Michelmores LLP has advised renewable energy company TLS Hydo Power on a £2.5m bond issue − the first for the UK-based energy provider.

TLS Hydro Power is part of the TLS Energy Group that owns and operates several hydropower sites across Scotland and England.  Funds raised from the bond issue will finance new energy schemes, including a 1MW project in the Perth and Kinross district of Scotland.

The bond issue was launched in conjunction with ethical bank Triodos, offering investors 7% interest a year, for five years. The offer has since oversubscribed, closing just three weeks after opening.

Alexandra Watson, Associate, who led the Michelmores team, said:

“It was a real pleasure to advise TLS Hydro Power through its first bond issue, giving investors the opportunity to support the future UK’s renewable energy industry. The bond issue proved very popular with investors and will provide TLS with the capital to finance new renewable schemes.”

For further information please contact Ian Holyoak, Partner and Head of the Renewable Energy team at Michelmores, by telephone on 01392 687682 or by email at ian.holyoak@michelmores.com.

The new Regulations replace the Public Contracts Regulations 2006 (as amended) in their entirety.  The Regulations transpose the Public Sector Reform Directive 2014/24/EU of 26 February 2014. The Government had stated that these would be transposed last autumn, but they were finally transposed with little fanfare on Thursday, 26 February 2015 and, in the main, apply to all procurements started on or after 26 February 2015. The old rules apply to procurements started before that date. The Regulations apply in England, Wales and Northern Ireland.  The Scottish Government has not yet transposed the EU Directive into Scottish Regulations.

A Prior Information Notice (“PIN”) issued on or after 26 February 2015 will fall within scope of the PCR 2015. The new Regulations will not apply to any health services contracts that are within the scope of the NHS (Procurement, Patient Choice and Competition)(No.2) Regulations 2013 (the “NHS Regulations”) until 18 April 2016.

Change to Procedures

You will be aware that there were previously four procurement procedures:

• The Open Procurement Procedure
• The Restricted Procurement Procedure
• The Negotiated Procurement Procedure with and without advertisement
• The Competitive Dialogue Procedure

Changes to the Competitive Dialogue Procedure

There are some subtle changes to some wording. For example, tenders received after close of dialogue may now be “clarified, specified and optimised” rather than “clarified, specified and fine-tuned”. In that context changes must now not be made to the “essential aspects of the tender” rather than the “basic features of the tender” as was previously the case.

The Negotiated Procedure with advertisement has been abolished. There are two new procedures:

• The Competitive Procedure with Negotiation

The CPN is a more heavily regulated procedure than the previous competitive negotiated procedure. It requires contracting authorities to specify award criteria and minimum requirements up-front in the procurement documents. Initial tenders (to be submitted within 30 days) then form the basis for negotiations. The minimum requirements must not be the subject of negotiation and there are controls on the conduct of the negotiations. It is permitted to reduce the number of tenders during the course of negotiations. Importantly, no negotiation is permitted after receipt of final tenders.

• Innovation Partnerships

Innovation partnerships are a new concept in EU procurement law. They are intended to be long term partnerships which allow for both the development and subsequent purchase of new and innovative products, services or works.

The term “partnerships” is not used in a technical sense to mean legal partnerships as defined under UK law. The term is used to indicate the partnering type approach to working together.

The Innovation partnership procedure allows for a single procurement process for: 1) the appointment of one or more innovation partners; 2) parallel innovative development work as well as permitting the number of partners to be reduced; and 3)  an option for the contracting authority to purchase the innovative supply, service or works developed as a result of the Innovation partnership.

The Regulations define “innovation” as “the implementation of new or significantly improved” products, services or processes. The non-exhaustive definition covers:

• production
• building and construction
• a new marketing method
• a new organisational method in business practices
• workplace organisation or external relations

This broad definition will cover a wide range of procurements, from development of a single specialist product to, potentially, major outsourcing arrangements.

The new or significantly improved products, services or processes should be implemented with the purpose of helping to “solve societal challenges” or to support the Europe 2020 strategy. From a practical perspective, contracting authorities will need to have a clear audit trail demonstrating how the proposed arrangements achieve this objective and fall within the definition of “innovation”.

Selection criteria for innovation partnerships are to include capacity in R&D and developing and implementing innovative solutions.  The contracting authority must invite a minimum of 3 economic operators to participate in the innovation partnership procedure, provided that there are 3 suitably qualified economic operators.

Time limits

The minimum timelimit for the PQQ stage for all of the procedures is now to be 30 days from dispatch of the OJEU Contract Notice.

The minimum timelimit for the ITT stage under the Restricted Procurement Procedure is now to be 30 days.

OJEU Contract Award Notices must be dispatched within 30 days of contract award, rather than the current 48 days limit.

New Light Touch Regime

Under the current rules, services are classified as either “Part A” services, which are fully regulated, or “Part B” services, which are only regulated lightly. The new Regulations abolish this concept. All services are subject to full regulation unless they fall within the list of services which are subject to a new “light touch regime”.

