Briefly Legal - Winter 2012

BRINGINGNEW LIFE TO OLD LANDJames Poyner of MillerArgent discusses thelargest reclamationproject in WesternEurope and its impact on economies worldwide

BUILDING ASTORY OFGROWTHGerry Choat of StoryHomes looks at themajor challenges facingthe UK’s housingindustry post-recession

BIM BOOST FORBUILDINGFour experts offer theirperspective on thestrengths, opportunitiesand challenges of BIM forthe construction industry

Investing in the north east

NewcastleGatesheadon the world stage

x116951_WB_p13_sw_x116951_WB_p13_sw 13/12/2012 08:24

Whilst the outlook for UKbusiness remains mixed, recentfigures released by the Office of National Statistics (ONS) are positive, indicating a 0.1%growth in the economy since the end of the summer. This hasbeen attributed to the OlympicGames, which was hailed a hugesuccess.

What was the key to this success?Excellence in performance anddelivery, and confidence – all of which were communicatedcarefully and enthusiastically to the wider public. Once it wasrevealed that London was tohost the Olympic Games, both the Coalition and LabourGovernments promoted the Cityas a hub of economic prosperityand innovative thinking. Indoing so, they have raised theprofile of our capital city on an international level.

Every business needs to ensurethe quality of its product andservice delivery – and then makesure that its potential customers(and clients) are aware of thatexpertise and quality of provision.Being good is pointless if no oneknows about you. Positioningyour business and its product isessential.

Watson Burton has positioneditself in the commercial arena as a law firm providing a qualitylegal service to clients nationallyand internationally, withparticular emphasis on servicedelivery.

In this edition of Briefly Legal,we feature articles whichemphasise the importance of differentiation and marketpositioning. NewcastleGatesheadInitiative in the context of inward

investment and Miller Argent in the highly regulated yetcompetitive opencast coal sector.

We also provide informedopinion on “crowdfunding”, thecommercial implications of theGovernment’s energy efficiencystrategy and advise you on theintricacies of risk management.

I hope that you enjoy readingthis latest edition of BrieflyLegal and it provides you withsome food for thought.

Finally, let me be the first towish you all a very HappyChristmas and a healthy andprosperous 2013.

Gillian HallSenior Partner

Watson Burton

2

A positive outlookThe London Olympics, the Leveson inquiry, a doubledip recession and the Queen’s Diamond Jubilee -2012 has certainly been a year to remember. The UK has taken centre stage on a number of levels.

x116951_WB_p13_sw_x116951_WB_p13_sw 13/12/2012 08:24

3

4 PuttingNewcastleGateshead onthe world stage

Catherine Walker, Inwardinvestment Director atNewcastleGatesheadInitiative, outlines theagency’s challenges in promoting inwardinvestment into the North East

8 Crowdfunding: the keyto kick-starting businessinvestment?

Watson Burton’s AndrewFrancey analyses howinnovative financing model,crowdfunding, is fastbecoming the preferredinvestment option for startup businesses

22 Bringing new life to old land

James Poyner of MillerArgent discusses thelargest reclamation projectin Western Europe and itsimpact on economiesworldwide

26 In the frame?

Watson Burton associate,Andrew Poyner, offers aninsight into the continuousdebate on FrameworkAgreements in the UK

28 Building a story ofgrowth

Gerry Choat of StoryHomes looks at the majorchallenges facing the UK’shousing industry post-recession

32 Planning for sustainable growth

Watson Burton’s Head of Planning, Bryan Riley,explains the implications of the Government’sproposed reform of theUK’s planning system

34 Hedging Claims: Is now the time to act?

Andrew Johnson, Head of Watson Burton’sCommercial Litigationgroup, discusses whataction to take whenconsidering cancellinghedging products

36 Prime positioning

Watson Burton’s CEO,Patrick Harwood, authorsthe second in a series ofarticles looking at the firm’sfive strategic priorities

38 An enlighteningpartnership

An interview with GillianHall of Watson Burton and Carolyn Ball of Tyne & Wear Archives andMuseums on theircommitment to celebratingarts and culture

16 Energising future skills

Jim Hubbard of NewcastleCollege explains thereasons behind thecreation of a purpose builtenergy academy and itsrole in bridging the nationalskills gap for the sector

18 An energy revolution

Lawyers from WatsonBurton’s energy groupanswer questions on theGovernment’s EnergyEfficiency Strategy

10 BIM boost for building

Four experts offer theirperspective on thestrengths, opportunitiesand challenges of BIM forthe construction industry

14 Managing risk

Professional indemnitylawyer, Michelle Levin,discusses the importance of risk management forbusiness

This is a Carbon Balanced Publication. The full carbon impact of this document has been offset by the conservation ofendangered tropical rainforest in association with the World Land Trust.

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:33

Putting NewcastleGateshead on the world stage

CATHERINE WALKER, INWARD INVESTMENTDIRECTOR AT NEWCASTLEGATESHEADINITIATIVE, THE DESTINATION MARKETINGAGENCY, IS TASKED WITH PROMOTING THESTRENGTHS OF NEWCASTLEGATESHEAD TOATTRACT INWARD INVESTMENT FROM THE UKAND OVERSEAS. SHE TELLS BRIEFLY LEGALWHY SHE AND HER TEAM ARE OPTIMISTICABOUT WINNING BUSINESS FOR THE AREA.

Putting NewcastleGatesheadon the world stage

4NewcastleGateshead Quayside

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:33


5

MY role is to help Newcastle-Gateshead Initiative gain agreater competitive edge in

attracting new investment and jobs to thearea. We aim to make it as easy as possiblefor national and international firms to relocateto Gateshead and Newcastle.

Over the last 12 years, NewcastleGatesheadInitiative has raised the profile of the area asan exciting and cultural city-break destination.Now the challenge is to attract businesses to locate and grow here and there is fiercecompetition from major cities across theworld.

ATTRACTING INVESTORSIt’s my firm belief that NewcastleGatesheadand the wider area offer unique assets that will continue to be attractive for investors,bringing new jobs and long-term opportunities.We’re talking to businesses from across theworld keen to look at the possibility ofrelocating here.

We have a number of investment projects inthe pipeline spread across the globe, in theMiddle East, Far East, America and Europeand we’ve already supported a national firm,Checkatrade.com, to open up a regional sales office in the area.

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:33

Angel of the North


6

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:34

Catherine Walker, Inward Investment Director at NewcastleGateshead Initiative

PARTNERSHIP APPROACHOur team works with NewcastleGatesheadInitiative’s current 170-strong partnership tosupport their work but also to tap into theirexcellent national and international networks.The partnership is supportive and extremelydiverse, including local government, law firms,retailers, architects, developers, hotels andrestaurants.

This collaboration means we are able torespond effectively to exciting investmentopportunities. Our priority is to create the best possible conditions to attract newinvestors and create the jobs of tomorrow

Over the last 12 years, NewcastleGatesheadInitiative has raised the profile of the areaas an exciting and cultural city-breakdestination. Now the challenge is to attractbusinesses to locate and grow here andthere is fierce competition from majorcities across the world

OVERSEAS MARKETSWe are in the process of initially building ourpresence in the North American, Canadianand Indian markets, identifying opportunitiesfor us to discuss potential expansion planswith companies at the right phase of growth.These countries are important targets for us.India is seeing a huge amount of outboundinvestment into Western Europe and the UK.

We are also hoping to take advantage ofmarket conditions in Canada, particularlyaround its video games clusters. The NorthEast has a thriving digital and creative clusterand we aim to present the region as afavourable alternative location for videogaming companies in Canada.

STRONG SECTORSWe are focused on promoting key businessactivities in the area, such as R&D, businessand professional services and advancedmanufacturing to inward investors. We canalso show potential investors compellingcompetitive advantage in key sectors such as science and health, creative and digital(including IT and software) and offshore andmarine.

Our team provides a bespoke service topotential and existing investors. Supportincludes research to help define the businesscase; advice and access to funding solutions;property solutions; introductions to businessnetworks and centres of excellence;assistance with recruitment and future talentprovision and PR and marketing support.

I joined the NewcastleGateshead Initiativefrom MIDAS, the inward investment agency in Manchester, earlier this year, and I was well aware of NewcastleGateshead Initiative’strack record promoting the area within the UK and around the world, with high pointsincluding its award-winning work on the 2005 Tall Ships’ Races.

