Wright, Johnston & Mackenzie Solicitors

Surviving the Swine Flu Pandemic

The swine flu pandemic is hogging (excuse the pun!) the media headlines and there is increasing public panic. So far employers haven’t felt the impact of swine flu and, given previous warnings about bird flu didn’t materialise, might be becoming complacent.

With the winter flu season approaching, the pandemic is expected to dramatically worsen. Prudent employers should be aware of the significant legal implications of the pandemic and be taking steps to determine what effects swine flu may have on their organisation.

Firstly, employers should be aware that they have a duty of care towards their staff under both the common law and health and safety legislation to provide reasonable protection from the risk of swine flu infection. The reasonable steps required of the employer need not be onerous and could be as simple as providing: anti-bacterial gel in the office bathrooms, keeping employees updated with government swine flu advice and ensuring that employees displaying symptoms are sent home promptly. However, if swine flu victims were to sue their employers for damages, proving that the employer was responsible for the infection might, in a pandemic, prove difficult. 

Secondly, employers may be faced with fearful employees refusing to come to work because they think they may become infected with swine flu at work. If employers have taken reasonable steps to minimise the risk, then an employee will most likely not be entitled to refuse to come to work. However in certain circumstances, a refusal to work while in the workplace may be reasonable. For example, a cashier serving a customer who was sneezing and spluttering could reasonably refuse to work if they were forced to do so.

Thirdly, employers can expect to have high levels of staff absence, which could be detrimental to the economic health of the business. Consequently, employers should devise a contingency plan to cope with high level of staff absence.

Finally, employers should review their important commercial contracts and specifically look out for any “force majeure” clauses to ensure they are prepared if the other party to the contract attempts to argue that the contract is invalid due to the swine flu pandemic or equally if they want to evade their own obligations to another party.

If the above steps are taken, employers can minimise the effects of swine flu and shield their business from the unsettling spectre of litigation. Our CDR Team can give your company a full legal health check to ensure that you are prepared for the pandemic.

This article has been extracted from an extended Briefing Note prepared by Neil Morrison, It can be obtained by emailing Neil through:njm@wjm.co.uk

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Once Bitten, Twice Shy?

We’ve all been there, haven’t we? You ask someone to do something and then you discover they have completely messed up. That’s fine when a member of your family has accidentally recorded over the episode of Dragons Den you wanted to watch; but what about in a commercial setting where serious money can be at stake.

If a local authority, for example, considers their appointed tram construction company (ahem!) to have breached their agreement and doesn’t want that company to continue with the works; what can they do? They are faced with a dilemma; do they immediately tear up the contract (or rescind to use the posh legal term) and claim damages or give the contract breaker another opportunity to remedy their breach?

It is a difficult question to answer because legal opinion is divided and there are conflicting Scottish common law authorities on the right to cure a breach of contract.

The Scottish Law Commission identified the right to cure as being problematic in their Breach of Contract Report published in 1999. They thought the basic rule should be that the aggrieved party should be able to tear up the contract without giving the other party an opportunity to remedy the breach. In support of their view, they argued that, although the right to cure is fashionable judicially, it undermines the fundamental principle that the aggrieved party should not have to accept performance from the contract breaker.

Some hard-nosed lawyers might argue that a right to cure might be abused by unscrupulous companies to delay non-performance indefinitely and may alter the balance of power in favour of the contract breaker. Of course, more liberal lawyers may take a different view and argue that a right to cure would avoid clogging up our courts with unnecessary actions and prevent aggrieved parties using a sledgehammer to crack a nut.

Perhaps we can all put aside our own personal views on right to cure and strike a balance between the interests of the aggrieved party and the contract breaker. The International Institute for Private Law has made recommendations that appear to achieve the necessary balance between the interests of both parties. The right to cure is allowed but subject to several conditions: the contract breaker must give immediate notice of the planned remedial works and a reasonable timescale, the cure must be appropriate in the circumstances, carried out promptly and the aggrieved party must have no legitimate interest in refusing the cure.

Unfortunately there is still no conclusive answer to the question of whether an aggrieved party must give the contract breaker an opportunity to remedy their breach. The Scottish Law Commission concluded that the existing Scottish law is in “a state of flux” and one cannot really argue with that view given the current uncertainty in the common law. 

Every week we see aggrieved parties seeking some redress for breach of contract. Whether a building dispute or non-delivery of goods, the basic principles remain the same – start with a strong contract and keep on top of your suppliers. If a major contractual dispute is threatening to develop, please seek legal advice at the earliest opportunity to give you the best chance of success. 

