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James Latham acquisition of Abbey Wood Agencies Ltd

James Latham acquisition of Abbey Wood Agencies Ltd

James Latham acquisition of Abbey Wood Agencies Ltd


SARAH REYNOLDS, PARTNER COMMERCIAL LAW

 

Sarah Reynolds of Kane Tuohy acted for James Latham Plc. in its recent acquisition of Abbey Wood Agencies Limited (“Abbey Woods”).

James Latham Plc. is based in the UK and is a leading importer and distributor of wood based panel products, natural acrylic stone, door blanks, hardwoods, high grade softwoods, cladding, decking and plastics.

Abbey Woods is a leading timber merchant company in Ireland with depots in Dublin and Cork.

This is the first acquisition by James Latham Plc. outside of the UK since its inception over 200 years ago.

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New Commercial Court Practice Direction

New Commercial Court Practice Direction

New Commercial Court Practice Direction –

Data collection undertaking


02/05/2019

A new Commercial Court Practice Direction was introduced on 12 April 2019.

A new Commercial Court practice direction – Practice Direction HC85 – Commercial list (PD HC 85) replaces Practice Direction HC50 of May, 2009. While PD HC85 reiterates the provisions of its predecessor, it adds a new requirement for solicitors, which is designed to assist the Court in data collection. In addition to the usual undertaking to use his/her best endeavours to ensure that the court’s directions will be complied with in full, the solicitor is required to undertake:

“that within 14 days of the conclusion of the case in the High Court, whether by agreement, discontinuance, strike out, dismiss or other court order, and whether before or after entry to the Commercial List, such solicitor will use his/her best endeavours to submit by electronic means to the Courts Service at commercialdata@courts.ie a Case Report in the format published in the High Court section on the Courts Service website www.courts.ie on the date of publication of this Practice Direction.”

The “Case Report” is in the form of an excel sheet. This includes an Explanatory Memorandum. The data sought is:

  • Commercial Court Case ID
  • Party seeking entry
  • Type of matter
  • Type of issuing proceedings
  • Value of Claim
  • Origin of Parties
  • Interim Motions
  • Date of fixing of trial hearing date
  • Trial date
  • Anticipated trial duration
  • Actual trial duration
  • Hearing end date
  • Date of judgment
  • Outcome
  • Costs
  • Follow-up
  • Enforcement action
  • Appeal lodged

Separate information is also sought for interim motions.

The Solicitor’s certificate seeking entry into the commercial list should also state the section(s) of O.63A r.(1) RSC under which the application is being made.

Source: The Law Society of Ireland


 

A BREACH OF GDPR – THE CONSEQUENCES

A BREACH OF GDPR – THE CONSEQUENCES

A BREACH OF GDPR –
THE CONSEQUENCES

“He’s making a list, He’s checking it twice,
He’s gonna find out who’s naughty or nice,
Santa Claus is in contravention of the
General Data Protection Regulation (EU) 2016/679”

A collective sigh of relief was exhaled when the General Data Protection Regulation (“the GDPR”) came into force on 25th May last. However, for those impacted by the GDPR the challenge is only beginning, and 25th May 2018 only marked the start of GDPR compliance not the finish! Even the most benevolent of operators, such as Santa Claus, cannot escape the clutches of the GDPR.

Organisations are now operating in a new landscape of data control and management where the “new norm” requires a heightened awareness both amongst senior management and employees of their GDPR obligations with the implementation of stringent controls to appropriately process and manage personal data.

By now, organisations should be familiar with their GDPR obligations and should have implemented appropriate processes and procedures to comply with those obligations and ensure the appropriate management of personal data.
However, this is not the time for organisations to put their feet up and survey a “job well done” on implementing GDPR processes and controls. Vigilance and ongoing monitoring are critical to building a culture of understanding of, and compliance with, the GDPR.
Although the most stringent security measures can be put in place to prevent data protection breaches, human error can circumvent the best in class processes and is the main cause of data breaches in organisations, and the most difficult to prevent.
The consequences of failure to comply can be significant from both a reputational and financial perspective which can include the imposition of significant fines by the Data Protection Commission (“DPC”) and organisations may also be exposed to civil actions by data subjects.

Fines

  • The DPC has significant powers to ensure compliance with the GDPR and take enforcement action as required.
  • The DPC can impose fines on organisations for non-compliance up to €20 million or 4% of the total worldwide annual turnover of the controller or processor in the preceding financial year (whichever is higher).
  • The higher tier of fines may be imposed for infringements of obligations relating to the core data protection principles such as transparency and accountability, the processing of sensitive personal data and breaches of data subjects’ rights.
  • The lower tier of fines (up to the higher of €10 million or 2% of the total worldwide annual turnover of the controller or processor in the preceding financial year) may be imposed for infringements of obligations relating to obtaining a child’s consent, to the communication of a personal data breach to the supervisory authority or the data subject or to the designation, position and tasks of the data protection officers.

Article 83 of the GDPR sets out what the DPC must consider before imposing a fine which includes: –

1. Nature and type of infringement: Consider the number of people affected, the damage they have suffered, duration of infringement, and purpose of processing;
2. Intention Was the infringement intentional or negligent
3. Mitigating factors What actions have been taken to mitigate damage to data subjects
4. Preventative measures How much technical and organisational measures the organisation had previously implemented to prevent the non-compliance
5. Categories of personal data What types of data the infringement impacts (e.g. special categories of personal data)

The Court must approve the quantum of any fines and the affected organisations have the entitlement to appeal the imposition of fines by the DPC.