When you put together the world-class culture,vibrant night-life and wonderful heritage, withour sector strengths, the skilled, loyal workforceand competitive property and labour costs,you get a really strong message for businesseslooking to expand overseas or relocate.


7

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:34

Crowdfunding: the key to kick-starting business investment?

8

Crowdfunding: the key to kick-startingbusiness investment?

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:34

Crowdfunding: the key to kick-starting business investment?

9

Volatile markets and a decline inaccess to conventional lending has forced businesses to consideralternative sources of funding. As aresult, innovative financing modelssuch as crowdfunding are fastbecoming the preferred platforms to secure investment for start upbusinesses. Corporate partner Andrew Francey explains.

a concept which originated inthe United States, is gainingpopularity in the UK as a meansof raising relatively small amountsof capital from a large numberof individuals (the “crowd”)and is most commonly used tofinance a standalone project or a start up. The premise is that abusiness or individual explainstheir project in the form of apitch, usually via a specialistwebsite or social media, with a view to attracting financialcontributions from as manyindividuals (or investors) aspossible. Those investors cancontribute perhaps as little as£10 or as much as they wish in return for an interest in thebusiness or project.

Kick-startinginvestment One of the most successfulspecialist websites to facilitatecrowdfunding is Kickstarter,which recently launched in theUK. Established in the US in2009, Kickstarter acts as a catalystfor investment in creative orproduct-based ideas and claimsto have so far raised more than£211m ($340m). It reports that,since its launch, more than 70,000projects have been pitched witha success rate of just over 40%.Kickstarter is hoping to replicatethat success in the UK byproviding small organisations

with an opportunity to securefunding from alternative sources.

For businesses, crowdfundingcould be a very useful way togain direct and quick access to multiple investors and theirfunds where money from abank (or indeed other sourcesof finance through moretraditional investors or venturecapitalists) is not available.

For an investor there are a numberof potential risks, including:

• there is no guarantee an investorwill receive a return on his orher contribution any time soon(if at all)

• an investor may well receive ashare of a business or projectbut that share may be dilutedby further investments fromother investors in the future

• it is unlikely that an investorwill be able to sell his or hershare in the business or projectas shares in crowd fundedbusinesses or projects are likelyto be illiquid

• there is perhaps a higher riskof fraud linked, in part, to theonline processes used.

With this in mind the UK’sfinancial services regulator, theFinancial Services Authority(FSA), has recently advisedcaution to “novice investors”actively participating in

crowdfunding. The FSA hasclearly emphasised thecomplexities surroundingbusiness investments forinexperienced investors whomay not be aware of the risksinvolved. In fact, to this end, theFSA went so far as stating:

“We believe most crowdfundingshould be targeted at sophisticatedinvestors who know how to valuea start up business, understand therisks involved and that investorscould lose all of their money”.

Legal and regulatoryrestrictions For crowdfunding platformsthemselves and for businessseeking crowdfunding, there arelegal and regulatory issues thatneed to be carefully consideredsuch as:

• if “regulated activity” (including,for example, certain types ofinvestment activity) is beingcarried out and no exemptionapplies, FSA authorisation willbe required

• unless an exemption applies,the business is FSA authorisedor the pitch itself is approvedby an FSA-authorised personthen, where a business“communicates an invitationor inducement to engage ininvestment activity” it will bein breach of the rules relatingto “financial promotion”

• unless an exemption applies, itis unlawful to offer transferablesecurities to the public in theUK without preparing andmaking available an FSA-approved “prospectus”

• there are certain restrictionsset out in the Companies Act

2006 relating to companiesoffering any of its securities to the public.

There are currently novel waysof structuring crowdfundingplatforms to steer around therelevant restrictions. One keymessage to emphasise, however,is that any business seekingfinance through a crowdfundingplatform should take appropriatesteps to ensure that the platformis properly established andcomplies with all relevant and applicable regulations and legislation.

The future ofcrowdfunding The launch of Kickstarter andother crowdfunding platformshas inevitably pushed crowd-funding and other alternativefinancing models to the forefrontof the investment agenda.

Whilst it clearly does not comewithout risks for potentialinvestors and indeed thoseseeking funding, crowdfundingas a concept could still prove tobe an innovative alternative andquick way to raise capital.Subject to how the business orproject for which crowdfundingis sought pans out, it can alsoprovide those seeking fundingwith easy access to a network ofinterested individuals for futurefunding rounds.

The key to the success of crowd-funding in the UK is likely todepend on whether or not theright balance is achieved by theregulatory authorities betweenprotecting potential investorswhilst maintaining the flow ofcapital to entrepreneurialbusinesses.

Find out how our corporate group can help you by getting in touch with Andrew Francey.Call 0845 901 0958 or email [email protected]

Crowd-funding,

Crowdfunding as a conceptcould still prove to be aninnovative alternative andquick way to raise capital

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 12:13

BIM boost for building

10


x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:34


11

Richard Shennan, Director and BIM champion at Mott MacDonald:Richard Palmer, head of Watson Burton's Professions and InsuranceGroup: Stefanie Stead, a chartered architect with Pearce BottomleyArchitects and chair of the Yorkshire and Humber CIC Committee: andAndrew Poyner, construction and engineering associate at WatsonBurton offer their views about the strengths, opportunities andchallenges of BIM.

Governments around the world are increasinglymandating the use of Building InformationModelling (BIM) techniques in order to achievesignificant cost and environmental savings ontheir construction projects, and to gain insightsinto the performance and operation of theirexisting assets. BIM involves the interaction of many technologiesoperated by numerous organisations in complexsupply chains. As the concept of BIM becomesmore prominent in the construction sector, wespeak to four people involved in the process tohear their different perspectives on the issue.

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:34


12

Richard Shennan: I believe BIM contributesto faster, safer, less wasteful construction, andmore cost-effective, sustainable operation,maintenance and eventual decommissioning.

Stefanie Stead: Collaboration is the key tosuccess – BIM is as much about people as it is process and technology.

Richard Palmer: Time will tell as to theextent to which claims will be reducedthrough BIM and whether significant costssavings will be achieved through using BIMwhen disputes are unavoidable. The potential,however, would appear to be substantial.

Stefanie Stead: BIM can potentially increasethe efficiency of design teams by reducing thenumber of problems that have to be resolvedon site, and the time and effort required inchecking on them.

Richard Shennan: I agree. Risk andinsurance are important considerations whichI believe BIM addresses effectively. The keything from a legal perspective is how themodel is put together. The structure of ourfederated model means that increasinginteroperability and collaborative dataexchange allows a number of co-ordinatedmodels to behave as if they’re a single entity.

Provided that a strong information managementsystem based on the federated model is putin place, the concerns of the legal professionabout the apportioning of risk and liability canlargely be laid to rest. There could be furtherbenefits in collaborative contracts and integratedinsurance, but we can use BIM effectivelyeven under current contracts subject toprotocols, tracked detail and managementsystems.

Richard Palmer: BIM should enableproblems such as clashes between designs of the different teams or programming issuesto be detected early before they becomeembedded. These can then be resolvedbefore the construction project is completed.In turn, this should reduce the incidence ofclaims. Where claims do follow, quantumshould be less because problems can beresolved earlier.

Stefanie Stead: The main misconceptionabout BIM is that you need to invest in the 3D software. A lot of smaller practices –architects, surveying, engineers – areconcerned about how they can make thisinvestment when banks are not lending. I’vehad professionals saying to me that it’s allvery well the government saying that BIM isan investment for the future, but where is themoney to come from to pay for it? We all needto get across the fact that BIM is all aboutmanaging information in a set format so youcan use it throughout the lifetime of the building.

Richard Palmer: Yes I agree. Anotherpopular myth is that if the design team areworking on one combined 3D model (ratherthan each professional providing their ownseparate 2D drawings), it will be difficult todetermine who is at fault for any problemsthat arise. In fact, as the design of an assetdevelops using BIM, a "frozen" version of the model is created with each addition to the process, so that there is a trail ofresponsibility. This trail should assist inresolving claims, where it is not possible to avoid them.

Stefanie Stead: I believe SMEs can becomeinvolved in BIM. It is not complex nor is it aradical new system. The apprehension is thatthe investment for small companies is off-putting but SMEs don’t need to investsignificant amounts. It’s more about building a better information management system and manipulating the data effectively.