More information from Neil Morrison: .(JavaScript must be enabled to view this email address)

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Here, that’s slander, that is!

During times of economic difficulties when money is scarce, disputes can arise and bad blood can develop between parties to such an extent that slander becomes an issue.

What actually is slander, I hear you cry? Often muddled with libel, slander is a form of verbal injury where one party maliciously tells fibs to a third party about the first party. In commercial cases, lies can be told about the victim’s business, which are intended to cause losses to that business. For example: John tells his friend Robert that meat from Alex’s butchery is tainted. Robert then stops buying his meat from Alex. The lie John told is slanderous as he has no proof about the quality of Alex’s meat and has caused Alex economic damage by telling that lie.

In Scots law there are very few reported cases but that doesn’t mean a Pursuer’s action of slander against someone will not succeed. If the three requirements for slander can be proved, then the Pursuer will win their case.

In order to win, you have to prove the following:

• The statement made must be false – for example, if one party says that the other party’s marina pontoons are unstable or unsafe then, if that statement is provably true, the aggrieved party cannot claim damages.
• The statement must be malicious – the Pursuer must prove that the false statement made by the Defender was made with malicious intent to cause loss to the Pursuer. If the Defender had no intention of causing any loss to the Pursuer, then the statement will not be slander. It’s up to the Pursuer to prove that the Defender was deliberately trying to undermine the Pursuer with the statement.
• The statement must have caused loss - the Defender’s remarks must have actually caused the Pursuer provable loss. It is not enough to say the remarks could have caused a loss but, in reality, no loss actually occurred. The Pursuer will have to prove the loss. For example, a rival paper merchant, B, telling paper merchant A’s customers that A is on the verge of going out of business and, to ensure continuity of business, they should transfer their custom, may be slanderous. However, if paper merchant A cannot directly prove a loss of orders as a result of B’s slander, then any action will fail.

If relations with your business partners sour, and you are aware of remarks that meet the three requirements for a slander action, then you may consider blowing the dust and cobwebs off this rarely used remedy to recover your losses. Our CDR Team are knowledgeable in this field of law and happy to assist you, should you need to raise actions for slander, defamation or passing off.

More information from Andrew Wilson: .(JavaScript must be enabled to view this email address)

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It was only an email….

In the past business people followed BT’s advertising mantra of “It’s good to talk” and communicated with one another by telephone, the odd memo and the old fashioned letter. The advent of email changed all that; suddenly it became the business world’s primary method of communication. Instead of relying on illegible faxes or the much-vilified postal system, we can simply fire off an email safe in the knowledge that the recipient will receive it in minutes and we haven’t even had to buy a stamp!

Of course, there are disadvantages too. The problem with email is that it’s all too easy to fire off an ill-considered email in the heat of the moment which could later come back to haunt not just the sender but their company too. A now notorious example was the Labour Party spin doctor, who sent an email within minutes of the World Trade Centre attack, saying it was “a very good day to get out anything we want to bury”.

The perils of unguarded email correspondence have featured in many employment law cases, but where’s the legal angle in litigation?

The recent case of Grant v Bragg proved that email correspondence can constitute a binding contract.

Mr Grant and Mr Bragg were both directors of a company in which they each held 50% of the shares. Mr Grant became seriously ill, which triggered a clause in the shareholder’s agreement to sell his shares to Mr Bragg. A draft agreement for the purchase of Mr Grant’s shares was drawn up but the parties never got round to signing it. 

Months were spent in disputing the agreement. Eventually Mr Bragg emailed Mr Grant offering to buy his shares under the draft contract. Mr Grant replied accepting Mr Bragg’s offer. Mr Bragg later changed his mind, and argued that he was not bound to buy the shares, as the contract had not been signed. Mr Grant raised proceedings to force the sale and the case was heard in the English High Court.

The Court held that while parties had initially decided to execute a formal document, they had then changed their minds and it was clear that Mr Grant had accepted Mr Bragg’s offer on the evidence of the email correspondence. In addition, the Court observed that to hold otherwise would only serve to defy the commercial reality of the situation.

The moral of this story is that a negotiating party should be aware of the informal ways contracts can be formed and not agree to terms by email unless they wish to be legally bound by them. Parties should qualify their emails as being non-contractual or “subject to contract” which should prevent a contract coming into force.

More information from Neil Morrison: .(JavaScript must be enabled to view this email address)

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Dación en Pago: Can you simply give up your Spanish Villa keys in exchange for discharging your mortgage debt?

