November 2009 - Getting the best from your professional advisors


Business Law Update
November 2009

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from Cousins Business Law

Gary CousinsWelcome to the November issue of the Business Law Update from Cousins Business Law.

This month there’s advice for all business owners on how to get the best from professional advisors and avoid expensive professional negligence cases. There’s important information for developers who need to gain access over the public highway.

And in the second in our series of articles on the alternative methods of dispute resolution, we look at adjudication and its role in settling construction disputes; and there’s more litigation madness and a few useful links for you to follow.

We hope you will find information relevant to your business in this month’s issue. Email your article suggestions or legal questions to


Gary Cousins
0121 778 3212

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Getting the best from your professional advisors

Pretty much every business uses professional advisors in some capacity or another. For small and family-owned firms, the accountant or IT expert can be invaluable in helping to keep the business solvent or being able to function effectively. Selecting the right advisor should be something to take very seriously and, if you have any doubts about the quality of their advice, taking action quickly is essential.

As solicitors who deal with cases where professionals get things wrong, we’ve been able to build up these tips for getting the best from your professional advisors and avoiding expensive professional negligence cases.

  1. Research your options
    Take time to ensure that the professional really understands your requirements at the outset. Ask them whether they have dealt with similar situations in the past, and push for examples, and maybe references too if it’s a large project. Don’t be afraid to speak to a few different experts at this stage. It’s all too common for a professional to promise they have the perfect solution only to find out later that they lack experience of your particular situation.

  2. Explain impact
    Make sure you fully understand the effect on your business if things should go wrong with the project or if you are given the wrong advice – and make sure the professional knows too. It is not uncommon for things to have a knock-on effect on others. If most of your sales are seasonal, for example, it could be extremely important for your new e-commerce website to be up and running by, say, October. What if it is not? What will you lose in sales and profit? If you have a deadline, make sure it is written into the contract and expressed to be “of the essence”, otherwise it might not be binding.

  3. Make a contract
    Make sure you have a written contract or, at least, an exchange of letters or emails stating exactly what the professional is to do, to what standard and by when. If you are presented with some standard terms and conditions, read through them carefully to ensure that they cover what you need and they do not exclude too much liability. Watch out for clauses that exclude your ability to rely on ‘representations’ made by the professional – this might mean that they can ignore all the promises they made you when selling you their services. If you are not happy with their terms and conditions, be prepared to negotiate to see if you can get them altered – in this economic climate, many will agree and, if not, there is likely to be someone else who will.

  4. Raise concerns
    As things progress, if you’re not happy, say so, and put it in writing. If things don’t improve, think about finding someone else. Although it will usually cost more to change professionals mid-way through a project, it can often save money, time and a lot of stress to change rather than persevere with professionals who are out of their depth. But get a second opinion before giving them the sack.

  5. Get advice
    If things do go wrong, get legal advice straight away. Professional negligence cases are often complex and it is important to take legal advice before you end the contract. How a contract is ended can affect the strength of any claim you have, and you must also think about damage limitation from the outset or your claim can be reduced.

Nowadays a ‘professional’ means anyone who holds themselves out as having a particular expertise. It does not just mean accountants, surveyors and lawyers, but also IT experts, engineers (of various sorts), financial advisors, business advisors, insurance brokers, tax consultants, project planners, architects, event organisers, sales and marketing consultants, and the list certainly does not stop there. You need to manage your professional advisors. Give them a clear brief in each case and act quickly is you are not happy with their performance. The costs can be great if you don’t.

For advice on how to handle professional advisors who are not coming up to scratch contact Cousins Business Law on 0121 778 3212.

Legal update

Defining the public highway for developers

Ascertaining the width of a road is often relevant in property matters particularly for property developers who are considering creating a new site access across a grass verge. Does the grass verge form part of the public highway? If it does not then the developer will have to ascertain the owner of the verge and attempt to negotiate rights of way over it.

A recent case has confirmed the position that if the grass verge is maintained at the public expense then it does form part of the public highway.

More generally, what amounts to a highway, subject to public rights of way, is what amount of land was initially dedicated as a highway. Inspection of highway authority and Land Registry plans is essential, but so too is an inspection on the ground.