The new light touch regime requires contracting authorities to advertise contracts for light regime services, worth €750,000/£625,050 (the equivalent value in £ is fixed until 31 December 2016 and will then be revised along with the other financial thresholds) or more, in the OJEU. The way in which the procurement process is run is not regulated in detail in the new Regulations.  EU Member states are required to implement their own rules on procurement processes for light regime contracts, subject to complying with transparency and equal treatment principles.

Light touch regime services are listed in Schedule 3 of the Regulations. In practice the list of services covered by the “light touch regime” looks very similar indeed to the current list of Part B services (certain health, educational/vocational services and social services)!  There are, however, some services which were Part B services but which are now fully regulated and so you have to check the list very carefully.

Light touch regime contracts at or over the threshold must be advertised in the Official Journal of the European Union (OJEU), using standard form notices. All contracting authorities may use either a Contract Notice to advertise in the OJEU or an enhanced Prior Information Notice, which can be published a year or more in advance and which can cover multiple contracts.

The Light Touch regime will not apply to any health services contracts that are within the scope of the NHS Regulations until 18 April 2016.

Changes to benefit SMEs

Division into Lots: Regulation 46(2), as part of the drive to encourage smaller suppliers, requires a contracting authority deciding not to divide a contract into lots to explain why this decision was taken in the Regulation 84 report (see paragraph 14 for more information on this). In order to encourage contracting authorities to “share out” lots amongst bidders, Regulation 46(4) allows a limit to be set on the number of lots that may be awarded to one particular supplier. However, Regulation 46(5) also requires contracting authorities setting such a maximum to provide details of the objective criteria they intend to use to decide how a lot should be awarded if the winner of that lot has already won the maximum number of lots permitted. This may prove to be difficult to do in practice.

The division into lots could be of particular interest to the construction industry, lots could potentially be used where a contracting authority wants to tender for the entire project under a single contract notice but then breaks that down into separate lots for perhaps site remediation, demolition, construction, or perhaps specialist works packages are required but the contracting authority wants to retain particular control.  Similarly with consultancy contracts, the contracting authority may wish to procure all of its professional team under one contract notice and then split each discipline into lots for the architect, engineer, surveyor, project manager etc.

Maximum of two times turnover: Regulation 58 limits the maximum turnover requirements that contracting authorities may set to a maximum of twice the contract value, unless due to the particular risks a greater turnover requirement is justified.

European Standard Procurement Document (ESPD): Regulation 59 requires contracting authorities to accept the ESPD, which is a standard EU form of self-certification available for use by a supplier, to demonstrate it is not within the exclusion criteria and that it meets financial standing and technical capability criteria. The contracting authority may request supporting documentation or evidence at any stage (Regulation 59(8)); however, if the evidence needed is directly obtainable (e.g. through central databases) then this route must be taken (Regulation 59(5)). In simple terms, it is intended that suppliers are unlikely to be requested to provide financial reports and accounts etc. unless they are appointed as preferred bidder, saving SMEs money and time.

Selection stage

New grounds for mandatory exclusion include those under the Counter Terrorism Act 2008 and the Serious Crime Act 2007. In addition, for example, where a supplier has failed to pay taxes or social security contributions and there has been a binding judgment or decision in the case, that supplier must be excluded.

There are new grounds for discretionary exclusion which contracting authorities will need to address, for example, where the supplier has:

• failed to pay taxes or social security contributions and the contracting authority can demonstrate this by ‘appropriate means’ even in the absence of a formal ruling; or
• performed poorly on previous contracts, resulting in termination or damages or the equivalent; or
• exerted undue influence on procurement decision making process; or
• various other circumstances which would distort competition e.g. conflicts of interest, collusion, prior involvement (where the impact of this is incapable of being neutralised by dissemination of information to other bidders).

Duration of exclusion: Regulation 57(11) states that for a mandatory exclusion offence a bidder shall be excluded for a period of five years, and for a discretionary exclusion, a period of three years. In addition, Regulation 57(13) sets out a “self-cleaning” mechanism where a supplier may provide evidence that, despite the existence of mandatory or discretionary grounds, it can demonstrate its reliability and that it has taken compensatory measures to prevent the issue happening again (see Regulation 57(15)). There is an obligation on the contracting authority to evaluate the evidence in the light of the gravity and circumstances of the misconduct, and to provide reasons to the supplier if it considers the “self-cleaning” to be insufficient and it wishes to proceed to exclude in any event (Regulation 57(17)).

Public Sector Mutuals: Reserved contracts for mutually-owned entities and sheltered workshops

The Regulations contain new opportunities for contracting authorities to further social and community policies by reserving contract opportunities to certain types of supplier.

Regulation 77 allows contracting authorities to reserve contracts for certain health, social and cultural services to employee mutuals without having to subject the contract to the application of the Regulations in full. (Note that health services which fall under the NHS Regulations are not covered by Regulation 77).

An organisation will qualify under regulation 77 if:

• its objective is the pursuit of a public service mission linked to the delivery of those services;
• profits are reinvested and/or are distributed on participatory considerations;
• ownership of the organisation is based on employee ownership/participatory principles or requires the active participation of employees, service users or stakeholders;
• the organisation has not had a contract for the services concerned reserved to it by this contracting authority in the previous three years;
• the contract term is no longer than three years; and
• the call for competition/advertisement makes reference to Article 77 of the Directive (from which the provisions of Regulation 77 are derived).

