| 51NEWS BRIEFSAdBlue checks become nationalLast year, the DVSA found that a After over 10,000 truck checks occurred between Februaryregional clamp-down on the usage and August 2018, DVSA found 388 vehicles that were non-of AdBlue emulators demonstrated compliant and had cheating devices fitted. Before this,high non-compliance with the they discovered that 1 in 12 vehicles on the road had cheatrules on AdBlue. This has therefore devices fitted.triggered the beginning of cheatdevice checks, nationwide as Checks have now become a national process in orderpart of Defra’s wider policy to cut to protect people from unsafe vehicles, explains Garethemissions. Llewellyn, chief executive of the DVSA. He also indicated that the DVSA will take the strongest possible action against anyone who uses cheat devices to try to get around emissions rules. Drivers could be faced with a £300 fine and even have their vehicle removed from the road if they are caught with an emissions cheat device or faulty emissions control system and do not correct this within 10 days. The operator will also have follow-up inquiries by the DVSA who have the power to inform and the Traffic Commissioners. Traffic Commissioners have historically taken a dim view of the use of AdBlue emulators.DfT Inclusive Transport StrategyThe DfT has recently published The awareness and enforcement of passengers’ rights,its Inclusive Transport Strategy staff training and improvements to accessible informationincluding: is also included in the Strategy. DVSA has reminded coach operators of their responsibilities concerning passengers• £300 million of funding for increased accessibility with disabilities. They should ensure that wheelchair users at railway stations; can use any available wheelchair spaces and not require passengers who use wheelchairs to book any further in• £2 million for installation of Changing Places toilets advance than passengers who do not. The DVSA will not at motorway services; hesitate to take action against companies breaking the law.• £2 million for audio and visual equipment on buses. T: 01254 828 300
52 | Brief Encounter Stephen Crossley Ian Jones gets to know our newest recruit, Stephen Crossley and provides readers with an insight into what makes him tick.backhousejones.co.uk
| 5301 What is the first news/historical event you can recall? Sitting in front of the tele waving plastic Union Jack flags for Charles and Diana’s wedding.02 What is the book you most wish you’d written? Alice’s Adventures in Wonderland. A fantastically surreal novel that sold over 100 million copies. What’s not to like!03 One bit of advice you’d give your younger self? Get on with it.04 What is your favourite saying or quotation? “Nothing ventured, nothing gained”05 Where do you want to be buried/have your ashes scattered? The Crossley family crypt. Seriously, we have one…06 If you were given £1m to spend on other people, what would you spend it on and why? I’d donate it to Cancer Research.07 The talent you wish you had? Being able to play a musical instrument. I used to play the recorder at school, badly.08 The best and worst present you’ve ever received? Best: An inflatable Tardis (albeit it didn’t take long to puncture!) Worst: Altair Design books (just Google it)09 What have you changed your mind about? What I want for Christmas.10 What is the biggest problem of all? Earth’s ever diminishing resources and antibiotic resistance.11 Are things getting better or worse? Better. Just look at the stats (poverty diminishing, average wages rising, less people killed by war, famine or terrorism each year)12 How do you keep the flame of hope for a better world burning brightly in dark times? Just get on with it!! T: 01254 828 300
54 | Fitness for purpose and exclusion clausesbackhousejones.co.uk
| 55Do you read Running a transport business is Well no, they don’t and a failure to payevery contract time consuming and stressful and close attention to terms and conditionsyou sign? delivering the service your customers inevitably leads to problems whenThe answer is expect, whether you’re carrying a things go wrong and you find yourselfprobably not. consignment or getting children to sitting in front of someone like me school on time, can be challenging. So explaining that whilst the vehicle you why spend your scarce and precious purchased for tens of thousands of time reading through boring terms and pounds doesn’t work as it should and conditions drafted by lawyers like me you’ve let down your customers and which all say the same thing at the end suffered financial loss as a result you of the day, don’t they? can’t recover those losses from the supplier because of the terms and conditions of contract you entered into with them. T: 01254 828 300
