Based on the results of a recent US survey carried out by The Research Intelligence Group (TRiG) 3 out 4 US consumers seek out their lawyers online. That’s a whopping 76% with just 24% seeking their legal assistance elsewhere.

The survey was based on 4,000 adult internet users and, in the US, 78% of the entire adult population are internet users.

Although these statistics may come as a shock at first they are hardly surprising when we take into account the rapidly increasing popularity of buying online. You purchase your groceries, clothes and even your insurance online, why not purchase your legal services online?

It’s quick, simple and convenient and it makes sense.

Nowadays consumers cut out the lengthy phone calls by sending a quick text or an email with all the relevant documents attached. It’s generally all left in the lawyers’ hands and probably the only contact the client will have with the lawyer that comes anywhere close to face to face contact is through Skype or conference calling.

But, despite the convenience of many online services, there is growing concern that the general public are having less and less direct contact with each other and are relying heavily on the internet just to avoid that contact.

By cutting out the middle man are we, quite literally, cutting ourselves off?

By banking online we are avoiding contact with the tellers in our local branch, by opting to read the news online we cut out the need to pop down to the corner shop to buy our daily and by chatting to friends and family on social networking sites it saves the effort of having to visit.

Is the internet making us an anti-social race?

In 2003 we saw the launch of LinkedIn, followed by Facebook in 2004 and, two years later, Twitter and, these days, a vast number of consumers use these social networking sites as a means of gleaning information and advice about lawyers and legal services.

There is no denying that we live in a digital age which is not likely to end anytime soon so, regardless of the fears that direct contact is diminishing and we are becoming more anti-social, there is little option but to move forwards into the realms of virtual living.

So, what does this mean for lawyers?

In order to keep up with this increasing online demand law firms, large and small, should devise a new marketing campaign to support these digital consumers and, if they haven’t done so already, create some kind of online presence, ideally something which is easy for consumers to both find and understand which gives them access to reports, legal guidelines, checklists and a ‘frequently asked questions’ section.

SEO is vital if they want their site to achieve higher rankings within search engine results and a blog is essentially, especially for smaller law firms who need to get noticed, fast.

A recent study by The American Bar Association has shown that, as a result of their online blogs, 60% of small law firms have landed new clients.

With over 900 million users spending an average of just under eight hours a month on the site Facebook is also a potential client haven so US law firms should also consider social media activity as part of their online business strategy.

Parties involved in litigation are called litigants. Each party has the right to support its argument presenting by evidence of any findings and facts. In the UK, civil litigation process is governed by the Civil Procedure Rules. The parties are bound to follow certain protocols regarding pre-trial behaviour and court room procedures. Litigation can either be concluded through successful pre-trial alternative dispute resolution or formal court ruling.

Litigation Solicitors

Litigation is a serious legal process and professional legal advice from experienced litigation solicitors should be sought as soon as contentious resolution becomes a real possibility. Litigation solicitor will assess the merits of your case, research other legal precedents that may indicate and affect the outcome of the dispute, gather evidence and interview any potential witnesses. If appropriate your solicitor will also try to find a suitable expert witness who will testify about technical issues. There are certain rules governing appointment of expert witnesses and generally in less complex cases both parties will have agree on and share one expert witness.

The Track System

Following the reform of legal system in 1999, there are three main tracks to which cases are assigned:

• The Small Claims Track
  • The Small Claims Track covers all claims in which  sought awards of no more than £5,000 (£1,000 for personal injury claims). Cases assigned to the Small Claims Track can be progressed fairly quickly and in a relatively informal way.
  • The Fast Track
    • The Fast Track is designed for cases that can be resolved in a relatively short amount of time. Most of claims assigned to this track are handled by the County Courts. Typically fast track cases are not worth more than £15,000. Any claim worth more than £15,000 qualifies for the Multi Track and will be likely to be allocated to it unless the matter in question is relatively straightforward and could benefit from quicker and less costly resolution via the Fast Track route.
    • The Multi Track
      • Multi track route covers court claims and claimants with sought awards of more than £15,000. More complex cases for less than £15,000 that are involve considerable amount of evidence and are likely to result in lengthy trial will also fall within the Multi Track. The Multi Track is very formal and significant amount of documents will need to filed before the expected trial date.