In addition, Regulation 20 allows contracting authorities to reserve the right to compete in a procurement process to sheltered workshops, provided that the OJEU Contract Notice references Article 20 of the Directive and at least 30% of the employees of the workshop are disabled or disadvantaged.

Under-threshold contracts

Regulations 109 to 112 of the PCR 2015 regulate contracts that fall under the threshold; this is part of the so-called “Lord Young reforms” aimed at encouraging smaller suppliers.

Regulations 110 and 112 require that:

• contracts as low in value as £10,000 (or £25,000 for ‘sub-central’ contracting authority procurements), if advertised at all, must be advertised on the government’s “Contracts Finder” portal; and
• unless one of the exemptions at Regulation 112(2) applies, details about contract award must also be sent to Contracts Finder.

Maintained schools and Academies are exempt from these requirements, as are contracts for health services covered by the NHS Regulations. In addition, Regulation 111 brings in a new ban on use of a selection (PQQ) stage for under threshold contracts and a statutory obligation to have regard to Cabinet Office guidance around this.

Codification of in-house exemption and material change case-law

Previously European case law (particularly, the Teckal and Hamburg cases) was authority on when an in-house contract or joint co-operation arrangement fell outside the scope of the 2006 Regulations. The new Regulations now sets out these exemptions in statute for the first time.

Previously European case law, especially the Pressetext case, was authority on the extent to which a public contract could be modified without triggering a requirement to run a new procurement process. Regulation 72 now sets that test out in statute for the first time and clarifies it to a certain extent.

Regulation 72(1) states that a modification which is provided for in the original contract in “clear, precise and unequivocal” terms will not trigger a new procurement process.

There is now a formal safe harbour where the change in value is relatively small – the lower of the value of the relevant threshold applying to the procurement or under 10% (services & supplies) or under 15% (works) (Regulation 72(5).

There is also no need for a new procurement where there has been a replacement of the supplier following a corporate restructuring, insolvency or merger, and the new supplier still meets the original selection criteria. This exemption is only available where there is no other substantial modification to the contract (Regulation 72(1)(d)(ii)).

Framework agreements

There is little new law in relation to frameworks, save that Regulation 33(5) confirms what guidance and case law have previously required; i.e. only contracting authorities who are identified as customers in the call for competition are entitled to call off contracts from a framework agreement.

Reports

There is now a need to provide a comprehensive procurement report for each tendering exercise.

Payment of Invoices

Regulation 113 was another late addition to the final version of the PCR 2015 and applies to all public contracts other than those for health services under the NHS Regulations and those awarded by a maintained school or Academy. It puts onto a statutory footing what previously had been the subject of guidance only; an obligation on contracting authorities to pay valid and undisputed invoices within a 30 day period (Regulation 113(2)(a)). There is also a requirement to ensure that invoices are considered and verified in a timely fashion – undue delay will not be a justification for failing to treat an invoice as valid and undisputed (Regulation 113(b)). Finally, there is an obligation on contracting authorities to ensure that suppliers abide by these conditions in relation to their own sub-contractors, such that the 30 day payment term is passed down the supply chain (Regulation 113(2)(c)).

Where a public contract fails to include these provisions, Regulation 113(6) will “deem” them to be included in any event, meaning there is no possibility of opting out of these obligations.

New Directives

There are two more Directives to implement, one on utilities and one on higher value concessions.

A concession contract is a contract under which a contracting authority or a utility outsources works or services to a contractor or provider, who then has the right to commercially exploit those works or services in order to recoup its investment and make a return. The key feature is that the contractor/provider bears the operating risk of the arrangement and so has no guarantee of recouping its investment or operating costs. Common examples of concessions might include: running catering establishments in publicly owned sports and leisure facilities, provision of car parking facilities and services; or the operation of toll roads.

The new concessions regime will mean that all concessions above € 5,186,000 will have to be advertised in the EU’s Official Journal. Purchasers will still be able to determine how their tender procedure runs, subject to certain minimum rules on mandatory/discretionary grounds for bidder exclusion, time limits for expressions of interest and tenders, and award criteria.

The above article contains a summary of complicated areas of law and is not legal advice.

Receiving negative feedback is never pleasant but as long as it is can be pinned to a genuine act or omission that a customer found unsatisfactory, there is an opportunity to use the feedback constructively and correct business practice where necessary. We have considered what can be done about negative feedback in our blog “All publicity is not good publicity: how to handle negative online reviews” but what can a business do if it finds itself at the receiving end of a false or malicious online review?

A Legal Solution

This question was recently put to the test by Colorado-based law firm which successfully sued 20 year old British internet troll Jay Page in the High Court for posting a libelous false review on the firms’ Google Maps profile (see: The Bussey Law Firm PC  v Page [2015] EWHC 563 (QB)).

The review read as follows:

“A Google User received 10 months ago
Overall Poor to fair
Scumbag Tim Bussey, pays for false reviews, loses 80% of his cases.
Not a happy camper
3 out of 3 found this review helpful”

Mr Page had no previous relationship with the Claimant firm but the Claimants established that Mr Page had advertised on Twitter as being willing to post “feedback” for $5 via the Fiver.com website.

