The High-Speed Rail Link: An Update

In January this year, the Transport Secretary Justine Greening announced the government’s decision to proceed with phase one of the new high-speed rail link (“HS2”) between London and Birmingham.  Greening claimed that the decision followed “in the footsteps of the 19^th century railway pioneers” and signalled the government’s commitment to providing “21^st century infrastructure and connections”.

The full HS2 proposal is to create a “Y” shaped rail network which will link London, Birmingham, Manchester and Leeds, together with midway stations in the East Midlands and South Yorkshire.  Its aim is to alleviate existing service routes and to improve services and connectivity.  The final route of phase one will link directly to the Channel Tunnel Rail Link and Heathrow Airport.

Despite Greening’s enthusiasm for HS2, the project is not without its detractors who claim that, at £32.7 billion, it is simply too expensive.  The Department for Transport (“DfT”) has attempted to counter this criticism by suggesting that the costs are not unbearable when spread over the period of HS2’s development and construction.

Nevertheless, HS2’s critics have also raised environmental concerns over the proposed route, which cuts straight through the Chiltern Hills and will affect thousands of homeowners.  This concern has been exacerbated by the government’s requirement to compulsorily purchase property along the route.  The DfT has sought to mitigate these concerns by outlining proposals to extend tunnelling in the Chiltern Hills and to compensate affected homeowners.

According to the DfT’s timetable, consultation in relation to HS2 will continue throughout 2012 and extend into early 2014.  The possible start of construction on phase one is scheduled for 2016.

However, it is this timetable which has attracted the most criticism.  The phase one route is not expected to open until 2026 and the lines to Manchester, Leeds and Heathrow Airport are only pencilled-in to open in 2032-33.  Lord Adonis, the former Transport Secretary, has expressed his frustration at the long time-scales associated with HS2 and asked that the DfT expedite HS2 “before we are all dead”.

With continued widespread support within the government, press and industry, the enormous potential of HS2 appears to remain but, somewhat ironically, it is a project which is not proceeding at high speed.

Peter Bott
PBott@LawBlacks.com
Tel: 0113 2279203

A Drug for Mice to Cure Alzheimers?

Introduction
Plaque found in the brain of Alzheimers patients has been cleared by a cancer drug tested on mice.  There are many years of research still to carry out before it can be seen if this really will help with dementia.

In the meantime -

• Did you know if you suffer a stroke or your understanding fails and you have nobody in place to deal with your paperwork and finances for you it causes chaos?
• Did you know it means an application to the Court of Protection based in London to appoint somebody to look after your affairs and paperwork?
• Did you know it involves a medical certificate about you being completed by a doctor or psychiatrist?
• Did you know it could take at least six months, probably longer to be able to appoint someone to look after your assets, your house, your business?
• Did you know it will probably cost you up to £1,800 to get all of this off the ground?
• Did you know there are annual costs and fees due to the court?
• Did you know that you can avoid all of this?

You should seriously consider making a Lasting Power of Attorney to name people that you trust to look after your affairs and finances if you are ever too poorly to look after them yourself.

Talk to either Katherine Jordan or Nick Rhodes about Lasting Powers of Attorney.  We charge £400 for the making and registration at court of one Lasting Power of Attorney.  The better and sensible option.

KJordan@LawBlacks.com
NRhodes@LawBlacks.com

Tel: 0113 2070000

What Now for Rangers F.C?

Whilst the recent statement from the Administrators that the Club is unlikely to go into liquidation will have come as a welcome relief to its supporters, it begs the question of what the future holds in store for Rangers F.C. following its entry earlier this week into Administration.  The Club plans to use the breathing space afforded to it to propose a Company Voluntary Arrangement (“CVA”) to its creditors. A CVA proposal usually seeks the agreement of creditors to waive a proportion of the debt due which is then paid over a period of time or from the realisation of assets at some time in the future.   The Administrators have indicated that they are reasonably confident that the Club’s proposal will be accepted by its Creditors. However, it is worth pointing out that a majority of more than 75% in value of the Creditors must vote in favour of any Arrangement in order for the proposal to become binding on Creditors.  If the debt to HMRC exceeds 25% of the total amount of the Club’s indebtedness then HMRC could, block any CVA proposal made by the Club.

The Administrators have also indicated that there are a number of parties interested in acquiring the Club and should the Club fail in its attempts to agree a voluntary arrangement with its Creditors then it seems likely that the Administrators will then try to sell the Club as a going concern.  That sale could be either to the existing owners or new owners.  Whilst, in my experience, most expressions of interest in the acquisition of Football Clubs rarely turn into firm offers, it is clear that the Administrators believe that this is a viable route for them in the event that a CVA proposal is not accepted by Creditors.

However the Club emerges from Administration and in what form and under whose ownership, the major challenge facing the Board is to deliver future sustainability. The current owners have estimated that the Club’s expenditure exceeds its income by some £10m per year. There are those who believe that the game North of the border is in decline and as evidence of that fact point out that had it not been for Sion FC’s expulsion from European competition, no Scottish Club would have survived in Europe beyond the preliminary rounds this season.  The inability to compete in Europe, it is said, reduces revenues and makes Clubs less attractive as a destination for top European players. The recruitment of lesser quality players affects attendances which in turn reduces income which in turn makes it more difficult to complete in European competition. Trapped in that vicious circle, some argue any reprieve for Rangers could only be temporary without radical change.