Since the 25th May 2018 (and as at 16th November 2018) the DPC has logged 3,111 data breach notifications. Of these, the GDPR applied in 2,734. The DPC has also logged 2,168 complaints, of which the GDPR applied in 1,321 cases. The DPC has received complaints and breach notifications that relate to issues that occurred both post and pre-GDPR (25th May) and the pre-GDPR cases are dealt with under the old Data Protection legislation.

On average, approximately 230 data breaches and 220 complaints were received per month last year (2017) and the increased figures since 25th May 2018 are indicative of the greater awareness and focus of organisations on their GDPR obligations.
We have yet to see how the DPC will exercise its powers and the parameters of any fines that issue but it is only a matter of time before we see the imposition of the first fines in Ireland for breaches of the GDPR.

The Data Protection Commissioner, Helen Dixon, speaking at the recent PDP Data Protection Conference in Dublin noted that the volume of complaints has been high since the GDPR came into effect and the DPC will prioritise the more important cases affecting the largest number of data subjects. To assist in the carrying out their statutory duties, staff in the DPC (which is currently at 117), is due to increase to 130 by the end of 2018.

As a sign of what may come to pass in this jurisdiction the Portuguese Data Protection Authority has issued two separate fines totalling €400,000 on a Portuguese hospital in July last for two breaches of the GDPR which related to the unauthorised access to patients’ clinical data. The first fine of €300,000 was issued for failing to respect patient confidentiality and limit access to patient data, and the second was issued for failing to ensure the confidentiality, integrity, availability and permanent resilience of treatment systems and services, was for €100,000.

Civil action

An impacted data subject can also take a civil claim for damages against an organisation (being either a data controller or processor) under Section 128 of the Data Protection Act 2018 without lodging a complaint with the DPC although it is likely that, in most cases, an aggrieved data subject will lodge a complaint in parallel to taking any civil action and will await the outcome of the DPC investigation prior to progressing any civil action.

Recently, more than 5,000 employees of Morrisons UK Supermarket claimed damages against their employer, including an allegation of breach of statutory duty under the UK Data Protection Act 1998 which predated GDPR implementation. This related to the malicious sharing (from his personal PC) by a disgruntled Morrisons’ employee of personal financial data of approximately 100,000 employees of Morrisons.

The UK High Court held that there was a sufficient connection between the position held by the disgruntled employee and his wrongful act as to make Morrisons vicariously liable. The Court of Appeal upheld the High Court’s decision.

This decision, although of persuasive authority only in this jurisdiction, will be of concern to employers where they may now find themselves liable for the wrongful actions of their employees and face liability from affected data subjects as a result of the malicious actions of their employees, even where the organisation is compliant with data protection laws

Corrective action and criminal prosecution

The DPC may direct corrective action under Article 58 of the GDPR requiring a non- compliant organisation, for example, to cease processing personal data, to comply with a data access request, and/or bring processing activities into compliance in a specified manner and within a specified time frame.

A non-compliant organisation (and a director, manager, secretary or other officer of that organisation) may also be convicted on indictment to a period of up to five years imprisonment (in addition to a fine) for failure to comply with the GPDR.

Conclusion

It is important for organisations to realise that 25th May 2018 represents the start of their GDPR obligations and not the end. Organisations should ensure that they regularly review their GDPR compliance processes to protect themselves against the reputational and financial risks of non-compliance, where even the best processes and controls can be impacted by human error. Organisations should put appropriate insurance is in place, where possible, to cover liability as well as implementing strong data security and protection measures and ensure appropriate staff training to protect themselves against such actions.
By taking the steps now to understand, evaluate and address current and future GDPR obligations, organisations will be best placed to deal with the various challenges that can come with the broad international scope of the GDPR.

PS: Of course, if Santa has the Data Subjects’ consent for his list, Christmas might be saved!

For further information on any of the issues raised in this article please contact

Sarah Reynolds  

Associate in Data Protection & Commercial Litigation,
Kane Tuohy Solicitors
Phone: 01-6722233
Email: sreynolds@kanetuohy.ie

Overview of The Mediation Act 2017

Overview of the Mediation Act 2017 (“the Act”) The Purpose of the Act The key policy objectives of the Mediation Act 2017 ("the Act") are to promote increased awareness and use of a particular alternative dispute resolution (“ADR”) mechanism known as...

Basic Legal Provisions in Ireland for Lease of Business Premises

Basic Legal Provisions in Ireland for Lease of Business Premises Legal Regulations in Ireland (excluding Northern Ireland) In relation to the basic legal provisions in Ireland for lease of business premises, in general terms the law of landlord and tenant...

Workplace Relations Commission one year on

THE WORKPLACE RELATIONS COMMISSION ONE YEAR ON The Workplace Relations Act 2015 (“the 2015 Act”) came into effect on the 1 October 2015. The 2015 Act transformed the manner in which employment and equality disputes are heard – it was one of the biggest...
A Brief Summary to the Planning and Development (Amendment) (No. 2) Regulations 2018 (S.I. No. 30 of 2018)

A Brief Summary to the Planning and Development (Amendment) (No. 2) Regulations 2018 (S.I. No. 30 of 2018)

A Brief Summary to the Planning and Development (Amendment) (No. 2) Regulations 2018 (S.I. No. 30 of 2018)

The Aim of the Regulations

The aim of the Planning and Development (Amendment) (No. 2) Regulations 2018 (S.I. No. 30 of 2018) (the “Regulations”) is to facilitate the re-use of existing and vacant commercial buildings for residential purposes by providing an exemption for the change of use, and any related works, of certain vacant commercial premises to residential use, without the need to obtain planning permission.

They form part of the Government’s action plan to increase much needed housing supply, maximise the use of vacant underutilised spaces and assist in the rejuvenation of inner-core urban areas.