In a decision that gives no concession for false reviewers, whatever their motive and seemingly whatever their means, the court sent a clear message that a remedy is available for victims of malicious and false negative reviews. The court awarded the two Claimants (the law firm and Mr Bussey, the individual lawyer embroiled in the review) £50,000 in damages and the Defendant was ordered to pay more than £100,000 in damages and costs combined.

Had the Claimants not already agreed a voluntary cap on damages, the figure would have been higher and the court was minded to award damages on a punitive basis (with the aim of punishing the Defendant) as well as damages for hurt feelings and distress and for injury to reputation.

The Practical Reality

The good news for businesses faced with false negative reviews is that a remedy is available in theory, though obviously the cost of litigation will be very high.  Even where litigation is not a viable option, the current predicament of Mr Page should encourage reviewers to remove false review, or, preferably, not post them in the first place.

The bad (and disappointing) news is that the publicity resulting from the judgment appears to have done the Claimant firm no favours. At the time of writing, there has been a 77% increase in reviews on the Claimant firms’ Google Maps profile. That’s 10 reviews in the last two weeks alone out of a total of 23 posted over a 3 year period.

The 13 reviews that existed before March 2015 all have a five star rating.

Each of the 10 reviews received since March 2015 received one star.

This serves as a reminder that the ‘legal’ solution may not always be make the most commercial sense. The publicity from this case has seemingly made the Claimant firm a target of revenge reviews, or perhaps they are genuine reviews, who knows? That is precisely the problem. As a result, the Claimants may be left asking “Was it worth it?”.

For further information, or if you or your business has been subject to malicious or false reviews, please contact Jayne Clemens, Solicitor in the Commercial & Regulatory Disputes team and defamation specialist with a particular focus on the removal of libellous material from websites and social media on jayne.clemens@michelmores.com or 01392 687724.

According to a 2014 survey by Deloitte, an estimated 81% of UK consumers read customer reviews/ratings1 and 40% write their own reviews. With common practice being to carry out internet searches in respect of a business before you engage its services or buy its products; having a favourable online presence is more important than ever.

The saga trending on Twitter at the beginning of March as #chavgate is an example of how not to handle negative online reviews. After receiving a disgruntled review on the restaurant’s Facebook page from a bride-to-be dining with friends on her hen do, a Manchester restaurant responded with a tirade of abuse, referring to the party as ‘chav cheap trash’, ‘peasants’ and ‘the bottom of the barrel of Society’. Understandably, this response attracted heavy criticism and the restaurant now appears to have deactivated its social media accounts.

Poorly handled reviews can land businesses in hot water but so can attempts to evade or mask negative reviews, either by attempting to counteract the damages with false positive reviews (a practice which has led to several search engine optimisation companies (SEOs) being fined in the USA) or by imposing terms and conditions which strictly prohibit the posting of negative reviews. Trying to control customer opinion often will compound negative publicity, as seen in the case of the Tripadvisor couple “fined” £100 for describing a Blackpool hotel as a “filthy, stinking hovel”.

Whilst prevention is always better than cure, it is almost inevitable that at some point a customer will feel dissatisfied. Negative reviews can be damaging to business so it is important that they are handled effectively.

1. Knowledge is key: The internet moves rapidly and a passive approach to your online business presence is not enough. By the time you find out about a negative review it may be too late to make a meaningful difference. Internet alerts such as Google Alerts and Social Mention can be set up to notify you as soon as your business is mentioned online, giving you the best chance to mitigate the damage.
2. Respond promptly: Assess what action needs to be taken and try not to ignore negative feedback. Even if the response is simply to thank the customer for their feedback and acknowledge the complaint (“thank you for your feedback, we are sorry to hear…”) it shows potential customers that you care about what your existing customers think.
3. Do not respond emotionally: As highlighted by the Manchester restaurant fiasco, it is important to respond professionally remembering that your response will be viewed by other existing and potential customers. Take a moment to look at the feedback from the position of a third party observer before responding.
4. Do not argue: Rather than try and justify your position publicly, it is often best simply to thank the customer and acknowledge the complaint (see point 2). Whilst some businesses think that they need to publicly defend their position, this can come across as petty and argumentative. If the matter needs further resolution, invite the customer to contact you. They may not take up the offer but viewers will see that you are actively trying to resolve the issue.
5. Ask for removal if the review is false or malicious: If the review goes further than a difference of opinion and is actually misleading then you may ask the website administrator to remove it under the website policy. If the post is defamatory, a legal remedy may be available (see our update “Malicious or fictitious: hope for victims of false online reviews?“) but we would advise a balanced approach, taking into account the potential backlash as a result of an over-aggressive stance. That being said, if reviews are extreme, you may wish to consider civil actions for defamation or malicious falsehood. If there are personal attacks on staff; you may wish to consider contacting the police as an offence of harassment may have been committed.
6. Train staff to use social media responsibly: It is important that any employee purporting to represent the views of the business online is trained to interact responsibly with the public. Remember that employers may be identified on employees’ social media pages. Whilst you cannot police the behaviour of employees outside of work, you can make sure they are receiving the necessary guidance to represent your business appropriately.