Richard Shennan: The ownership of thecomponents of our federated model is clearlyunderstood by our clients and partners andmaps on to existing contractual owners - for example architects, structural engineers,building services engineers and civil engineers.Each can develop their own model which isbrought together by BIM so they can be co-ordinated as a single central source. How thefederated model is managed is critical.

Stefanie Stead: I’m in a small practice andwe are currently putting together a strategy,making sure we have the processes in place,and when necessary we have the software.Different people require different things – forexample quantity surveyors don’t need CADbut do need the viewer. BIM is an evolution ofthe process that most practices already havein place, and we are simply fine-tuning it andmaking it clear to others.

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:34


13

Richard Shennan: Guidance on collaborativeworking is provided in BS 1192 and the newPAS 1192-2. We use a ProjectWise filemanagement package tailored to this standard.We know when models by one set of peopleare at a certain stage, shared and approved,both internally and externally. We know whenthey’re signed off and published and whatpurpose the model has.

Tracking means everyone’s quite comfortableand aware of the level of detail from inceptionto completion. It prevents situations occurringwhich could be confrontational becauseeverything’s tracked.

Stefanie Stead: We need to embrace BIMbut not as a sudden change. In my previousfirm it took us a year or so. The take up of BIMin SMEs is as much to do with procurement asmodelling.

Andrew Poyner: BIM encouragescollaboration and trust between members ofthe team, and brings real value to the client.Many larger competent organisations areoperating at BIM level 2 but don’t realise it. To get to BIM Level 3 will, however, be a bigcultural shift for many companies.

Richard Palmer: A time sequence can be added with BIM which shows what theconstruction will look like at week 1, week 2 etc, to create a 3D construction programme.This allows better planning for temporary worksthat are necessary, helps to identify health andsafety issues and allows all components to betracked so that orders can be placed at thecorrect time. With fewer delays and safetyissues identified and minimised, this shouldalso mean fewer claims against contractors.

Andrew Poyner: With regard to contractualliabilities, an agreed form of "BIM Protocol"needs to be agreed between clients, contractorsand designers within the industry and producedin such a form which is easily capable offorming a supplement to standard formcontracts (e.g. JCT, NEC, ICE etc). There iscurrently much commentary on this point, andthis is where the lawyers can add real value byclearly setting out the legal liabilities betweenthe parties contributing to BIM and removingsome of the mystery and misunderstandingthat may exist within the industry.

Richard Shennan: We can’t wait three yearsfor new contracts to be written. We work withthe existing contractual contract and IP.Protocols are emerging which set out theclient’s requirements so that everyone canunderstand the rules of the game, and the UKGovernment task force is about to publish astandard template for a BIM Protocol. Eachpartner can work effectively to fulfil contractsand it provides a great foundation forinteroperability between the tools we use.

Richard Palmer: Because the BIM modelcan deal with and incorporate the manner inwhich the asset is to be operated in the future,owners should be clearer on how the designteam expects the asset to run. We often seeclaims against a designer where the owner ofan asset blames the design, and the designersays that the problems are down to poormaintenance/ incorrect operation on the partof the owner.

With BIM, it will be easier to determine theseissues should they not be picked up prior tocompletion of the construction. This may savecosts when a dispute is unavoidable.

Stefanie Stead: The government’s decisionto make the use of BIM on all public projectsmandatory has been a matter of concern to some smaller firms because the tendersubmissions require three years’ equivalentprojects, during a time when few majorconstruction projects have been started. Thishas resulted in some talented businesses nothaving a chance to put themselves forward.I’m hoping the procurement process willbecome more flexible as BIM evolves.

Richard Shennan: BIM works best when all the key project players are collaboratingand contributing. At Mott MacDonald we havestrong leadership and belief in BIM, and it’sbacked by the board and chairman and byBIM enthusiasts which helps to move itforward. We have it functioning top down andbottom up and we’re keen to communicate its benefits to outside parties - people don’talways get it until they see it. Our model andhow it’s used is important, and we showrather than tell. It sparks enthusiasm from the clients too.

Andrew Poyner: What construction andassociated industries need to appreciate isthat BIM is relevant now - not in the future.Organisations are increasingly using BIM tobring about time and cost management benefits.If clients can start to see and understand thevalue of investing in BIM and the measurablecapital savings it can reportedly achieve, thenthis will help speed up the process and assistthe Government in achieving its BIM goals.

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:34

Managing risk

14

MANAGING

In today’s uncertain economictimes, managing risk is afundamental considerationwhen conducting business.

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 12:14

Managing risk

15

Now,morethanever, it

is important for professionals to consider how active riskmanagement can both improvethe efficiency of their businessand help avoid claims arising. At the very least, when claimsdo occur, risk managementinitiatives can make firms awareof what is needed to enableinsurers or their panel solicitorsto deal with such claims.

In order to put appropriateprocedures in place, it is vital to identify and analyse risksfaced by your organisation and implement a coordinatedprogramme to effectively tacklethem. This may feel like asignificant task to start with,however, this process willpositively impact the businessby minimising the probability of unfortunate events andsafeguarding the resources of the company to make it as secure as it can be.

EquippingemployeesThe main issues can often stemfrom a lack of attention toappropriate resourcing, such as taking time to ensure thatemployees within theorganisation are not strayinginto areas outside of theirdesignated expertise. Often,problems can surface wherestaff are not suitably qualified to undertake certain tasks, yetare expected to provide expertisebeyond their capabilities.

It is also important to ensurethat work levels are as equal aspossible across the board, toavoid certain individuals havingtoo much to do or not beingproperly supported by othermembers of the team. Leftunchecked, this can often leadto mistakes being made. Managersof any business should go togreat lengths to ensure that allstaff, whatever their qualificationsor experience, are properlytrained both in relation to the

work they do and in respect of the firm’s own procedures.There needs to be a consistentapproach to how tasks areallocated and who is best placedto carry them out.

Protecting businessAs risk management can oftenbe overlooked and dismissedwithout a real understanding ofhow implemented procedurescan be effective, early legaladvice can really assistprofessionals in how best toprotect their businesses.

As professional indemnitylawyers, we manage and tackleclaims against professionalsevery day. As part of this, we areacutely aware of the challengesfacing professionals and theirbusinesses. An element of thisprocess includes assessingwhether current insurancepolicies respond to claims,particularly if there is an issuewith professionals failing tohave proper procedures in placefor managing risk. Aside fromissues relating to the work itself,this can include personnel beingunaware of precisely what theirpolicy covers and also crucially,how to properly notify or makea clam under a professionalindemnity policy.

The difficulty with risk is that itis ever present. Even when it isclear that an issue has alreadyarisen, professionals may facerisks to their professionalindemnity insurance cover. Somepolicies contain “conditionsprecedent” which means that ifa stipulated condition within thepolicy is not fulfilled then covercan be avoided. Often this relatesto when a claim, or even thepossibility of a claim, should benotified to the insurers, but canalso be used to deter admissionsof liability, whether knowinglyor otherwise.

Understanding your limitations An essential element of riskmanagement is to ensure thatyou understand the limit ofindemnity on your policy. If youhave a limited amount of coverand continue to deal withtransactions which are in excessof that limit, then this couldleave the business liable for thedeficit beyond the cover providedby an insurer. This would be inaddition to any excess that thebusiness is obliged to meetwhen a claim is paid out.

Your policy could require you topay an element of your legal costsas part of your excess or thecosts of defending a claim mayseparately payable by yourinsurers regardless of how muchthe excess is. Whatever thefinancial arrangements of apolicy, when a claim is paid out,if the right limit of indemnity isnot in place or terms of the policyare breached, this may be thedifference between a businesssurviving and becoming insolvent.This is yet another reason whyit is absolutely necessary tounderstand the terms of a policy.

We can help professionalsminimise risk by offering adviceon practical steps that can betaken to manage risk effectively.We can look at a firm’sdocumentation such as termsand conditions and contracts tocheck that these best suit theneeds of the business and helpavoid claims arising. You canalso consult your firm’s brokerwith any insurance issues, inparticular relating to when andif a claim or potential claimshould be notified. It is alwayspreferable to err on the side ofcaution in light of the negativeimpact of failing to identifynecessary steps to ensure cover.