Land that has been maintained by the highway authority adjacent to the surface of the highway may form part of the highway itself since maintenance is usually strong evidence that the land was originally intended to be dedicated as part of the highway, and is not in private ownership.

Where there are fences or hedges on either side of the highway, and the presence of these boundary features are referable to the highway, it may be presumed that the highway includes all of the land between the features. The "hedge to hedge" presumption is that a highway extends to the whole width of the space between fences on either side of the highway and is not limited to the metalled part of the roadway.

This is just another example of a trap for the unwary developer and another reason why you should always see your lawyer in his wellies.

Developers needing advice should contact Steve Petty on 01926 629 005 or email Steve.

Plain English Legal Advice

Settling construction disputes quickly

Last month we took a general look at the various forms of alternative dispute resolution (ADR) and went on to consider mediation in more detail. This article takes a close look at adjudication, which is the most commonly used alternative to court proceedings in the construction industry.

Since its introduction in the late 1990s, it has been used very effectively as a quick solution to construction contract disputes allowing many construction projects to be completed in spite of major disagreements between the parties involved.

Applied as a means of resolving construction disputes across England, Scotland and Wales, it applies to any contracts in writing, although it doesn’t apply to contracts with home owners for domestic works.

Adjudication can be used to settle disputes on all aspects of a construction project, from architectural works, surveying and design work through to the provision of labour for construction projects, and advice on building, landscaping, engineering and interior and exterior decoration.

Adjudication is mainly used to settle disputes over payment but can also be used to tackle issues around delay or disruption and defective works, amongst other things.

The main benefit of adjudication over the traditional court route to solve disputes is that it’s quick as there is a very short timetable for adjudications to be completed, usually 28 days. An added benefit is that it is possible for work to continue whilst the adjudication takes place.

Both parties are liable for the costs of the adjudication, although the contract can deal with this issue by, for example, specifying that the losing party pays the costs or that costs are split evenly.

Once made, the adjudicator’s decision can be enforced by the courts although, if one of the parties feels determined to pursue the dispute further, there is nothing to stop them from taking the case to a court or adjudication. However, they will still have to abide by the adjudicator’s decision in the meantime.

Although not a cheap form of dispute resolution, adjudication has proved a very successful method of resolving construction disputes and seeing projects through to completion.

Read our detailed article Adjudication – how does it serve construction disputes? online.

With any construction project the best approach is to consider the terms of the contract carefully and take detailed advice. This should include advice on the adjudication clause.

Next month we look at arbitration and expert determination as further alternatives to settling disputes between businesses.

Useful Links

Getting your Health & Safety Message Across

The Health and Safety Executive has launched an online tool allowing businesses to design and produce their own personalised health and safety posters. You can choose from seven basic poster templates covering different industry sectors and types of health and safety danger.

Tax Guide for Self Employed

Which? have produced a useful guide to Tax for the Self-Employed. With information on how to determine whether you are self employed and how to make the most of allowances and expenses. It’s a useful read for anyone who is, or is thinking of, becoming, self-employed.

Litigation Madness

Fruity litigation fails

You’ll often be advised to examine the small print in contracts but the failure of a woman in America to read the small print on a breakfast cereal box led to some fruity litigation in California this year.

Janine Sugawara issued proceedings arguing that she had been deceived into buying a breakfast cereal called ‘Cap’n Crunch’s Crunch Berries’ because she thought that it contained a fruit called crunchberries. Apparently, she had been eating the cereal happily for four years before she realised with dismay that her breakfast bowl actually contained coloured cereal balls rather than berries.

Her case was eventually thrown out after a judge examined the wording on the cereal packet, which clearly stated that the product was made of “sweetened corn & oat cereal ... enlarged to show texture.” He also found that “there is no such fruit growing in the wild or occurring naturally in any part of the world” and that a reasonable consumer would not have been deceived into believing that the cereal contained a fruit that did not exist.

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Cousins Business Law is a member of the Law Society & regulated by the Solicitors Regulation Authority under number 485128. Head Office: Swan House PO Box 11543, Birmingham, B13 0ZL. Tel +44 (0)121 778 3212. Fax: +44(0)121 275 6155