Alternative Dispute Resolution

Under the Civil Procedure Rules the courts and litigants are obliged to cooperate to ensure smooth and time and cost effective resolution of the matter. Para 8.1 of the Practice Direction to Pre-Action Conduct states that:

‘Starting proceedings should usually be a step of last resort, and proceedings should not normally be started when a settlement is still actively being explored. Although ADR is not compulsory, the parties should consider whether some form of ADR procedure might enable them to settle the matter without starting proceedings. The court may require evidence that the parties considered some form of ADR (see paragraph 4.4(3)).’

There are a number of different alternative resolution techniques that can be considered. Some ADR procedures are more common in certain professional areas i.e. arbitration in the construction industry. For more information you can also visit the Centre for Effective Dispute Resolution website.

The most common forms of ADR include:

• Mediation
  • Mediation is similar to negotiation except it involves an independent third party who helps to reach a mutually agreeable compromise (mediator). The downfall of mediation is that as most ADR procedures it is not legally binding.
  • Arbitration
    • Arbitration is the most formal form of alternative dispute resolution. Unlike other forms of ADR arbitration is legally binding on the parties. In arbitration parties will pass their case to an independent accredited arbitrator who will make a formal legally binding judgment.
    • Negotiation
      • Parties negotiate potential settlement before formal litigation proceedings commence. In many cases litigation solicitors are involved by the parties to represent their interest. Often negotiations continue through to initial stages of formal litigation. Many cases are successfully resolved at significantly smaller cost to the parties.
      • Conciliation
        • Conciliation is very similar to mediation as it involves an independent third party who tries to help to resolve the dispute. Conciliator however takes more active approach and expresses his or hers opinion on the matter. Mediators throughout the mediation process do not express their own views.

In this article we examine a number of advantages that written contracts provide over oral agreements and consider some of severe consequences that may arise in the case of verbally formed contracts.

Written Contracts Advantages

Aside of the fact that certain contracts are legally required to be in writing, it may also be wise to ensure that a contract is evidenced in writing, to ensure that the terms agreed are clearly defined and transparent evidence of the whole deal exists in the event of a dispute. Although certain arrangements may not require a written formal contract, it is expected that complex commercial deals involving a lot of different terms, warranties and conditions that need to be satisfied should be clearly set out to avoid any subsequent doubts. Failure to record an agreement properly in writing could potentially lead to costly litigation.

Contracts Legally Required to be Recorded in Writing

It is always wise to check whether or not a particular transaction is required by law to be evidenced in writing. Failure to honour the requirement could result in the contract being held void, voidable or unenforceable.

• A contract for the sale of an interest in land, an agreement creating equitable charge or a mortgage of a legal estate in land (s2 Law of Property (Miscellaneous Provisions) Act 1989);
• With certain exceptions, transfers of shares (s770 Companies Act 2006);
• Assignments of certain IP rights (ss90(3) and 222(3) Copyright Designs and Patents Act 1988); and
• Guarantees (s4 Statute of Frauds 1677);
• Assignments of contractual benefits (s136 Law of Property Act 1925).

Verbal Contracts

As mentioned above, the English legal system allows for contractual arrangements to be completed verbally. The word completed is particularly important here as only fully agreed verbal contracts can be legally recognised as valid. Any agreements that are subject to negotiations and with uncertain terms will not be likely to be upheld by the courts. Clearly, one of the most significant dangers of verbal contracts is the risk of not being able to prove its existence. There may be many different reasons leading to a dispute. For instance, parties could interpret differently certain words used, could later forget about certain things being said or simply as mentioned before disagreements could arise as to what constituted the very final agreement and not negotiations.

If the case becomes contentious and goes to court the judge will try to determine the situation based on the evidence available. Sometimes the case may come down to one party’s word against the other’s. Where monetary consideration was evidenced by i.e. a receipt or bank wire it may prove existence of the contract but exact verbally agreed terms will still remain difficult to prove.

To ensure that you secure your position you should ideally record the agreement in writing or at least evidence its existence by for instance a receipt, emails or letters.

Electronic Communications

The EU Directive of Electronic Commerce 2000 made it possible for contracts to be made via electronic communications (i.e. emails).

In order to sell goods or services on the street, you need to obtain a licence from the local council. This could be from a mobile van selling food such as fish and chips or ice cream to stationary stalls selling flowers.