Find out how our professions and insurance group can help you bygetting in touch with Michelle Levin. Call 0845 901 0948 or [email protected]

”“As professional indemnity

lawyers, we manage andtackle claims againstprofessionals every day. As part of this, we are acutelyaware the challenges facingprofessionals and theirbusinesses

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 12:14

Energising future skills

16

Newcastle College’s Energy Academy is apioneering centre focusing on innovation,skills development and training for theenergy sector

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:35

Energising future skills

17

Energising future skillsJim Hubbard, Director of the Energy Academy atNewcastle College, explains the reasons behind thecreation of a purpose built Energy Academy, whichhas won national praise for its targeted approach to skills training in the renewable energy sector.

Newcastle College’s Energy Academy is a pioneeringcentre focusing on innovation, skillsdevelopment and training for the energy sector.

It is believed that the UK’s offshore wind and marine energy sector could support 88,000 jobsby 2021, up from around 10,600 at present. A huge increase in the number of available skilledrecruits in this sector needs to be trained to meet that demand.

major components for wind generatorassemblies.

The 20,000 square feet Energy Academy is alsoattractive to companies operating in Internationalmarkets, with proposals for collaborativetraining ventures already well advanced. Itsrole as a specialist training hub will boost thechances of further major job creation as theoffshore market develops.

Our staff work closely with employers, clustergroups, Sector Skills Councils and others inthe sector to develop and grow business ideas.Employers have access to the innovativeequipment, workshops, incubation facilitiesand classrooms that can be used to assistwith research and development ideas.

Transferable skillsThe Academy is providing transferable skillstraining in the engineering and energy sectorsto help employers train, retain and recruithighly skilled workers for generations to come. It also offers training for experiencedengineers who aim to gain the skills andspecialist knowledge required to becomeproject team leaders. These are in growingdemand across the offshore energy market.

The Crown Estate has identified three mainareas in which there are major skills gaps inthe offshore sector. The first is ‘qualityengineering’, the second is project managers,and the third is for those who can interpretsea bed surveys. Our offer of engineering,subsea sector skills and higher level sector-specific courses will help to close the skillsgap and create new opportunities for UK

We developed the Energy Academy in directresponse to the national skills gap and the needfor higher level skills and training in regional,national and international renewable energyindustries.

Delivering key skillsOur academy was officially opened earlier thisyear, and we are now delivering nationallyaccredited qualifications and specialistprogrammes to meet demand from employers,strategic partners and government. Theseinclude sector-specific degree level andapprenticeships at all levels, soon to be joinedby honours undergraduate and master’sdegrees relevant to offshore wind and windtechnologies.

The Academy is now training engineering,subsea and renewable energy apprentices aswell as higher level apprentices, and is providingcourses including a foundation degree inrenewable energy technologies. There is alsoa range of welding, fabrication and sustainabilitycourses, and CNC – full five axis training,instrumentation and SCADA programmes.

Open to businessWe are based on the north bank of the RiverTyne, a key location for North East based growthfor companies in the renewable energies sector.

Businesses, employees and individuals arebenefiting from access to all our programmes,which include bespoke courses. We are buildingstrong links with SMEs by responding to theirtraining and research requirements. Theseinclude supporting an infrastructure to develop

companies to be part of the burgeoningoffshore renewable market.

The Energy Academy offers specialist facilitiesfor all its students, including high specificationwelding bays and electrical workshopsequipment, such as a computed numericallycontrolled (CNC) machine. We have alsoinvested in a wind turbine nacelle and turbineblades to support training in the manufacture,assembly and maintenance of offshore windturbines.

Bridging the skills gapThe size of the Academy means we will havea significant impact on UK-wide skills resource.Our students are already making good use ofthe six classrooms and Learning ResourceCentre, three technical lab size rooms, threeenclosed workshops and a large open planworkshop at the Academy. We are alsoresearching provision for other forms ofrenewable energies technologies to bedelivered within the Academy.

The possibilities brought by renewable powerare huge, but only if the UK can supply thepeople with the right skills to take advantageof them. The dedicated Energy Academy isplaying an important role in attracting investorsin the fast-growing offshore energy sector tothe UK and the River Tyne, and providing skillsdevelopment and training to boost the nationaland international offshore renewable industry.

Jim Hubbard, Director of the Energy Academy at Newcastle College

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:35

18

An energy revolution

An energyrevolution

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:35

19


Last month saw the Department of Energy and ClimateChange (DECC) publish the UK’s first ever comprehensiveEnergy Efficiency Strategy. Aimed at kick-starting agroundbreaking transformation in energy for both consumersand businesses, the strategy presents ambitious plans for alow carbon economy. As businesses prepare themselves forimplementing new energy saving measures, members of ourenergy and utilities group answer questions on theframework and its implications for the wider business world.

Panel: Duncan Reid, corporate partner, Sarah Wilson, construction partner,Jacqueline Turner, employment partner and Louise Williamson, utilities manager

In your opinion, which sector(s) do you think will benefitthe most from implementation of the strategy?

Duncan Reid: The retail sector looks likely to be impacted by theimplementation of the strategy, with high profile industry namessuch as John Lewis, buying into the proposed energy savingincentives. The national retailer has agreed to work alongside theDECC in introducing a product-labelling trial next year with theaim of demonstrating to customers the lifetime running costs ofhousehold appliances. A similar trial undertaken in Norway led toa significant change in purchasing patterns for consumers relatedto energy efficient goods. It is likely that once the trial is completedin the UK that the same changes will occur here and retailers willneed to respond to consumer needs in the appropriate manner inorder to retain market share. We are already seeing largeinternational retailers addressing the issue of energy efficiency,with the most recent example, IKEA, announcing plans to use100% clean energy by 2020.

Jacqueline Turner: The strategy places an emphasis ondriving forward energy efficiency for the public sector. Inthe long term, the initiatives to be implemented should

stimulate national economic growth. The initiatives outlined willtake place in two stages. The first will begin with the Governmentassessing the compatibility of the proposed energy efficiencyinvestments with existing funds within the public sector budgetingframework and publishing guidance as a response to assistorganisations across the sector in cutting their energy use. Thesecond phase will see the nationwide rollout of the Governmentfunded project, RE: FIT, which is the Mayor of London’s awardwinning programme targeted at improving low carbon initiativesacross the sector. These initiatives, if implemented in the correctmanner, will both facilitate the public sector’s use of the EnergyServices Company (ESCO) market and contribute to substantialfinancial savings for organisations within the sector.

QA

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:35


20

Sarah Wilson: As a professional specialising in the constructionsector, I can see that house building will experience some changesas the focus turns towards the creation of eco-friendly homes.Through initiatives such as the Green Deal and Feed in Tariffs(FiTs), house owners have become a major target for theGovernment’s energy efficiency schemes and house builders are increasing pressure to provide sustainable environments viarenewable energy solutions. For our clients operating within thesector, this means changing the way in which houses are built,reflecting on how materials are sourced, reviewing electricityrequirements and providing creative solutions with the aim ofreducing water usage. The sector has a lot to offer in assisting theGovernment with its aim of reducing the UK’s carbon emissionsby 80% by 2050.

Louise Williamson: Major issues for both consumers andbusinesses are high energy costs and carbon emissions andcurrently there is very little guidance to assist in reducing either.The strategy is attempting to tackle this by making fundingavailable to increase the proportion of facilities managers receivingspecialist energy efficiency training in businesses across thecountry. In doing so utility companies will see benefit fromworking with clients who have a greater understanding of theservice provided. From our experience in working alongsideenergy providers, we have found that they have already developedinitiatives aimed at producing a low carbon economy, such asundertaking research and development to help deliver low carbonelectricity distribution system through Smart Grid Projects.

The Government’s aim tocreate jobs and provide costeffective energy solutions is asignificant step forward inhelping to establish the UK asa hub of energy efficiency

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:35


21

The Energy efficiency strategy includes plans to save 22 power stationsworth of energy by 2020; do you think implementation of this frameworkwill assist the Government in meeting this target?

Duncan Reid: The Government’s aim to create jobs andprovide cost effective energy solutions is a significant stepforward in helping to establish the UK as a hub of energy

efficiency. However, the cost implications are something that needscontinuous monitoring. An element of the strategy outlines detailsof a £39 million cash injection to fund five centres examiningbusiness and household energy and demand. If utilised correctly in the given timescales then this aspect of the strategy will beinvaluable to the UK. Whether this is achievable remains to beseen.

