Watson Burton Briefly Legal Winter Edition

AUTUMN/WINTER2014/2015

IN MYEXPERIENCEEntrepreneur Roy Stanley on thirteen years of IPOs

CONSTRUCTION2025More than a year later, howhas the strategy beenimplemented?

ENERGY UPDATEIs the North of England ontrack to be the energy capitalof the UK?

CLOUD TECHNOLOGY...

drivinginnovation

WELCOME: By Duncan Reid

2 Briefly Legal � autumn/winter 2014/15

ur clients in the construction industryhave shown particular optimism thisyear. Fuelled by Help to Buy, house

builders and their associated supply chains sawa significant upturn in new projects getting offthe ground. I welcome the contribution from myConstruction and Engineering partner, SarahWilson and her article on how the Construction2025 strategy will see government and industryworking together to drive growth and continuethe positive momentum in the sector.

Construction isn’t the only industry that hasturned a corner; business confidence isreturning across the board. Not only are weseeing more inward investment coming intoour regions, but crucially, businesses are findingit easier to access finance. Venture capital expertsIan Richards of Northstar Ventures and PaulWigham, Associate in Corporate from WatsonBurton, explore the current funding opportunitiesin more depth in their Q&A.

For those companies further down the line,the M&A market is gathering momentum and2014 has so far seen a record number of IPOson the London Stock Exchange. For thoseconsidering the option of a flotation, RoyStanley, Non-Executive Director of the TanfieldGroup shares his experience of takingcompanies through the IPO process.

We’re delighted that two of our key regions,the North East and Yorkshire, have seenstrong economic recovery. Not only hasavailable finance spurred entrepreneurship inthe region, but the North of England has beenmarked out as a prime strategic hub for theoffshore renewable energy market. AdamLovell, Editor of Yorkshire Business Insiderlooks at how Government and the privatesector can collaborate to realise the region’senergy potential.

Our specialists from Watson Burton haveshared their experience on some of the issuesfacing our clients, from the data protectionminefield surrounding big data, to the impactof whistleblowing on employers.

And as the firm celebrates another strongfinancial year, our CEO Patrick Harwood givesus his perspective on essential leadershipqualities.

It is hugely rewarding to see our clientsemerging from some challenging times andmaking great strides forward. We hope youfind our views and thoughts in this issue useful,wherever you are in your business journey.

Duncan ReidPartner & Head of Corporate,

Watson Burton LLP

As 2014 drawstowards a close we can reflect on ayear when Scotlanddecided to remainpart of the UnitedKingdom and whenmany were braveenough to declarethat the recession is finally behind us.

O

Welcome to the latestissue of Briefly Legal W

elco

me

3Briefly Legal � autumn/winter 2014/15

CONTENTS

10

3016

34

4 Cloud technologydriving innovationin the educationsector

8 Big Data: Big Questions

20 Is the North ofEngland on track to be the energycapital of the UK?

24 Energy and politicsdon’t mix

26 Investing in abright future

30 Exporting forgrowth

32 Codification,clarification,innovation: the newprocurementDirectives

34 Be sure and avoidinsurance risk

36 Energy drives greatleadership

38 60 seconds with...Chris Graham

16 Focus on house building

18 Whistleblowing andemployment law -what both sidesneed to know

10 Roy Stanley: In myexperience

14 Construction 2025: Buildingmomentum?

This is a Carbon Balanced Publication.

The full carbon impact of this document

has been offset by the conservation of

endangered tropical rainforest in

association with the World Land Trust.

20

4

BRIEFLY LEGAL: Cloud technology driving innovation in the education sector

4

Cloud technologydriving innovation inthe education sector

Briefly Legal � autumn/winter 2014/15

Gareth Davies,MD at Frog Education



The classroom is a constantly evolving environment andtechnology is transforming the way teachers communicatewith students. The ICT budget of any school is now typicallysecond only to staffing costs with iPads, Kindles and otherhandheld devices playing an integral role in meeting thedemands of a tech-driven generation.



“Teachers can now sethomework,collect it andgrade it online...

hildren as young as five are set to learn how to code from September 2014, with arecent study from Ofcom revealing that six-year-olds have the same understanding ofusing tablets as that of a 45-year-old. Going hand in hand with this digital revolution is

cloud computing. With teaching now taking place in areas beyond the classroom, the future ofeducation is geared towards anywhere, anytime learning. As such, educational institutes arecatching on to the cloud as a means to create a more targeted learning experience, facilitatinggreater collaboration amongst teachers, students and parents.