Michelmores can help your business develop a social media policy for use by the business and its employees. If you are the subject of extreme negative reviews, we can help you explore the options for legal challenges.

Finally, don’t take offence to negative reviews. Where possible, view criticism as constructive and address your business practices accordingly. Someone has taken time out of their day to provide honest feedback at no additional expense to you and highlighted issues you may not otherwise have been aware of. Negative reviews are an opportunity to improve.

For further information on any of the issues raised here, please contact Jayne Clemens, Associate in the Technology, Media & Communications team at jayne.clemens@michelmores.com

1 Deloitte, The Deloitte consumer review – The growing power of consumers, 2014

In recent years, cyber hacks on large corporates and even governments have become an almost daily occurrence. Despite this, a significant number of UK businesses are failing to adequately protect themselves from such attacks and face potentially significant losses as a result. According to new research from the government’s “Cyber Streetwise” campaign, so-called SMEs (small and medium sized businesses) are particularly at risk due to a misperception that they are not likely to be targeted by cyber criminals. The research found that two thirds of SMEs do not consider themselves to be vulnerable to attack and just 16% are prioritising their cyber security in 2015. This is worrying in light of findings by the Department for Business, Innovation & Skills (BIS) in late 2014 that 60% of small businesses in the UK had suffered a malicious cyber breach in the previous year.

High profile hacks

From large retailers like Sony and Target to celebrities Rihanna and Jennifer Lawrence, over the last few years there have been numerous high profile cyber attacks. These have usefully highlighted the growing risk of cyber crime but have left many with the impression that cyber criminals only go after large, global corporates or high profile individuals. In reality, anyone who holds data is a potential target.

In 2014 Symantec estimated the chances of a large company being the subject of a so-called “Spear Phishing” attack as 1 in 2.3 (or 39%), with the chance of a small business being attacked as 1 in 5.2 (or 30%). These statistics show that cyber crime is just as much of a threat to SMEs as it is to global corporates like Sony. Importantly, whilst large companies may have the resources to monitor and better manage cyber security through technology, systems and controls, SMEs are unlikely to have those same resources, making them an easy target.

How can SMEs protect themselves?

According to BIS, the most common problems faced by SMEs come from “internal threats”, staff exposing IT systems to malware by plugging in external devices, opening infected emails or using unsafe websites. Taking certain, seemingly obvious, steps can protect an SME from a cyber attack, for example: training staff; keeping software secure by installing updates; using anti-virus software; using complex passwords; and encrypting data. Even if SMEs adopt all of these best practices, however, the sophistication of cyber threats and the fact that cyber criminals continuously adapt and develop new ways to attack, means it is likely if not inevitable that these companies will suffer breaches.

Should SMEs have dedicated cyber insurance?

Many SMEs think that their traditional insurance covers will adequately protect them in the event of a cyber attack but in reality that is not the case:

• PI policies usually provide third party cover only and do not cover the costs of reputational damage, PR, customer care, regulatory investigations etc.
• Fidelity or “crime” policies typically require both a loss to the company and a corresponding gain to an identifiable individual, whereas it is usually impossible to identify the cyber criminal behind an attack.
• Fidelity policies also do not extend to a business’s lost income or reputational damage.

In 2014 the New York Supreme Court held that Sony’s insurers were not obliged to indemnify the company under its general commercial liability policies, whereas Target was said to recover approximately $90 million under its dedicated cyber liability policies.  In our view, a similar decision would be likely in the English courts.

Taking out cyber cover – a health warning!

There are a number of things which policyholders should bear in mind when purchasing cyber cover.

1. Don’t underestimate the true cost of an attack

Many businesses misjudge the amount of business interruption costs which they may suffer following an attack, particularly where the company has a significant online presence and may have to cease trading altogether while it investigates a breach.

2. Negotiate the retroactive date and extended reporting period

Cybersecurity firm Mandiant recently reported that the average number of days attackers were present on a victim’s network before they were discovered was 229 days, over 7 months. In our experience, many new cyber policies offered by the London market are written on a claims-made basis with a retroactive date that is the same as the policy inception date. The result is that coverage is only available when both the hack and the resulting loss occur during the policy period, and policyholders will not be covered when:

• Their network is breached weeks or months before the policy has incepted but the loss only arises after policy inception; or
• Their network is breached during the policy period but the resulting loss only arises after the policy has expired.

We see no reason why, when insurers have carefully assessed a company’s cyber risk profile (including sometimes using an independent IT consultant), the retroactive date should not be 1 year, preferably two years, before the inception date.

Similarly, in our view insurers should be willing to offer an extended reporting period, which extends the period of coverage beyond the policy’s expiry date thereby providing cover for losses which occur after expiration as a result of a breach during the policy period.

Conclusions

Cyber crime has become an unfortunate inevitability for many UK businesses. Despite increased awareness and improvements in technology, there is only so much a business can do to protect itself through infrastructure alone. SMEs are particularly vulnerable as they may not have the resources to prevent an attack or the financial stability to withstand one. Insurance is an important way for these businesses to protect themselves, although policy wordings need to be reviewed carefully to ensure that cover is sufficient and the policy properly responds in the policyholder’s hour of need.

