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

Although the media interest surrounding the Awaab Ishak inquest focussed on the presence of damp and mould, there were other matters arising in evidence in that case which have not been touched upon as extensively by the press. That is not to minimise the possible risks that may be associated with extensive exposure to mould, but rather to put in context that there are many other hazards and concerns which can be associated with domestic premises, all of which may require investment and attention from the property owner.

The Social Housing (Regulation) Act 2023, which was already in draft form prior to the Awaab Ishak inquest, was amended in light of the Coroner’s conclusion in that case to include a specific obligation on social housing landlords to investigate and repair, within a specified timescale, “prescribed hazards,“ which were reported from their housing stock

These additional obligations were proposed to form part of tenancy agreements, and were intended to provide tenants with an enhanced course of redress against landlords who were considered to be failing in their maintenance duties.

The Government has now launched a consultation which considers proposals for the full implementation of Awaab’s Law.

What are the proposals?

The consultation offers seven proposals for comment, being:

1. If a registered provider is made aware of a potential hazard in a social home, they must investigate within 14 calendar days to ascertain if there is a hazard.
2. Within 14 calendar days of being made aware that there is a potential hazard in a social home, the registered provider must provide a written summary of findings to the resident that includes details of any hazard identified and (if applicable) next steps, including an anticipated timeline for repair and a schedule of works.

Whilst the consultation makes clear that physical visits to properties may not always be necessary, where remote viewing/ information sharing is possible, this requirement does imply and require a certain level of knowledge by the investigator to understand the potential hazards, and make a determination as to their severity.

3. If the investigation indicates that a reported hazard poses a significant risk to the health or safety of the resident, the registered provider must begin repair works within 7 calendar days of the written summary being issued.

In determining whether a hazard poses a risk to health and safety, the consultation encourages landlords to consider any specific vulnerabilities of residents of which they are aware, with the overall approach being one of proactivity. Supportive medical evidence will not be required to determine the risk.

4. The registered provider must satisfactorily complete repair works within a reasonable time period. The resident should be informed of this time period and their needs should be considered.

The explanatory notes which accompany the consultation detail that specific timescales for completion of works should reflect the nature of the problem, as well as being proportionate to the scale of repair as well as taking into account the needs of the residents.

5. The registered provider must action emergency repairs as soon as practicable and, in any event, within 24 hours.

The explanatory notes confirm that ‘emergency repairs’ are those which present a significant and imminent risk of harm.

6. In the event that the investigation finds a hazard that poses a significant, or a significant and imminent, risk of harm or danger, and the property cannot be made safe within the specified timescales for Awaab’s Law, the registered provider must offer to arrange for the occupant(s) to stay in suitable alternative accommodation until it is safe to return.
7. The registered provider will be expected to keep clear records of all attempts to comply with the proposals, including records of all correspondence with the resident(s) and any contractors. If the registered provider makes all reasonable attempts to comply with the timescales but is unable to for reasons genuinely beyond their control, they will be expected to provide a record of the reasons that prevented them from doing so.

Overview of costs

The Government is unable to estimate the net additional costs of the proposals however they are considered likely to be small, on the basis that aside from specifying the response time, Awaab’s Law goes no further than re-stating landlords existing obligations.

The consultation itself states:

Social landlords already have a responsibility to maintain their homes to meet the Decent Homes Standard… to remedy disrepair, and to maintain homes so that they are fit for human habitation. To be fit for human habitation a home must be safe, healthy and free from things that could cause you or anyone else in your household serious harm. Therefore, the duty to make repairs to reported hazards is not a new burden on landlords, and the costs associated with the investigation and repair timescales are likely to be minimal, as the additional burden is the speed at which repairs need to be responded to, not the repairs themselves.

Familiarisation costs for year one are estimated in the region of £1.6 million, with the costs associated with the provision of a written summary of hazard findings anticipated in the region of £154 million.

The key driver behind the consultation is for social housing landlords to take faster action in responding to hazards within a home that are significantly impacting a resident’s health and safety. The consultation goes on to consider that the remediation of hazards will serve to stop the deterioration of these issues and may even improve mental health and wellbeing, on the basis that, “remedying disrepair in a timely fashion means residents feel their complaints are taken seriously, their pride of place is heightened, and they will feel happier to be at home. These health improvements are likely to result in a reduced burden on the NHS, with fewer housing relating issues resulting in residents requiring medical attention. There are also likely to be wider societal benefits of reducing health and safety hazards in homes, such as reduced instances of lost productivity due to ill health.”

Commentary

Awaab’s Law, and the proposals currently open for consultation, were introduced following the media frenzy flowing from the November 2022 inquest. However, without more long-term investment and increased funding streams, social housing providers are likely to continue to be placed in an impossible position. In the absence of a blank cheque, it is a difficulty that is not easily resolved.

Whilst the objectives are laudable, as the consultation itself accepts, the proposals are not novel in themselves and re-state existing obligations. What is liable to change however is the time within which those activities need to be put in hand. This may present an immediate logistical problem for many, especially smaller organisations which may have fewer/ more limited resources, and fewer bodies on the ground to put in hand the required attendances when required.

On the resources issue, although the government does not anticipate significant costs, those funds still need to be sourced, and any monies incurred as part of the expected ‘familiarisation’ period will not be available for other projects, such as the construction of new build homes, or upgrade of existing stock. Without downplaying the seriousness of health and safety risks, the remediation of issues in one property may result in a net loss for the stock as a whole if funds are not otherwise available – for example, to fund replacement fittings or new build projects.

Awaab’s Law is also restricted to the social housing sector and does not affect private sector landlords. The occurrence of mould – and other residential hazards – is not exclusive to the social housing sector, yet the proposals are likely to result in an imbalance between the private and the social housing sector, with the latter benefitting from generally faster remediation.

Additionally, tenants owe a duty to behave in a ‘tenant-like manner’ during the life of their lease. However, the current proposals risk severing that responsibility and shifting the responsible burden onto already over-stretched and under-funded social landlords and may, at their extreme, require a landlord to repair a hazard regardless of their genesis or the manner in which they have arisen.

Pannone Corporate has advised on the sale of Eco-Readymix Ltd, a leading producer of mortar and concrete in the North West.

The company, which was established in 2004 and has sites in Wrexham and Ellesmere Port, was acquired for an undisclosed sum by Aggregate Industries, a member of the Holcim Group. The acquisition will reinforce Aggregate Industries’ position in the North West market and also help establish its place in the UK mortar market.

Pannone’s corporate team advised the shareholders of Eco-Readymix. The team included corporate partner, Tom Hall, Bez Borang and Sam Roberts. They were supported by James Harris, partner in the real estate team.

Hall said: “This is a fantastic deal. A regional business that is anchored in a traditional sector, but is forward-looking in its approach, particularly around sustainability and the environment.

“We’re delighted to see the business attracting the attention of a heavyweight, such as Aggregate Industries, and we will watch with great interest as the combined businesses make an even greater mark on the North West market.”

Eco-Readymix produces Ready to Use mortar and Dry Silo Mortar and serves national house builders, groundworkers and civil engineering firms alongside the domestic market.

It also produces ready mix concrete, liquid and traditional screed, concrete masonry blocks and aggregates. The company has strong sustainable credentials. Its Wrexham site is almost entirely powered via a biomass system alongside both wind and solar power. It employs 52 people across its sites.

Dragan Maksimovic, Chief Executive Officer of Aggregate Industries UK, said: “We are delighted to be able to announce the acquisition of Eco Readymix and welcome them to Aggregate Industries.

“As a business, it has clear sustainable values very much in line with our own and will strategically add to our strong footprint in the North West.

“This also marks our entry into the UK mortar market with a knowledgeable and ambitious management that has multiple synergies with our own. The acquisition supports our long-term strategy to continue to grow our business in order to become the UK’s leading supplier of sustainable construction materials and solutions.”

Picture credit: Iryna Melnyk

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, it appears that any such law may now essentially be stagnant.

Whilst the draft Public Accountability Bill (also known as the Hillsborough Law) sought to establish a statutory duty of candour – being an obligation on public servants to be open, transparent and honest following public disasters – these proposals will not now proceed any further, at least not in the current session of Parliament.  Rather than enact legislation and subject it to parliamentary scrutiny, the Government has, instead, indicated it will sign a comparable Charter.

What does the Charter say?

The Charter responds to Bishop James Jones’ previous report published in 2017, in which he identified 25 points of learning.  One of the key recommendations within this was the creation of a Charter for families bereaved through public tragedy.  This Charter seeks to ensure that the lessons of the Hillsborough disaster and its aftermath, are learned, to prevent those who are affected by public tragedy in the future from having the same experience.