That may result in a renewed clamour for the admission of Scotland’s top two Clubs into the English league pyramid system.  Clearly membership of the English Premier League would substantially increase the revenue streams of both Clubs and, for all of Celtic’s protestations this week that they can exist independently of Rangers, it is difficult to imagine that they would turn down the opportunity if it arose.

Could it be that this week’s events represent the beginning of a process that sees Rangers and Celtic abandoning Scottish football for greener pastures and if so, what fate lies in store for those left behind? In a few short years, will the fans of Motherwell, Aberdeen and Dundee United all be suffering the same agonies as those experienced by Rangers fans this week?

Ian Scobbie is the head of the firm’s Insolvency Unit and the former Chairman of Scarborough Football Club.
Email: IScobbie@LawBlacks.com
Tel: 0113 227 9327

Rangers go into Administration. If you want to know what Administration is . . . then read this!”

Outline

Administration allows for the reorganisation of a company or the realisation of its assets. It usually follows soon after a company becomes insolvent. The process takes place under the protection of a moratorium, which prevents creditors from enforcing their claims against the company.

When a company enters administration, an insolvency practitioner is appointed as the company’s administrator. The administrator then takes over the control of the company’s business and assets from the company’s directors, with a view to carrying on trading in the first instance.

Purposes of Administration

The administration of a company must achieve one of the following objectives:

• The rescue of the company as a going concern (the primary objective).
• The achievement of a better result for the company’s creditors as a whole than would be likely if the company were wound up (without first being in administration) (the second objective)
• The realisation of some or all of the company’s property to make a distribution to one or more secured or preferential creditors (the third objective)

An administrator must attempt to achieve the objectives of administration in this order.

In the context of Glasgow Rangers, the administrator must firstly pursue the primary objective. Having obtained a moratorium, it has been proposed that the administrator seeks to reach a voluntary arrangement with the company’s creditors. Such an arrangement is sought in order for the company and the creditors to reach a compromise that is as beneficial to both parties as possible. If successful, ultimately such an arrangement would allow the company to carry on trading.

Failure of Administration

If the administrator is unable to keep the company trading, then the company usually enters liquidation. This means that the assets of the company are sold off to realise any remaining funds, to be distributed to the creditors in the order of their security. However, unlike administration where the company can be saved, liquidation results in the dissolution of the company.

Luke Patel
Partner
Email: LPatel@LawBlacks.com

Going for Broke

An Insurance Broker has a duty to ensure that a policy meets the needs of its client. This is a continuing duty and requires a Broker to advise his client of any changes to the policy throughout its duration. A Broker who fails to comply with this duty could find themselves facing a negligence claim with a substantial liability.

The case of Ground Gilbey Ltd & Davey Autos Ltd –v- Jardine Lloyd Thompson UK Ltd concerned the owners of part of Camden Market in North London and their Insurance Broker. The claim followed a major fire in February 2008 which had been caused by a liquefied petroleum gas heater which had been left on in one of the stalls and had ignited clothing set out for sale. The Claimant’s Insurers alleged that they had failed to comply with the terms of their policy and the Claimants in turn alleged that this had been caused by the failure of their Insurance Broker to inform them of various conditions of that policy.

The Broker had failed to pass on to the Claimant details of the policy conditions which required immediate removal of the gas heaters and a survey condition making cover conditional upon satisfactory completion of certain risk improvements. The Claimant settled their claim against their Insurance Company in the sum of £3.8 million, which was approximately 70% of its value. The Claimant then brought a claim against their Broker in negligence.

Mr Justice Blair sitting in the Commercial Court of the Queen’s Bench Division held that the Broker had been negligent in failing to advise the Claimant of the terms of their policy. The Broker’s breach of duty had caused the Claimant to settle their claim against their Insurance Company for £1.7 million less than they would have done had there been no issues with the policy. This sum was recoverable from the Broker as it represented the difference between the amount actually recovered from the Insurers and the amount which would have been recovered had the Broker not been negligent.

In this particular case, the Broker well knew that the stall-holders were using the gas heaters and they failed to inform the Claimant that the policy of insurance no longer met their requirements. As a result of their failure, the Claimant was left with uncertain rights against their Insurer and suffered a loss.

The Court found that a Broker owes a duty to his client to take reasonable steps to obtain a suitable policy which meets the needs of his client. Part of that duty is to avoid exposing the client to unnecessary risks of legal disputes with their Insurer. The Broker’s duty includes drawing to the attention of his client any unusual or onerous terms and conditions and explaining the nature and effect of the same. The Broker’s duty continues throughout the life of the policy and if he becomes aware of material information which may affect the policy, he must act in the best interests of his client by drawing it to his attention.

