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.

The changes in planning obligations required for sites of 10 homes or less have arisen following a Government consultation in March this year. The stated reason for the changes is that they are designed to address concerns about the disproportionate burden on developer contributions on small-scale developments.

David Richardson and I have been considering the changes and have concluded that they are not as wide reaching as they first seem.

What the changes have done is to remove the burden of “tariff based contributions” (referred to as Section 106 obligations) on developments of 10 or less units.

As a key point, we have concluded that “tariff style contributions” in this context do differ from “CIL”.  There are a couple of reasons for this:

• the CIL Regs do not have a de minimis threshold- the idea being that CIL brings in more money than s106 did; and
• if the Government meant CIL they would have said CIL- the consultation is about ‘section 106 obligations’, and CIL is not a s106 obligation but a separate charge.

So the changes do not remove the requirement to pay CIL. But they do mean that obligations imposed by local authorities towards wider infrastructure cannot be requested.

In terms of affordable housing, it looks like it will come down to local policy.  If local policy requires on-site provision, than it would seem that can still legitimately be requested.  If local policy is to seek a contribution for off-site provision then that will fall within the exemption, and so will not be a legitimate request.

Also, the changes do not prevent the local authority from seeking any planning obligations on developments under the 10 unit (or 5 unit- see next para) thresholds. So contributions which relate to site specific infrastructure e.g. improvements to road access, street lighting etc. can be requested if they will make the development acceptable in planning terms.

The changes do not apply to development on rural-exception sites. Nor do they apply to designated areas under section 157 of the Housing Act 1985, which includes National Parks and Areas of Outstanding Natural Beauty- in this case local authorities have the option to choose to apply to a lower threshold of 5 units or less.

There is no obligation on LPAs to re-open negotiations on sites already consented, but there is also nothing which restricts the making of a new application on a site which is already consented. So developers will be considering renegotiating any existing obligation- with a backstop that they re-apply!  As always, until someone litigates on this, it is all a bit up for grabs!

The changes have been applied to the National Planning Policy Guidance (“NPPG”) and came into effect on 28 November 2014.

For more information please contact Mark Howard, partner in the Planning team at mark.howard@michelmores.com or on 01392 687621.

Setting the scene

“The tree which moves some to tears of joy is in the eyes of others only a green thing that stands in the way. Some see nature all ridicule and deformity… and some scarce see nature at all. But to the eyes of the man of imagination, nature is imagination itself.”

William Blake

At the outset, and rather not in keeping with the received thinking of my profession, I am going to nail my colours to the mast and declare myself an out and out tree enthusiast. Don’t get me wrong, I am no green activist, I like a good road scheme as much as the next lawyer/surveyor.  My common frustration is that a tree which is a thing of beauty and amenity is often given a crew-cut by an occupier of land with sometimes misplaced concerns that it might be secretly dangerous.

As the case law which I am about to outline shows, occupiers of land should not be put by the law into a position where they feel the need to be ‘insurers of nature’ where it comes to trees. What has prompted all of this is the recent case of Stagecoach South Western Trains Limited v Hind and anr.

The case concerns Rose Cottage, a property in Staines owned by a Ms Hind. Rose Cottage backed onto a railway line, where on or near the boundary a mature Ash tree grew. On a windy winter night part of the Ash tree blew down, falling across the railway line. Shortly afterward an empty train collided with the part of the tree on the railway line. The tree caused some damage to the train, for which the train company decided to seek damages from Ms Hind. Ms Hind had recently commissioned some work on the tree, which was undertaken by Mr Steel, a tree surgeon. Evidently not wanting to miss an opportunity one train company also sought damages from Mr Steel and it was unsuccessful in that regard.

The Honourable Mr Justice Coulson, in the sort of lucid and carefully considered judgment which only a Technology and Construction Court Judge can give, summarised the law applying to Ms Hind’s position as follows:

(a) The owner of a tree owes a duty to act as a reasonable and prudent landowner;

(b) Such a duty must not amount to an unreasonable burden or force the landowner to act as the insurer of nature. But he has a duty to act where there is a danger which is apparent to him and which he can see with his own eyes;

(c) A reasonable and prudent landowner should carry out preliminary/informal inspections or observations on a regular basis;

(d) In certain circumstances, the landowner should arrange for fuller inspections by arboriculturalists. This will usually be because preliminary/informal inspections or observations have revealed a potential problem although it could also arise because of a lack of knowledge or capacity on the part of the landowner to carry out preliminary/informal inspections.

(e) The resources available to the householder may have a relevance to the way in which the duty is discharged.

Ms Hind was an enthusiastic gardener, and took an active interest in the care of her trees.  Over the period 2001 – 2009 she had spent over £4,000 on tree surgeons for her garden. Some of the work which Ms Hind had commissioned involved cutting the deadwood from the offending Ash tree, and generally keeping it tidy. However the defect in the tree which caused it to fall on the railway line on that night resulted from an ‘included bark union’ in one of two stems forming the main trunks of the tree. The Judge found that this would not have been an obvious concern to a reasonable and prudent landowner, and in any event, in this instance the offending area was covered by a thick layer of ivy. In this case the train company was unsuccessful.

Although Mr Justice Coulson provided an eloquent summary of the law, some queries remain.  Does ‘the duty to act where there is a danger which is apparent to him and which he can see with his own eyes’;  means that the characteristics of the reasonable and prudent landowner are always those of an amateur? Some commentators seem to indicate that a ‘large and well resourced’ landowner might be expected to have an army of expert arborialists surveilling every bough and twig for hidden hazards on a very regular basis.  I think that would be an overstatement of the duty imposed by the common law even upon large institutional landowners.