The Charter lists six key points as to how the Government is committed to acting in practice, within the confines of the existing rules, regulations and codes.  The six rules are:

1. In the event of a public tragedy activate its emergency plan and deploy its resources to rescue victims, to support the bereaved and to protect the vulnerable.
2. Place the public interest above out own reputation.
3. Approach forms of public scrutiny, including public inquiries and inquests with candour, in an open, honest and transparent way, making full disclosure of relevant documents, material and facts.  Our objective is to assist the search for the truth.  We accept that we should learn from the findings of external scrutiny and from past mistakes.
4. Avoid seeking to defend the indefensible, or to dismiss or disparage those who may have suffered where we have fallen short.
5. Ensure all members of staff treat members of the public and each other with mutual respect and courtesy.  Where we fall short, we should apologise straight forwardly and genuinely.
6. Recognise that we are accountable and open to challenge.  We will ensure that processes are in place to allow the public to hold us to account for the work we do and the way in which we do it.  We do not knowingly mislead the public or the media.

Hurdles to implementation

However, far from addressing the concerns highlighted by those affected by the Hillsborough tragedy, as well as other public disasters, the Charter is considered by those who are intended to benefit from it, as falling far short of the mark. Not only does a Charter lack the weight of its statutory counterparts, but in addition there are serious and fundamental procedural questions which need to be addressed before for any such duty can achieve its intended aims.

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 with the Charter is that it 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, the Government’s pledge to activate its emergency plan and deploy resources to rescue victims and 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.

In respect of the Charter’s pledge regarding public inquiries and inquests, the granular detail which supports this pledge states, “full disclosure may not always be possible in relation to broader scrutiny, or enquiries…in signing the Charter, the Government is not intending to widen the disclosure obligations which currently apply, or to narrow the well-established exceptions to those obligations”.

One of the issues which arose from the various inquiries into Hillsborough, was the potential withholding of information and lack of disclosure.  However, the Charter does no more than to simply re-state the current framework regarding disclosure and expressly does not seek to expand the current regime.  It is unclear, therefore, how this pledge marks any form of change than what has already gone before.

In addition, 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 a Hillsborough Charter is broadly to be welcomed and may be seen to go some way towards addressing the concerns and queries raised by the families following that disaster and subsequent litigation, there is also much commentary that it simply falls far short of the expected mark and does not go as far as anticipated.

As the Charter does not have statutory force, it is not clear what the consequences of breach may be for us who act in contravention of it.  Possibly not much.

In parallel with the Hillsborough Charter, the police Ethical Code of Conduct now includes a duty of candour, but aside from any disciplinary proceedings arising in respect of individual officers, it is not clear how the pledges are to be enforced.  By its nature, the criminalisation of particular activities rests in the procedural ability to impose a penalty for non-compliance  However, in the absence of statutory footing for the Hillsborough Charter, there is no stick and it is difficult to see how breach, or non-compliance can be enforced.

That being said, the law does not operate in a vacuum and were the Hillsborough law to be enacted in the terms previously suggested, this would potentially 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 affected.

The Labour Party have indicated, in its manifesto, that it will reconsider a manifesto pledge around the Hillsborough law and the results of a general election in 2024 remain to be seen.  Whilst it may be the case that any future Labour Government considers that the Hillsborough Charter, as exists, is sufficient, this is unlikely to satisfy those who have been personally affected by the Hillsborough law and who do not consider that the Charter has, in fact, gone far enough.

The draft wording of the Terrorism (Protection of Premises) Draft Bill (also known as ‘Martyn’s Law’) continues to work its way through Parliament, and following its inclusion in the King’s Speech.

Whilst some aspects of the Bill have recently been subject to scrutiny and criticism, the fundamental purpose of the draft is to be welcomed.

Although identification of ‘lone wolf’ individuals, their methodology and where and when they may attack are often difficult to predict, such ‘low complexity’ attacks are no less deadly than those committed by organised terrorist groups and it is only correct that all businesses prepare for the unthinkable.

The draft Bill, also known as Martyn’s Law in honour of Martyn Hett, who was killed during the 2017 Manchester Arena attack, seeks to address this issue by imposing proactive security measures on organisations that may be subject to terrorist attack.  Specifically, the Bill requires those responsible for certain public premises to expressly consider the risk from terrorism and implement reasonably practicable and proportionate mitigating measures in response. The Bill also proposes to establish an inspection and enforcement regime, to ensure compliance with the legislation once it comes into force.

Which premises are caught?

The definition of ‘qualifying public premises’ is wide and includes premises used for:

• retail purposes
• hospitality and entertainment
• sporting grounds
• exhibition halls
• hospitals
• transport terminals; and
• childcare and educational facilities.

To be caught by the definition, and the additional duties imposed, the public must have access to the premises which themselves must have a capacity for 100 or more individuals.

Certain ‘qualifying public events’ are also caught by the provisions, which includes events held at premises which are not qualifying public premises, but to which the public have access and have capacity for 800 or more individuals.

What is the duty that is imposed?

Different duties apply depending on the size of the qualifying premises, with those having a public capacity of 800 or more individuals being classed as an ‘enhanced duty premises.’ Other public premises are subject to a ‘standard duty’.

In either scenario, the duties are imposed on the person (or persons) who has control of the premises for their relevant use, or the qualifying public event.

In addition to being obliged to register the premises, the responsible person must also:

• ensure that a standard terrorism evaluation of the premises has been completed
• revise that evaluation as required and ensure it is kept up to date
• make available a copy of the current evaluation to each individual who uses the premises as a place of work; and
• provide the regulator with a copy, on request.

A standard evaluation must be reviewed every time there is a material change to the premises or its use, as well as within 12 months of the previous review.

The evaluation should include information as to the:

• types of terrorism most likely to occur at or in the immediate vicinity of the premises
• the measures in place in relation to the premises that might be expected to reduce the risk of acts of terrorism of those types occurring at or in the immediate vicinity of the premises
• the measures in place in relation to the premises that might be expected to reduce the risk of physical harm to individuals if acts of terrorism of those types were to occur at, or in the immediate vicinity of, the premises
• the procedures to be followed if acts of terrorism were to occur at, or in the immediate vicinity of, the premises; and
• the ways in which individuals who use the premises as a place of work will be made aware of the standard terrorism evaluation of the premises, or relevant information in the evaluation.

Where the enhanced duty applies, the responsible person must also prepare a terrorism risk assessment at least three months before the date of the event taking place. The draft Bill explains that a terrorism risk assessment is an assessment of:

• the types of acts of terrorism most likely to occur at, or in the immediate vicinity of, the premises or event
• the reasonably practicable measures that might be expected to reduce the risk of acts of terrorism of those types occurring at, or in the immediate vicinity of, the premises or event; and
• the reasonably practicable measures that might be expected to reduce the risk of physical harm to individuals if acts of terrorism of those types were to occur at, or in the immediate vicinity of, the premises or event.

What are the responsibilities?

The draft Bill serves to impose additional duties on those responsible for qualifying premises.

For example, Martyn’s Law if enacted in its current form will oblige those responsible to provide terrorism protection training, and to implement prescribed security measures and plans in the event of an attack.

Enforcement

Obligations under the Bill will be monitored and enforced by local authorities, using a ‘reasonably practicable’ test to assess what is proportionate in any given situation.

If contraventions are identified then the Bill provides for notices to be served, as well as the imposition of financial penalties. Of note, the maximum penalty in respect of standard duty premises is £10,000, but for those subject to the enhanced duty is the greater of £18 million, or 5% of qualifying global revenue.

Failure to comply with a notice which has been served will be an offence, being punishable on conviction by up to two years custody and/ or an unlimited fine. In addition, individuals within an organisation may also be guilty of an offence if the corporate’s offending is shown to have been committed with their consent, connivance or neglect.

Conclusion

The aims of the Bill are commendable, and have been prepared following consultation with various parties in the aftermath of the Manchester Arena attack in 2017. The specific and deliberate focus on the risk of terrorism is to be welcomed and it is hoped that the Bill is able to complete its passage through Parliament as soon as possible.

However, the proposals are not in themselves novel and largely reflect and mirror existing duties imposed on organisations and businesses in respect of day-to-day health and safety management. Where this legislation differs however is that it prescribes the risk (terrorism) to be expressly considered and requires relevant organisations to proactively prepare in anticipation of that risk materialising.

The additional inspection and enforcement responsibilities come at a time when local authorities are financially stretched and it will be interesting to understand from where the additional funding and resources to achieve this aim will be sourced. For example, the impact assessment which accompanies the draft legislation estimates that the total set-up and on-going cost of Martyn’s Law to be between £1.1 billion and £6.3 billion.

In addition, criticism has been levelled at both the arbitrary capacity cut-off figures – given that acts of terrorism do not usually abide by such distinctions – as well as the potentially disproportionate cost which will be imposed on small and medium-sized venues. Whilst the Bill, if enacted, will certainly increase provider knowledge, it remains unclear how it will provide a benefit to venues, given the random and often unforeseeable nature of terrorist activities.