56 | It’s one of those conversations I So why is this? Well, the courts and Others will seek to exclude any liabilitydislike having with my clients, as most parliament have historically taken the using a clause such as,of us expect that when we buy goods, view that businesses should be free towhether that be a new television or an contract on whatever terms they see “all statements18-tonne truck, it should “do what it fit (within certain limits; for example conditions orsays on the tin”. you cannot, by law, exclude liability for warranties as to personal injury or death caused as a the quality of theBut what happens if it doesn’t? result of negligence) as experienced goods or their business people of equal bargaining fitness for anyAll transport companies will, from time power are best placed to decide on particular purposeto time, invest in new or used vehicles. what terms they wish to contract with whether expressThey’re an essential asset and the one another. or implied by lawbackbone of your business. Without or otherwise aretrucks, trailers, buses, coaches Whilst ‘light touch’ regulation of hereby expresslyor removal vans you can’t run a business to business contracts is excluded.”transport business (putting to one side welcomed by most it can often leadsubcontracting, which would require to a nasty surprise when you realise However, section 6(1A) of the Unfairan article of its own!) and buying a new you’ve signed up to something which Contract Terms Act 1977 (‘UCTA’)vehicle requires significant investment, you didn’t know about because you provides that a seller’s impliedwhether you purchase it outright or didn’t read the contract or presumed undertakings as to conformity withopt for leasing or a hire-purchase would never need to be relied upon by goods with description or as to theiragreement. the other party. quality or fitness for purpose can only be limited or excluded to the extent thatMost haulage companies are aware The most common of such ‘limitation such a term satisfies the requirementof the RHA’s Conditions of Carriage or exclusion of liability clauses’ as of “reasonableness”.and how these restrict their liability they’re known are those that excludewhen, for example, goods are lost in or limit (hence the catchy title!) the So, what is meant by reasonableness?transit, and why their customers need remedy you’d normally be entitledto obtain their own insurance to cover to if the goods you purchased, and Section 11(2) of UCTA states,their share of the potential liability. for the purposes of this article I’ll be focussing on vehicles that don’t work “ln determining for the purposesBut many of my clients are unaware as expected or are unable to perform of section 6 or 7 above whether athat most businesses (if not all) that the tasks for which they were bought. contract term satisfies the requirementsupply vehicles use similar terms and The Sale of Goods Act 1979 applies to of reasonableness, regard shallconditions to restrict or exclude their all contracts for the supply of goods be had in particular to the mattersliability if something goes wrong. and ‘implies’ certain terms into all specified in Schedule 2 to this Act; contracts, including that the goods but this subsection does not preventThis lack of awareness stems, I think, supplied must be of satisfactory the court or arbitrator from holding, infrom a misconception that businesses quality and reasonably fit for purpose. accordance with any rule of law, thatare afforded the same rights as a term which purports to exclude orconsumers when purchasing goods. Most businesses when contractingThe truth is they aren’t and the range with other businesses will seek to limitof liabilities that can be limited or those implied terms by including inexcluded are surprisingly wide and their terms and conditions a statementinclude if a vehicle is unfit for purpose such as,or not of satisfactory quality. “the Supplier’s total liability to the Customer shall not exceed £[AMOUNT]. The Supplier’s total liability includes liability in contract, tort (including negligence), breach of statutory duty, or otherwise, arising under or in connection with the agreement”backhousejones.co.uk
| 57restrict any relevant liability is not a “If a clause falls foul of theterm of the contract.” “reasonableness test” it will have no effect and will be “severed”Schedule 2 of UCTA goes on to specify from the contract...”the matters that should be consideredwhen determining whether a limitationor exclusion of liability clause is“reasonable” and these include;• the strength of the bargaining determining this and as UCTA allows Having dealt with many “fitness for positions of the parties relative to scope for judicial discretion when purpose” cases over the years and each other, taking into account applying the “reasonableness test” having seen the effect limitation or (among other things) alternative this can often lead to seemingly exclusion of liability clauses have means by which the customer’s conflicting decisions as to what had on my clients my general advice requirements could have been met; does and what does not constitute a when purchasing goods on a business reasonable limitation or exclusion of to business basis is you should• whether the customer received an liability clause. always read the contract, including inducement to agree to the term, or any standard terms and conditions in accepting it had an opportunity of However, as a rule of thumb any clause that may apply and if the contract entering into a similar contract with that purports to leave the customer includes a limitation or exclusion of other persons, but without having a with no remedy when there has been liability clause challenge it and seek to similar term; a serious breach of contract (such as negotiate a better deal. Ask the seller if a new truck’s engine failing