Louise Williamson: At this point in time, it is difficult to say. Both public and private sector organisations still face stringentlimitations in terms of allocating their budget and initiating energyincentives within an organisation can often prove to be expensive.

Sarah Wilson: Accomplishing this target would be a greatachievement. However, the DECC openly acknowledges that there are a number of barriers to overcome before this can becomea reality. Misaligned financial incentives and behavioural ideologyare what the Government describes as two of the main barriers toenergy efficiency and until these are dealt with in an appropriatemanner (as outlined in the strategy) then achieving the target willprove difficult.

Jacqueline Turner: As long at the Government continues itsendeavours in educating businesses in relation to the benefits ofenergy efficiency then there must be the possibility that the targetwill be achieved.

Reform White Paper, the programme assessed whether there issufficient support and incentives to make efficiency improvementsin electricity usage and ascertain whether there is a need forappropriate additional measures. This assessment concluded byconfirming that there is significant potential for greater efficiencyin the use of electricity in the UK. Since then, initiatives such asthe Renewable Heat Incentive (RHI), FiTs and Smart Meters have been implemented and will work alongside the Green Dealsupporting the expansion of energy saving measures inorganisations of all shapes and sizes.

Duncan Reid: The Government envisions that implementation of this strategy will provide the opportunity for British businessesto develop expertise which can be exported to overseas markets.The DECC states that early adopters of energy saving measuresare already receiving international recognition for their approach,citing Arup as an example, who is currently undertaking an energyefficiency audit on university campuses in USA. With this in mind,there is a great potential for businesses across all sectors to seizethe opportunity to enter new markets and demonstrate theirspecialist expertise on a wider scale.

What are the commercial implications of theStrategy for the firm’s clients?

Sarah Wilson: Out of a total 27 million homes acrossBritain, research by the DECC shows that 14 million are not properly insulated with a high proportion built before

the end of World War II. As a result, there is a large demand forbuildings, both domestic and commercial, which are bothsustainable and eco friendly. This in itself creates both commercialchallenges and opportunities for our clients, with businesses acrossthe full supply chain feeling the effect of new energy initiatives.

Jacqueline Turner: The energy efficiency sector in the UKalready accounts for 136,000 jobs and in 2010 / 2011, producedsales of approximately £17.6 billion. The aim of the strategy is toprimarily stimulate energy efficiency and boost economic growthin the UK. This has the potential to result in the creation ofemployment opportunities in the sector as well as to reducerunning costs for businesses across the board, thereby increasingproductivity.

Louise Williamson: The strategy contains the Government’sElectricity Demand Reduction project, which is set to have asignificant impact on utility providers across the UK. Initiated inJuly 2011, in response to a commitment in the Electricity Market

The aim of the strategy is to primarilystimulate energy efficiency and boosteconomic growth in the UK

QA

QA

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:35

Bringing new life to old land

22

Bringingnew life to old landMiller Argent is a 50-50 joint venture betweenthe Miller Group Limited, the UK’s largestprivately owned housebuilding, construction andproperty development company, and ArgentGroup plc, a leading London based developmentcompany which specialises in major urbanregeneration schemes, including Kings CrossCentral, London and Brindley Place, Birmingham.

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:35


23

demand fromeconomiesworldwide,

particularly in emerging countries, has led to asustained increase in the worldwide demandfor coal over the last decade. As a result, anincreasing number surface mine sites havebecome commercially viable, which has providedthe UK surface coal mining industry with amajor opportunity to maintain and in placesincrease activity and output. The UK opencastsector directly employs more than 2,500 fulltime workers.

As well as helping to drive economic growthand achieving energy security in the UK, theland reclamation which is an integral part ofsurface mining projects can bring back hugeswathes of land which were formerly derelictand under-used.

James Poyner, director of Miller Argent, discusses the largest reclamationproject the company has undertaken to date (the Ffos-y-fran Land ReclamationScheme), and its ambitious plans for the future.

Ffos-y-fran is the largest land reclamationscheme of its type in Western Europe. It is a17-year project in Merthyr Tydfil, South Walesin which we are reclaiming over 1,000 acres of unstable and derelict land. Ffos-y-fran is, in essence, the third and final phase of theoriginal East Merthyr Reclamation Schemewhich was conceived and developed by thelocal Councils.

We have been working on this project since1996 and actually commenced site operationsin 2007. We expect to recover over 11 milliontonnes of Welsh dry steam coal over the life of the c. £800 million scheme. Our restorationstrategy aims to restore the land to alandscape that recreates its characteristicsbefore industry came to the area.

To do this we first had to clear 350 thousandtonnes of non-inert material from three,potentially hazardous redundant rubbish tipslocated on the site.

Investing for future valueWe devised our restoration strategy not onlyto reclaim the derelict land and deal with itsproblems, but also to make the land productiveagain before returning it to Urban Common.

A large proportion of the 1000 acres of landwas derelict, and restoring it all withoutextracting coal would have cost more than£130 million. As well as the three unsightlyand hazardous landfill tips, the site was alsohome to abandoned vehicles, dangerouschartered and uncharted mine shafts andadits – underground mine entrances.

Growing

Aerial shot of Ffos-y-fran

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:35


24

“

”

As well as helping to drive economicgrowth and achieving energy securityin the UK, the land reclamation whichis an integral part of surface miningprojects can bring back huge swathesof land which were formerly derelictand under-used

Aerial shot of Ffos-y-fran

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:35


25

Expert teamWe have a team of specialists working with us, including a full time archaeologist,working with a team we employed from theGlamorgan-Gwent Archaeological Trust tocarry out all the main archaeological works on site.

Archaeological features protected duringoperations, such as the Scheduled AncientMonument known as Sarn Howell Pond and elements of the Dowlais Free DrainageSystem, the wooden aqueduct over thedisused railway line that is a listed buildingand the recently discovered Iron AgeSettlement, would also be incorporated into the restoration strategy with suitablemanagement being afforded to protect and preserve these features throughout the period of aftercare.

The dedicated site team also includes miningengineers, environmental managers and up to 15 specialist consultants in areas includingecology, hydrology, hydrogeology and airquality etc. The Ffos-y-fran project createsemployment for in excess of 200 peoplealtogether, but indirectly maintains and providesemployment for up to 400 additional jobs insupport activities throughout the scheme.

Environmental focusWe pride ourselves on our rigorousenvironmental policies and procedures, andhave gained the high industry environmental

standard BSEN ISO 14001. The environmentalmonitoring we carry out routinely includesconstantly monitoring the water quality, noise,dust, air quality and vibration levels. Ourenvironmental manager is involved with widermanagement plans for the ecological area,monitoring the Great Crested Newt populationand Lapwing nesting areas and many otherecological features.

We have safeguarded the ecological area atFfos-y-fran which contains newts and manybird species, and an ancient wooded valleywhich also contains diverse wildlife. Oursupport ranges from putting up a number of bird and bat boxes, and initiating a treeplanting scheme. Over a thousand trees havealready been planted and further tree plantingwill continue every year of the project.

Care for the environment is one of our primarycorporate responsibilities and we are fullycommitted to improving standards ofenvironmental management on all our projects.We aim to minimise waste, prevent pollution,and pursue good practice in resourcemanagement, and set targets and use plansto monitor the achievement of environmentalobjectives. Each employee is expected toprioritise environmental considerations, and all our staff are provided with environmentaleducation and training.

Nant LlesgThe Miller Argent team is now preparing aplanning application for another major project

in South Wales, at the neighbouring NantLlesg site. This will involve an 11-year excavationresulting in the recovery of up to six milliontonnes of coal, creating around 300 jobs inthe region.

Most of the coal produced at Nant Llesgwould be transported to Aberthaw PowerStation in the Vale of Glamorgan and to theTata Steelworks at Port Talbot. Having asource of local coal significantly reduces ourreliance on imports from other parts of theworld and increases Wales’ energy security.

While recognising the great importance ofreducing carbon emissions through renewableenergy, Nant Llesg would play a vital role inaddressing the energy gap we face in Wales.It is an important job creator which will, likeFfos-y-fran, result in long-term improvementsto the area.

James Poyner, director of Miller Argent

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:35

In the frame?

26

The use of Framework Agreements hascontinued to generate much debate in theconstruction and engineering industries,with prominent political and industryfigures voicing widening concerns overtheir application.