To discuss this in more detail, contact associate partner in Pannone Corporate’s regulatory team, Bill Dunkerley.

Once again, both individual lawyers and teams at Pannone Corporate have featured strongly in this year’s Chambers 2024, consolidating the impressive showing in the Legal 500 rankings, which were announced last month.

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.

Highlights from this year’s Chambers 2024 include:

• The Corporate team maintaining their Tier One band for the second successive year
• The IP and Media team continuing their strong run in Tier Two, having moved up in the 2022 rankings
• The litigation team making it seven years in a row as a Tier Three ranked team
• In Employment, partner, Fiona Hamor has been ranked individually, along with David Walton and Bill Dunkerley in the Health & Safety team
• Both Gareth Birch (Real Estate) and Daniel Clarke (Restructuring and Insolvency) feature individually for the second successive year
• In total, Pannone has 12 individually ranked lawyers, with four on the ‘ones to watch’ list.

So, what do our clients say about us?

Corporate: “They understand the market and the needs of clients and formulate them into pragmatic solutions.”

Employment: “A great all-round team of high-level thinkers with the ability to transfer that knowledge into actionable solutions.”

Litigation: “No stone is left unturned and every correspondence is well considered.” 

IT: “Pannone’s commercial awareness is a key distinguishing factor of them as a firm.”

Commenting on this year’s results, senior partner Paul Jonson said: “It’s excellent to see such positive feedback from clients, highlighting our strong and client-orientated approach, robust and highly professional advice, ability to translate complex legal matters, and a clear commercial awareness – all important and consistent qualities across the firm.”

Chambers produces annual 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.

Welcome to our latest IP update – insight into the most recent cases and developments in IP law. We’ll uncover the news stories most relevant to you and provide insight into what they mean for your business.

To find out more, click here 

If you have any questions about the updates or any IP issues or challenges you’re facing, please contact Melanie McGuirk or Grace Astbury.

Pannone Corporate has strengthened its cross-sector expertise, after being appointed by a trio of high-profile clients – TalkTalk, Silentnight, and ExamWorks.

The North West law firm will provide legal support to UK connectivity provider, TalkTalk, which operates Britain’s biggest unbundled broadband network, while the firm has also recently been appointed by renowned sleep brand, Silentnight.

In addition, Pannone has joined a panel of external advisers for ExamWorks – a market leading service provider to the insurance, legal, and healthcare sectors. The company specialises in a range of services, including accident aftercare, medical reports, health assessments and rehabilitation treatment.

Paul Jonson, senior partner at Pannone Corporate, said: “We’re delighted to be appointed by such respected brands – each of which has carved out a strong, market leading position in their chosen sectors. To be aligned with key industry players is a step forward in our growth journey.

“It’s also really pleasing that each of the brands is North West born and bred, while possessing a national and international reach that demonstrates the strength and depth of our regional economy. We look forward to working alongside TalkTalk, Silentnight, and ExamWorks moving forward.”

Earlier this year, Pannone was appointed by The Lowry, New Balance and Beauty Bay, strengthening its retail and leisure credentials.

Pannone Corporate has been recommended as top tier in two practice areas and also recommended in a further ten practice areas in The Legal 500 2024 edition released yesterday.

Here are some highlights from what our clients had to say:

Commercial litigation 

“Direct partner contact, in-depth subject expertise and competitive rates due to its size and structure which makes it stand out in the Manchester and national market.”

“Pragmatic yet thoroughly detailed advice together with responsiveness and quick turn-around times – an invaluable resource for a busy in-house team.”

“Collaborative, responsive, thoughtful and with a deep knowledge and understanding of our business.”

Commercial property

“The team is very experienced and offers a personalised service. They are highly knowledgeable and able to represent the core interests of their clients without prompting.”

“A smaller team that offers a big company service and an ethos personalised to the needs of the client.”

“Valued members of their team and ours. They are always available and ready to answer quick questions and give advice.”

Contentious trusts & probate

“Sound, intelligent advice and support.”

“Exceptional advice and persuaded me to agree to mediation. This proved to be excellent advice and helped achieve a fantastic result, avoiding court costs.”

“Client-focused and provide realistic straight-talking advice in a manner clients can easily understand. They are very experienced around the legal issues but also have their eye on costs.”

Corporate & commercial

“Able to manage demanding and challenging stakeholders – always with a smile on their faces.”

“Highlights risks in a commercial manner. Doesn’t labour incidental points, a characteristic that helps keep processes moving and on track.”

“Always has a solution when required to get through a log-jam and able to manage diverse stakeholders to ensure a consensus solution is found.”

Debt recovery

“Pannone are very good at replying and explaining their process. We can call them anytime and they pick up – not the case with other firms.”

“The personal touch and the relationships with people at Pannone. They have held inhouse training at their Manchester office to help myself and my staff understand the legal process.”

Employment

“Supported several very complex cases and always quick to respond, giving excellent and considered advice. They understand our business and some of the difficulties we face and apply this when giving advice.”

“‘We have built a strong relationship with the whole team and no matter what the issue, any of them can be approached and you can trust that if it is not their area of expertise they will liaise with the subject expert within the team before providing advice.”

“Their employment law knowledge is fantastic, and they present this in a simple yet effective way.”

Health & safety

“An outstanding partner to myself and the whole business. Nothing is too much trouble.”

“Undoubtedly the firm to watch in the North West, buckets of experience mixed with in-depth knowledge of the regulatory landscape means the firm is going from strength-to-strength.’

“The class act of the North’

Insolvency & corporate recovery

“A very commercially sound and technically gifted team who provide an excellent service.”

“Excellent technically and commercially, and fun to work with.”

“Strong technically, very commercial, results-orientated and well-respected in the market.”

“A good communicator and always willing to take a commercial view.”

Intellectual property

“Pannone have kept up with us every step of the changes in our organisation, and their diligent handling of our cases has played a significant part in our organisation’s success post-pandemic. They are consistently a pleasure to deal with – no matter the query or the request, the team work tirelessly to meet our expectations.”

IT & telecoms

“Adept at providing commercial and pragmatic advice which comes from being experts in the sector.” 

“Manages to provide the right level of advice for our business without over-engineering it.”

Media & entertainment 

“Highly professional, supportive and excellent advice”

“An ability to see around corners…always my first choice.”

Property litigation

“A very cohesive and proactive team, which is essential to support our sometimes urgent and time-critical requirements.”

Notable individuals

Hall of Fame

Melanie McGuirk – Intellectual Property

Tim Hamilton – Corporate and Commercial

Leading Individuals

Amy Chandler – Intellectual Property

Amy Chandler – IT and Telecoms

Nicola Marchant – Contentious Trusts and Probate

Paul Jonson – Commercial Litigation

David Brown – Property Litigation

Melanie McGuirk – Media and Entertainment

Jack Harrington – Employment

David Walton – Health and Safety

Next Generation Partners

Gemma Staples – Property Litigation

Jonny Scholes – Contentious Trusts and Probate

Rising Stars

Sarah Bazaraa – Intellectual Property and Media & Entertainment

Arshnoor Amershi – Corporate and Commercial

Andrew Walsh – Corporate and Commercial

Natasha Mafunga joined Pannone Corporate at the start of the year as a solicitor in the dispute resolution team. In the latest in our blog series, My Life in Law, Natasha reflects on the first nine months of her at career at the firm, her love of people and problem solving, what she would do if she was managing partner for the day and the Broadway career that never was!

Tell us a little bit about your role at Pannone?

I work in the dispute resolution team and, since I joined in January, I’ve developed a mixed caseload consisting of commercial litigation work on the one hand and contentious probate and trusts work on the other.

That’s what really appealed to me about the job – I liked the idea of doing commercial litigation work alongside contentious probate and trusts. What’s more, the firm has a clear progression route and invests in the development of its people – people who, I might add, are absolutely lovely to work with, which applies across all teams!

What route did you go down, in terms of training and qualifications?

After completing my A-levels in Law, Psychology and Sociology, I went down the ‘traditional’ route of getting my LLB undergraduate law degree at the University of Chester, before getting a training contract and qualifying. I was able to do my training contract alongside my LPC MSC in Law, Business and Management, which I did part time. It was tough at times juggling work and doing my LPC, but I managed to get through it fairly unscathed!

Why did you choose this route?

I didn’t really consider any other route at the time. I was lucky enough to be able to get a postgraduate loan for my LPC, as I was doing it alongside my masters. This meant that I didn’t have to worry about how I was going to fund my course.

Tell us what does a typical day look like?

No day is ever really the same. It usually starts of with me updating my to-do list from the previous day, checking my calendar for upcoming meetings and deadlines and trying to get my head down with the hopes of crossing a task off the list. My tasks can range from having phone calls with clients, opponents and third parties, responding to emails and drafting letters and court documents, all the way through to attending conferences with counsel or even court hearings. It’s always important to keep an eye on upcoming deadlines and have the Civil Procedure Rules to hand at all times.