The Court held that it had been reasonable for the Claimant to settle its claim against the Insurer at 70% of its value given the uncertainties in their rights under the policy. This was despite arguments from the Broker that the Claimant had settled for commercial reasons as a result of their financial position. Mr Justice Blair considered it was at least arguable that the Claimant’s cover had been prejudiced by the Broker and their rights under the policy were uncertain or doubtful. This was sufficient for the claim against the Broker to succeed.

For more information or advice on these and related matters, please contact Luke Patel on 0113 2279316 or by email at LPatel@LawBlacks.com

What “Price” a round of Golf?

Although many people think of golf as a safe, non-contact sport, statistics in the UK show that around 12,000 golfers a year require hospital treatment as a direct result of injury on the golf course.  In one-year alone 3,530 head injury accidents were recorded.  There has even been cases involving settlement of vet bills for treatment to a dog whose leg was broken by a wayward golf ball!

A golf ball is an extremely hard object, and when it’s travelling at high speeds can result in serious injuries if it hits another golfer, or someone else’s property.  Most UK household insurances do not include cover for personal accident injuries sustained while playing sports such as golf.  Most people are not aware of this, and independent research has found that nine out of ten UK golfers are not properly insured on the golf course against personal injury or accident.

Recent news reports have revealed that personal liability claims against golfers are on the increase, with claims tripling in the last five years after the courts ruled in favour of a claim launched by a lorry driver who lost an eye after being hit by a badly sliced drive.

The case that has led to this increase in claims was in 1998, when the high court ruled in the case of Anthony Lighting (whose faulty shot blinded a lorry driver in one eye) that ‘golfers are liable for shots that cause injury, no matter how slight the risk’. The case was upheld on appeal with the Court of Appeal ruling that golfers who mis-hit shots causing injury to other persons will be liable to pay damages even if they do shout ‘FORE!’. In 2001 the UK’s largest Public Liability claim for a golf sport injury was settled.   The £87,000+ settlement (including legal costs) was made following an incident at the London Golf Club in September 1996.  A declared provisional ball was ‘duck hooked’ low to the right, hitting a fellow golfer on the right temple as she walked forwards to the ladies tee.  She suffered serious head injury.  As Golf Courses are often being built close to residential areas nowadays and getting busier, the probability of injuring a fellow golfer or a passer-by is much more common (by ball or club) and the risk of doing so is greater every time you play. Add to this the compensation culture of today, where people are much more likely to prosecute, stepping out onto the golf course is an increasingly risky business, where hitting a fore could result in a costly lawsuit.  Could you afford the costs and damages if sued? It may mean financial ruin if you are not adequately insured! Without insurance your next golf shot could cost you a fortune!

Golf members are starting to see the importance of taking out personal liability insurance, but the law does make provision for injured parties suing the club itself. It would be prudent for managers of golf clubs, to carry out a risk management review and check the clubs insurance policy very carefully.  As the compensation culture shows no signs of abating, clubs need to ensure that they don’t get caught out.

People are often under the misapprehension that their household insurance policy extends cover to golf equipment and public liability needs.  However, many policies exclude public liability cover for sport injury and offer only restricted cover for equipment used for golf.  Some golf clubs offer ‘golf insurance’ for an extra fee on membership or green fees, some even make it mandatory.  This cover is often limited to public liability on that course on that day only.

Personal liability claims can run into thousands of pounds, so the best advice to any golfer is to make sure they have adequate personal liability insurance.  This won’t prevent the incident from happening, but it does mean that if the worst happens, they are protected and reduce the risk of paying out thousands in compensation.

Stephen J Lownsbrough
Associate & Head of Sport
Blacks Solicitors LLP
Tel: +44 (0) 113 207 0000
Email: SLownsbrough@LawBlacks.com

PRS for Music announces consultation on simplifying licence fees for amateur sports clubs

PRS for Music has announced the start of a consultation in relation to licence fees for the public performance of its repertoire at not-for-profit amateur sports clubs.  The aim of this consultation is to simplify the charges for such organisations and potentially provide a reduction of almost 30% on a like for like licence basis.

Working with the Sport and Recreation Alliance throughout 2011, PRS for Music has now proposed a new tariff which it believes will simplify licensing while ensuring that the contribution of music creators to the sector is recognised.  The proposed new tariff includes the creation of “unlimited music events bundles” for a flat annual fee and the simplification of how background music charges are assessed.

The six week consultation began on 24 January 2012 with the objective of providing amateur sports clubs and other interested stakeholders with the opportunity to share opinions on the proposed new tariff.

Keith Gilbert, Director of Public Performance Sales at PRS for Music stated: “The consultation intends to gather opinion from all relevant stakeholders, helping us ensure we’ve got the balance right between the needs of music creators and music users.   Amateur sports clubs are essential to community life and we want them to be able to use music wherever they need, especially as part of their fundraising activities.   We hope the proposed changes will be received positively and lead to a simplified and more cost effective licensing process.”

Please visit www.prsformusic.com/customerconsultation for more details on the consultation.

Peter Bott
Trainee Solicitor
PBott@LawBlacks.com