When the Exemption applies

The exemption applies to existing buildings that have a current commercial use with reference to Classes 1, 2, 3, and 6 of Part 4 to Schedule 2 of the Planning and Development Regulations 2001 (S.I. No. 600 of 2001) (referred to in the Regulations as the “Principal Regulations”), the definition of which Classes are set out below:

  • Class 1: Use as a shop.
  • Class 2: Use for the provision of (a) financial services, (b) professional services (other than health or medical services), (c) any other services (including use as a betting office), where the services are provided principally to visiting members of the public.
  • Class 3: Use as an office, other than a use to which class 2 of this Part of this Schedule applies.
  • Class 6: Use as a residential club, a guest house or a hostel (other than a hostel where care is provided).

Limitations

There are certain limitations on the nature and type of buildings that may benefit from the exemption, as follows:

  • The building must have been completed prior to the making of the Regulations (on 8 February 2018);
  • The building must have been used for one of the 4 classes of use referred to above at some time in the past;
  • The structure or part of the structure which is to be developed must have been vacant for 2 years or more immediately prior to the commencement of the development.

The change of use, and any related works, must occur between 8 February 2018 and 31 December 2021, so while the exempted development permitted is permanent in nature once the criteria are satisfied, the exemption can only be availed of during this period.

A number of other conditions and limitations apply, relating to works, the detail of which are set out more particularly at section 2 (Sub-Article (6)(d)) of the Regulations in the link below.

Notifying the Planning Authority

A developer must notify the Planning Authority in writing of the details of the development at least two weeks prior to the commencement of the proposed change of use and related works, and the notification shall include information on the location and number of residential units involved, including the unit sizes and number of bedrooms in each unit.

Compliance with the Building Regulations 1997 to 2017 must still be achieved, and Building Control procedures will still apply.

RELEVANT LINKS


See relevant links below:

1. Planning and Development (Amendment) (No. 2) Regulations 2018 (S.I. No. 30 of 2018) 

2. Circular Letter PL 01/2018 issued by the Department of Housing, Planning and Local Government, on the Planning and Development (Amendment) (No. 2) Regulations 2018

 

 

 

Vicky Pigot – Senior Associate

5 June 2018

Repayment of Stamp Duty where land used for Residential Development

Repayment of Stamp Duty where land used for Residential Development

Section 83D of the Stamp Duties Consolidation Act 1999 as inserted by Section 61 of the Finance Act 2017


Repayment of Stamp Duty where land used for Residential Development

Introduction

The Finance Act 2017 introduced a mechanism for repayment of stamp duty paid on land where that land is subsequently used for residential development, such that if the maximum amount of stamp duty is repaid under the mechanism, the effective rate of stamp duty ultimately payable would be 2%.

Repayment of Stamp Duty – criteria

Stamp Duty paid on instruments executed on or after 11 October 2017 that relate to the transfer of non-residential property and on which 6% stamp duty liability was paid, may be repaid by the Revenue Commissioners up to a maximum of two-thirds of such stamp duty paid,  if construction operations of one or more dwelling units on the land commence on or before 31 December 2021 and pursuant to a commencement notice within the period of 30 months following the date of execution of the deed.

Clawback provisions

The section contains clawback provisions and any repayment of stamp duty will be clawed back if:

  • the residential development is not completed within the period of 2 years of issuance by the relevant building control authority of their acknowledgment of the commencement notice; or
  • when the development is completed: (i) at least 75% of the total surface area of the land is not occupied by dwelling units; or (ii) the gross floor space of dwelling units on such land does not amount to at least 75% of the total surface area of that land.

The Repayment

The amount to be repaid is determined by the formula A x B x 2/3 where:

A = the amount of stamp duty paid (at the rate of 6%); and

B = the proportion of the area of the land on which residential development occurred,

      expressed as a fraction.

Documentary evidence in relation to repayment of stamp duty

To satisfy themselves that either the conditions for the making of a repayment, or the conditions for the avoidance of a claw-back, are satisfied, the Revenue Commissioners may specify documents and particulars be submitted, to include the following:

  • copy of any commencement notice
  • copy of any acknowledgment sent by the Building Control Authority
  • copy of any planning permission granted
  • the number and gross floor space of dwelling units constructed
  • the area of the land expressed in hectares.

All relevant documentation should be retained by the claimant for six years, as same may be requested by Revenue to evidence the legitimacy of any such claim.

Making a Repayment Claim

Once construction operations have commenced pursuant to a commencement notice acknowledged by the Building Control Authority, a claim for a repayment can be made by an accountable person by electronic means (in a form and manner yet to be specified by Revenue) and should include a statutory declaration stating that construction operations of one or more dwelling units on the land commenced pursuant to a commencement notice within the period of 30 months following the date of execution of the deed, and (where a claim relates to a part of the stamp duty paid) the proportion of the area of the land represented thereby. Note that a repayment does not carry interest (although interest shall be repayable on a clawback) and cannot be made after the expiry of 4 years following the date of acknowledgment by a Building Control Authority (notwithstanding the development might be carried out in phases).

Appeal

If Revenue refuses the repayment they shall notify the claimant in writing of the decision and the reasons for it, who may appeal to the Appeal Commissioners within 30 days of receipt of any such notice.

Single-unit developments and multi-phased developments

While the above relates to multi-unit single phased developments, Section 83D of the Stamp Duties Consolidation Act 1999

also applies to single-unit developments and multi-phased developments with the conditions set out above modified accordingly.