What is the most satisfying aspect of your job?

I enjoy working with people and problem solving. The work I do as part of the contentious probate and trusts team especially allows me to see how much of a real difference my colleagues and I can make to people’s lives, often in very sensitive and stressful circumstances.

Looking ahead, what are your career ambitions?

Simply put, I want to be the best solicitor I can be in my areas of specialism and provide a great service to my clients. In doing that, I trust that I will always be rewarded with progression. Who knows, it might lead me to joining the partnership one day.

Talking of being a partner, if you were managing partner for the day, what’s the first thing you would do? 

I like the idea of a 30-minute wellness session where employees can do some simple yoga, meditation or breathing techniques to clear the 1,000 tabs that are always open in our minds at any one time.

Keeping your managing partner hat on, what can lawyers / the legal profession do to better support clients?

Its important to always be clear on costs from the outset and not be afraid to continue raising the subject with clients throughout. De-mystifying the process and the costs likely to be involved will ensure that clients keep coming to you for advice.

Outside of work, what do you enjoy doing?

From about 2020, I got into walking and hiking, as you couldn’t really do much else at the time due to Covid. Now it’s one of my favourite things to do.

What would you be doing if you didn’t have a career in law? 

Apparently I can be quite dramatic, so I imagine I would’ve been a world famous Broadway actress by now. If only the law hadn’t got to me first!

On that note, it shouldn’t surprise colleagues about your previous skills and talent!

No! I played a lead role in an adaptation of We Will Rock You the musical in high school. The talent being I can memorise a script fairly quickly. Hopefully that footage never sees the light of day!

Earlier this year [July], the EU adopted a decision that will see the free flow of personal data between the EU and the US – a move that will undoubtedly be welcomed by trans-Atlantic businesses. The adequacy decision for the EU-US Data Privacy Framework will allow the free transfer of personal data between EU and US companies participating in the framework on the basis of binding safeguards. 

Under the EU GDPR, the European Commission (EC) has the ability to determine whether jurisdictions outside of the EU offer an adequate level of protection for EU citizens’ personal data. The effect of such an adequacy decision is that personal data can freely flow between the EU and the non-EU jurisdiction without additional safeguards needing to be put in place. Those additional safeguards included, for example, the use of EU approved Standard Contractual Clauses (SCCs) in contracts between the data exporting and importing parties, and the carrying out appropriate data protection impact assessments. In relation to EU-US data flows, this decision is highly valuable, with the White House stating that there are more data flows between the EU and the US than anywhere else in the world. 

This is not the first time the EU and the US have attempted to put a framework in place for the free flow of data. The two previous decisions of the EC, the Safe Harbor, put in place in 2000, and the Privacy Shield put in place in 2016, were declared invalid by the European Court of Justice (ECJ) in 2015 and 2020 respectively, following challenges from privacy activist Max Schrems. These decisions were invalidated in part because of programmes allowing US authorities to access personal data transferred from the EU for national security purposes. This meant US domestic law limited the protection of EU citizens’ personal data in a way that did not provide for an essentially equivalent, and therefore sufficient, level of protection as guaranteed by EU law. 

The EC has stated that “new binding safeguards have been introduced to address the points raised” by the ECJ in 2020, including limiting US authorities’ access to data to the extent that it is “necessary and proportionate to protect national security”. The Data Protection Review Court has also been established, allowing EU citizens an independent redress mechanism which will investigate and resolve complaints relating to access to their data by US authorities. 

Joe Jones, director at the International Association of Privacy Professionals said that there had been “significant reforms” to the US’s surveillance safeguarding, and that the Data Privacy Framework was not just a “reheating” of the two previous attempts. However, he also said “the question is: is it good enough?” Perhaps predictably, Max Schrems is unenthused about the proposed agreement. noyb, the not-for-profit organisation led by Schrems, states that data agreements with the US will not work unless the necessary changes in US surveillance law are made, which is yet to happen. Schrems is quoted as saying that simply calling something ‘new’, ‘robust’ or ‘effective’ will not be enough for the Court of Justice, and noyb have already prepared various challenges to be filed with the ECJ. 

But what does this mean for the UK? The adequacy decision does not apply to UK-US personal data flows. In June 2023, the UK and US announced that a commitment in principle had been reached in relation to a proposed data bridge allowing for the free flow of data between the UK and US organisations that have been certified under the scheme. The data bridge would act as an extension to the EU-US Data Privacy Framework, purportedly providing businesses with an annual saving of £94.2 million. However, if the EU-US Data Privacy Framework is subject to challenge and ultimately declared invalid, this may affect the UK-US data bridge. There are also further concerns that the scope of the data bridge could bring the EU’s UK adequacy decision into question. 

For now, the new adequacy decision will facilitate EU-US data flows. It will be interesting to see how the challenges from privacy campaigners develop and what effect this will have on efforts to facilitate the transfer of data between the UK and US.  

UK businesses trading in the US may wish to consider the following steps in preparing for the introduction of the UK-US data bridge:

• Until the data bridge enters into force, businesses should ensure they continue to implement and use the correct safeguards, for example, by using the form of agreements approved by the UK ICO, namely the International Data Transfer Agreement (IDTA) or International Data Transfer Addendum (UK Addendum). Both of these agreements incorporate approved SCCs.
• Businesses should update and review data sharing agreements in place with US companies, pending the entry into force of the data bridge. 
• It is worth businesses being aware that according to the US Department of Commerce, US companies that are certified under the Privacy Shield should be able to easily self-certify under the new Framework. Businesses can check the Shield participants here: https://www.dataprivacyframework.gov/s/participant-search. Given that both the new agreements seem to be based on the previous Privacy Shield, it’s a good indication whether businesses will be able to easily enter into a data transfer when the data bridge enters into force.
• If businesses have been cautious about trading in the US due to the restrictions on data sharing, it may be worth re-evaluating this point. When the data bridge enters into force, the process to comply with it should be much simpler. European data exporters should find the compliance process less complicated for data transfers to the US, as the burden of documentation and compliance will mostly be shifted to the participating US data importers by virtue of the requirement to self-certify under the EU-US Data Privacy Framework. 

In our insolvency and restructuring blog series, we’ve been exploring the various options available to businesses that may find themselves in financial distress, but fundamentally have a sound business that has the potential to succeed.

We’ve covered topics, such as Company Voluntary Arrangements (CVAs), pre-pack administrations, as well as what to consider in the early stages of restructuring.

When it comes to proactive ways to deal with a business that needs a helping hand, these are the most popular and, to a large degree, the most effective methods to keep a business above water. However, there are some less common tools that, in the right circumstances, could help companies to move forward. So, what are they?

Liquidation
Traditionally, liquidation is a terminal process. It’s generally intended to bring the life of a company to an end in an orderly fashion.

However, there are scenarios where liquidation can be used in a more proactive way. In certain circumstances, typically smaller businesses can use liquidation in a similar way to a pre-pack administration, where the assets of the business are essentially reacquired from the liquidator.

It’s also important to note that there are two basic forms of liquidation – insolvent and solvent. On the one hand, if you cannot afford to keep the business afloat and know it’s the end of the line, then it’s worth considering insolvent liquidation as a means to formally close down the business. On the other, if the company has been successful, but you’re in a situation where you want to wind it down (e.g. as part of a wider group restructure, or perhaps after an SPV has served its purpose), then a solvent liquidation may be the best route for you. In that scenario, the assets of the business are realised and distributed to the shareholders.

Moratorium process

The standalone moratorium was introduced via the Corporate Insolvency and Governance Act 2020. It can be used independently (in that it is not automatically followed by an insolvency process – moratoriums in English law have traditionally been attached to administration or a CVA, for example) and is designed, according to the Government, to create ‘formal breathing space in which to explore rescue and restructuring options, free from creditor action’.

Except in certain, limited circumstances, no insolvency proceedings can be instigated against the company during the moratorium period, which is 20 days. It also prevents most forms of legal action being taken against a company without permission from the court.

Insolvency statistics indicate that the moratorium has not been widely used. That might be down to a lack of understanding of the process – new law always takes time to settle of course – but, it’s important to note that, while 20 days may appear a short amount of time in order to resolve serious financial issues, the intention is really that a business uses that time to consider and finalise wider restructuring plans. In reality, the expectation would generally be that the moratorium would be followed by some other form of insolvency process. In that sense, there is no reason why the moratorium cannot be a useful tool in the right circumstances.

What are the options?

When a business finds itself in difficulty, the good news is that there are a number of options they can explore with the support of a professional adviser. Those options have been covered at greater length in this series and the links to our previous blogs are below:

General Restructuring;

CVAs; and

Pre-pack Administration.