The Renewable Energy team at Michelmores LLP has acted for award-winning Spanish-headquartered engineering firm, Gamma Solutions SL on its sale of Wilton solar farm.

The Michelmores team, led by associate Alexandra Watson with support from trainee solicitor Kieran van Bussel, acted on the sale to a renewable energy fund, having previously advised on the acquisition of this 9.4MW site near Liskeard. Gamma is the main contractor for the project, which is expected to be commissioned in mid-March.

Alexandra Watson commented

“It was a pleasure to work with Gamma again on another large-scale solar PV plant in the UK, which is well under way in the construction phase.  Collaborating with Gamma’s in-house team, we worked to a very tight timetable in order to ensure that the 31 March ROCs deadline was achievable.”

Cesar Gonzalez, CEO at Gamma said

“We are thrilled with the outcome on this project. Gamma is very active in the UK solar PV market and we are grateful for the support provided by the Michelmores’ team in getting this project over the line”.

For further information please contact Ian Holyoak, Partner and Head of the Renewable Energy team at Michelmores, by telephone on 01392 687682 or by email at ian.holyoak@michelmores.com.

A couple of years after the original buzz surrounding 3D printing and how it might revolutionise the manufacturing sector, it continues to generate headlines – just last week, the BBC reported on a 3D printed heart that helped to save a girl’s life.

What’s all the hype (still) about?

From 3D hearts to dresses, jewellery, supercars and houses, and using materials as diverse as plastic, metal and chocolate; it seems that there is little a 3D printer cannot print.

Also known as additive manufacturing, 3D printing allows you to create a design on a computer screen which then talks to the 3D printer instructing it to precisely spread thin layers of the chosen material on top of each other, building up a solid 3D structure.

3D printing has allowed manufacturers to get much quicker at producing prototypes (taking weeks or months off the process), but with techniques and the materials improving, manufacturers are now able to produce final products ready for end-users. For smaller manufacturers who may have previously outsourced the prototyping, this means they can now make significant savings (of time and money). In theory, 3D printing should allow manufacturers to easily produce local and cheaper made-to-measure products, whilst also allowing them to manufacture with greater flexibility, accuracy and functionality.

As a result of these advantages and the relative cheapness with which you can now buy a 3D printer (for less than £1,000), 3D printers are popping up throughout the UK, with the UK’s first 3D printing café opening up last year in Shoreditch, East London, where you can get a coffee whilst watching your design come to life.

Are there any legal concerns?

Of course there are! Although 3D printing has been around for quite some time, there remain no specific laws governing the industry.

Products that can be reproduced by a 3D printer are likely to be protected by various intellectual property (IP) rights in the UK and worldwide, including patents, design rights, trade marks and copyright. These rights could be infringed if an unauthorised person makes copies of the protected product for commercial purposes. The software files that contain the product code may also be protected by IP rights (including copyright), meaning that sharing and copying these files could be IP infringement.

Whilst there are limited exceptions under English law that allow an individual to create a product for his own personal use without infringing some of these IP rights (namely trade marks and design rights), that individual cannot then sell the product.

There are also concerns that, as 3D printing becomes more mainstream, the production of counterfeit goods will increase, as it allows products that may be protected by IP rights to be replicated accurately, cheaply and quickly. As 3D printing becomes more accurate, it may become hard to tell whether you have a counterfeit product or the real thing.

What next?

This consumer level of IP infringement could be challenging to monitor and police for brand owners and manufacturers. One solution could be to create an iTunes-type database of design (software) licences that consumers can legally purchase for an affordable fee, or to sell your own design licence straight from your website.

It is a case of watch-this-space for the law to change as 3D printing keeps pumping.

For more information please contact David Thompson, Partner in our Intellectual Property team. 

The National Planning Policy Framework (NPPF) was introduced in March 2012 and sets out, in a relatively slim line document, the national planning policy that has replaced a plethora of planning policy statements and guidance. The NPPF places an emphasis on promoting sustainable development and in its core planning principles provides that planning should “support the transition to a low carbon future in a changing climate ………. and encourage the use of renewable sources (for example, by the development of renewable energy)“.

Section 10 of the NPPF concerns meeting the challenge of climate change.  Paragraph 97 is a particularly useful statement for renewables industry as it explains that to “help increase the use and supply of renewable and low carbon energy, local planning authorities should recognise the responsibility of all communities to contribute to energy generation from renewable or low carbon sources“.

The NPPF goes on to encourage authorities to have a positive strategy to promote renewable energy, design policies to maximise renewable and low carbon energy development, consider identifying suitable sites, support community led initiatives and identify opportunities where development can draw its energy supply from decentralised, renewable or a low carbon energy supply system. The NPPF also states that:

1. when determining planning applications local planning authorities should not require applicants to demonstrate the overall need for renewable energy or low carbon energy; and
2. even small scale projects do provide a positive contribution by cutting greenhouse gas emissions.