Author: Vicky Pigot

12 April 2018

Overview of The Mediation Act 2017

Overview of The Mediation Act 2017

Overview of the Mediation Act 2017 (“the Act”)

The Purpose of the Act


The key policy objectives of the Mediation Act 2017 (“the Act”) are to promote increased awareness and use of a particular alternative dispute resolution (“ADR”) mechanism known as mediation. This mechanism can be used even if proceedings have been issued and the Act has been designed so that mediation will co-exist alongside the court system.

What is Mediation?


The Act defines mediation as a confidential, facilitative and voluntary process in which parties to a dispute, with the assistance of a mediator, attempt to reach a mutually acceptable agreement to resolve a dispute. Certain types of disputes have been excluded for example arbitration, disputes which fall under the function of the Workplace Relations Commission and judicial review.

Key Principles of Mediation


Facilitative

There are a number of different forms of mediation; for example facilitative, evaluative, narrative or transformative mediation.

However, it appears from the definition of mediation in the Act that the legislature has adopted the traditional form of mediation known as facilitative in which the mediator is a neutral intervener who offers minimal assistance.

This is reinforced by section 6(9) which provides that it is for the parties to determine the outcome of the mediation. Therefore, the Mediator will facilitate communications between the parties, but full responsibility will lie with the parties to achieve a resolution.

One exception is set out in section 8(4) which provides that the mediator may, at the request of all the parties, make proposals to resolve the dispute, but it shall be for the parties to determine whether to accept such proposals. This provision may perhaps be used where the parties have reached an impasse but are still committed to reaching a resolution.

Confidential

Both the definition of mediation and section 10 of the Act provides that the mediation process is confidential. In particular, section 10(1) of the Act provides that all communications (including oral statements) and all records and notes relating to the mediation shall be confidential and shall not be disclosed in any proceedings before a Court or otherwise. There are of course exceptions to this namely:

A. Exception under section 10(2)

  • In order to implement or enforce a mediation settlement,
  • To prevent physical or psychological injury to a party,
  • Is required by law,
  • Is necessary in the interest of preventing or revealing the commission of a crime, the concealment of a crime, a threat to a party, or
  • Is sought or offered to prove or disprove a civil claim concerning the negligence or misconduct of the mediator occurring during the mediation or a complaint to a professional body concerning such negligence or misconduct.

B. Exception under section 10(3)

Evidence introduced into or used in mediation that is otherwise admissible or subject to discovery in proceedings shall not be or become inadmissible or protected by privilege in such proceedings solely because it was introduced into or used in the mediation.

C. Exception where Court has invited parties to consider using mediation

In circumstance where a mediation did take place after an invitation from the Court under section 16 (see below) but an application to re-enter the proceedings was subsequently made, the Mediator is required to prepare a report setting out whether or not a settlement was reached and, if one was reached, a statement as to the terms of the mediation settlement. It appears that this report and the terms of settlement may not enjoy the protection of confidentiality.

D. Exception where the Court is deciding to award costs of proceedings following an unreasonable refusal by a party to consider using mediation following an invitation under section 16 of the Act.

3.  Voluntary

Mediation is a voluntary process in that the parties must voluntarily agree to participate in the process. They must also choose voluntarily to continue participating in the process, for example section 6(4)(A) provides that a party may withdraw from the mediation at any time during the mediation. A person can be accompanied to a mediation by a person including a legal advisor who is not a party to the dispute.

Any settlement reached must be agreed voluntarily between the parties. The Mediator or an opposing party cannot impose a solution or settlement terms on the other party.

4. Enforceability of Agreement

Pursuant to section 11(1) of the Act, the parties shall determine if and when a settlement has been reached and whether that settlement is to be enforceable. However, section 11(2) provides that notwithstanding subsection 1 a settlement shall have effect as a contract between the parties to a settlement except where expressly stated that it shall have no legal force until it is incorporated into a formal legal agreement or contract to be signed by the parties.

Section 11(3) provides that a court may on application of one or more parties to a mediation settlement, enforce its terms except where the court is satisfied that the mediation settlement:

  1. Does not adequately protect the rights and entitlements of the parties or their dependants (if any),
  2. Is not based on full and mutual disclosure of assets,
  3. Is otherwise contrary to public policy
  4. A party to the mediation settlement has been over borne or unduly influenced by any other party in reaching the mediation settlement.

The Mediator


It is up to the parties to select a mediator. In terms of regulation of the profession, the Act has adopted a “light-touch” approach. Pursuant to section 9 of the Act the Minister shall, as soon as is practicable after the coming into operation of the Act, prepare and publish a code of practice or approve a code of practice prepared by a person other than the Minister which sets standards for the conduct of mediations. Pursuant to section 12(1), the Minister can declare that the body specified in the said order shall be recognised and known as the Mediation Council of Ireland. The Act does however place certain requirements on the mediator namely:

  1. Conflict of Interest before mediation – Section 8(1)(a)(i) provides that the mediator must carry out enquiries as to actual or potential conflicts of interest prior to the commencement of the mediation. If a conflict comes to their attention prior to the mediation commencing, then they cannot act as a mediator.
  2. Details of qualifications – Section 8(1)(b) provides that prior to commencement of mediation, the mediator must furnish the parties with details of their qualifications, training, experience, CPD training and further furnish to the parties a copy of any code of practice published or approved in accordance with the Act which they subscribe.
  3. Conflict of interest arising during a mediation – Section 8(2)(a) provides that if during the course of the mediation, the mediator becomes aware or ought reasonably to be aware of an actual or potential conflict of interest, then the mediator must declare same. The mediator must cease to act unless the parties agree to them continuing to act as the mediator.
  4. Treatment of parties – Section 8(2)(b) provides that the mediator must act with impartiality and integrity and treat the parties fairly.
  5. Legal advice for parties – Section 8(2)(d) provides that the mediator must ensure the parties are aware of their rights to each obtain independent advice (including legal advice) prior to signing any mediation settlement.
  6. Length and speed of the mediation – Pursuant to section 6(5) of the Act, the mediator together with the parties is required (having regard to the nature of the dispute) to make ever reasonable effort to conclude the mediation in an expeditious manner which is likely to minimise costs.
  7. Charging of fees – Section 20(2) provides that the fees and costs of the mediation shall be reasonable and proportionate to the importance and complexity of the issues at stake and to the amount of work carried out by the mediator. It should also be noted that section 6(10) provides that the fees and costs of the mediation shall not be contingent on its outcome. Pursuant to section 20, unless ordered by the court or agreed between the parties, the parties shall pay to the mediator the fees and costs agreed in the agreement to mediate or share equally the fees and costs.
  8. Withdrawal from mediation – Pursuant to section 6(6), the mediator may withdraw from the mediation at any time by notice in writing to the parties.
  9. Negligence – In respect of negligence on the part of the mediator, section 10(2)(e) contemplates the potential for redress against a mediator by way of civil claims and/or complaints to professional bodies.

The Agreement to Mediate


The parties must enter into an agreement to mediate prior to the commencement of the mediation. Section 7 provides that the parties and proposed mediator shall prepare and sign an agreement to mediate which appoints the proposed mediator and contains the following information:

  1. The manner in which the mediation is to be conducted,
  2. The manner in which the fees and costs of the mediation will be paid,
  3. The place and time at which the mediation is to be conducted,
  4. The fact that the mediation is to be conducted in a confidential manner,
  5. The right of each of the parties to seek legal advice,
  6. The manner in which the mediation may be terminated (subject to section 6(6) which allows the mediator to withdraw at any time by notice in writing stating the reasons for withdrawal),
  7. Such other terms as may be agreed between the parties and mediator.

Statute of Limitations


Section 10 of the Act provides that the period beginning on the day on which an agreement to mediate is signed and ending on the day which is 30 days after (a) the mediation settlement is signed by the parties and mediator or (b) the mediation is terminated, whichever first occurs, shall be disregarded for the purpose of the Statute of Limitations.

It should be noted that the time spent obtaining the other sides agreement to mediate and approving and engaging a mediator is not counted. As these stages can take time, the parties should be careful that the limitation period does not expire (or that the other side is delaying matters so that the matter becomes statute barred).

Solicitors’ Obligations


Part 3, section 14 of the Act sets out Solicitors’ obligations. From the 1st of January 2018 (being the date of commencement) a Solicitor shall, prior to issuing proceedings on behalf of a client, advise the client of the following:

  1. Consider using mediation as a means of attempting to resolve the dispute,
  2. Provide the client with information in respect of mediation services, including names and addresses,
  3. Provide information about the advantages of resolving the dispute otherwise then by way of the proposed legal proceedings,
  4. Advise the client of the benefits of mediation including that it is voluntary (but may not be appropriate where the safety of a child is at risk), confidential and that the mediation settlement can be enforceable if the parties agree.

Court Intervention


A.  Inviting parties to mediate – Pursuant to section 16 of the Act, the Court may on application of a party or of its own motion invite the parties to consider mediation and provide the parties with information about the benefits of mediation. An application by a party requesting the court to invite the parties to use mediation must be made no later than 14 days by motion on notice before the date on which the proceedings are first listed for hearing, unless the court orders otherwise.

If the parties decide to engage in mediation following the invitation, then the Court may adjourn the proceedings, make an order extending time for compliance by a party with the rules of the court or make such order or direction as it considers necessary to facilitate the use of mediation.

The existing Order 56A rule 2 of the Rules of the Superior Courts have been amended in accordance with the Act and provides that the Court may issue an invitation to consider mediation mentioned in section 16(1) of the 2017 Act of its own motion in any civil proceedings to which the  Act applies, on any occasion on which such proceedings are before the Court. Furthermore, where following an invitation by the Court the parties decide to engage in mediation, the Court may having heard the parties, make such orders in accordance with section 16(2) of the 2017 Act as it considers appropriate.

Given that Order 56, rule 2 triggers Order 99, rule 1B in respect of costs (see below), the Court of Appeal’s decision in Atlantic Shellfish Limited and Ors v the County Council of the County of Cork & Ors [2015] IECA 283 should be considered when assessing whether an application pursuant to section 16 is appropriate. It should be noted however that the judgment was given before Order 56A rule 2 was amended following the commencement of the Act, however the wording of the rule was relatively similar.

Case Study


Background – The first named Plaintiff operated an oyster fishery and the second named Defendant was a shareholder and director of the first named Plaintiff. The first named Plaintiff had operated its business on foot of certain Oyster Fisheries Orders made in 1963 and 1970 and maintained that from 1988 onwards, the fishery was contaminated by untreated sewage water that had been redirected into Cork Harbour following the grant of a foreshore licence. As a result, the Plaintiffs had issued proceedings in 1992 against Cork County Council and the Minister for the Marine. Those proceedings were settled, and the parties agreed inter alia that a secondary waste water treatment plant would be constructed. The treatment plant was installed, however the oysters continued to be contaminated and a significant number of customers reported becoming ill over the subsequent years. In 2002, the first named Plaintiff was forced to close its fishery permanently.

Proceedings were issued in October 2001 by the Plaintiff in respect of the loss suffered as a result of this closure. In 2014, the Plaintiffs issued a motion seeking an order pursuant to Order 56A, rule 2. The Court refused to exercise its discretion concluding that the purpose underlying the Plaintiffs’ application was artificial and that the real purpose of the application was to seek to “copper fasten its position with regard to a future application for costs”. The Court indicated that it might have taken a different course had it been satisfied that the State Defendants’ reasons for declining mediation could be considered to be other than bona fide or where there was still some reasonable possibility that the invitation, if so ordered, would be accepted.