It’s true to say, of course, that what works for one business may not necessarily work for another. Similarly, what is effective in one sector might not have the same impact in another. The key to insolvency and restructuring is to understand the current state of your own business and to be open minded about the various options available to you. No-one ever wants to seek insolvency advice, but sometimes it is impossible to avoid. Professional support is likely to be hugely valuable if you do find yourself in that position.

If you would like to discuss this blog, or any of the blogs in our insolvency and restructuring series, contact me on  (0)7920 237687 or email daniel.clarke@pannonecorporate.com

In this short article, Jack Harrington and Radhika Das from our employment and pensions team consider the use of mediation as a conflict resolution tool. They look at why employers should be utilising mediation, the benefits of doing so, and how to implement mediation in your workplace.

A recent Acas study found that workplace conflict costs employers around £30bn per year. It reported that nearly half a million employees resign each year as a result of conflict, costing employers around £2.6bn annually. A further 874,000 are estimated to have taken sickness absence each year as a result of conflict, at a cost of around £2.2bn annually.

The study found that while 35% of respondents had experienced an incident of conflict or ongoing difficult relationships at work, just 5% had taken part in workplace mediation. Of those who did go through mediation, 74% said their conflict was fully or largely resolved.

Mediation is a flexible, voluntary and confidential form of dispute resolution increasingly being used for resolving disputes in the workplace as an alternative to more formal procedures. A CIPD survey suggested that ‘mediation is an effective approach to help resolve workplace disputes [which] should be required before using the formal grievance process.’

Larger organisations have set up their own internal mediation schemes in order to train employees to act as mediators. Often, employers prefer to engage an external mediator. External mediators offer a number of benefits, including:

• Saving resources: setting up an internal scheme can be costly and employees often don’t have the time to commit to facilitating a mediation process.
• Conflicts of interest: it can be difficult for an employee to remain impartial and unbiased.
• Seniority: if those involved in the mediation are senior individuals within the business, it can be difficult for an employee to feel comfortable facilitating the mediation.
• Confidentiality: disputes often concern sensitive or confidential information. An external mediator can help to control the spread of that information within the organisation.

A simple first step on the journey to introducing workplace mediation is to include mediation in internal policies and procedures as part of the organisation’s approach to people management. For example, as the CIPD survey referenced above suggests, encourage mediation to be considered before the formal grievance process is used.

It is increasingly being recognised that mediation can be a ‘win-win’ approach – employees are able to reach a resolution without going through a lengthy and adversarial process, and employers are able to improve staff retention and avoid expensive tribunal claims. It is unsurprising therefore that the reported number of mediations carried out in England and Wales jumped from 2,000 in 2003 to 12,000 by 2018 and 16,500 by 2020.

Our employment and pensions team have qualified mediators who would be happy to assist you with implementing mediation as an approach to resolve workplace disputes. For more information, please contact jack.harrington@pannonecorporate.com.

We will be talking more about the benefits of workplace mediation and practical tips on approaching it at our next HR Club on 14 September 2023 – contact jolanta.jones@pannonecorporate.com to register your place.

Following Pannone Corporate’s Freedom of Information Act request to the Care Quality Commission (CQC), regulatory associate partner, Bill Dunkerley, looks in more detail at what the statistics tell us and asks: what next for the CQC? Read more here:

What next for the CQC

Pannone Corporate has announced the promotion of five people, as it continues to invest in future talent across the law firm.

Effective from 21 July, Arshnoor Amershi has been promoted to Associate Partner in the Corporate team, having joined the North West firm as a trainee solicitor in 2011. Ranked as an ‘Associate to watch’ in leading legal directory, Chambers and Partners UK, Arshnoor specialises in all aspects of corporate legal work, including mergers and acquisitions, disposals, and debt and equity investment.

She recently advised on the sale of Up & Away Aviation – a provider of aircraft cleaning and detailing services – to US-based group, Unifi Aviation. Unifi is the ground aviation services company that forms part of the Argenbright Group, which Pannone has previously acted for on its cross-border strategic investment in risk-led intelligent security solutions provider, Amberstone Security.

Arshnoor is joined by Andrew Walsh who, having qualified as a solicitor in 2017, is also promoted in the Corporate team, becoming a Director. Andrew was instrumental in assisting Dutch client Boels Rental and French-listed company Visiativ SA continue their buy and build strategy in the UK.

In the last 12 months, the Corporate team has seen unprecedented activity levels and headcount has risen from 10 to 14 as a result, putting the team in a perfect position to capitalise on significant growth opportunities in the market.

Commenting on the promotion, Arshnoor said: “I’m delighted to have been promoted to Associate Partner in the Corporate team, as we continue to make our mark in the North West M&A market.

“Having joined the firm as a trainee solicitor, it’s hugely satisfying to have moved up through the ranks, while playing a part in the growth of the firm. It really is an exciting time to be at Pannone, as the firm’s growth story continues to unfold.”

In total, Pannone has promoted five people. These include the promotion of three lawyers to Senior Associate in the well regarded Dispute Resolution team – Callum Halley, who specialises in commercial disputes and who joined the firm in 2019;  Gemma O’Brien, who also specialises in commercial disputes and joined Pannone in the same year; and Elizabeth Walsh, who joined the firm in 2018 and advises on contentious trust and probate disputes, as well as commercial disputes.

Paul Jonson, senior partner at Pannone, commented: “Pannone has an unwavering commitment to invest in people. Our staff represent the future of the firm and have an integral role to play in helping us to reach our long-term goals.

“The promotions are all thoroughly well-deserved and testament to the passion and dedication of our team.”

Pannone Corporate has advised multi-concept operator, Mission Mars, on the letting of a flagship London site, as part of an ambitious expansion plan for 2023/24.

The Manchester firm acted as legal adviser to the hospitality company on the acquisition of a prominent 20,000 sq ft building on Shaftesbury Avenue, Trocadero. The site will be transformed into the latest Bavarian-style beer palace, Albert’s Schloss – one of a number of new openings planned for this year and next.

The Pannone team was led by Real Estate partner, James Wynne and included Senior Associate James Brandwood and paralegal Harry Jenkins.

James Wynne said: “Mission Mars operates some of the most iconic bars, restaurants and event venues in Manchester, but over the last few years has extended its portfolio beyond the North West under its highly successful Albert’s Schloss and Rudy’s brands.

“The opening of its flagship bar and restaurant on the equally iconic Shaftesbury Avenue, is an exciting milestone for the company – one of a number of regional operators which have set their sights on London as part of their strategic growth. It demonstrates the wealth of potential that exists for Manchester leisure and hospitality operators, as well as the wider appeal of brands such as Albert’s Schloss on a national level.”

James has worked alongside BGF-backed Mission Mars since 2018, with the firm acting for the company on a number of real estate deals. This includes advising on conditional agreements for leases, leases and all ancillary documentation.

The Pannone Real Estate team works with a number of high-profile names, such as Boohoo, Bestway, and Junkyard Golf. Pannone recently advised the crazy golf brand on the letting of its second London site – its biggest location to date.

The Manchester firm acted as legal adviser to the competitive socialising brand on the acquisition of a prominent 19,500 sq. ft. building in the heart of Camden Town. The former Shaka Zulu restaurant will be transformed into an immersive crazy golf experience and will be the company’s seventh site opening. This includes its flagship venue on First Street in Manchester, Liverpool, Leeds, Oxford, Shoreditch in London, and Newcastle.

Wynne added: “We’re delighted to be working alongside such exciting North West brands as they extend their footprint across key cities in the UK. The London site openings are another significant step forward for Junkyard Golf and Mission Mars and demonstrate the vibrancy and potential that exists in the regional leisure and hospitality industry.”

Safeguarding concerns in the UK care sector are falling from the highs seen during the coronavirus pandemic, new figures show.

From January to May this year, more than 9,000 safeguarding alerts and concerns have been raised in the sector. This compares to a total of 21,886 in 2021, with figures hitting 23,116 last year.

The figures obtained through a Freedom of Information (FOI) request to the Care Quality Commission (CQC) – conducted by law firm Pannone Corporate – also show that inspections in the UK’s care sector are on track to fall, continuing the downward trend seen since 2019.

Announced inspections fell from a peak figure of 6,684 in 2019 to just 1,458 in January to May 2023. Unannounced inspection also appear to be decreasing. According to the FOI figures, 2,223 unannounced inspections were carried out in the first five months of 2023. In 2016, this reached a high of 19,586.

The significant reduction has been attributed not only to the pandemic, with the CQC temporarily ceasing all physical inspections from 16 March 2020, but also to the evolving regulatory model being adopted by the Commission.

Bill Dunkerley, regulatory lawyer and associate partner at law firm, Pannone Corporate, commented: “The seismic impact of the pandemic on the care sector is widely documented and this can be seen in the figures released by the CQC around safeguarding concerns and inspections.

