promised something in exchange for it. The law does not interfere with the bargain struck between two parties and so will not test whether consideration is adequate, so long that the consideration has a value, even if that is a pound.

Who must the consideration move between?

Consideration must move from the party who seeks to enforce a promise, as this is in line with the doctrine of privity to a contract, i.e. only those privy to the contract can enforce the rights under the contract. However, the consideration does not necessarily have to move to the person who makes the promise.

Does past consideration count?

Consideration which is given at some time in the past is not a valid form of consideration, this being an act which has come before the promise was made and therefore not something of value.

4          Intention to create legal relations

Why is this important?

If the courts determine an agreement was reached without a mutual intention to create legal relations, that agreement will not be legally binding.

What is required?

When considering whether the parties had the necessary intention to create legal relations, the courts will consider the conduct of the parties and all the relevant circumstances. If an intention is disputed, the onus is on the party who claims there was no intention to prove this allegation. In order to avoid any ambiguity, it’s beneficial for parties to clearly identify their intentions from the outset.

The business presumption

Businesses should be aware that there is a presumption that there is an intention to create legal relations in commercial circumstances. In the event a party objects to there being a presumed intention, the onus is on that party to prove otherwise.

5          Certainty of terms

Are the terms clear?

For there to be a legally binding contract, there must also be certainty of terms. This requires all the essential terms that form the contract to be complete and free from ambiguity. If an agreement omits a material term or is uncertain, this may lead to the agreement not being capable of being enforced.

The court’s approach

In assessing whether essential terms have been agreed, the court will assess whether an honest and reasonable businessperson would have concluded from the parties’ communications and conduct that they had agreed all the terms they considered to be a precondition to creating legal relations.

Generally speaking, the court will not wish to interfere with agreements reached between two commercial parties. However, in certain circumstances, the court does have the ability to fill in gaps in a contract to give effect to the parties’ intentions. This will depend on all the circumstances of the case.

What’s next…

Our next blog post in this series will examine the ‘battle of the forms’ and how to ensure that your contract terms govern your business relations.

If you would like to discuss this blog, please contact Paul Jonson on 07737571147 or by email to paul.jonson@pannonecorporate.com