Licences can be obtained by submitting a written application and a fee with the following information:

• Name
• Address
• Date of Birth
• Location / Street Name (for stationary traders)
• District Area (for mobile traders)
• Trading Hours
• Goods or Services to be Traded
• Storage Arrangements
• Description of the Vehicle or Stall

The council will consider the documentation provided and consult with both the highways agency and the police before making a decision on whether to grant a trading licence. They will take into consideration things like: parking, impact on local residence, what other outlets are already trading in that area etc.

The local council will then either grant a full licence or a temporary one if it is only needed for a certain number of days (e.g. for festivals). There is a limit to the number of temporary licences a local council will issue to one party within a year, this is usually around five.

If you application is accepted and you are granted a street trading licence it will come with terms and conditions which you must comply with, including a requirement to carry the licence with you at all times and produce it when requested upon inspection.

Staff do not have to apply for a separate licence; however they must comply with the terms of the original licence.

Failure to Comply

Failure to comply with the terms of the licence will lead to it being revoked. Your licence may also be revoked if the council later find that you have made inaccurate or misleading statements in your application, which if done knowingly could also be a criminal offence.

Trading on the street without a street licence is a criminal offence and could result in a fine of up to £1,000 and if caught without a licence your goods are also likely to be seized. The following may also result in a criminal offence:

• Failure to produce a street trading licence
• Failure to comply with the conditions of the street trading licence
• Providing false information to an inspector
• Obstructing an officer in the course of their duty

51% of all the companies who participated in the survey claimed that late payments did cause a problem and 56% of those businesses who didn’t receive prompt payment ended up making late payments themselves to their suppliers.

53% of the construction companies who participated also claimed that late payments were a worrying problem, with 31% of those construction companies claiming that, as a result of the late payment of invoices, they had very nearly gone out of business.

20% of the participants in other business sectors including restaurant owners and retailers also claimed that late payment of invoices was a significant issue and 5% of those retailers have also come close to going out of business.

In the 1990s a review of the construction industry was carried out by Sir Michael Latham which subsequently led to the Construction and Regeneration Act 1996. The main aim of this Act was to improve cash flow within the industry.

However, it appears that this Act has not achieved what it was initially set up to do and, although amendments were made to the Act last autumn, it is, as yet, too early to see if these amendments have had any significant impact.

The amendments were aimed at encouraging a fairer payment system and improving the right for contract workers to cease work in the event of non payment.

Graydon UK’s Gordon Skaljak stated that it is not possible for companies to achieve sustainable growth if they are not paid on a consistent and timely basis. He also stated that, due to the current state of our economic climate, it is imperative that companies are aware of the risks posed by late payment of invoices.

Mr. Skaljak feels that the Government and the business community need to join forces in order to eliminate the UK’s growing trend in late payments to protect construction companies.

The FPB (The Forum of Private Businesses), who also participated in the research, said that large corporations needed to be persuaded to pay their suppliers in full and on time.

The research showed that 135,000 companies had their supplier credit withdrawn without any notice, roughly the same figure expected a discount in return for prompt payment, despite no agreement being put in place at the start of the job and 278,000 suppliers changing their terms of payment.

The Chief Executive of the FPB, Phil Orford, whilst discussing the negative impact that late payments were having on small businesses, said that businesses owners needed to try to put some type of strategy in place to help minimise those late invoice payments, the strategy could include incorporating stronger management procedures when it comes to the company’s cash flow, ensuring that invoices are correct and sent out in a more timely manner and for all small businesses to be given the support they need in tackling late payments.

Let’s take a look at some of the further statistics from the survey to get a better idea of the all round affects that late payments are having on small businesses across the UK.

Of all the 500 small businesses who participated in the survey:

• 16% said they had experienced a reduction in turnover

• 35% experienced reduced profits

• 29% experienced an increase in bank fees for going overdrawn on their accounts

• 23% experienced a delay in growth and the delay in introducing new services or products

• 41% were forced to make late payments to their suppliers

• 17% had to delay the hiring of new staff

• 16% were almost put out of business
  

When asked what methods they had in place to minimise late payments the majority of the small businesses stated that pestering the company in question was their general method of achieving payment.

Making a Claim

There are two main ways of making a claim to the credit card provider, namely:

• Section 75 of the Consumer Credit Act 1974 if the goods are for more than £100 but less than £30,000.00;
• Chargeback if the goods are worth less than £100.