The second of the above statements has proved particularly contentious among planning committee members, faced with locally contentious projects that in some instances have a relatively low energy contribution.

The operation of the NPPF has recently been reviewed by a Communities and Local Government Committee in the House of Commons.  On 9 December 2014 the Committee issued its Fourth Report of Session 2014-15.  The Report itself makes interesting reading, but sitting behind it are the minutes of the various sessions held by the Committee during which they heard submissions from all manner of interested parties across various industries.

The panel session in relation to renewable energy involved representatives from Energy UK, Renewable Energy Systems and Renewable UK.  It is clear from the minutes that the participants took relatively little, or no, issue with the actual wording of the NPPF and agreed with its “spirit”.  Nonetheless, they aired concerns with regard to how the NPPF was applied.  Chief amongst those was the continuing close monitoring and calling in of appeals by the Secretary of State.  Whilst there was an acknowledgement that the Secretary of State was testing his July 2013 guidance, the ongoing monitoring was generally considered excessive. In the view of the participants, this monitoring is preventing the planning inspectorate from developing its own expertise and best practice when determining such appeals.

Time was also spent discussing the need for local authorities to actively plan in their local plans for the provision of renewables.  The session participants noted that very few planning authorities have the promotion of renewable energy as a theme running through their plans, and on the participants’ wish list was for local planning authorities to get their plans up to date and ensure that the plans fully integrate the NPPF requirements set out above.  Participants also bemoaned the rising profile of the housing supply shortage versus the momentum, and traction in the media, that was previously being gained by the renewables industry. The statistic that stands out is that only 15% of policies adopted so far have any reference to energy or renewable energy in the form of supplementary planning guidance.

The Report itself spends relatively little time discussing the renewables session, albeit it does note that the Secretary of State was found to be more likely to refuse renewables applications than those for other types of development.  The Report stops short of criticising the sheer amount of call ins by the Secretary of State.  Indeed it confirmed it found no evidence to suggest that the Secretary of State was doing anything other than determining the recovered appeals in accordance with Government policy.  However, the Committee did pick up on the comments made by participants as to the deterrence effect on investors if projects continued to spend upwards of 2 years (in the case of wind energy) in the planning system.

Perhaps disappointingly therefore, the sole recommendation in the Report is that the Government take appropriate steps to speed up the process of taking decisions on recovered planning appeals and if necessary should allocate more resources to the team supporting the Secretary of State on such decisions.

Data protection laws change fast − and as a result, a number of our clients have asked us to summarise some of the key developments from 2014.

Nathaniel Lane, solicitor in the Technology, Media & Communications (TMC) team, takes a look at some of the most important data protection developments that took place last year at EU level, and looks forward to the developments on the horizon for 2015.

Data retention directive, Google Spain and Data Protection Regulation

Most of you are aware of:

• the two of the major ECJ decisions in 2014 – invalidation of the data retention directive and the Google Spain case; and
• the slow progress of the proposed Data Protection Regulation.

These have been well publicised. As such, we will not dwell on them here. Suffice it to say their magnitude cannot be underestimated and it is no coincidence that the two ECJ decisions were made so close together.

Rynes

Speaking to clients, less people were aware of the Ryneš case decided in mid-December. A gentlemen in the Czech Republic had used CCTV for the purposes of the protection of the property, health and life of the owners and occupants following several broken windows at the family home. The CCTV film captured two people who broke windows at Mr Ryneš’ property. One of those captured complained that the footage was not processed in accordance with the relevant data protection laws. The ECJ agreed with the suspect that the ‘household exemption‘ was not applicable because the CCTV also monitored a public footpath and the house opposite. However moral the data controller’s purpose, the ECJ ruled that the ‘household exemption‘ must be narrowly construed to processing carried out for a ‘purely‘ personal or household activity and the fundamental right to a private life prevailed.

The Rynes case has a very wide practical effect given current recording technology (mobile phones etc) and as technology develops (e.g. Internet of Things). For example, the ECJ’s ruling that ‘To the extent that video surveillance such as that at issue in the main proceedings covers, even partially, a public space and is accordingly directed outwards from the private setting of the person processing the data in that manner, it cannot be regarded as an activity which is a purely ‘personal or household’ activity for the purposes of the second indent of Article 3(2) of Directive 95/46′ appears to mean that recording your child’s nativity play on your mobile phone or other recording device infringes other pupil’s right to privacy or otherwise breaches the DPA.

2015

Looking forward, a gauge of the EU’s priorities for 2015 can be found in a recent speech by Věra Jourová, Commissioner for Justice, Consumers and Gender Equality:

• people to regain control over their personal data;
• strong data protection rights that are effectively enforced;
• conclusion of the Data Protection Regulation;
• building a digital single market with a level playing field;
• ensuring ‘Safe Harbor’ is really safe; and
• ensuring all EU citizens not resident in the US enjoy the same enforcement rights as those enjoyed by US nationals in the EU today.

This may mean that 2015 may be an even more monumental year regarding data protection for Michelmores’ clients than 2014, particularly if the Data Protection Regulation is concluded.