Issue – The appeal focused upon the circumstances in which a court should exercise its discretion in favour of making an order pursuant to Order 56A, rule 2 inviting the parties to engage in ADR.

Decision – The Court outlined that when dealing with an application pursuant to Order 56A, rule 2, it must consider whether it would be appropriate to exercise its discretion having regard to all of the circumstances of the case.

  1. It must first be satisfied that the issues in dispute between the parties were amenable to the type of ADR proposed.
  2. Assuming that the Court answered the first question in favour of the applicant, then the Court should consider any other relevant circumstances inter alia whether the application was made bona fide and that the applicant was genuinely willing to engage with the proposed ADR rather than one made for the sole purpose of improving the applicant’s negotiating position given that the effect of the order would be to trigger the cost provisions of Order 99 rule 1B (see below).
  3. The Court’s decision may further be influenced by factors such as:

 (i)            the manner in which the parties had conducted the litigation up to the date of the application,

(ii)           the existence of any relevant interlocutory orders,

(iii)          the nature and potential expense of the proposed ADR,

(iv)         the likely effect of the making of the order sought on the progress of the litigation should the invitation be accepted, and the ADR prove unsuccessful,

(v)          the potential saving in time and costs that might result from the acceptance of an invitation,

(vi)         the extent to which ADR can or might potentially narrow the issues between the parties

(vii)        any proposals made by the applicant concerning the issues that might be dealt with in the course of the ADR, and

(viii)       any proposals as to how the costs of such a process might be borne.

Decision – In this particular case, the Plaintiffs’ motion failed to pass the first question.

The dispute was not amenable to mediation as it raised a novel point of law in relation to the grant of the foreshore licence. It was argued that the State owed a duty to any person who may be adversely affected by the operation of that licence such that the State is obliged to police and enforce the licence in order to protect such third parties (i.e. the Plaintiffs).


B. Adjournment of proceedings where agreement to mediate has been entered into – pursuant to section 19, where parties have entered into an agreement to mediate and one of those parties commences proceedings in respect of the dispute, then the other party can apply, after an appearance is entered but before delivering any pleadings or taking any steps in the proceedings, to adjourn the proceedings.

The Court will adjourn the proceedings where it is satisfied that there is insufficient reason why the dispute should not be dealt with in accordance with the agreement to mediate and the applicant at the time when proceedings were commenced was willing (and still remains so) to do all things necessary for the proper implementation of the agreement to mediate.

C. Costs – section 21 of the Act provides that where the Court has referred a matter to mediation under section 16, it may have regard to any unreasonable refusal or failure by a party to consider using mediation or to attend mediation, in the awarding of costs in proceedings. Section 21 sets out the factors to be considered by the Court in awarding costs namely that the court will consider any unreasonable refusal or failure by a party to consider using mediation and any unreasonable refusal or failure by a party to attend mediation following an invitation to do so by the Court under section 16.

Order 99, rule 1B already provided that the Court, in considering the awarding of costs of any appeal or of any action, may where it considers just, have regard to the refusal or failure without good reason of any party to participate in any ADR process referred to in Order 56A, rule 2 (as it was before it was amended in accordance with the Act). Order 99, rule 1B has been amended as follows:

  • In considering the awarding of the costs of any appeal or of any action in which the parties have been invited by the Court to consider mediation as a means of attempting to resolve the dispute the subject of the proceedings in accordance with section 16(1) of the Mediation Act 2017, may, where it considers it just, have regard to the matters set out in section 21 of that Act.

Consequently, a Court will consider when deciding on the issue of costs whether a party has, following an invitation made in accordance with section 16 of the Act, unreasonably refused or failed to consider using mediation or to attend a mediation.

It should also be noted that the Court has confirmed that Order 99 rule 1B will only be triggered once an invitation has been made in accordance with Order 56A, rule 2 [Hollybrook (Brighton Road) Management Company Limited v All First Property Management Company Limited and Anor [2011] IEHC 423]. An informal invitation by the Court should not trigger cost implications.

Whilst it appears that there have been no written judgments yet in which an Irish court has awarded costs against a party who had unreasonably refused an invitation to mediate the dispute, the English Court of Appeal case of Dunnett v Railtrack plc [2002] 1 W.L.R. 2434 may provide some guidance going forward.

Facts – the Claimant brought a case suing for damages arising from negligence following the death of her three horses which had been struck by the Defendant’s express claim. The Claimant was unsuccessful at first instance and on appeal. At first instance, the Judge has suggested that the parties consider mediation. The Claimant then referred this suggestion to the Defendant who instructed its solicitors to turn it down as it would involve the payment of money, which it was not willing to contemplate, over and above what it had already offered during negotiations.

Decision – the Court of Appeal held that the reasoning used to reject the offer indicated that the Defendant misunderstood the purpose of ADR. It was a lawyer’s duty to further the overriding objective of the Civil Procedure Rules 1998 being that the Court must deal with cases justly and at proportionate cost. This duty included consideration of whether ADR was a possible remedy. Consequently, if a party rejected ADR out of hand, he would suffer the consequences when costs came to be decided and for that reason no order was made as to the costs.


AUTHOR:

Natalie Coen – Solicitor

ncoen@kanetuohy.ie

Basic Legal Provisions in Ireland for Lease of Business Premises

Basic Legal Provisions in Ireland for Lease of Business Premises

Basic Legal Provisions in Ireland for Lease of Business Premises

Legal Regulations in Ireland (excluding Northern Ireland)

In relation to the basic legal provisions in Ireland for lease of business premises, in general terms the law of landlord and tenant is governed by common law and by statute law.

