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Welcome to Fortune Law's Briefing Update 
Welcome to our briefing update for March 2010.
This month, having been instructed on a number of new lease matters and also some contentious landlord and tenant issues we have a particular focus on property.
Our client and referrer of the month is IX Consulting, a property advisory company focusing on the European commercial real estate market. In short, they advise on the acquisition of freehold and leasehold property and provide a market research service. IX Consulting are based in Mayfair.
Keeping with the theme, one of our legal updates relates to rent deposits paid by commercial tenants. The second legal update is on employee's holiday entitlements.
As stated in our February newsletter, a number of our clients have been "thinking smart" about the value of their assets. Whether this is to strengthen their balance sheet, avoid claims for IP infringement, prepare themselves for sale or investment or simply to stand out from their competition, we are currently acting on a number of trademark registrations. As a result our offer on UK trademark searches has been extended until the end of this month. Please scroll to the bottom of this update.
If you have any questions in relation to any of the matters set out in this briefing update or wish to speak to us in respect of any other legal issues do call or email us on 0207 440 2540 or skassam@fortunelaw.com . We are always happy to help.
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Featured Client
 Jonathan Heap
iXConsulting
www.ixconsulting.co.uk
"The business of leasehold and freehold acquisition is often tricky and time
consuming, requiring professionalism, patience and diplomacy particularly in
the often-tense run up to completion. Shainul's team offer my clients a flexible service to suit all requirements and their personal nature and ability to react quickly to find solutions and guide the process forward means that they are an asset on every deal; no matter the size. They have also acted on a number of corporate issues for me, constantly delivering what they have promised and always on budget. Quite simply, Fortune Law supply the levels of quality in their service that I strive to deliver through my commercial property company, making it easy to recommend them to my clients."
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Landlords, Property Agents and Tenant Deposits - Who's Liable?
In a recent case Draycott & Anor v Hannells Letting Limited (t/a Hannells Letting Agents) [2010] EWHC 217 (QB), the landlord's agent transferred a rent deposit to the Deposit Protection Service (DPS) several weeks after receiving the deposit. The deposit was supposed to have been transferred within 14 days of receipt.The tenant applied to the county court under section 214(4) of the Housing Act 2004 for the agent to be fined for failing to transfer within the requisite time.
The agent's argument was that a claim under section 214(4) could only be brought against the landlord, not the agent and also that where the tenant commences proceedings at a time when the deposit is protected, no order may be made under section 214(4).
The County Court held that the tenant could claim against the agent. The agent had breached the initial requirements of the DPS, and was liable to pay the penalty.
The agent appealed. On appeal, the High Court held that, although the tenant was entitled to bring proceedings against the agent, there had been no breach of the initial requirements of the scheme. The court could not impose a penalty as the deposit was protected before the tenant commenced proceedings.
The decision is significant for the following reasons:
- On the High Court judge's interpretation of the DPS, there is no liability if the landlord protects the deposit before the tenant commences proceedings. By contrast, it seems that there would be a penalty where an insurance scheme is used, although this is still arguable.
- The tenant can bring proceedings against an agent who receives a deposit and fails to protect it.
To avoid the risk of litigation and sanctions, landlords and agents should ensure that they protect deposits and provide the prescribed information within 14 days of receipt.
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If your Employee is off sick, can he or she carry their Holiday Entitlement over to the next year?
HELD: In Shah v First West Yorkshire Limited an employment tribunal held that an employee whose pre-arranged holiday coincided with a period of sick leave should be allowed to carry over that leave entitlement to the following holiday year.
Regulations 13 to 16 of the Working Time Regulations 1998 (WTR), give workers the right to 5.6 weeks leave per year. At least four weeks of that leave can only be taken in the holiday year to which it relates but employers can agree to provide for the carry over of all or any of the remaining leave if they so wish.
THE FACTS: Mr Shah booked four weeks' holiday from 22 February to 21 March 2009. As he worked part time this accounted for 12 days of holiday. The relevant holiday year under his contract of employment ran from 1 April to 31 March. In January 2009 Mr Shah broke his ankle and was absent from work between 15 January to 18 April 2009.