“What’s also clear is that the CQC is not static in its approach and the standards which it expects providers to achieve continue to evolve. This is evident in the introduction ‘Single Assessment Framework’, as well as the initial evidence-gathering phase being simplified into six new categories, to streamline the information collated. The feedback received will allow the CQC to make individual assessments more bespoke to individual providers, for example in respect of their delivery model or population group.”

The FOI research also shows that since March 2021, the CQC has received nearly 37,000 whistleblowing enquiries, with more than 6,000 being received in the first five months of 2023. The number of complaints raised during the same 26-month period topped 135,000. However, with only 25,017 made between January to May 2023, it’s unlikely the figure will exceed the 62,591 seen in total in 2022.

Dunkerley said: “The trend across the board is a general decline in headline figures, with complaints, whistleblowing, and safeguarding concerns all likely to be lower in 2023 based on the current statistics.

“As the CQC continues to roll out its new regulatory model, and Inspectors find their feet with the new data-driven approach, it will be interesting to see how the figures develop over the coming months and years. It may be the case that the CQC’s new approach results in a permanent reduction to the frequency of inspections, but equally may also result in an increase in the use of its more dynamic powers, such as notices, which can have an immediate and profound impact on a provider’s continuing operations.”

Dunkerley added: “Whilst the CQC has modified the form of its regulatory function, and amended its assessment criteria over the years, its fundamental roles have remained consistent: ensuring the safety and quality of care of service users; and maintenance of appropriate standards of behaviour by providers.

“These are the same core objectives held by providers, and so long as they continue to put these demonstrable tenets at the centre of their business, then they are likely to be well-placed to respond to any future changes in the CQC’s operations and regulatory model.”

Company Voluntary Arrangements (CVAs) have grown in prominence in recent years, as businesses have sought to implement them as a means to continue trading in the toughest of conditions – most notably on the high street.

Most recently, Wilko is understood to be considering a CVA in a shake-up of its business and upmarket retailer, Robert Goddard, is the latest business in a growing list to use a CVA as a restructuring tool. The independent mini chain, which operates across 10 locations and employs 100 people, had its CVA approved by creditors at the end of June – a move that protects both its staff and retail outlets.

Despite their popularity, CVAs remain the subject of debate and discussion. Consider, for example, the landmark High Court ruling last year when a large London landlord overturned a CVA decision relating to one of its contractors [link – https://www.insidehousing.co.uk/news/large-london-landlord-overturns-cva-in-landmark-high-court-ruling-81483].

The increased use of CVAs to manage obligations to landlords, in particular, is clearly divisive – driven by the continued fall-out from a global pandemic and the current economic landscape, both of which are accelerating the fortunes and misfortunes of many businesses, particularly those on the high street. However, there are companies that have suffered irreparable damage in the last three years. As such, CVAs are a viable option for those businesses finding themselves unable to recover from the relentless challenges that have rained down on them since the beginning of 2020.

Whatever your view on the current framework, it’s hard to deny that CVAs have played, and continue to play, a vital role in enabling businesses to continue to operate.

So, how do CVAs work?

A company voluntary arrangement (CVA) is, in simple terms, a legally protected agreement between a company and its creditors to restructure its debt. There are very few rules about what terms a CVA can and cannot contain – the driving factor tends to be what the creditors of the company will realistically approve. Typically though, a CVA will entail an insolvent company repaying all or a proportion of its debts over an agreed period of time. Usually, this is between three to five years. Provided that the company complies with the terms of the CVA, it will effectively be free of the pre-CVA debt at the conclusion of the arrangement.

What are the benefits?

The biggest benefit of a CVA, provided that it is approved by the creditors of the company in question, is that it enables the insolvent business to continue trading more or less normally. A CVA also allows business owners to:

• Keep control of the company – unlike administration or liquidation, when control of the company is passed to an insolvency practitioner, the directors maintain control of the business. A CVA is supervised by an insolvency practitioner, but that role tends to be significantly less hands on as compared to other insolvency procedures.
• Reduce the debt pile– debt owed to creditors can be reduced.
• Keep hold of contracts and accreditations– it is typically easier to retain key contracts, accreditations, licences and the like in the context of a CVA (as compared to administration or liquidation). This should be reviewed ahead of committing to a CVA though – a CVA will still often trigger insolvency related provisions in typical contracts.
• Trim the fat – a CVA may facilitate the termination of certain contracts and leases to help ease the cost burden on the business. Again, however, you should seek advice if this is an outcome you wish to achieve – CVAs modelled in this way are not straightforward (as is demonstrated by the case law referred to above).
• Breathing space– Importantly, CVAs allow you the time to restructure and make any necessary changes to the business model, laying the foundations for future growth.
• Keep the cash flowing – cash flow is integral to the success of any business and a well thought out CVA can, indeed should, help to improve your cash flow.

Seemingly secure companies have found themselves in a fragile position in recent years – a prospect that may have seemed unfathomable as trading drew to a close at the end of 2019. Given the current state of affairs, with inflation causing the cost of doing business to swell, the price of funding becoming prohibitive to many, not to mention the debt pile gaining significant fat thanks to 13 consecutive interest rate rises, it’s becoming particularly difficult for cash-poor businesses with little working capital and growing liabilities to operate.

With so many unknowns and factors outside of the control of businesses, the key is to be prepared, flexible and open to opportunities for restructuring and re-organisation. It’s important for businesses to take a proactive approach, to keep their financial position under ongoing review and consider all of the possibilities potentially available in a timely manner. Waiting in hope may only minimise the options available and force businesses into increasingly difficult choices. A CVA may well be one answer to the issues a business faces.

If you’d like to discuss the blog in more detail, contact me on  (0) 7920 237687 or email daniel.clarke@pannonecorporate.com

In our latest retail law update, we look at the news and legal developments affecting the sector.

This month, it covers how to transform retail spaces in the face of 47 shops closing every day last year, the In the Style High Court case and the lessons to be learned around protecting business ideas, the battle of the supermarket giants over logo use and trade mark infringement, as well as a guest article from Dan Williams, founder and managing director at 100% Group on the power of technology in the retail environment.

Read our quarterly update here.

If you would like to discuss these topics in more detail, or have any questions, contact partner, Melanie McGuirk on 07790 882567 or email Melanie.mcguirk@pannonecorporate.com

With a year under his belt at Pannone Corporate, we speak to real estate solicitor, Dominic Beddow, on his legal career so far, the importance of being able to ‘switch off’ from the day job, his passion for the Toon Army, and his mission to ‘indoctrinate’ his wife and daughter into Geordie life!

Tell us a little bit about your experience before joining Pannone in April 2022.

“I started my legal career in 2016. At the time I was a paralegal specialising in landed estates. My role primarily involved dealing with first registrations of land, Farm Business Tenancies, generational tax planning (Inheritance Tax), and registration and sales of woodland.

“During my training contract, I did seats in commercial real estate (mainly landlord and tenant issues), corporate (predominantly buying and selling of pharmaceutical companies and dentistry practices), as well as employment, where I acted for employers dealing with wrongful termination claims, and also large-scale redundancy exercises.

“After qualifying in October 2020, I went into the ground rents team, where my work primarily involved asset management for a large freeholder, dealing with anything from simple Deeds of Variation and Licences for Alterations, to managing the legal side of large works projects, such as merging multiple flats/properties into one.”

What route did you go down, in terms of training and qualifications?

“I studied Law with Business at the University of Liverpool, before completing the Graduate Diploma in Law at BPP Liverpool. I then moved to Chester, where I started legal life as a paralegal, whilst simultaneously studying the Legal Practice Course at the University of Law at the weekends. I completed my LLM Masters around the time I started my training contract.”

Why did you choose this route?

“During my A-Levels, I was still torn between a career in law and one in business, and so I decided to undertake a combined honours degree. I enjoyed both disciplines, but it was clear from an early stage in my undergraduate degree that law was the route I wanted to go down.”

Tell us about your role at Pannone?

“I am a solicitor in the real estate team. I primarily cover landlord and tenant based issues, with a specific focus on leases of units in major shopping centres. I also deal with purchases of development land, advice regarding overage, assents of land, and general transactional work.”

What was it that attracted you Pannone?

“I had trained and qualified at the same firm in Chester, which is a fantastic city and one which I am proud to call home, but it’s a relatively small legal community compared to Manchester. I was ready to make a move to a new firm and a new city.  I’d heard great things about Pannone, and got in contact with managing partner, Nicola Marchant, who invited me in for an informal chat. After a further conversation with the senior team, I knew straightaway that Pannone was the perfect firm for me.”

When it comes to the day job, what is the most satisfying aspect?

“It has to be learning something new on a daily basis, and never being allowed to remain within your comfort zone!”

What does a typical day look like?

“Every lawyer will say this but, quite simply, there is no such thing as a ‘typical day’.  I will sign off for the day with a good idea as to what the next will involve, but it’s very rare for that not to change. Business never sleeps, so I often start my day dealing with new matters which have come in overnight. Every day is different, which is a challenge, but one I enjoy.”