Nathaniel Lane is a Solicitor in Michelmores’ Technology, Media & Communications team who has an ISEB Certificate in Data Protection. For further information on this matter or data protection generally, please contact Nathaniel at nathaniel.lane@michelmores.com or on 0207 788 6313.

The Renewable Energy team at Michelmores LLP has acted for award-winning Spanish-headquartered engineering firm, Gamma Solutions SL on its acquisition of two consented solar farms during June 2015.

Gamma Solutions is an international group, which specialises in engineering in the renewable energy sector. Gamma is a key player in the market, as a sponsor of renewable energy and ESCO projects, involved in developing, building (as EPC contractor) and ongoing asset management.

In 2015, Gamma’s investment is expected to be 200m€ in Europe and Latin America. This achievement is one of the reasons why Gamma Solutions has become one of the most innovative business groups, with a strong performance and global development.

Associate Alexandra Watson and trainee Solicitor Kieran van Bussel acted on the acquisition of Priors Byne a 17.5 hectare solar farm in West Sussex with a capacity of 7.5MW and Sowerby Lodge, a 4.99MW capacity solar farm on a 13.5 hectare site in Barrow-in-Furness.

Alexandra Watson, an Associate in Michelmores Corporate team commented;

“With the addition of these two sites, we have supported Gamma on four of its large solar PV acquisitions and we are delighted to help them expand their portfolio.  Gamma has already commissioned three large-scale projects in the UK in the last year, and these further two sites are due to be commissioned later this year.”

House building is an important part of any government’s long term economic plan, and one of the key challenges is to help buyers buy, lenders lend, and builders build.

This week David Cameron has announced a new scheme to help first-time buyers step onto the property ladder and at the same time boost new house building.

The Starter Home initiative will offer 100,000 first-time buyers under the age of 40 the opportunity to purchase discounted, high-quality new properties. Aspiring home owners and “hardworking young people [who] want to plan for the future and enjoy the security of being able to own their own home” (David Cameron) will be able to register their interest in owning a Starter Home from January 2015.

At the core of the initiative is a reform to the planning system which unlocks brownfield sites not already identified for housing, to be exempt from Section 106 planning costs and Community Infrastructure Levy. In return, a minimum 20% discount below the current local market rate will be offered to young first-time buyers. House builders currently face an average cost of £15,000 per home in s106 affordable housing contributions and an estimated £6,000 in CIL.

To prevent Starter Homes being re-sold quickly and at a profit, the 100,000 new homeowners will be restricted from selling their Starter Home at market value for a fixed period to ensure savings are passed on to other first-time buyers; the government consultation currently suggests a period of between 5 and 15 years with a sliding scale of discount.

A new Design Advisory Panel will also be established to make sure the new Starter Homes are not only lower cost but also high quality and well-designed. The design panel, which will include representatives from the Royal Town Planning Institute and the Royal Institute of British Architects, will no doubt set the standard for housing design across the country.

The Starter Home Initiative could be another positive step in tackling a housing shortage and allowing people to realise their aspirations of home ownership. The government consultation continues and we can expect to see further details of the scheme by March 2015…watch this space.

Gail Bedford is a solicitor in the Real Estate team. For more information, please contact Gail on 01392 687 683 or email gail.bedford@michelmores.com

The British Insurance Brokers’ Association (Biba) and the Association of Insurance and Risk Managers in Industry and Commerce (Airmic) have given evidence before a House of Lords special public bill committee considering the Insurance Bill.

The special committee held its final meeting on 15 December 2014 and the Bill is on track to become law before the General Election in 2015, although it will not come into force until some time later.

Graham Trudgill, executive director of Biba and Graham Terrell of JLT (and deputy chairman of Biba’s liability and accident committee) told the committee that Biba strongly supports the Bill. Trudgill said that the organisation was in favour of the abolition of ‘basis of contract’ clauses, which convert representations by an Insured in a proposal form into warranties, thereby potentially enabling Insurers to avoid liability where there is an inaccuracy in the proposal form.

Biba said it also approves of the proposed new regime of more proportionate remedies for failure to make a fair representation of risk, replacing the current sole remedy of avoidance (even for innocent non-disclosures), which the organisation described as “draconian”.

Airmic CEO John Hurrell and technical director Paul Hopkin also gave evidence to the committee. In a statement on its website Airmic said: “Airmic fully supports the Bill, designed to overhaul the outdated system that has been in place for over a century.”

As well as supporting the current draft Bill, both Biba and Airmic made the case for reinstating proposed protections against the inappropriate reliance on warranty breaches by insurers to avoid policies, which were removed from the Bill to enable it to proceed through the expedited process for non-contentious Law Commission Bills. Biba said that brokers believe that insurers should pay a claim when the breach of a specific risk mitigation term is totally irrelevant to a loss.

Michael Mendelowitz, Chairman of the British Insurance Lawyers’ Association (BILA) and Lord Mance also gave evidence to the committee.

Comment

The proposed changes will undoubtedly provide greater contractual certainty for commercial policyholders. They will also address the current perceived inequality under English law, which tends to favour insurers, by contrast to New York law, for example, which is generally considered to be more balanced. As a consequence, the new Bill will hopefully ensure that the London insurance market remains competitive on a global basis.