S75 of the Consumer Credit Act 1974

Section 75 of the Act applies to both goods purchased on a credit card and normal type of loan arranged by the seller. The section specifically does not apply to goods purchased on a hire purchase or conditional agreement.

There is no requirement to firstly pursue a claim against the seller, you can make a claim against the credit provider straight away. Alternatively, you can also elect to pursue a joint claim against the seller and the credit provider.

Importantly, for goods purchased on credit after 1 February 2011 you may be able to make a claim even if the value is more than £30,000.00. However, if the goods are worth more than £30,000.00 and you bought them before 1 February 2011 you will not be able to make S75 claim.

Unlike in the case of goods worth less than £30,000.00; for goods worth more than that you will need to meet additional criteria. One of them is to attempt to claim the sum from the seller first.

Once you have tried to claim the money off the seller and:

• The seller has refused or is unable to give you compensation;
• It has not been possible to contact the seller successfully;
• The seller has liquidated its business;
• The credit is for less than £60,260;
• The goods were not purchased on a credit card;
• The loan agreement clearly specifies the goods that you have purchased (i.e. a new car);
• You have not received and accepted alternative compensation or replacement of the faulty goods from the seller;
• Your loan was a personal and not business loan;
• The loan was arranged for you by the seller. If you have found the lender yourself, you will not be able to make a claim.
• The loan is not a hire purchase or conditional sale arrangement.

Sample S75 Claim Letter

YOUR NAME AND ADDRESS

CREDIT PROVIDER’S DETAILS INCLUDING ADDRESS

 (DATE)

 Dear Sirs,

 Reference:

I am lodging a claim in relation to (ITEM DESCRIPTION) that I  purchased using my credit card (INSERT DETAILS) on (DATE) from (RETAILER’S BUSINESS NAME AND ADDRESS).

When the item was delivered, I discovered it was faulty because (EXPLAIN THE FAULT).

I have tried unsuccessfully to resolve this dispute with the retailer and now require you to pay me for the cost of repairing it or  for providing a full refund (SELECT AS APPROPRIATE).

I base my claim on section 75 of the Consumer Credit Act 1974 which makes you jointly and severally liable for any breaches committed by the retailer.

I would greatly appreciate if you responded within 14 days.

Yours faithfully,

For more letter templates you can also visit the Which? website.

Credit/Debit Card Chargeback

Chargebacks are operated by banks and card providers (i.e. VISA). Chargeback allows you to reverse a card transaction if there is a problem with goods you have purchased (i.e. the goods do not match their description or are faulty).  You can use chargebacks both with credit and debit cards. The right to make a successful chargeback is not automatic and is subject to the provider’s assessment. To make a chargeback you will need to contact your bank within a certain time period that should be specified in the agreement between you and the bank. The time limit also depends on the type of card that you have. VISA’s time limit is 120 days. The bank in turn will contact the seller’s merchant bank provider and attempt to recover the money.

Chargebacks are particularly useful in the case of goods worth less than £100.

What information can I get access to?

Public bodies are under an obligation to provide you all information requested within 20 working days. However, if there is a good reason to withhold the information access can be refused and reasons for refusal will be provided. Refusal of access can be either qualified or absolute.

Absolute refusal means that access will not be granted at all due to the information being expressly exempted by the Act. For a full list of exemptions you can refer to the Act or visit a dedicated Freedom of Information Act Wikipedia page. Some of the most notable exemptions include information that is related to security matters or legally prohibited from being disclosed by the UK or EU law.

Qualified refusal is subject to the public interest test. In the first instance the public authority will assess whether or not the requested information is covered by any relevant exemptions. Secondly, the authority will determine whether or not it is in the public interest to make a disclosure. Importantly, even information that is covered by the exemptions may be disclosed if the disclosure will not be against the public interest.

Does it cost anything?

You may need to pay fee in respect of postage, photocopying or any other relevant costs that the public authority may incur to fulfil its obligations in respect of your request. Should the authority decide to charge you, you will be provided with a Fees Notice within 20 days of the public body receiving your request.

What is a public sector body?