What are your career ambitions?

“I aspire to become a partner one day but, more importantly, I want to reach a stage where I am confident in as many aspects of my role as possible, with a following of clients who can always rely on me to be able to deal with anything they throw at me.”

If you were managing partner for the day, what’s the first thing you would do? 

“I would introduce a family fun day! Lawyers generally have an inability to ‘switch off’ – even when we’re not working, we are thinking about what needs to be done, which can sometimes impact on those around us. As such, I would introduce a day, every so often, when families are invited to the office, where they can meet the team, take part in fun activities, and see what we do. Looking after your own mental health is so important, particularly in a fast-paced working environment. Something like this could really make a positive difference.”

What can the legal profession do to better support clients? Does anything need to change?

“For me, it’s about delivery of information. We spend a large part of our lives learning the theory of law, the technical aspects, and how to think and speak like a lawyer. This is great for passing exams, but often doesn’t translate well to clients, who typically want a straight answer, delivered in a user-friendly manner.

“Law can also be portrayed in a certain way – think Harvey Specter in the television series, Suits! However, the reality is somewhat different. You meet such a wide variety of people in this job, from all walks of life, and I would like to see this side portrayed more.”

What would you be doing if you didn’t have a career in law? 

“If I didn’t have a career in law, I would love to be involved in the business side of football.”

What do you enjoy doing outside of work?

“I’m a relatively new father, and I enjoy nothing more than taking my daughter to Chester Zoo. She adores animals, and her excitement during those long walks around the zoo are positively infectious!

“Outside of family life, I am a passionate (sometimes overly passionate) Newcastle United fan. I don’t get to as many games as I used to since my daughter was born, but I have worked hard to indoctrinate my partner and daughter into Geordie life, much to the dismay of my partner’s Liverpool-supporting family!”

In the last three years, companies of all shapes and sizes have had to contend with a plethora of challenges that have severely tested the balance sheet and put a strain on even the best run businesses. Brexit, a global pandemic, geo-political tensions, a cost-of-living crisis, record inflation, rising interest rates, and crippling energy prices, have all been layered on top of each other to create a bruising trading environment for many.

The simple fact is, demand in certain sectors has fallen and is slowly recovering, the cost of business has shot up, and the job of getting things done has become more time consuming and onerous. It’s little wonder that a significant proportion of SMEs have accumulated considerable liabilities during this period and have reached the point where a different course of action is needed, in order to secure the long-term future of their business.

Step in, pre-pack administrations. Loved by some, loathed by others (namely creditors), pre-pack administrations haven’t always had the best reputation, because the sale of the business and assets is often completed before the creditors of the insolvent company are even aware of the administration.

Post-COVID, many predicted a resurgence in ‘pre-packs’, which has yet to materialise, but with much of the Government support brought on by the pandemic now at an end, the restructuring tool remains a viable and useful mechanism for securing the future of those businesses that are fundamentally sound, but have been weighed down by debt and outstanding liabilities.

So what are ‘pre-packs’ and how can they help businesses looking to restructure? 

What is a pre-pack?

The term ‘pre-pack’ is used to describe the process whereby the business and assets of a company are sold, via administration, in an arrangement that is typically negotiated in advance of the company concerned formally entering into an insolvency process. The buying party is often (but not always) connected to the company (e.g. a new company formed by the existing directors of the company in administration).

Essentially, the process allows a valid business to survive whilst relieving it of creditor pressure but also ensuring that its assets are realised for proper value. It’s the latter aspect of that equation that has been an area of concern for some and which reforms brought in two years ago were focused upon – tightening up regulatory intervention and introducing more accountability.

When is a pre-pack appropriate?

‘Pre-packs’ can be a really effective tool for all concerned when they’re used in the right way. Typically, they’re used where a company has a good underlying business but is struggling to meet its ongoing liabilities – it’s not uncommon for there to be an imminent threat of, for example, a winding up petition, or a cessation of supplies/services which would damage the business.

Administered properly, pre-pack administrations create a virtually seamless transfer of business and assets from the insolvent company to the purchaser. This can have significant benefits for the majority of stakeholders involved, because it allows for a high level of continuity. The business can continue trading under the same name (subject to compliance with section 216 of the Insolvency Act and its associated provisions), often from the same premises, and with the same staff. This means that the underlying business retains value, which is ultimately good news for all involved (especially when compared to the potential outcome, for example, in a liquidation). For those reasons, where they are viable, ‘pre-packs’ have always appealed to struggling businesses.

During the COVID-19 pandemic, the Government put in place a significant number of measures to support businesses, including those in the Corporate Insolvency and Governance Act, aimed at protecting businesses during the pandemic, providing much-needed respite for struggling companies. Those protections and safeguarding measures have now largely gone, leaving many businesses still exposed to the economic headwinds, which is where pre-pack administrations can play a part.

Key considerations

There are a number of important questions to ask and considerations to be made when exploring the option of pre-pack administrations.

• While ‘pre-packs’ allow you to ‘drop’ your debt at the point at which the company enters administration, allowing the business to continue trading without those liabilities, it does not remove the pressures that continue to face businesses, such as rising interest rates and energy bills. While you may be able to remove the historical arrears that have been saddling the business, you still have to ensure that you have sufficient means to meet any liabilities in the future, such as the general costs of running a business. As such, carefully consider what these may be moving forward.
• Focus on customer contracts. Following a ‘pre-pack’, these could be terminable and in any event, will need to be assigned or novated to the new company, so it’s important to consider customer relationships and whether they would support the new business following administration.
• The same can be said for suppliers. Think carefully about key supplier relationships and the likely impact of a ‘pre-pack’ on them, in terms of outstanding liabilities.
• It’s extremely likely that the ‘new’ business will need to explore lending options moving forward, so it’s important to look at your current banking and lender relationships as well. Quite often, lenders will not support a business post-pre-pack, particularly if they’ve been left exposed. As such, in many cases, businesses will need to secure new banking facilities elsewhere.
• It’s important to consider your employee position, before embarking on a pre-pack administration. Typically, in the event of a ‘pre-pack’, all staff will TUPE across to the new business, but ensure you seek professional advice about dealing with employment issues as part of the process.
• As a business, if you rely on equipment that you’ve rented as part of a hire purchase agreement for example, it’s essential to note that those terms and conditions will be with the old company that’s going into administration, so thought needs to be given to future arrangements.
• Property must also be taken in account – are you in leased premises? Again, those terms will be held with the old company and will potentially need to be renegotiated.
• The vital thing to remember throughout the process is that nothing is free. In order to buy the business out of administration you will need to pay the administrators for the assets that are being transferred. In an insolvency scenario, it may well be the case that the price of the business will be lower than if you were buying it solvently on the open market, but it still needs to be funded. In addition, it’s important to note that administrators are not obliged to sell to the previous owners. In the event that a competitor gets involved in the bidding process, the price may be driven up.

Pre-pack administrations have a valid part to play in securing the long-term future of businesses, but there is a lot to consider before going down the route of a ‘pre-pack’. Now is the time to go through your options, taking into account the future economic outlook. With interest rates and energy bills still creating significant ongoing liabilities for companies, which will not necessarily be taken away by a pre-pack administration, it may pay to wait for the waters to calm before embarking on your ‘pre-pack’ journey.

If you’d like to discuss the blog in more detail, contact me on  (0) 7920 237687 or email daniel.clarke@pannonecorporate.com

In this short article Michael McNally and Lorna Shuttleworth from our employment and pensions team consider the use of external investigators when carrying out workplace investigations. They look at why an organisation may instruct an external investigator, the benefits of doing so, and the issues to consider when instructing external investigators.

On 21^st April 2023 the Government published Adam Tolley KC’s investigation report into complaints about the conduct of the Deputy Prime Minister, Dominic Raab MP. Mr Raab resigned the following day. A few days later, on 24^th April, the CBI wrote an open letter on the recommendations of Fox Williams, an external law firm, following its appointment to carry out an investigation after reports in The Guardian in early April of a ‘toxic culture’ at the CBI and other serious allegations. Both stories involve external lawyers being appointed to conduct investigations into serious workplace issues. Whilst these are two high profile examples, organisations will often instruct barristers, law firms, and other independent professionals to investigate serious issues that arise in the workplace.

In this article we look at why, based on our experience of carrying out external investigations on behalf of organisation, an organisation may instruct an external investigator, the benefits of doing so, and the issues to consider when instructing external investigators.

1. Seriousness

External investigators are usually appointed when a matter concerns the most serious types of allegations and/or relates to senior individuals. This was the case in both the Raab and CBI investigations. For example, in the case of the CBI, the external investigation was focused on “whether the CBI’s leadership was aware of any of the events before the recent media reporting, and if so what steps they took or failed to take in response.” In relation to that particular issue, it would be very difficult for someone within the CBI to have looked into that question because it specifically concerned the actions of the CBI’s leadership.