a short they will agree to exclude such clauses• whether the customer knew or time after purchase) is more likely and if they refuse, go elsewhere or ought reasonably to have known of to be found to unreasonable than a seek to purchase on your own terms the existence and the extent of the clause that seeks to limit the amount and conditions by providing these term (having regard, among other of money recoverable. prior to making payment or by writing things, to any custom of the trade to the supplier confirming that the and any previous course of dealing Other factors the courts can take into purchase is being made on their terms between the parties); account include the use of small print excluding those you do not agree with or unnecessarily convoluted drafting and expressly identifying these.• where the term excludes or restricts and a failure to bring a particularly any relevant liability if some onerous clause to the attention of the Unfortunately, there is no ‘one size fits condition was not complied with, customer. all’ approach so if you’re looking to whether it was reasonable at the purchase goods and don’t agree with time of the contract to expect that If a clause fails foul of the the supplier’s terms and conditions compliance with that condition “reasonableness test” it will have or you’ve purchased goods and the would be practicable; and no effect and will be “severed” from supplier is refusing to compensate you the contract, meaning that it cannot due to the incorporation of limitation• whether the goods were be relied upon and the customer is or exclusion of liability clauses in the manufactured, processed or entitled to recover its losses as if that contract you should always seek adapted to the special order of the clause had never existed. legal advice before deciding how to customer. proceed. If, however, such a clause is found to• So, what does this mean in practice? be reasonable the supplier is entitled Stephen Crossley Which terms are likely to be viewed to rely on it, the customer is bound T: 01254 828 300 as reasonable and which are not? by it and the customer will only be E: [email protected] entitled to the remedy, if any, set downUnfortunately, there is no in the contract, which can often meanstraightforward answer as each recovering nothing or an amount thatcase is judged on its merits and the is less than the actual loss suffered.particular circumstances that appliedwhen the contract was agreed willbe considered by the court when T: 01254 828 300
58 |backhousejones.co.uk
| 59A picture tells a thousand words,and could cost you thousands if youdon’t have permission to use it!In a world where we are now so reliant on technology and the iii. If you cannot locate the owner of the image this doesinternet, and in an industry where competition is great its very not mean copyright doesn’t exist and you must take allimportant to have an up to date website and good, constant reasonable steps to find the owner. If you cannot find theadvertising. This inevitably involves the use of photographs owner the photograph is known as ‘orphan works’ and tofrom the internet with the mistaken belief that because they use it you would have to obtain an orphan works licenceare freely available we can use then as we wish. from Intellectual Property Office, the cost to apply for this is £20.00 for one licence and the licence fee is determinedPhotographs are protected by copyright as artistic works, when the licence is granted. Unless you specifically want tothis means that in order to use a photograph commercially use the image in question, it may be quicker and cheaper to(not taken by yourself or an employee of the business), you find an alternative image as per i and ii.will need the permission of the copyright owner in order todo so. The copyright owner being the creator of the image. Copyright infringementIn the UK, copyright lasts for the life of the creator plus 70 When an individual or business infringes copyright, thereyears, therefore if the photograph is less than 70 years old it are various actions that can be taken by the individual oris still in copyright. organisation that owns or administers the copyright.Copyright law is also complex for photographs published In practice, they may write to the infringer and ask that theybefore 1st August 1989 where the creator has died. Prior purchase a licence to use the image and generally a practicalto the Copyright Design and Patent Act 1988 (‘the Act’) resolution is agreed. However, legal action is available to theunpublished works were given perpetual copyright up until owner of the copyright and the Court has the power to makethe point they were first published. In order to remove this an order for the infringer to pay not only for a licence butperpetual copyright, the Act reduced the term of protection also compensation for the infringement and legal fees, all offor such works to 50 years from the implementation of the which can amount to a lot more than the original licence fee!Act. This means that photographs not published prior to theAct are due to remain in copyright until 2039. Practical steps to takeA common example of where copyright infringement may 1. Always obtain permission or a licence to use any imagehave occurred is where you have used a photograph on your commercially.website which you found by simply googling images relevantto what you wanted. This is almost certainly an infringement 2. Review all images in current use to check you haveof copyright. permission or a licence to use the images.How do I obtain permission to use a photograph? 