The latter operates to impede the freedom of both landlord and tenant to contract as they might wish in certain circumstances, e.g. statute provides that a lease which contains an absolute prohibition against alienation and the carrying out of improvements are subject to the proviso that a landlord cannot unreasonably withhold consent to a request by a tenant to do so.

Form of the Lease

Statute requires leases to be in writing if they are to create the legal relationship of landlord and tenant.  In addition, implied and oral tenancies are also recognised.

Object of the Lease

The object of the lease is to reflect in writing the commercial terms of the letting negotiated between a landlord and tenant, subject to compliance with statute law.  Under Irish Law a lease is founded on contract rather than tenure.  The tenant has an interest in property which entitles it to exclusive possession for the period of its tenancy, a right it may assert against third parties as well as the landlord.  Also, a tenant may dispose of or deal with its interest for example by assignment or a subletting subject to the terms of the lease.

Different forms of lease are used for residential and business premises.

Duration of the Lease

Under statute, a lease must have a definite duration either in years, months or weeks.  A business tenant is entitled to a new tenancy commencing on the termination of its previous tenancy provided it can prove business equity or long possession equity or improvements equity.  Business equity is established after five years of continuous occupation of the property for the purpose of carrying on a business.  The tenant can contract out of its right to a new tenancy by executing a renunciation of its entitlement to a new tenancy and by obtaining independent legal advice in relation to the renunciation.

In general, when a landlord grants a business lease of between five to ten years it requires a tenant to renounce its right to a new tenancy.

Basic Legal Provisions in Ireland for Lease of Business Premises

Maintenance/Reparations

  • With a single letting of an entire building, the tenant is liable for all repairs and outgoings, unless the parties agree otherwise.  Parties sometimes agreed to append a Schedule of Condition to the lease which records the condition of the property at the date of the granting of the lease which limits the tenant’s repairing obligations to the condition of the property as detailed in the Schedule of Condition;
  • In the case of a letting of part of a building, the landlord usually covenants to maintain the structure and common areas but passes on the cost to the tenant through a service charge.  The tenant is responsible for all internal repairs;
  • In the case of a short term letting of an entire building, i.e. one for less than five years, the repairing obligation will normally apply to the interior only with the landlord being responsible for the exterior including the structure.

Rent

The rent of a business lease is negotiated between the parties.

The normal business lease in Ireland contains a rent review clause which provides that the rent payable under the lease will be reviewed every five years on the basis of the market rent which might reasonably be expected to be achieved for the property at the time of the review.

Prior to 28 February 2010, a rent review clause provided that the rent could never fall below the rent payable immediately before the review.  These clauses were referred to as “upwards only” rent review clauses.

As a result of legislation, in any business lease entered into after 28 February 2010, any rent review clause must provide that the rent payable following a review will be fixed at an amount that is less than, greater than, or the same as the amount of rent payable immediately prior to the date on which the rent falls to be reviewed.  This, in effect, prevents the operation of an “upwards only” rent review clause.  The objective is that any reviewed rent must reflect the market conditions prevailing at the time of the review.

New Ownership of a Lease – Transferring or Assigning a Business Lease

A tenant can, subject to obtaining landlord’s consent (not to be unreasonably withheld) transfer/assign its lease to a new “owner”.  The tenant must, under the terms of the lease, obtain the landlord’s consent to such transfer/assignment and provide the landlord with details of the new “owner” together with evidence of its financial standing. The new “owner” will be bound by the obligations on the part of the tenant contained in the lease.

Termination of the Lease

The terms of the lease will contain the basis on which a lease can be terminated e.g. breach by a tenant of the covenants and conditions such as non-payment of rent.

The parties can negotiate a “break date” by either party during the term of the lease and the notice period for such intended “break”.

In general, a landlord has no right to forfeit a lease unless the tenant has been in breach of one or more of its terms.

Statutory Reliefs – Compensation

There are various statutory reliefs which entitle a tenant to compensation e.g. for carrying out improvements, for disturbance and where a tenant is entitled to a new tenancy and the landlord refuses to grant same on the basis of redevelopment of the property.

Very often, a landlord can be entitled to compensation from a tenant for failure by the tenant to repair the property in accordance with the terms of its lease.  Compensation payable to the Landlord cannot  exceed the value of the property.

VAT on a Lease

VAT may be payable on rental income where a landlord opts to charge VAT.

Jurisdiction

The Irish Courts have jurisdiction over all matters relating to Irish property.


AUTHOR:  SHEENA BEALE, PARTNER

sbeale@kanetuohy.ie

01-6722233

ALL CHANGE? The Sectoral Employment Order (Construction Section) 2017

A Sectoral Employment Order for the general construction industry has been signed into law by the Minister for State at the Department of Business, Enterprise and Innovation.

The Sectoral Employment Order (Construction Sector) 2017 (the “Order”) gives effect to measures recommended by the Labour Court in July 2017 relating to pay and conditions for employees in the general construction sector and takes effect from 19 October 2017.

Who does the Order affect?

The Order relates to the general construction sector, including operatives and general craft workers and so affects all employers and employees (whether agency or otherwise) in both “Building Firms” and “Civil Engineering Firms” (“the Sector”) which definitions are historically widely accepted.

The objective of the Order is to set the mandatory pay and conditions of employment for a basic hourly rate for the Sector and two higher rates of pay based on the level of skill of the operatives concerned. Therefore, employers within the Sector are first tasked with categorising their employees and workers.

Categories and Pay Rates

In relation to pay, specific mandatory pay rates have been set for categories of workers in the Sector, as follows:

Category 1 Worker: Skilled general operatives who have worked in the Sector for more than one year: €17.04 per hour.