The Freedom of Information Act applies to all public authorities including the following:

• Government departments;
• Houses of Parliament;
• Northern Ireland Assembly;
• The Welsh Assembly;
• The Armed Forces;
• Local authorities and city council;
• NHS institutions, hospitals and doctors’ surgeries;
• Educational bodies;
• Public museums;
• Police forces;
• Certain committees and advisory bodies;
• Public companies wholly owned by the Crown or public authorities and exercising crown functions (i.e. the Financial Ombudsman).

Some authorities are specifically excluded from the Act. Most notably this includes the UK intelligence units.

Writing a good freedom of information request

Before writing to the authority you should check that the information that you are intending to request has not already been published. The request should be well-written using polite language and clearly defining what you are actually looking to gain access to. It is vitally important to be as specific as possible as requests of excessively broad nature can be refused.

Below you will find a good sample freedom of information request.

Dear Sirs,

I would like to kindly request the following information [state what kind of information you would like to obtain and whether there are any specific documents such as correspondence or data] held by your organisation in respect of the following dates [put relevant timeframes].

If possible I should prefer to obtain such in electronic format to my email address [state your email address]. Nonetheless, I will happily accept postal delivery if such is more convenient to yourselves.

Although, I do understand that you are under no duty to provide me with any guidance, I would greatly appreciate if the information could be provided along with any relevant explanation notes that would help me to understand the requested information. I would also greatly appreciate if you clearly mark confidential parts of the information that has been blanked out or removed.

Thank you for taking your time to deal with my request.

Yours faithfully,

[Your Name]

Where to start?

Expectations

Firstly, you should try to set realistic expectations as to the price that you would like to sell your business for. To do so you will need to speak to a commercial or corporate finance adviser. Furthermore, to obtain the best possible advice you will need to provide the advisers with the most up-to-date accounts. Based on the information provided and external sources, they will be able to give you an estimation that reflects not only the financial state of the company and type of business that you are in, but also overall market conditions. They may also have in mind somebody who could potentially be interested in buying your business.

Prepare the business for sale

Make sure that your business is ready for sale. Gather as much detailed information as you can about existing financial and legal affairs so that the buyer’s advisers can easily review it. The information that you should have available upon a request includes:

• Profit and loss accounts;
• Details of relevant tax returns;
• Details of any debt finance, leases and other liabilities;
• Information about any pending litigations;
• Certificate of Incorporation;
• Company’s Constitution documents (Articles and Memorandum);
• Details of shareholders;
• Statutory books.

Selling or closing a business also means that you will need to settle your tax affairs with the HM Revenue & Customs. For more guidance on taxation you can read this closing or selling a business guidance provided by the HMRC.

Finding a buyer

Once you have set a price you will need to find potential buyers. Usually it is good to set a price that will attract more than one potential buyer as this will give you better bargaining position and help to justify the asking price. There are many ways of finding buyers but it is recommended to use professionals who will ensure that the process is confidential. In some cases, it might also be an option to contact any competitors who could be interested in taking your business over.

Getting the right team of advisers

To complete the sale, you will need a team of advisers including an accountant and a lawyer. It is prudent to clearly set out their duties and responsibilities and closely monitor their work throughout the process.

How long does it usually take?

It really depends on particular circumstances. Preparation for the sale can begin months before the actual transaction takes place. Firstly, you should get your business in the best possible shape to maximise its value and ensure that it is marketable. Valuation, preparation of accounts, finding potential buyers and successfully negotiating the deal can take anywhere from a few weeks to several months. Once you have completed the above and successfully negotiated the price, the actual sale will be likely to take a minimum of a month, followed by contractually agreed hand-over period.

How should I select the right buyer?

Unless you have some specific criteria regarding your perfect buyer, your main concern should be the buyer’s financial health and capability to complete the transaction. Check their company accounts to establish how secure their financial position is. If the buyer is planning to use debt finance to purchase your business make sure to confirm at what stage his discussions with the lender are. If part of consideration for your business includes shares in the buyer’s company you should obtain professional valuation prior to proceeding.

You should also clearly define their expectations as to practicalities of handing the business over to them and formalities that they may require such as specific warranties or indemnities.

What are heads of terms?

Heads of terms are a legally binding document that sets out the principal points of the agreement such as the price. Heads of terms are usually signed subject to successful completion of due diligence process. It is common for the buyer to pay some of the seller’s costs if he decides to pull out of the agreement without the seller’s fault.

