November 2008: Advice on professional negligence


Business Law Update
from Cousins Business Law

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November 2008

Gary CousinsWelcome to the November issue of Business Law Update from Cousins Business Law. This month there’s useful advice for anyone looking to pursue a claim of professional negligence and some advice for anyone involved in leasing commercial premises.

I hope you will find information relevant to your business in this month’s issue. We are keen to cover topics of concern to business people so, if you have questions or topics you would like us to cover, email your ideas to


Gary Cousins
0121 778 3212

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What can I do when a professional lets me down?

It is a fact about modern business life that we all need to instruct independent professionals to advise us in our business. These professional may advise us on financial matters (accountants, financial advisors, etc.), the law (solicitors, barristers, other lawyers, etc), information technology (IT consultants, software and website developers, etc), land, property and plant (surveyors, land agents, various specialists on plant and machinery) as well as general experts such as project managers and business advisors of all sorts.

What all these professionals have in common is that they are human and therefore prone to errors - and, if they make a mistake while working for you, it could be very costly.

However, not all mistakes mean you have a good claim. The law is complicated and it is vital that you take early advice from a solicitor with experience in professional negligence cases. Some of the main things to consider are set out below.

Exactly what did you agree they would do? Do you have a contract in place? Are there any exclusion clauses?

What you should do if you think you have a claim
  1. Get all your paperwork together and put it into date order.
  2. Write a statement, in date order, saying exactly what happened from when you first contacted the professional until now.
  3. Write a note of exactly what you consider the professional did wrong and why.
  4. Write another note detailing what losses you have suffered and how.
  5. Contact your solicitor to get some initial advice on whether you have a claim. If you have prepared the above statement and notes, they should be able to advise you quickly on whether you have a case worth investigating further.

Read the full article which covers negligence and how to prove negligence as well as causation and damages on the Cousins Business Law website.

For advice on whether you have a claim and help with your claim contact Gary Cousins, experienced litigation solicitor who regularly advises clients on professional negligence claims. Call Gary on 0121 778 3212 or email Gary here.

Legal Update

The Language of Leases

Like most other legal documents, leases tend to use language which isn’t especially consumer friendly.

Here are just a few terms you are likely to see in the average commercial lease with a plain English definition. A full list of the most common terms in leases is available on the Cousins Business Law website:

Alienation – dealing with the premises either by transferring the lease to someone else, subletting or sharing occupation of the premises

Break Clause – a clause in a lease giving the landlord or the tenant (usually the tenant) the right to bring the lease to an end early

Engrossment – preparing the final copy of a legal document for signature

Forfeiture – the termination of a lease by a landlord as a result of the tenant’s breach of one or more of its obligations in the lease

Keep open clause – a clause sometimes found in a lease of retail premises requiring the tenant to actively trade from the premises throughout the term of the lease

Reservations – rights that the landlord retains over the property you are renting e.g. rights of access to inspect the property.

If you are about to sign a commercial lease and concerned about terms you don’t understand, take advice from an experienced Commercial Property Solicitor. Cousins Business Law property specialist, Steve Petty, offers a free initial lease review.

To book a free telephone lease review, complete our Book Appointment form stating that you would like a lease review in the Enquiry Details. Alternatively call Steve Petty on 01926 629005.

Plain English Legal Advice

Landlords and Insolvent Tenants

Q: I’m a landlord of commercial premises. My tenant has stopped paying the rent and service charges and I am worried might be insolvent. What can I do?

A: There are a number of legal remedies available to try to recover what is owed.

  1. Distress. A landlord has the power to seize the tenant’s goods and sell them to recover rent arrears.
  2. Forfeiture. A landlord has the power to enter the property peaceably and bring the lease to an end for a breach of the lease. Sometimes notices need to be served first.
  3. Sue. A landlord can commence court proceedings to recover the arrears.
  4. Deposit. A landlord is usually entitled to pay the arrears from the deposit.
  5. Winding-up proceedings. A landlord could commence proceedings to wind-up the tenant company (or bankrupt an individual). This can often result in payment being made.
  6. Serve a notice on a sub-tenant. In certain circumstances, a landlord could serve a notice requiring a sub-tenant to pay rent directly to the landlord.

The most appropriate remedy will depend on the precise circumstances in your particular case and you should obtain legal advice on what procedure to use and how to do it lawfully.

If your tenant has become the subject of a formal insolvency, there might still be things you can do. There are different types of ‘insolvency’ and what you can do will depend on the type.

Liquidation, Bankruptcy or Administration
If one of these happens, then, without the court’s permission, a landlord can only pay himself from deposit monies or by claiming rent from a sub-tenant.

If the tenant has been made Bankrupt, a landlord can use distress for up to 6 months’ rent arrears.

If the tenant is in Administration and the company is continuing to trade, then often the Administrator will offer to pay future rent (although not arrears). If this happens, sometimes you can apply to the court for permission to recover the arrears too.

Administrative ReceivershipUnlike Liquidation, Bankruptcy or Administration, a landlord can still potentially use all the remedies listed above.

If you are a landlord struggling to get payment from your tenants and worried about their financial solvency contact Cousins Business Law for an initial free telephone assessment.

Useful Links

Getting Paid

The Business Link website has a section on Recovering Late Payments which could provide useful information and advice in these difficult times. There’s an interactive tool you can use to find out the options available to you to recover unpaid debts alongside a guide to the relevant legislation.

Top tips on beating credit problems

The Institute of Chartered Accountants in England and Wales (ICAEW) is offering timely advice to help small firms deal with credit problems. Top tips include carrying out new credit checks on customers and getting regular updates from major customers.

Cousins Business Law News

As we’ve reported in recent ezines Cousins Business Law is bucking the trends of many traditional law firms, continuing to grow when others are struggling. As a result we are interested in speaking to any experienced Commercial Solicitors and also litigation lawyers, from those recently qualified to partners. If you know any one who you feel able to recommend ask them to contact Gary Cousins by email or on 0121 778 3212.

Litigation Madness

This month’s litigation madness shows what can happen when neither the parties’ lawyers nor the courts properly assess the merits of a case at an early stage. What should have been a straightforward, small claims case, ended up in the Court of Appeal with the appeal court judge, Lord Justice Goldring, saying, "What happened in this case exemplifies much that is wrong with our civil justice system."

David Peakman, a cable jointer, sued Linbrooke Services Ltd, a telecommunications company, for £2,232 after his contract to joint cables into railway junction boxes was terminated without notice. Linbrooke counterclaimed for around £60,000: some £3,019 of this was for defective work and the rest for loss of profits.

The case eventually came to trial before Judge Graham Robinson. The trial lasted 8 days and the Judge found that the loss of profits case was hopeless and there was no evidence to support it. His judgment was for Mr Peakman to pay £265 to Linbrooke for defective work.

Not only had Linbrooke and its lawyers spent a considerable amount of time in fighting an essentially hopeless case but the parties had run up costs bills of over £100,000. The appeal court was particularly critical of the judge, saying, “I am afraid that it is clear that overall the judge failed to exercise that degree of control over these proceedings which he should have. The CPR [court rules] gives him wide powers in that regard. Unfortunately he did not exercise them.”

The parties and their solicitors should never have let this case go so far. Either side could have taken action early on to stop this case dead in its tracks and, in our opinion, certainly should have done so.

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Cousins Business Law is a member of the Law Society & regulated by the Solicitors Regulation Authority. Head Office: Swan House PO Box 11543, Birmingham, B13 0ZL. Tel +44 (0)121 778 3212. Fax: +44(0)121 275 6155