Category 2 Worker: Skilled general operatives including scaffolders who hold an advanced scaffolding card and who have four years’ experience, banks operatives, steel fixers, crane drivers and heavy machine operators: €18.36 per hour.

Craft and New Entrant Workers: Bricklayers/Stone Layers; Carpenters and Joiners; Floor Layers; Glaziers; Painters; Plasterers; Stone Cutters; Wood Machinists; Slaters and Tilers: €18.93 per hour. Apprentices in these trades are to be paid at one third of the full craft rate, rising to 90 per cent of the full craft rate in their fourth year. Notably the categories do not include electricians and plumbers. Operatives who are over the age of eighteen and entering the sector for the first time: €13.77 per hour.

Extra Time Pay

The Order also fixes unsocial hours payments at either “time plus a half”, or double time, depending on the timing of the work. The Order does not include provisions on travel times as the Labour Court requires further consideration of the many legal and technical issues before it is in a position to come to a definitive recommendation. Existing contractual arrangements in this regard remain in force.

Pension

The Order provides that employers must provide a pension scheme to workers from the age of 18, with no less favourable terms, including both employer and employee contribution rates, than those in the Construction Workers Pension Scheme.

Sick Pay

The Order provides for a mandatory sick pay scheme with mandatory employee and employer contributions in line with the Construction Industry Sick Pay scheme. Employers who fail or neglect to make the authorised deductions shall be liable for the total contribution required to ensure that the worker’s sick pay benefits are maintained in full for the period of service with them.

Dispute Resolution

The Order provides for individual and collective grievances with recourse in the first instance to the employer; then to the WRC and then the Labour Court.

No industrial action can take place in relation to matters the subject of the Order until the dispute resolution procedure has been exhausted.

Next Steps

Employers in the Sector will need to categorise their employees and then review their terms and conditions to ensure that they comply with the Order. The Order applies from the 19 October 2017 and is legally binding on the Sector. The provisions are enforceable by the WRC.

Any Questions?

Contact Jenny Martin of Kane Tuohy, Solicitors at jmartin@kanetuohy.ie or telephone 016722233

The Sectoral Employment Order (Construction Section) 2017

The Sectoral Employment Order (Construction Section) 2017

ALL CHANGE?

The Sectoral Employment Order (Construction Section) 2017

A Sectoral Employment Order for the general construction industry has been signed into law by the Minister for State at the Department of Business, Enterprise and Innovation.

The Sectoral Employment Order (Construction Sector) 2017 (the “Order”) gives effect to measures recommended by the Labour Court in July 2017 relating to pay and conditions for employees in the general construction sector and takes effect from 19 October 2017.

Who does the Order affect?

The Order relates to the general construction sector, including operatives and general craft workers and so affects all employers and employees (whether agency or otherwise) in both “Building Firms” and “Civil Engineering Firms” (“the Sector”) which definitions are historically widely accepted.

The objective of the Order is to set the mandatory pay and conditions of employment for a basic hourly rate for the Sector and two higher rates of pay based on the level of skill of the operatives concerned. Therefore, employers within the Sector are first tasked with categorising their employees and workers.

Categories and Pay Rates

In relation to pay, specific mandatory pay rates have been set for categories of workers in the Sector, as follows:

  • Category 1 Worker: Skilled general operatives who have worked in the Sector for more than one year: €17.04 per hour.
  • Category 2 Worker: Skilled general operatives including scaffolders who hold an advanced scaffolding card and who have four years’ experience, banks operatives, steel fixers, crane drivers and heavy machine operators: €18.36 per hour.
  • Craft and New Entrant Workers: Bricklayers/Stone Layers; Carpenters and Joiners; Floor Layers; Glaziers; Painters; Plasterers; Stone Cutters; Wood Machinists; Slaters and Tilers: €18.93 per hour. Apprentices in these trades are to be paid at one third of the full craft rate, rising to 90 per cent of the full craft rate in their fourth year. Notably the categories do not include electricians and plumbers. Operatives who are over the age of eighteen and entering the sector for the first time: €13.77 per hour.

The objective of the Order is to set the mandatory pay and conditions of employment for a basic hourly rate for the Sector and two higher rates of pay based on the level of skill of the operatives concerned.

Extra Time Pay

The Order also fixes unsocial hours payments at either “time plus a half”, or double time, depending on the timing of the work. The Order does not include provisions on travel times as the Labour Court requires further consideration of the many legal and technical issues before it is in a position to come to a definitive recommendation. Existing contractual arrangements in this regard remain in force.

Pension

The Order provides that employers must provide a pension scheme to workers from the age of 18, with no less favourable terms, including both employer and employee contribution rates, than those in the Construction Workers Pension Scheme.

Sick Pay

The Order provides for a mandatory sick pay scheme with mandatory employee and employer contributions in line with the Construction Industry Sick Pay scheme. Employers who fail or neglect to make the authorised deductions shall be liable for the total contribution required to ensure that the worker’s sick pay benefits are maintained in full for the period of service with them.

Dispute Resolution

The Order provides for individual and collective grievances with recourse in the first instance to the employer; then to the WRC and then the Labour Court.

No industrial action can take place in relation to matters the subject of the Order until the dispute resolution procedure has been exhausted.

Next Steps

Employers in the Sector will need to categorise their employees and then review their terms and conditions to ensure that they comply with the Order. The Order applies from the 19 October 2017 and is legally binding on the Sector. The provisions are enforceable by the WRC.


Any Questions?

Contact Jenny Martin of Kane Tuohy, Solicitors at jmartin@kanetuohy.ie or telephone 01-6722233