Legal Advice

The simple answer to this question is a ‘Lawyer’ a person who practices law, whether as a Barrister, Solicitor, or Chartered Legal Executive, Attorney & Counsellor at law, Foreign Qualified Lawyer and Paralegals. Lawyer in the context I refer to it is much wider than would be expected and reflects changes introduced by the Legal Services Act 2007.

The Legal Services Act 2007, which came into force on the 6th October 2011, was hailed as a landmark day for the legal industry, and in another breath it was termed “Tesco Law” as it was anticipated that law ‘shops’ would open in Tesco stores; and whilst this reality has not come to pass, a new paradigm in legal services provision has.

Under the Legal Services Act 2007, Section 12 and schedule 2 defined six reserved activities, (1) Exercise of rights of audience; (2) Conduct of Litigation (3) reserved instrument activities (concerning land registration and real property) (4) Probate
activities (5) Notarial activities (6) Administration of Oaths. Section 12 further defined a legal activity as either a reserved legal activity or as the provision of legal advice, assistance or representation in connection with the application of the law or with any form of resolution of legal disputes.

The effect of the Legal Services Act and the definition under Section 12 was that it deregulated the provision of legal work, so that companies that did not offer legal services as their primary business can now undertake legal practice. Essentially it was this point that spawned the ‘Tesco Law’ because technically supermarkets would now be able to offer legal services.

This deregulation simply gave credence to what was already happening, which was the provision of expert legal advice to businesses by non-solicitor lawyers. Expert advisors had been providing advice and preparing documents and contracts, giving expert advice on commercial and business law, construction law, representing clients in adjudications, arbitrations, providing representation at Employment tribunals and other tribunals, relating to matter like, boundary disputes, registration required under the law, (In the Care Industry, In the Security Industry for example), giving advice on consumer protection law, corporate law, acting as company secretaries, giving advice on compliance issues, consumer protection law and a whole raft of Alternative Dispute Resolution problems.

The benefits of early legal advice and why pro-activity is better than reactivity.

The reality is that Law is the lifeblood of the business world, and therefore Lawyers must spend time with clients or potential clients and do more than just listen to their clients concerns and desires. Lawyers must ask questions that help identify the legal issues at stake and use the answers to identify the legal point at issue. Once the issue has been identified the lawyer must act on the client’s behalf, research the law of the jurisdiction, then provide advice, guidance and where appropriate suggest solutions.

One question many people ask is whether or not it is worthwhile engaging a lawyer and will the costs
in time and money outweigh the benefits the advice provided. Traditionally, clients come to their lawyers once they the prospective client, has realised that they have a problem, it is only then that a legal opinion is sought, effectively trying to close the door after the horse has bolted, what is known as a reactive approach. Many practitioners of Non-Reserved activities are progressive and react pro-actively, seeking to avoid problems before they arise. The question of reactive and proactive legal services is well illustrated in the context of the management of projects. Many project managers are suspicious of lawyers and regard the law as cumbersome, full of jargon and divorced from the realities of the day-to-day business community. In the past this has led to work being undertaken in isolation from the intricacies of the legal system, leaving the law to lawyers without attempting to
integrate good legal practice with sound project management discipline, and sensible business management. The law then tends to rear its head most noticeably for many projects at the cradle (contract negotiations) and then at the grave (in the resolution of disputes) but often the intervening period, at times when those crucial preventative measures can be taken are regarded as the esoteric province of lawyers.

The law is mysterious, even to the most sophisticated business owner. It is sometimes illogical. It is often frustrating. The reasons for seeking legal advice can be triggered by frustration at artificial limitations imposed by law, the inflexibility of Local or International Regulations and the unpredictability of the legal system. Companies sometimes fall victim to frivolous lawsuits, suffering the apprehension of the threat they represent. This is compounded by the expense of having to defend when they should not have to.

At some point, frustration at the law intersects with frustration at the traditional cost of legal advice.
That is when companies begin to wonder if they can get more personalized, cost effective legal services at a market rate that makes business sense. Corporate clients are recognising that the expensive hourly rates charged by solicitors, which are then transferred into high fixed fees, are unsustainable within the marketplace when other providers can provide equal or superior services, in many cases, for fixed prices which are dramatically cheaper than traditional providers.

Obtaining early legal advice from the outset is extremely important for several reasons. Parties are usually more willing to negotiate essential terms of agreements at the bringing of their relationship, it allows parties to ascertain their legal position at an early stage ensuring that they can minimise their exposure to potential legal risks and possible litigation. Early legal advice can reduce the risks of litigation in the future or end a dispute before too much cost is incurred, these cost to reduce the existence of these risks can and must be considered an investment in the future of the business.