Mr Justice Coulson referred to some of the case law and quoted from it as follows:

 “…If there is a danger which is apparent, not only to the expert but to the ordinary layman which the ordinary layman can see with his own eyes, if he chooses to use them, and he fails to do so, with the result that injury is inflicted, as in this case, upon somebody passing along the highroad, the owner is in those circumstances responsible, because in the management of his property he had not acted as a normal reasonable landowner would act.”

“An unreasonable burden must not be placed on the reasonable owner: “the standard to be taken should be that of an ordinary landowner and not an expert. It was neither the duty nor the practice of the ordinary prudent landowner to make a meticulous examination of its individual trees.”

Yet there is a notion of a requirement for a large organisation to have trained arborialists roaming the grounds of their estates ticking boxes indicating the presence of ‘actively lifting root plates’ and the like. Unfortunately there are conflicting authorities on the matter.

In one House of Lords case in 1952 it was said:

“The test of the conduct to be expected from a reasonable and prudent landlord sounds more simple than it really is. For it postulates some degree of knowledge on the part of landlords which must necessarily fall short of the knowledge possessed by scientific arboriculturists but which must surely be greater than the knowledge possessed by the ordinary urban observer of trees or even of the countryman not practically concerned with their care.”

On the other side are a host of cases (which go no higher than the Court of Appeal) and seem to take as read that an ‘expert’ should be employed to conduct regular detailed inspections of each and every tree. Bowen v National Trust for Places of Historic Interest or Natural Beauty might be said to proceed on this basis, although the manner in which the inspections were carried out was not impugned. Chapman v London Borough of Barking & Dagenham proceeded on the basis that the Council should have had an ‘expert’ examine the offending horse chestnut tree, and then based upon this initial examination decide whether or not to climb it for a closer look. Finally in Poll v Viscount Asquith of Morley, and anr a multi stemmed Ash tree fell into a road causing Mr Poll to hit it on his motorbike and suffer injury. That case was presented to the High Court on the basis that there were three levels of tree inspector, and the Court found that the appropriate level of inspector would have been a ‘level two’ which on any account would appear to be a more accomplished ‘tree person’ than the individual postulated by the House of Lords in 1952.

These later cases might be explained by comments that appear in an occupier’s liability case to the effect that a ‘higher’ standard of care might be expected of a “…large organisation with ample staff…”

Recent Guidance

The correct basis for defining the duty is as set out by Mr Justice Coulson in Hind where he commends the HSE guidance published on the topic:

55 The other document was the SIM 01/2007/05 published by the Health and Safety Executive (“HSE”). This document is principally aimed at local authorities and those dealing with trees on a regular basis. It sets out to balance, on the one hand, the benefit and value of trees, with the “limited” risk that they pose. At paragraph 7 of the document, the HSE say:

“Given the large number of trees in public spaces across the country, control measures that involve inspecting and recording every tree would appear to be grossly disproportionate to the risk. Individual tree inspection should only be necessary in specific circumstances, for example where a particular tree is in a place frequently visited by the public, has been identified as having structural faults that are likely to make it unstable, but a decision has been made to retain it with these faults.”

At paragraph 10(ii) the guidance goes on:

“For trees in a frequently visited zone, a system for periodic, proactive checks is appropriate. This should involve a quick visual check for obvious signs that a tree is likely to be unstable and be carried out by a person with a working knowledge of trees and their defects, but who need not be an arboricultural specialist.”

Would the effect have been obvious?

In another tragic case the bough of an old oak in Windsor Great Park fell upon a father, Mr Imison, who was unloading bicycles from his car in order to go along with his family on a bicycle ride. Mr Imison’s injuries were fatal.  It is of interest that the defendant (Surrey County Council) was responsible for 3,600 miles of roadway bordered by some 2 million trees; in 1975 Central Government had issued a circular to it as a Highway Authority to the effect that it should conduct inspections of such trees. 29 years later, and around three years before the tragic accident befell Mr Imison, the defendant engaged someone to do that job; however he had not yet made it to the offending tree.

The Court, following the 1952 House of Lords decision concluded that whilst the defendant had failed in its duty to inspect the trees for which it was responsible, the defect which caused the bough to fall upon Mr Imison would not have been obvious upon making the appropriate inspection. The defendant was not liable.

In this case, it is noteworthy that the defendant had all but destroyed the remnants of the bough which had fallen. If such a terrible event should occur, occupiers must put in place procedures to ensure that evidence is preserved.

Location, location, location?

The final matter arising from the analysis above is whether or not a tree in a particularly high risk location (such as at school gates) should be inspected more invasively than one in an isolated location? It would not appear so.  Mr Justice Coulson’s found that Mrs Hind did not have to obtain an expert’s opinion upon the state of the Ash tree at the bottom of her garden just because it bordered a railway.  Nevertheless it is clearly good practice however to conduct inspections in high risk areas on a more regular basis, particularly in where such trees are susceptible to disease, drought, or storm.

Conclusion

The decision of Mr Justice Coulson has helped calm some hysteria that had arisen as a consequence of some of the preceding cases.  However, none of this changes the established principle that in the event a tree has have obviously dangerous features, an occupier of land should commission an expert to look at it in more detail, and if necessary take steps to mitigate any risks posed by that tree.