Only a few years back, thousands of us were happily snapping up Spanish properties during the Spanish construction boom but with the world recession hitting the Spanish property market, many UK buyers are now feeling the pinch. Suddenly property is no longer a financial asset but a heavy financial millstone around UK buyers’ necks.

Buyers who can no longer keep up with mortgage payments on their Spanish property are placed in a very difficult position. The anxious buyer’s first port of call should be their Spanish bank. There’s no use sugar-coating the position and the best thing to do is be completely honest with the bank manager and outline the financial difficulties that are now being faced. The buyer may be able to negotiate some kind of deal with the bank such as an interest only mortgage payment.

If, following negotiations, the bank is still unwilling to budge, then it’s time to get tough! A buyer should give their bank an ultimatum that, unless the bank agrees to one of their suggestions, they will simply hand over their keys, deeds and utility invoices to the bank. A bank is not an estate agent nor does it wish to be, so an ultimatum should, at least, persuade the bank to pay more attention to the buyer’s proposals rather than dismiss them out of hand.

If the ultimatum fails, then the last available option is the “dación en pago”, which in plain English is formally handing the property keys and deeds over to the bank before a notary public in exchange for the buyer’s mortgage debt. However it should be remembered that this option is only available if the property is not in negative equity and the bank hasn’t started any repossession procedures against the property. A buyer’s attempt to enforce a “dación en pago” against an unwilling bank in the Spanish courts will be unlikely to succeed unless the property has positive equity.

More information from Neil Morrison: .(JavaScript must be enabled to view this email address)

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You Couldn't Make It Up...

At the end of LawSuit!, it’s time to sit back and let a wry smile spread across your face. Our ‘You couldn’t make it up . . .’ section contains items from the global legal community that you simply couldn’t make up, proving that life is stranger than fiction. This issue’s news comes from the USA.

Golfer who failed to yell “Fore!” is sued!

An American Court confirmed there is no legal obligation on a golfer to yell “Fore!” following a wayward shot. Golfers have been shouting the warning over hundreds of years and it has become golf etiquette as a simple, short way of telling other golfers to watch out.

In 2002, golfer Anoop Kapoor launched a stray shot out of the rough, which struck his friend Azad Anand in the eye, causing him to lose sight in that eye. Mr Anand sued his fried claiming that Mr Kapoor was liable on the basis that he failed to yell “fore” before the ball struck him in the eye.

However the Court ruled in favour of Mr Kapoor. Although the judges sympathised with Mr Ananad, they held that he was not entitled to damages, and that being hit by a stray ball is an “inherent risk of the game of golf.” The Court was persuaded by the fact that Mr Kapoor’s shot was so far off course that a warning would not have been anticipated.

The Court Panel observed: “While we are sympathetic to the fact that plaintiff was seriously injured as a result of this accident, to conclude that the defendant can be held ‘liable’ in tort for a poorly-executed golf shot because he may have negligently failed to shout ‘fore’ is inimical (contrary) to the rationale underlying the doctrine of primary assumption of the risk, and at odds with the public policy goal for its adoption—to encourage ‘free and vigorous participation’ in sports and recreational activities.”

Source: The New York Law Journal and The Wall Street Journal.

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WJM’s Commercial Dispute Resolution Team

When you see a legal fight on the horizon, whether it involves you personally or your business, your best advice is to “lawyer up”. Many lawyers approach such problems by focusing on the court as the only way to end the argument if people cannot agree.

At WJM, we focus on solving arguments in the most appropriate way for our clients’ needs and the problem that they have. We will look at your problem and approach it in the best way for you, identifying a cost effective and sensible solution where your costs are not disproportionate to the value of the claim you are facing.  In many cases negotiation and mediation are often as effective as litigation and we will not jump straight to litigation if there is a better way of approaching the problem.

‘Commercial’ doesn’t mean we just act for businesses. It means that we focus on solutions which take into account the needs of your bottom line, whether in your own business or from your own pocket.

More information from Liam Entwistle: .(JavaScript must be enabled to view this email address) or Andrew Wilson: .(JavaScript must be enabled to view this email address)

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Employment Briefing

You may also be interested in WJM’s Employment Briefing which offers regular updates on employment news and views. If you’d like a copy delivered straight to your PC, please email .(JavaScript must be enabled to view this email address) with the title “Employment Briefing” in the subject line.

For further information on these or any other dispute related issues, please contact:

Liam Entwistle .(JavaScript must be enabled to view this email address) 0141 248 3434
Andrew Wilson .(JavaScript must be enabled to view this email address)  0131 221 5560

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