3. If you receive a letter claiming you have infringed on the owner’s copyright, seek legal advice immediately.i. If you can locate the original website the image is fromthen make contact and request permission to use the image, Libby Pritchardplease note there may a fee for this. If the website host T: 01254 828 300simply has a licence to use the image they may refer you to E: [email protected] copyright owner to seek permission.ii. In a lot of cases, images that appear on the internet arecontrolled by picture libraries who either own the copyrightto the image or have the copyright owner’s permission tolicence the right to use the image. This is a simple processwhere you purchase the licence to use the image. T: 01254 828 300
60 |Employees: are yoursmotivated?Keeping staff incentivised is an issue with many employers acrossthe globe and throughout a variety of industries. With the well-knowncurrent shortage of HGV drivers, the concern may be particularlyprevalent in the transport industry as employers seek to ensure theyattract and hold onto good quality employees.A popular method of incentivisation One type of share option scheme In order to grant EMI options, there areused by small and medium companies which has become popular is an certain requirements to be fulfilled by(‘SMEs’) is a share option scheme, ‘Enterprise Management Incentives the company:whereby an employee is given the option’ (‘EMI option’). An EMI option islegal right to buy a company’s shares a type of employee share option which • It must be an independent tradingin the future, but at a price that is can enable both the company and the companyfixed today. The fixing of the share individual to benefit from favourableprice means that, if the value of the tax treatment. As per the EMI Code, • It must have a maximum ofcompany increases over time, the this type of share option scheme must £30million in gross assetsemployee could make a significant involve a written agreement betweenprofit when they eventually sell their the employer and employee. • It must have fewer than 250 full-timeshares. employeesbackhousejones.co.uk
| 61“Over 8 in 10 of the companies Top 10surveyed reported that the EMI tips forscheme had assisted their business Managementwith retention and there was an Buy-Outsimprovement in staff morale.” (MBO’s)• It must not operate an ‘excluded Over 8 in 10 of the companies surveyed 1. Enlist the help of a team activity’, which, under the relevant reported that the EMI scheme had of professionals from the law, includes industries such as assisted their business with retention outset those dealing in: and there was an improvement in staff morale. 2. What finance do you • Goods, other than in the course require? of ordinary trade of wholesale/ Around half of the businesses said that retail distribution the scheme had benefited in recruiting 3. ‘The conflict’. Ensure the staff generally, and also in recruiting MBO does not become a • Leasing (including assets on hire) higher quality workers – which can, distraction from your usual of course, help the company’s growth line of work • Property development going forward. 4. Create shareholders’ • Farming EMI share option schemes are really agreements worth considering for SMEs who wantIn addition, the employee has to work to incentivise, motivate and involve 5. Set a time-frame toat the company for at least 25 hours their staff (or, indeed, potential staff). complete various stages ofper week (or, if less, at least 75% of There are questions which can arise the MBOtheir working time). They cannot be when thinking about granting EMIgranted EMI options if they, or their options, so it’s important to involve 6. Preparation is key toassociates, have a material interest your solicitor and accountant to ensure ensure smooth transitionin the company, or if they are non- that the scheme is executed correctly.executive directors or consultants of 7. Ensure the structure ofthe company. At Backhouse Jones, we have a the MBO and the business corporate commercial team which going forwards is wellIn order to avoid the EMI options can work alongside your accountant thought outlapsing, they must be bought by the to advise on EMI share schemes andemployee within 10 years of their grant. draft the documents required. 8. Consider warranties andOther lapsing provisions will often be indemnities required bywritten into the option agreement, to Brett Cooper different partiesthe employer’s advantage, such as if T: 01254 828 300the employee becomes bankrupt, tries E: [email protected] 9. Prepare your accountsto assign the options to someone else, accuratelyor tries to use them as security. 10. Get a confidentialityA recent government publication agreement (also knownfound several pieces of evidence as a non-disclosurewhich supports the EMI scheme. agreement or an NDA) inThe research which was carried out place from the get go.showed that the scheme is often usedas a tool to assist with the recruitment tel: 01254 828 300and retention of employees.