2. Perception

That last point leads on to the next reason why an external investigator may be appointed, namely ‘perception’.

In the case of Mr Raab, the CBI, and other examples such as the allegations of discrimination at Yorkshire County Cricket Club, it could undermine any findings if the organisation was seen to “mark its own homework”. This principle is also true of lower profile, albeit serious, matters.

To be able to draw a line and move on, it’s not enough that an organisation takes the matter seriously, it must be seen to have taken it seriously. Interested parties need to have confidence in the findings. History is littered with examples of investigations and inquiries that are perceived to have been a “whitewash”. Whilst instructing an external party to investigate concerns will not always ensure the right perception, it can certainly help to do so.

3. Complexity

Workplace investigations need to be handled properly and thoroughly. If they are not, there can be serious legal, financial and reputational consequences for the business.

In respect of grievances for example, Acas states that it is highly recommended that anyone appointed as an investigator should be trained in the relevant area wherever possible. If there is no one within the business who is suitably qualified, experienced, and confident to deal with the investigation, it is advisable to instruct a third party with the relevant experience.

The process of identifying relevant issues, questioning witnesses, analysing the evidence, and making findings can be difficult and external investigators will often be chosen for their skills in these areas. For the most serious issues, which as mentioned earlier are usually the subject of external investigations, it is vital that these things are done as well as possible.

4. Neutrality

Best practice is that an investigator is impartial and acts fairly and objectively. For day-to-day workplace issues it will usually suffice that the investigator is not directly involved in the matters being investigated. However, for more serious matters the issue of neutrality needs to be carefully considered.

If the investigator is found, or even just perceived, to have been biased,  it leaves the findings of the investigation open to challenge. Appointing an external party, seen to be a neutral actor in the process can also help in ensuring witnesses are willing to co-operate and are candid when giving evidence.

However, one thing to consider on this point is to what extent the investigator is said to be independent.

Depending on the nature of the investigation external investigators may conduct the investigation on behalf of the organisation (in the same way an internal member of staff might). Whilst this may not be independent in the strictest sense of the word, the fact the issue is being looked at by someone from outside the organisation with specialist skills can still be beneficial. Alternatively, whilst the organisation may ultimately pay the external party for their services, some external investigations are conducted with a view to them being truly independent, for example we have seen published reports that will make it clear that the investigator’s fee will be paid before a report is delivered. If instructing an external investigator it is important to consider the exact nature of their role and ensure that is clearly communicated to anyone with an interest in the process.

5. Privilege

In some circumstances, including where litigation is anticipated, an investigation report may be legally privileged. The scope of this privilege may be wider if lawyers, rather than other third parties, carry out the investigation. Legal privilege is particularly helpful where the organisation does not know what the investigation will reveal, enabling a confidential investigation into  the concerns in order to determine how best to deal with them. Without the benefit of legal privilege, some organisations might well be deterred from carrying out an investigation for fear of what they may find.

We know from our experience of carrying out, supporting, and advising on workplace investigations that these issues play a part in deciding whether to appoint an external investigator. And, whilst we are not privy to the thought process of those who instructed external investigators in the examples cited in this article, no doubt some of these considerations played a part in their decision.

If your business has an issue which requires further investigation, please contact michael.mcnally@pannonecorporate.com.

Pannone Corporate has advised crazy golf brand, Junkyard Golf Club, on the purchase of its second London site – its biggest location to date.

The Manchester firm acted as legal adviser to the competitive socialising brand on the acquisition of a prominent 19,500 sq. ft. building in the heart of Camden Town. The former Shaka Zulu restaurant will be transformed into an immersive crazy golf experience and will be the company’s seventh site opening. This includes its flagship venue on First Street in Manchester, Liverpool, Leeds, Oxford, Shoreditch in London, and Newcastle.

The Pannone team was led by Real Estate partner, James Wynne and included James Brandwood (Senior Associate) and Harry Jenkins (paralegal.)

James Wynne said: “Junkyard Golf has become an iconic brand – not only in its hometown of Manchester, but across the country. The latest opening in one of London’s best cultural hotspots is testament to company’s growth ambitions, but also its resilience in weathering the COVID-19 pandemic, which significantly impacted on the leisure and hospitality sector.

“We’re delighted to be working alongside such exciting North West brands as they extend their footprint across key cities in the UK. This is another significant step forward for Junkyard Golf and forms part of ambitious domestic and international growth plans for 2023.”

James has worked alongside Junkyard Golf since 2017, with the firm acting on all site openings since.

The Pannone Real Estate team works with a number of high-profile names, such as Boohoo, Bestway, and Mission Mars.

A 14-strong team of Pannone fundraisers took to the streets on Sunday to compete in the 20^th Great Manchester Run.

Taking part in both the 10k race and the half marathon, the team raced around the streets of the city, taking in sights such as Beetham Tower and Old Trafford Football Ground, before finishing the race along with more than 25,000 other participants.

The Pannone team were raising money for one of the firm’s chosen charities, St Ann’s Hospice, with more than £2,500 being raised so far.

Paul Jonson, senior partner at Pannone Corporate, said: “Congratulations to everyone who completed the Great Manchester Run, in what were very hot and sunny conditions!

“It’s fantastic to see so many of the team coming together to support one of our chosen charities, St Ann’s Hospice – an amazing charity which carries out such vital work across Greater Manchester. It’s also really pleasing to see the values and ethos of the firm come to life on the streets of Manchester.”

St Ann’s Hospice is a Manchester institution and one of the oldest and largest adult hospices outside of London. It provides care and support to people with life-limiting illnesses, as well as to their families and carers.

The Pannone team have a number of other charitable events lined up in support of the charity, including a Tough Mudder challenge later this year. If you would like to support the team, please visit https://www.justgiving.com/fundraising/pannone-corporate-llp

Michael McNally lives in Heswall on the Wirral and is an associate partner in Pannone’s employment team. In this instalment of My Life in Law, he tells us about his 17-year career in law and what’s changed in the industry during that time.

What was your experience prior to joining Pannone?

I qualified in 2006 and have always specialised in employment law, even spending some time before qualification working as an employment law advisor. Before joining Pannone in September 2020, I worked at Hill Dickinson and Freeths.

I’ve always worked in commercial employment law advising employers and have particular experience working with clients in care, retail, transport and logistics, leisure and retail, and manufacturing. I’m also an experienced employment tribunal advocate.

What’s your current role and why did you join Pannone?

I joined as a Director and became an Associate Partner last year. The firm has a great reputation, both for the quality of its work and culture. Having worked here for a couple of years, I’ve not been disappointed in either regard.

What route did you go down, in terms of training and qualifications?

The standard route for my generation of law at university, LPC in the Chester College of Law, followed by a training contract. I did approach things a little differently though and did my training contract in local government at Chester City Council, as it was then.

Why did you choose this route?

I wouldn’t say I chose it, as such – it just seemed the most obvious way of becoming a solicitor at the time. With hindsight, I appreciate you don’t need to do a law degree at university to become a lawyer. If I had my time over again, I would have done a non-law degree and then the conversion course before the LPC.

What is the most satisfying aspect of your job?

Understanding what the client wants to achieve and then helping them to achieve it. I enjoy the technical side of the law, but working with the client is the most satisfying part of the job.

What does a typical day look like?

There isn’t one! The best thing about being an employment lawyer is the variety.

A day could include drafting an article first thing, then working with the corporate team on a transaction. After lunch, there could be a preliminary hearing in the employment tribunal by video and, later in the day, I could be on a call with a client’s HR Director and CEO discussing a re-organisation.

If you were managing partner for the day, what’s the first thing you would do? 

Give myself a long-term contract in the role, as I’m not going to get much done in a day!

What would you be doing if you didn’t have a career in law? 

My original reason for going into law was because I thought it would be a good way of becoming a football agent, so maybe I’d have ended up doing something like that! Although, to be honest, it’s not a job I would want now, but when I was 15 it seemed like a great career!

What can the legal profession do to better support clients? Does anything need to change?

I have been lucky enough to work at firms and with lawyers who I think do a very good job of supporting clients. The focus should always be on providing the client with responsive commercial advice.

Going forward, I think law firms will need to offer a wider range of business services than they do now – similar to how many accountancy firms will offer other services (including legal support in some cases). The profession is also going to need to adjust to the changes that technology will bring, particularly in respect of AI.

What do you enjoy doing outside of work?

Being a Liverpool season ticket holder; I enjoy going to regular Champions League finals!

Do you have any particular skills/talents that your work colleagues may not know about?

This is more of a talent that I wish I had, but I went through a phase a few years ago of tinkering with watches. I still aspire to assemble my own watch one day – making one may be beyond me!