There is a big industry associated with optimising websites to rank highly in google, known as Search Engine Optimisation (SEO). For the last 10 years or so, whilst there are other factors, perhaps the most important factor for any given site and pages on that site to rank on the all important page 1 of google search results organically ie not pay per click has been the quality and quantity of inbound relevant links from other websites.

Given that being on page 1 creates a lot of visitors, enquiries and work, there is fierce competition and so SEO workers have often pushed hard for inbound links, and most end up paying, one way or another for a proportion if not high proportion of links. Google in turn has always known this and historically has had a policy of mostly ignoring links which are garnered from automated sources or clearly paid for. But google has changed it’s policy drastically and fast and is now penalising what it considers to be attempts to manipulate the rankings, with sites being demoted fast, literally in the millions.

Aside from the fact that many clients and SEO people are furious that google has changed things so radically, and many say that the search engine results are currently appalling because good sites, albeit that they have “played the game” with google are being replaced by sites that have not bothered with any seo so cannot be penalised. In not bothering with seo, in some sectors this means, not bothering with content either, which sort of ridicules google’s claims that they want great content to replace over optimisation as they have called it.

The real agenda from google may be to make seo so uncertain and expensive that businesses revert to more pay per click which is if course google’s bread and butter.

Anyway, on to the legal position. Some businesses are threatening to sue google, although we doubt thgis will happen for 2 reasons :-

1. the google search index is google property, they can allow people in, change the rules etc as they wish

2. google would argue that those penalised have breached their rules

So, who else might be in the firing line ? Well, a lot of businesses who have been hit hard are appealing to google on the basis they have a rogue seo consultant who got links without their consent. Google is pretty unsympathetic to this, so is the underlying position that litigation may arise between the client and seo provider ?

Perhaps, but it would of course depend on the contract, if any, between the seo company or person and client/ If the terms and conditions aren’t clear on the policies which the seo company might use to links etc then there could well be disputes, certainly loss of revenue is happening on a big scale due to these changes. The seo company might counter argue that the client knew full well that google changes it’s rules regularly, as it sees fit (although the current penalties are unprecedented in type and scale) and that rankings under the old way google worked could only be achieved by procuring links in whatever way necessary.

It does look like this google upheaval will create a lot of fall out and we suspect quite a bit of litigation, so we will keep a close eye on developments and report anything interesting.

Any view on the above ?

With the recent surge in acquisitions, mergers and takeovers of small businesses by large corporate entities it becomes increasingly important for small business owners to become more aware of issues associated with intellectual property protection and due diligence.

Although global statistics for patent and trademark applications grew by 7.2% and 11.8% in 2010, according to the World Intellectual Property Organisation there is still a large proportion of small enterprises that fail to implement adequate IP protection mechanisms.

In its recent publication the United States Patent and Trademark Office reports that patent filings by small businesses in the United States are quite rare and that small businesses fail to sufficiently protect trademarks, copyrights and trade secrets. Interestingly, non-patentable trade secrets are relatively easy to protect by non-disclosure agreements with staff members.

What are the causes of failure to implement sufficient intellectual property protection measures?

High Costs Misconception

The recently published American data demonstrates that vast amount of businesses do not implement appropriate protection measures due to their cost. The reason comes as a big surprise for a number of reasons. Firstly, it is possible to register a trademark in the US for not more than $500.00. It is true that patents are more expensive and here the fees for maintenance can run into a few thousand dollars. However, businesses need to understand that saving on IP protection in short-term will be far more costly in the long-term. Many businesses work hard and spend a lot of their financial resources to develop innovative and original concepts that later on can bring profits. By not protecting innovations properly you risk the idea being also used by somebody else and losing majority of its value. Moreover, without sufficient protection in place you will not be able to approach any potential buyers as firstly they will be in a position to go away and develop your idea themselves or secondly they will be worried that since your idea has not been protected it might have already been copied by somebody else.

By comparison the fees in the UK are even lower. At this time application for trademark registration in relation to goods or services within one class costs £250.00. Any additional class costs only £50.00 to register.

On the other side of the venue we have companies that recognise true value of intellectual property rights and follow legal procedures to ensure full protection. These companies not only enjoy the peace of mind but also can more effectively profit from their innovations and attract potential investment from venture capitalists.