In the frame?

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:35

In the frame?

27

Ask the operators of a majorFramework Agreement to define what it is, and

a typical response may be: “It’s an essentiallyfacilitative document that provides a mechanismfor one party to place orders with the other onstandard terms over a period of time.”

Ask an SME construction organisation in today’srecession hit market and the response wouldmost likely be quite different: “Frameworksappear to reward only the larger organisations,who are often based outside the frameworkregion (or country), and once appointed preventany other legitimately worthy organisationfrom tendering for the work for a substantialperiod”.

An organisation’s viewpoint on FrameworkAgreements is dependent on which part ofthe framework the business is positioned, or not, as the case may be.

The benefits and beneficiariesThere are various reasons why FrameworkAgreements are implemented and argumentsfor their use can include:

• They facilitate similar transactions. Agreeingstandard terms and conditions and processesmake it easier and faster and therefore cheaperto reach agreements where contracting partiesenter into a series of similar transactions inthe future.

• They provide consistency and producebenefit from economies of scale.

• Where a party (who is subject to the publicprocurement rules) is contemplating a seriesof similar transactions, the procurement of asingle Framework Agreement covering allthe potential transactions is an extremelyattractive alternative to continuousprocurements. The transactional cost ofmultiple procurements is a key concern tothose involved in the public sector and aFramework Agreement can reduce thesecosts and provide commercial certainty (ifdrafted properly).

Public sectorprocurement The National Audit Office (NAO) recentlyreported that Government guidance to thepublic sector is that Framework Agreements

have the potential to create a reduction incapital expenditure and process efficiencies of up to 10%.

The Yorkshire based “Construction SectorNetwork” has indicated that following a surveyof SMEs and micro-contractors, they foundthat frameworks were in fact creatingsignificant barriers to winning contracts. Theconcern with Framework Agreements on aregional scale is the potential implication forthe local supply chain. This can have a seriousadverse effect if local suppliers are excluded in favour of larger non-regional companies,largely owing to an inability to fulfil therequirements of what is perceived to be (bySMEs and micro-contractors) an unfairlydrafted Pre-Qualification Questionnaire(“PQQ”) or tender process.

Indeed, the Federation of Small Businesseshas indicated that SMEs only win around 2%of the public sector’s annual business in theUK, even though SMEs account for more than50% of Britain’s GDP. This means that thestructure and PQQ process for FrameworkAgreements will need to change if SMEs areto be considered equally as a frameworksuppliers alongside their larger competitors.

Private SectorProcurement Leading UK retailers and supermarkets haverecently indicated that in such tough competitivetimes, solely using Framework Agreementsmight not be the right method of procurementand that a shake-up of the procurementprocess may be required.

So, what are these retailers and supermarketswanting that a framework arrangement doesnot provide? Well, they are predictably lookingfor key savings, but are also looking for betterorganisation in supply chains, bettermanagement of materials and slicker logistics.Would this then mean “off-panel” work?(possibly, but subject to exclusivity andproviding that the proposals provided areinnovative and ultimately cost effective).

Such dual approach to procurement obviouslybenefits the framework employer, but perhapsthe existing framework supplier who has gonethrough a detailed and cost discounting pre-qualification process may be left a little confused.

Frameworks of thefuture Given the sheer volume, reliance and currentduration of existing Framework Agreements in the UK, this method of procurement willnot.disappear in the foreseeable future.

More likely, the pressures on Government andthe private sector to make frameworks moreinclusive to SME's will hopefully result in somechange in PQQ structure and tender evaluation.Doing so may allow other worthy participantsin the industry a chance at obtaining valuablework in a tough economic climate.

In addition, the use of statutory measuressuch as the Infrastructure (Financial Assistance)Bill 2012-2013, which proposes to guaranteeup to £40bn of investment in infrastructureand up to £10bn in new homes, may helpstruggling SMEs to balance the work whichthey are currently missing out on undercurrent Framework Agreements, although we shall have to wait until next year to assessthe impact of this.

Find out how our construction group can help you by gettingin touch with Andrew Poyner. Call 0845 901 2070 or [email protected]

“”

An organisation’s viewpoint on FrameworkAgreements is dependent on which part ofthe framework the business is positioned,or not, as the case may be

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:35

Building a story of growth

28

BUILDINGA STORYOF GROWTH

Gerry Choat, Managing Director(North East) of Story Homes looks atthe major challenges facing the UK’shousing industry post-recession.

The slump in the UK’s housing activity over the last few years has intensifiedthe economic downturn. The CBI believes it accounts for a third of theoverall drop in GDP during the recession. Boosting activity in the housing

and construction sectors could help to drive the UK’s recovery and lead to sustainable, long-term solutions for a healthy housing market.

One of our company’s real strengths is its strategically acquired land bank, which includes sitesfrom Scotland to Lancashire. This land bank has grown a great deal in the last five years whileconditions favoured acquisitions. We’re moving south, with land bought from the Homes andCommunities Agency at Lancaster Hospital, Lancashire which is about to be developed, andnorth, with an 800 units scheme underway in Dumfries.

We’re planning to expand our housingdevelopments over the next four to five years. Story Homes has the experience tounderstand where the opportunities are andwe do our research in depth before makingsignificant investments.

Story’s decision to move into house buildingin the North East began with strategic landacquisitions followed by the recent opening of its 240 unit scheme at Shotley Bridge. Thissite was also acquired from the Homes andCommunities Agency who required a highstandard of design and energy efficiency aspart of the development proposal. At themoment Story Homes, with its base in Carlisle,is building about 150 houses a year and weaim to double that in each of the next threeyears through geographic expansion.

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:36


29Shotley Bridge development

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:36


30Shotley Bridge development

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:36


31

KICK-START UKHOUSING MARKETWe need action to kick-start the housebuilding industry across the UK. The numberof new properties being started this year hasfallen to a three-year low. Capital spending by the public sector is dropping, and capitalinvestment by private sector companies isneeded to fill a growing gap.

There has to be a steady pipeline of newhousing supply combined with sustainabledemand to bring about stability and longer-term economic health in the housing market.

The new attitude from government, whichsays it’s committed to “getting Britain buildingagain”, could help to change the culture post-recession. The government’s housing strategyaims to unlock the housing market andstimulate the construction industry. It includesa £400m Get Britain Building pot to supportnew development and 'build now, pay later'deals for public land.

North East regeneration, however, will requiresignificant investment from private sectorcompanies and swift, positive responses fromplanning authorities to bring back some of thelost momentum. A presumption in favour ofsustainable development needs to be thenorm in practice before we will see majorchange taking place.

CULTURAL CHANGEHowever, there’s a hopeful glimpse of a culturalchange in local authority forward-planningmaking an appearance. Local authoritiesseem to be coming to terms with the neweconomic reality of limited public funds and a need to encourage private investment.Allocating housing land in high demand areas, where people actually want to live, is becoming more commonplace across the region.

Recognition of the fact that many of thehousing regeneration projects favoured bylocal authorities, although highly laudable, are simply not financially viable withoutsignificant public subsidy. Councils are alsowaking-up to the opportunity for the planninggain requirements from the poplar privatehousing schemes being used to cross-subsidise the regeneration schemes. This new way of working is a process which StoryHomes fully understands and is happy toengage in a partnership arrangement withlocal authorities.

This change in strategic thinking within thepublic sector has also been accompanied by the promotion of localism. The localismagenda is often interpreted as a way in whichto stop or control things happening in an area,but it should also be there to enable muchmore progress to be put in place.

Once the principle of development has beenestablished through the planning system, itsdelivery should be influenced by the localcommunity, but not stopped. The ambiguity at the heart of localism plays out throughplanning applications, when local politicianscan feel they’re under pressure to say no tonew developments from some residents. Thegrowing impact of social media and lobbyistsmean that such pressure is felt all the morekeenly, round the clock.

GROWTH AND JOBSNew housing is a potential source of muchneeded economic growth and jobs, whichoffer any region a competitive edge for inwardinvestment. It was interesting to see thatMiddlesbrough over-rode objections to anumber of housing schemes at the end of2011 because of its ambitions for the widereconomy.

Durham County Council is also being bold inits aspirations for economic growth, focusinginvestment in attractive market areas toincrease the impact and effectiveness ofstrategic developments. Its local plan, like allothers in the region, has investment as a keypriority.

