Wright, Johnston & Mackenzie Solicitors

Arbitration Agreements threatened by the Equality Act 2010?

It is not uncommon for arbitration clauses to set out that institutional rules such as International Chamber of Commerce (“ICC”) or London Centre for International Arbitration (“LCIA”) will govern the arbitration. Many of these institutional rules specifically take into account the arbitrators’ nationalities. The recent case of Jivraj v Hashwani [2010] EWCA Civ 712, has cast doubt over whether arbitration clauses with institutional rules or nationality restrictions are valid.

The Court of Appeal recently held that arbitrators fall under “employees” in the UK Equality (Religion or Belief) Regulations 2003 and therefore the arbitration clause in the parties’ contract was void as it breached the Regulations by stipulating that the arbitrators must all be of the same religious belief.

While it has to be noted that clauses stipulating religious beliefs of arbitrators are quite rare, this decision could have far-reaching consequences as any restrictions on arbitrators may now invalidate arbitration clauses because the arbitrators now fall within the Equality Act 2010. The consequences of an unenforceable arbitration clause would be that the national courts would reclaim jurisdiction, which is undoubtedly the last thing that parties who have agreed to arbitration would want to happen.

There is a glimmer of hope that parties could rely on the “occupational requirement” defence (Regulation 7 of the 2003 Regulations) provides an exception where being of a particular religion or belief is a genuine occupational requirement. However practically speaking such a defence may be of no assistance as arbitrators’ nationalities are often not an essential requirement to ensure impartiality.

The Jivraj case has been appealed to the UK Supreme Court and is expected to be heard in late 2011. In the meantime, though, any arbitration clauses that incorporate institutional rules or express restrictions on arbitrators may fall foul of the Equality Act 2010 and be rendered unenforceable. That said, the Act is worded differently from the Regulations, with the potential saving grace that only the offending part of the clause shall be rendered unenforceable, which would thereby allow the arbitration process to proceed to an award despite having been in breach of the Act.

For more information, contact Neil Morrison: .(JavaScript must be enabled to view this email address)

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Wrong fax number hits local authority with £100,000 Data Protection fine!

Many commentators have viewed the Data Protection Act 1998 (“the Act”) as toothless and reasonably weak when it comes to enforcement of data protection. However the UK Information Commissioner is now taking a harder line with organisations that fail to comply with their obligations under the Act.

The Information Commissioner (“the Commissioner”) was given new powers in April 2010 that allow fines of up to £500,000 to be imposed on organisations where they have committed serious breaches of the Act’s security requirements.

The new powers have been wielded recently in two cases. In the first case, an employee of a local authority mistakenly faxed sensitive personal information relating two child sex abuse cases to the wrong destination by entering the wrong number. The Commissioner fined the local authority £100,000.

In the second case, an employment training company’s employee had his laptop stolen while working from home. Unfortunately the laptop contained sensitive personal data, including criminal records and individuals’ income details, which were unencrypted. No harm was caused by the loss of the laptop but the employment training company was still fined by the Commissioner £60,000 on the basis that individuals’ privacy had been potentially exposed.

The implications for businesses are that compliance with data privacy must become a priority with organisations designing risk minimisation policies and procedures to limit the possibility of serious breaches occurring.

The Commissioner has said that he wants to send out a “strong message” and with increasingly large fines being imposed it is to be hoped that organisations will now take data privacy seriously, especially when the data is sensitive or financial.

For more information, contact Neil Morrison: .(JavaScript must be enabled to view this email address) or Steven Docherty: .(JavaScript must be enabled to view this email address)

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Fallago Rig wind farm decision proves controversial!

The recent decision of the Scottish Ministers to grant planning consent for the proposed wind farm at Fallago Rig has provoked a great deal of media interest. The controversy surrounding the case centred largely on the level of local opposition to the development, an issue that is of particular relevance to an increasing number of wind farm applications.

The planning application was initially refused at a Public Inquiry in February 2008. This was due to an outstanding objection from the Ministry of Defence on grounds that the wind farm would cause unacceptable interference to radar systems.

Following the refusal the Ministry of Defence indicated that they might be prepared to withdraw their objection, and discussions took place between the Ministry of Defence and the Scottish Ministers regarding the conditions under which this might happen. A new inquiry was opened, but limited to issues that had arisen following the original inquiry in 2008. By the time of the re-opening of the inquiry, the ministry of Defence had withdrawn their original objection.

There was substantial and organised opposition to the proposal, from local people in particular.