His sickness absence overlapped with his booked holiday. However, during this absence he received contractual sick pay and paid holiday pay for the twelve days leave he had booked.
On 4 April 2009 he wrote to his employer, First West Yorkshire Limited (FWYL), asking to reclaim his 12 days' holiday. FWYL responded negatively on 21 May that this was not possible as it related to a previous holiday year and was "lost".
On 16 September 2009 Mr Shah submitted a claim for loss of holiday under the WTR and unlawful deduction from wages under the Employment Rights Act 1996. FWYL argued that:
- The tribunal had no jurisdiction to hear the claim because it had been submitted more than three months after the date on which the holiday should have been taken and was therefore out of time.
- Regulation 13(9) of the WTR requires leave to be taken in the current holiday year only.
Decision
The tribunal upheld Mr Shah's claim stating that FWYL had refused to permit Mr Shah to exercise his rights under the WTR by refusing him to take his accrued holiday in the following holiday year when he was prevented from taking it in the current leave year. The tribunal also held that the claim had been submitted in time. Mr Shah's written complaint counted as a written grievance and so he was entitled to an extension of three months to submit his claim.
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What is a Francovich Claim?
The Francovich principle is a principle of EU Law which was established in the case Andrea Francovich and Others v. Italian Republic that concerned a compensation scheme which Italian workers were entitled to under a EU directive. The case established the idea of state liability for compliance with EU law.
The ruling provided that a member state would incur liability for a breach of community law where:
(i) the rule of community law infringed was intended to grant rights to individuals;
(ii) the breach was sufficiently serious and there was a manifest and grave disregard by the member state of its discretion;
(iii) there was a direct causal link between the breach of an obligation by the member state and the damage sustained by the injured party.
In the Francovich case workers who suffered damage when their employer became insolvent were entitled to compensation under an EC directive (Directive 80/987/EEC), which required Member States to secure their protection. Since Italy had failed to implement the directive, the individual workers brought a claim before their national courts for compensation for the damage they had suffered due to this failure.
A Francovich claim is therefore a cause of action in damages against a government for failure to implement EU law.
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What are Disbursements?
Solicitors charge disbursements which are costs additional to their actual fees for carrying out agreed work for the client. So, what are disbursements?
Disbursements are costs that incurred while carrying out work in respect of a client's instructions. These costs vary from client to client and depend on the nature of the work carried out. For instance, if the matter is litigious, the disbursement charges would include Counsel or court fees, if the matter relates to registration of a trademark, the charges would include the Intellectual Property Office application fees or if the matter is Corporate, there may be Companies House charges.
Disbursement charges that apply to all clients include printing, scanning and photocopying of relevant documents. When drafting documents such as contracts or terms and conditions, drafts that have been amended by either party are printed in order to establish an audit trail and to understand what amendments have been made to the agreement. This is good practice to ensure a client's instructions have been properly followed and where there are 2 sets of solicitors for instance in a property matter, to keep an eye on what clauses have been rejected or deleted. All drafts are printed and kept on the client file.
In addition to printing document drafts, all email correspondence between the parties and with the client is printed and filed. This is to ensure an accurate narrative of the client instructions and the events that occurred from the date of instruction until completion.
What do we at Fortune Law do?
We set out disburesments separatley from our legal fees on our invoice and adopt a transparent policy. Our fees reflect our blended hourly rate and illustrate the amount of time and work that was necessary for our team to carry out the client's instructions. The Disbursements are non-legal costs incurred and we believe that our clients should be informed of what costs have been incurred and how their money is being spent.
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| Free UK Trademark Search Package |
During March and April, you can take advantage of our UK trademarking search service for free. Until April 30th 2010 we are waiving our usual search fee. Just quote Code FLNL2 when you call us. |
| Offer Expires April 30th, 2010 |
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Please note that information contained in this briefing update does not constitute legal advice. All statements of law are applicable to the laws of England and Wales only. Copyright Fortune Law 2010. All rights reserved. |
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