Story Homes has continued to do businessthrough three economic downturns, and thenew North East base has the ability to be fleetof foot, with strengths in decision making andlocal control that underpin successful buildingand business strategies.

Our land bank means that we have the abilityto build on our presence in the region relativelyquickly. Good quality houses in well-thoughtout locations are attractive not only to housebuyers but also to business and industryinvestors.

A good quality of life is an important asset,and is reflected in the choice of housing,leisure and landscape in an area. We intend toboost competitive advantages through futureStory developments in the North East,Cumbria, Lancashire and Scotland.

Gerry Choat, Managing Director (North East) of Story Homes

”The slump in the UK’s housingactivity over the last few yearshas intensified the economicdownturn

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:37

Planning for sustainable growth

32

Planning forsustainable growthEarlier this year the Coalition Government published its longawaited National Planning Policy Framework (NPPF) as part of itsproposed radical reform of the UK’s planning system. The policy,which aims to “protect the environment and promote sustainablegrowth”, has caused much debate across the industry, with manyprofessionals voicing concerns over the future of regeneration andaffordable housing.

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:37

Planning for sustainable growth

33

Despite recent pronouncements of a slight rise in GDP during the lastquarter, the plight of the construction and housing industry is yet to benefit from the raft of central Government proposals

and initiatives recently brought into play.

As a result, recent Government pronouncements have foreshadowed further changes to the planningsystem which appears to be seen as the block on development potential - be it housebuilding or theprovision of much needed national infrastructure.

The recent publication of theGrowth and Infrastructure Billcontains a further tranche ofprospective changes to theplanning system. In many waysthe proposals appear to be indirect opposition to the provisionscontained in the Localism Actrecently passed in 2011. Forexample, the Community Rightto List Assets and the provisionswith regard to the bringing intoforce neighbourhood plans (whichhave already been brought intoforce). It seems likely that thepresent and proposed planningchanges will run counter to thespirit (if not some of the actualprovisions) of the Localism Act.

Proposals in the new bill includethe option of making planningapplications directly to theSecretary of State where a localplanning authority has beendesignated. The intention here is to designate those authoritiesthat have a poor record ofperformance, with a view toavoiding delays in obtainingplanning permissions from localauthorities for much neededdevelopment proposals. Thiswould not appear to follow theGovernment’s intentions todevolve development decisionmaking to a neighbourhoodlevel, but instead seems to fosterthe impression that theGovernment intends to wrestthe most important decisionsaway from local areas and put itback into the hands of centralGovernment.

Growth and Infrastructure BillOther proposals contained inthe new bill cover:

• the broadening of the powersof the Secretary of Statetoward costs in planningappeals

• the limits that are to beimposed on the amount ofaccompanying informationrequired by a local planningauthority when planningapplications are made

• provisions for thereconsideration ofeconomically unviableaffordable housingrequirements contained inSection 106 Agreements

• excluding the right of localgroups to apply for town orvillage green status of landearmarked for proposeddevelopment.

The bill additionally containsprovisions which would allowthe Secretary of State to allowcertain business and commercialprojects of national significanceto be considered under thenationally significant infrastructureregime contained in the PlanningAct 2008. This is to enable thoseschemes to proceed faster thanat present, with the Governmentspeeding up the processes forholders of consents under Section36 of the Electricity Asset 1999.This entails categorising themin the same position as holdersof development consent ordersmade under the 2008 Act.

Planning for change It remains to be seen whetherthese measures will result in anincrease in the number ofplanning applications beingmade for development proposalsso that the construction industrycan again begin to contribute toa rise in GDP. Anotherconsideration is whether theunderlying reason for its malaisestill resides in the lack of availablefinance on offer to the generalpublic and SMEs in the form ofeasily obtainable mortgages andbusiness loans, which wouldinevitably allow capital injectioninto projects for growth to becommenced.

One thing is for sure, there willbe a backlash from those opposedto development projects, such asperceived invasive road schemesand environmentally unfriendlyonshore wind farms. The rise inlocal protest groups is alreadybeing seen and a return toplanning permissions beingobtained by way of appeal (anda reappearance of “Swampy”)may be not far away.

Find out how our planning team can help you by getting in touch withBryan Riley. Call 0845 901 2071 or email [email protected]

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:37

Hedging Claims: Is now the time to act?

34

Recent investigations by the Financial ServicesAuthority (FSA) suggest that whilstbanks made much of the virtues of

hedging as a means of protecting against interest rate rises, little focuswas given to what would happen if rates went down. This was aconcerning omission as a number of these products included a floorbelow which customers would not benefit from interest rate falls.

The credit crunch of 2007/8 and the consequent collapse of bankbase rates has led to a number of customers being significantly worseoff as a consequence of having entered into hedging product. In anumber of instances customers were obliged to take out the hedgingproduct as a condition of banks providing loans. This issue has beencompounded by the fact that many customers who have attempted tobreak the hedge (i.e. cancel such products) have found that the costsof doing so is prohibitively expensive and were unaware of such costsuntil attempting to cancel.

As a result, a number of customers are now looking to the FinancialServices Ombudsman and / or the Courts for redress. At the momentvery few cases have made it to court and as a consequence there

remains a deal of uncertainty about the obligations owed by the banksto their customers and the extent to which those obligations havebeen breached.

Reasons to act now Whilst the law in this area is still developing there a combination offactors means that if customers are considering taking action inrelation to hedging issues, they would be well advised to act fast.

The first is the limitation period; depending on the circumstances itmay well be that a customer would only have 6 years to commenceproceedings from the date the product was entered into or the chanceto claim may be lost. If the sale was in the period of 2006 to 2008timing is likely to be critical (although there are circumstances in whichthe limitation period may be extended and/or run from a date laterthan that of the agreement).

The second reason to consider acting now is that banks may be morewilling to consider settling claims in the early stages before the lawdevelops. Once the Courts have given authoritative rulings the risks

Banks have offered hedging products for many years. From 2006 there was anapparent change in the approach to the sale ofsuch products in terms of the number sold andthe range of customers they were sold to. In themost common form of such products the “hedge”was linked to interest rates. The theory was that suchproducts provided a degree of interest rate protectionfor the customer by setting a ‘ceiling’ for the rate that thecustomer would pay.

Hedging Claims: Is now the time to act?

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:37

”

“Hedging Claims: Is now the time to act?

35

Recent investigations by the Financial ServicesAuthority suggest thatwhilst banks made muchof the virtues of hedgingas a means of protectingagainst interest rate rises,little focus was given towhat would happen ifrates went down

Find out how our commercial litigation team can help you by getting in touch withAndrew Johnson. Call 0845 901 0911 or email [email protected]

faced by the banks will become clearer and they are more likely totake a robust view in relation to claims they consider to be“borderline”.

The third reason to consider acting now relates to After the EventInsurance (ATE Insurance). In general terms ATE insurance providesthat if a party who has insurance loses the litigation, the policy paysthe other side’s costs (which would otherwise be payable by the losingparty) and no premium is payable by the losing party. If the party withinsurance wins, the premium is recoverable from the other party as acost of the litigation (subject to an argument about the reasonablenessof the premium). This position is due to change as from 1 April 2013as ATE insurance premiums will no longer be recoverable as a cost ofthe litigation (subject to limited exceptions).

As the banks have lined up a roster of expensive city firms to defendthem the potential costs downside if a claim fails is very significant.Post 1 April 2013, the insurance premium to protect against exposureto such a costs downside will no longer be recoverable. This shift inthe balance of power as regards costs recovery is likely to provide theBanks with a significant tactical advantage.

Timely adviceOur team has experience of advising on a number of misspelling claims.Our first step in advising clients is consider if the product has beenmissold and the basis any claim (addressing issues such as anyattempted exclusion of liability by the bank). This stage would alsoinvolve a review of the position in relation to limitation.

It might be that your claim is better progressed via the Financial ServicesOmbudsman, with limited input from lawyers. However, if the claim islikely to worth more than £150,000 it may fall outside the scope of theOmbudsman scheme and formal legal proceedings, or at least thethreat of them, might be required.

Our intention is always to give clients accurate, commercial and timelyadvice. If a claim can be settled on reasonable terms without the needfor litigation that makes sense. If settlement pre-issue is not possible wecan advise on options for litigation, including the issues of funding andcosts protection. This would include considering ATE insurance.