NOT LEGAL ADVICE: Information provided in this Blog, is for information purposes only. It is not and should not be taken as legal advice. You should not relay on or take or fail to take any action based upon this information. Never disregard taking legal advice or delay in seeking legal advice because of something you have read in this blog, or on this website. Ian Randall is an Attorney & Counsellor at Law (NY), with 25 years of Corporate and Commercial experience in several jurisdictions. To see how Owllegal could help you, please visit; www.owllegal.org or email Ian Directly, his email address is ian@owllegal.org.

Extensions of Time

A construction contract will define the works that the contractor must deliver and, unless it contains provisions to the contrary, neither party is entitled to unilaterally change the scope. Since
changes will often be necessary or desirable, a contract will typically contain a mechanism to allow the employer to order a variation.

Normally a contractor will be in breach of contract for undertaking a variation and departing from the scope of the contract where no formal instruction has been
given. An employer may give the contractor permission to depart from the contract scope without instructing a variation under the contractual mechanism.

It is important to distinguish between:

  • A contractual instruction, which triggers a right to payment under the contract.
  • A permission, which merely allows the change to be made and ensures that the contractor is not in breach.

If the employer only gives permission, then the contractual variation mechanism will not have been operated and the contractor will not, typically, be entitled to payment.

The employer may give such a permission to change the scope without issuing a formal instruction for many reasons, such as:

  • The need to change the scope arises because of the contractor’s failure.
  • The contractor introduces an improvement to the scope without consulting the employer.

Whether the employer’s communication to the contractor qualifies as a contractual variation instruction (or instead merely represents a permission) depends on how the contract defines such instructions.

Contracts will typically specify that an instruction should be given in advance of the change being undertaken and that it should be in writing. While these stipulations may be typical, they are not uniform.

Some contracts provide that a written communication given after the change has been implemented will constitute a valid instruction triggering the right to additional payment. An employer can
quite easily issue a communication to the contractor intending to give permission that discrepant works may remain, while inadvertently finding that it has, in fact, issued a retrospective variation instruction providing for additional payment.

Often it will be the case that the contractor argues that the employer’s permission gives it a right to payment despite the fact that no contractual instruction has been given. The following four grounds are the most common bases on which such an argument is advanced:

Waiver. While the parties’ contract may provide that payment for a variation will only be triggered if the employer has issued an instruction in the prescribed form, the employer may waive this
requirement.

Implied promise to pay. The principle is illustrated by Molloy v Liebe (1910) 102 LT 616, PC. The employer and contractor disagreed as to whether an item of work was within the contract’s scope or extra. The contractor undertook the item of work and subsequently sued for payment. The court found that the item of work was outside scope and therefore was additional, it was nevertheless not liable to pay because of the absence of an instruction. The court found that, when the item of work was undertaken the employer must have been impliedly promised that
it would pay if it was subsequently established that it was wrong as regards the disputed scope.

Variation of the contract itself. The product that one party agrees to deliver under a contract represents one of the contractual provisions. The parties can agree to change the stipulated product in the same way that they can agree to change any other contract provision.

Collateral contract. The parties may agree that additional work is undertaken under an entirely new contract that is separate to their original agreement.

Establishing a right to be paid under one of these four grounds may superficially appear easier to establish because it will not be necessary to demonstrate that a formal contract instruction has been issued. But other challenges arise. Not least, that it will normally be the case that the employer itself has to agree to the waiver, change or extra work.

It should be emphasised that in order for any of these four grounds to be made out the employer will need to have given consent for the change to be made. Typically, therefore, they arise where the employer maintains that it has given permission but not a formal instruction. It can, instead, be the case that the employer pointedly refuses to approve any change to the works, whether as an instruction or permission. In such circumstances, the contractor will need to establish that the employer was under some form of positive obligation to give approval.

Acknowledgement: Thomson Reuters online resource Practical Law Construction Blog

NOT LEGAL ADVICE: Information provided in this Blog, is for information purposes only. It is not and should not be taken as legal advice. You should not relay on or take or fail to take any action based upon this information. Never disregard taking legal advice or delay in seeking legal advice because of something you have read in this blog, or on this website. Ian Randall is an Attorney & Counsellor at Law (NY), with 25 years of Corporate and Commercial experience in several jurisdictions. To see how Owllegal could help you, please visit; www.owllegal.org or email Ian Directly, his email address is ian@owllegal.org.

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Ian Randall

Results driven Corporate and Commercial Lawyer with 25+ years of experience ensuring the legality of Corporate and Commercial transactions. Adept at drafting corporate and commercial documents, reviewing, disputing, and advising on Commercial and Corporate matters. Clear ADR: Accredited Civil and Commercial Mediator and Alternative Dispute Resolution Specialist.

Honours Degree in Law and a master’s degree in Employment Law and Practice from the University of Central Lancashire.

A member of the New York State Bar in Good Standing.

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