62 |I would normally use myown standard terms andconditions, but one of mycustomers wants me to signhis own bespoke contract,what are some of the issuesI need to be aware of?Wherever possible, your own terms This may be necessary if, for example, • An annual cap. This ensures thatand conditions should be used as you are providing specialist transport the customer making a claim in onethese are favourable to you and services or specialist vehicles, and year still has a meaningful remedycover the main points which you your customer wants some comfort in subsequent years (and so is notshould be concerned with. that your subcontractor has the incentivised to exit the contract relevant experience. early);However, where your customer wantsyou to sign a bespoke contract, which Liability • An amount linked to the sums paidmay or may not incorporate your under the contract. This will increaseown terms and conditions, you need Most bespoke contracts will impose as the contract continues, reflectingto be aware that where there is any a higher limit of liability than your own the profits the operator has made;inconsistency between the terms in terms and conditions . In addition tothe bespoke contract and your terms this, they will try to recover indirect • A high fixed sum and a percentageand conditions, the bespoke contract or consequential loss suffered as a of the sums paid under thewill usually supersede your terms of result of delays – which could include contract. This gives the customerbusiness. This can lead to issues such fines imposed on your customer. In all a meaningful remedy if somethingas: likelihood you will not have any idea goes wrong early on, when the total about what these possible fines could fees paid are still low.Subcontracting be, which could then expose you to unquantifiable risk. These approaches may be combined.Most bespoke contracts will say that For example, an annual cap could beyou are not entitled to outsource or You should seek to limit your liability a percentage (which could exceedsub-contract any of the services, to the fullest extent possible, either by 100%) of the sums paid in a year.which is obviously very restrictive referring to the limits set out in your A cap may apply to each claim (orand in most cases impractical for an terms (which should be favourable for series of connected claims). Or it mayoperator. Where there is a clause that you), or by introducing other caps on be an overall cap. Or you can haveprevents subcontracting you should your liability. Caps can be formulated in a combination, as in a cap of £X perlook to delete this, or at the very least many ways. Some common examples claim or series of connected claims,make it clear that subcontracting are: subject to an overall cap.can take place provided you notifythe customer of the identity of the • A single figure which applies for the Time of the essence.subcontracting party. If this is resisted, duration of the contract;then you can amend to say you can There may be a clause saying, “timesubcontract provided the customer shall be of the essence in performingprovides their consent, which cannot the services”. This may sound quitebe unreasonably withheld.backhousejones.co.uk
| 63Q&A Commercial Contractsinnocuous, but without knowing the your limitation of liability as discussed There should be an indemnity clausefull extent of the implications of this, above. Rather than be left open to a as well, which should aim to protectyou will not realise how dangerous claim for damages from your customer, you (not your customer) in the eventthis wording is. For example, if you you may want it made clear that you will that the customer defaults under thehave certain windows by which you instead offer your customer “service GDPR and causes you loss.must fulfil the services (and let’s face credits”, these are a set reduction onit most of you do), and you are late on future charges (and this could only be Force majeurejust one occasion, even by a matter of a relatively small amount) for a failureminutes, then your customer is entitled to hit a previous KPI. You should also Many bespoke contracts or terms andto terminate the entire contract. This have a reasonable procedure in place conditions will have a force majeuredoes not just mean that particular to allow you and your customer to clause, which is designed to ensurecontract. work together to address any failure to one or both parties are not compelled hit KPIs, and you should be afforded a to perform their obligations under theIf you have a fixed term contract of reasonable time to rectify any service contract if there has been an eventsay 3 or 5 years, the entire fixed term failure before the customer seeks other outside of their control. There is oftencontract can be terminated if you are remedies under the contract, such as a list of examples, such as Acts oflate by just 5 minutes on any one job. damages or early termination. God, riots and terrorism. However, itIf you have a particularly valuable is very sensible in the transport sectorcontract, you cannot afford to fail to GDPR to include ‘adverse road and weatherexclude such a clause. It may be your conditions and road closures’ as theycustomer wants to cancel the contract Under the new General Data Protection can play a huge part in the inabilityfor another reason (such as they’ve Regulation (GDPR), it is a requirement to perform services, especially infound a cheaper alternative), so don’t for businesses who process personal the winter months. By specificallygive them that option by the inclusion data to have an agreement in place referencing this type of event, youof this clause. which governs the data flow. It is should be able to protect yourselves in therefore highly recommended that the event that these conditions occurKPIs you include a data protection clause and the customer expects you to still in your terms and conditions, or any perform under the contract.Your customer may look to impose a bespoke contracts.set of KPIs on you which sets out the Backhouse Jones has a corporatelevels of service you are required to The clause would highlight obligations commercial team which specialisesmeet. If this is the case, make sure it of both yourselves and your customer, in drafting and negotiating bespokeis clear and unambiguous what your which are minimum legal requirements commercial contracts, and standardliabilities are if you do not meet these under the GDPR. terms and conditions, in the transportKPIs, and this should be linked to sector. T: 01254 828 300
01254 828 300 The [email protected] Backhouse Jonesbackhousejones.co.uk 22 Greencoat PlaceThe North LondonBackhouse Jones SW1P 1PRThe PrintworksHey RoadClitheroe, LancashireBB7 9WD
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