The primary objection was that the cumulative landscape and visual impact of the development would be unacceptable. It was argued that the proposed site was in a valuable landscape area where there were already a number of wind farm developments. A number of these developments had gone ahead after the 2008 inquiry, and development at the Fallago Rig site would mean that the Lammermuir Hills area would become completely dominated by wind farms. Reference was made by objectors to the scale of local anger and opposition to the proposal. Although the Ministry of Defence had withdrawn its objection other objectors argued that the proposed solution to the aviation problem was not precise enough. Objectors also made reference to possible negative impacts on tourism and recreation in the area.

A separate argument was made that the process by which the application had been handled was unfair, undemocratic, and contrary to natural justice. It was argued that the discussions that had taken place between the Scottish Ministers and the Ministry of Defence had excluded other relevant parties and created the irretrievable appearance of bias. The Scottish Ministers, it was argued, had compromised themselves by holding discussions regarding the granting of consent outside of the Inquiry process.

The decision

The Reporter appointed to decide the appeal agreed that the cumulative landscape and visual impacts of the development would be significant. These drawbacks were outweighed, however, by the significant contribution that would be made by the development towards renewable energy targets. The Reporter noted in particular that national policy support for renewables had increased since 2008. The crucial objection on radar interference had been overcome, as there was now a technically feasible solution that could be implemented within a reasonable timeframe. The Reporter found that there was no evidence of significant adverse impacts on tourism or recreation.

Wider significance

The decision to grant consent has proven to be highly controversial. Objectors to the proposal have accused the Scottish Ministers of disregarding the views of local people and of undermining wider public confidence in the planning system.

However, all the parties to the original inquiry, all those who had made representations on the original application and all those who had previously been consulted on the application were asked whether they wished to take part in the new Inquiry. The scope of the re-opened inquiry was widened beyond the issues on aviation in response to concerns raised by objectors. As such, full account of the views of objectors was taken during the inquiry process.

In addition, the Reporter to the original inquiry in 2008 found that the contribution to renewable energy targets of the development outweighed any negative environmental effects. The reason for refusal following the original inquiry had been the radar interference issue, and the Ministry of Defence objection had fallen away prior to the re-opened inquiry.

This case shows that despite the strengthening in national policy support for renewable energy development, wind energy developers should be mindful of the likelihood of meeting organised opposition and objections to their applications for planning consent. 

For assistance on planning matters please contact Fraser Gillies .(JavaScript must be enabled to view this email address) or Iain Crosbie .(JavaScript must be enabled to view this email address).

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Do Squatters’ Rights Exist?

Squatters’ rights differ depending on which jurisdiction in the UK the squatting takes place. For example, in England and Wales squatting is, strictly speaking, not illegal. The homeowner’s difficulties are exacerbated as English law prohibits physical removal of squatters, changing the locks or cutting off utility supplies.

Obtaining a court order for the eviction of a squatter can often be a lengthy and expensive process. However once the court order is obtained then bailiffs can remove the squatter without too much difficulty.

However in Scotland squatting is illegal under the Trespass (Scotland) Act 1865 whereby a person who lodges or occupies a house without the consent or permission of the owner is guilty of an offence. The homeowner has the right to eject the squatter without notice or a court order but cannot physically remove the squatter using force or any other illegal means. A squatter can be imprisoned or heavily fined if caught living in someone else’s property without permission. The homeowner can also sue the squatter for any losses (such as loss of rental income) by raising a civil court action in the Sheriff Court for “violent profits”.

However although it is illegal it may still be difficult to remove the squatters if they do not go voluntarily as physically removing them is an assault and if the police feel the issue is a civil matter then there is little else to do but turn to the Courts as changing the locks etc is illegal. If the squatters take a robust stance and argue that they are allowed to lawfully reside there and perhaps produce a lease claiming to be tenants then evicting a squatter may be problematic and a court action will require to be raised for summary ejection to determine whether the squatters have any right or title to occupy the homeowner’s property (as per Glasgow Lock Hospital v Ashcroft & Others) which may take 2 months or more to conclude.

It is interesting to compare the position in the UK jurisdictions with Spain. Traditionally Spanish law has been somewhat sympathetic towards squatters with the result that the eviction process could often take up to a year or more. The homeowner is also unable to take any self-help measures such as changing the locks or cutting off the electricity supply to a squatter because that would be a Spanish criminal offence.

In 2009, a new Spanish law was enacted due to widespread criticism of the current law relating to squatters. The new law was supposed to reduce the eviction process known as “juicio de desahucio” to around two to five months. Regrettably despite the introduction of the new law, many Spanish evictions can still take longer than five months. However once an eviction order is eventually obtained, which is known as a “lanzamiento”, then the police will remove the squatters without delay allowing the homeowner to recover possession of their property.

For more information, please contact Neil Morrison .(JavaScript must be enabled to view this email address) or Iain Crosbie .(JavaScript must be enabled to view this email address).