Not all customers who have been sold hedging products will have viableclaims and those customers who have claims need not pursue them.However, now is the time to consider whether you have a claim andtake appropriate expert advice.

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:37

Prime positioning

36

PRIM

E PO

SITI

ONIN

G

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:37

Prime positioning

37

IN THE SECOND IN A SERIES OFARTICLES ON THE FIRM’S FIVESTRATEGIC PRIORITIES, CHIEFEXECUTIVE OFFICER, PATRICKHARWOOD, EXPLAINS THE VALUE OF MARKET POSITIONING INHELPING WATSON BURTON ACHIEVE ITS STATUS AS A PREMIERCOMMERCIAL PRACTICE OFNATIONAL SIGNIFICANCE.

FOR any business operating in professional services,the formation of a clearly

defined corporate identity is pivotal to itssuccess. A progressive vision, combined with a consistent internal and externalrepresentation of an organisation, signalstriumph for companies and clients alike and is what we strive to achieve on a daily basis.

Our positioning within the sectors in which we operate forms an essential element ofWatson Burton’s national brand. By workingin conjunction with our four other identifiedkey strategies – our clients, our people, ourcommon purpose and our new start – the firm is able to strengthen its position todemonstrate our continuous commitment to delivering quality in all that we do for ourgrowing national client base.

BUILDING LASTINGRELATIONSHIPSAs a dynamic, forward thinking commercialentity, we cultivate a clear-sighted approach tobuilding strong long-term client relationships,a notion which lies at the heart of ourbusiness strategy. Our team recognise thatthe needs of our clients’ continue to change in line with the political, social and economicdemands of the marketplace and we workhard to ensure that the service we provide isflexible in meeting their ever changing legaland commercial requirements.

Our mission is to develop productivepartnerships with national organisations. As a result, we hand pick a core team of lawyersfor each client with the aim of presentingindividuals that not only have the technical

ability required to provide practical businesssolutions, but also the high level commercialawareness of business management toproduce the best possible results. This isunderpinned by regular review meetings toguarantee that each stage of the relationshiphas both strategic direction and an affinity formeeting the business objectives of our clients.

To date, our flexible, client orientatedapproach to the development of lastingrelationships has produced outstandingresults for our clients. This year alone, ourtalented lawyers have advised SpringfieldHealthcare Group and Wear Inns in securingmulti-million pound investments to aid theirexpansion plans, our employment lawyershave become the first in the country tosuccessfully challenge TUPE regulations inrelation to outsourcing of services and wehave saved a Wolverhampton-based clientmore than a quarter of a million pounds bysuccessfully appealing against an Office ofFair Trading (OFT) penalty.

These successes offer only a small sample ofthe excellent work undertaken by our lawyersand visibly express our ongoing obligation toenhancing the businesses who we work with.To this end, we endeavour to create successful,cost effective working relationships, based ona mutual trust and deep understanding of theneeds of our clients’ businesses and the widermarketplace.

INVESTMENT FOR GROWTHWithin the fast-changing sectors that we workin, we pride ourselves in being pro-active indealing with problems before they arise andstrongly believe that a heightened awarenessof our clients’ business and the marketplace is key to our sustainability and future growth.

This year has seen the firm gain momentumwith the appointment of over 25 newemployees, who all have a crucial role to playin maintaining the core identity of WatsonBurton. From our offices in Newcastle, Leedsand London we are positioned to delivernational level expertise at regional rates, with a physical presence that meets the needs ofnational clients.

Our recruitment programme has seen the firm inject new vitality into our service offeringin Newcastle and Leeds. With three centuriesof history in the North East, our firm is apassionate supporter of stimulating economicprosperity in the region and is committed todoing all that we can to assist local businessesin their endeavours. You will see from page 4of this publication that the regional agency,NewcastleGateshead Initiative has somefantastic plans for attracting inward investmentinto the region and we take great pleasure inassisting them to highlight the North East as ahub of high quality business transactionsworthy of national recognition.

As a firm, we are extremely excited about ourrejuvenated team operating from our Leedsoffice. The appointments of lawyers such asAndrew Johnson, Joanne Sears, AndrewPoyner, Michelle Levin and Andrew Franceycomplements our existing service to theYorkshire market and adds a new dimensionto our exemplary team. Over the next year,our dedicated team will continue to work hardto build upon the foundations created in theregion for the ongoing success of our clients.

POSITIONED FOR SUCCESSOur main aim in positioning the firm is toensure that when clients are asked todescribe their impressions of Watson Burton,they respond with phrases such as “clientfocussed”, “commercially astute” and“understand our goals and aspirations.”

In creating and maintaining our marketposition, we place our clients at the core ofeverything that we do and recognise thatwithout them we would not exist. We areproud to say that we have a distinct corporateidentity – we know who we are, understandour clients and are positioned for nationalgrowth. This, in itself will make great strides in helping us achieve our vision of being anational firm of quality.

Find out how Watson Burton can help your business bygetting in touch with Patrick Harwood. Call 0845 901 2091 or send an email to [email protected]

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:37

An enlightening partnership

38

Watson Burton’s approach to supportingcommunity initiatives is underpinned by apassion for celebrating arts and culture,which has this year led to the firm partneringwith Tyne & Wear Archives & Museums(TWAM) to further promote its nationallyrecognised collections.

Left to Right: Gillian Hall and Carolyn Ball at The Discovery Museum

x116951_WB_p13_sw_x116951_WB_p13_sw 27/11/2012 10:37

An enlightening partnership

39

In our role as corporate partner with TWAM, we aim to encourage and inspire creativitywithin the community in which we live and work. We believe that the collections ofinternational significance in archives, art, science and technology, archaeology,

military, social history, fashion and natural sciences do that and more, providing valuablelearning resources to the region that has a positive impact on the lives of individuals.

Some of the 12 museums and galleries owned by TWAM are monumental landmarks in theregion, with both Discovery Museum and the Great North Museum recognisable in the citycentre skyline of Newcastle. They also boast some world-class collections which have beenawarded designated status by the Department for Culture, Media and Sport in recognition oftheir national importance.

Innovation A core element of our partnership is a mutualunderstanding and belief in the importance ofart and culture and its effect on wider society.To us, the work undertaken by TWAM promotesthe region as a leading centre for culture anddiversity and personifies innovation in all that itdoes.

As a national law firm with a 200 year historyin the North East, we pride ourselves on ourability to offer support to modern day pioneers.Over the years, we have provided legal servicesto some outstanding innovators across thecenturies, from Joseph Swan in the 1800s toa range of 21st century technology pioneers.TWAM has in fact captured elements of ourhistory within its collections, displaying JosephSwan’s drawings and first light bulbs in theDiscovery Museum.

Joseph Swan selected Watson Burton to advisehim on the patent protection of his carbonfilament light bulb in the 19th century. Swanwas the inventor of the electric light bulb,patenting his a year before Thomas Edison,and his Gateshead house was the first in theworld to have working light bulbs installed. His patent led to the creation of productswhich have changed home and business lifethrough-out the world.

Gillian Hall, Senior Partner at Watson Burton,said: “The TWAM collections are an importantpart of the region’s heritage and hasinternational significance.

“Joseph Swan was one of 19th century’smost notable inventors. His creativity hasmade a significant difference to how we alllead our lives today. We are very proud of the

fact that Watson Burton played a part in thisgroundbreaking work. We are also gratefulthat institutions like TWAM are there to educatethe region’s next generation of innovators bygiving them access to the North East’s greathistory.”

Carolyn Ball, Archives and Records ServicesManager at Tyne & Wear Archives & Museums,

said: “In the current financial climate, it can be difficult for organisations such as ours to obtain the relevant support and funding, so we are extremely grateful for corporatepartners such as Watson Burton. One of ourmain objectives is to make a positive impacton people’s lives and we strongly believe thatwe do that.”

For further information on the services provided by Tyne & Wear Archives & Museums, visit their websitehttp://www.twmuseums.org.uk/

The TWAM collectionsare an important part of the region’s heritageand has internationalsignificance

x116951_WB_p13_sw_x116951_WB_p13_sw 13/12/2012 08:24

40 watsonburton.com

...a superb level of service The Legal 500

x116951_WB_p13_sw_x116951_WB_p13_sw 13/12/2012 08:24

Briefly Legal - Winter 2012

Documents

Transcript of Briefly Legal - Winter 2012