At Frog, we work with over 800 schools in the UK and 12 million users worldwide to delivertechnology to the education sector; from implementing cloud services and technical support to ongoing training with teachers. Many of our staff have a wealth of experience in education – from ex-teachers to Ofsted inspectors – meaning that we’re perfectly positioned to discusssome of the issues that today’s educators face.

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Giving teachers a helping handTeaching remains a dedicated profession andmany either stay in the classroom longbeyond the school bell or take home a largebag of student homework. However usingcloud computing through virtualised desktops,teachers are able to access applicationsanywhere – rather than relying solely on theirschool computer. The cloud allows individualsto access data securely from remotelocations. This in turn means that teacherscan now set homework, collect it and grade itonline – all from the comfort of their home ifthey so desire. This provides an increasedelement of flexibility as well as the ability tobecome more responsive and share instantfeedback.

Instant, on-the-go sharing is largely the normfor today’s younger generations and it’s hugelyimportant that they’re provided with the capacityto do the same in an educational environment.Feedback on work, including any commentsor grades, is instantly available via a computer,smartphone or tablet. Students are able to logon and view group projects, including anyedits that have been made to the project forexample. This element of collaborationcreates a much improved dialogue amongstpeers – and their teachers – as a result.



“One of the biggest challengesthat schools will need to addressas the use of cloud technologygrows in importance is that ofconnectivity

Improved collaboration – teachers, pupils andparentsThere are typically three parties concerned ina pupil’s education – the teachers, the parentsand of course the students themselves. Oneof the biggest benefits that cloud technologyoffers is an increase in communication betweenall three. Parents can log on to a dedicatedportal from any device and access their child’sschoolwork, including recent grades andcomments from their teacher or areas forimprovement. Teachers can also share picturesfrom school trips or assemblies that parentsmay have missed, uploading them to a secureportal that parents can then access.

Heads of year and other managerial staff arealso provided with a more holistic understandingof work that staff are setting, including lessonplans, classroom worksheets and schedulesaround upcoming school trips. This is a greatopportunity for senior staff – whose role maylie outside of the classroom – to gain a clearerunderstanding of creative ideas and see if theyhave the potential to be implemented acrossdifferent departments. Lastly, headteachersand decision makers are able to keep an eyeon what applications teachers are using mostfrequently and which can be deemed asbusiness critical, which in turn helps whenmanaging budgets.

What next for cloud? The bring your own device (BYOD) trend is one that is accelerating at a rapid pace as cloudtechnologies and mobile learning begin to work more closely together to drive innovation ineducation. Primarily, the scheme allows students to bring their own devices in to school, withsecondary schools the main target. A survey carried out by the British Educational SuppliersAssociation entitled Tablets and Apps in Schools found that more than two thirds of schools(67%) are now considering BYOD, compared to just over half (52%) in 2012. Consensusfrom the industry remains largely positive at present with BYOD expected to enhancelearning, reduce procurement costs across the ICT department and increase the amount ofavailable resources.

Northumbria University is just one example of an educational institution that has jumped onthis trend with the university handing out iPads preloaded with key texts to new students,making it possible for pupils to access work at home or on the go as well as in class.Similarly, the Essa Academy in Bolton hit the headlines back in 2012 when it announced thatevery student would be provided with an iPod Touch, while each teacher would be providedwith their own iPad.

One of the biggest challenges that schools will need to address as the use of cloudtechnology grows in importance is that of connectivity. School broadband was in manycases installed with a small number of devices in mind and slows down to a snail’s pacewhen handling large numbers of pupils uploading homework at the same time.

Increasingly, schools are taking technology more seriously and the advantages that a cloudinfrastructure can bring far outweigh the inconvenience of upgrading outdated internetservices. Used well, the cloud makes it possible to build a genuinely productive communitythat includes staff, parents, and most importantly, students.

Gareth Davies, Managing Director at Frog Education

@FrogEducation

BRIEFLY LEGAL: Big Data: Big Questions

With the ongoing hype and media attention surroundingBig Data, commercial law specialist, Sam Jardine,considers some of the key questions coming out of theBig Data debate.

BigData:BigQuestions


What is Big Data?Big Data is defined by leading analysts,Gartner, as “high-volume, high-velocity andhigh-variety information assets that demandcost-effective, innovative forms of informationprocessing for enhanced insight and decisionmaking.”

It describes the increasing application ofanalytics to massive (and often disparate andunstructured) datasets to provide a broadrange of outcomes, such as targetedadvertising, trend analysis and even creditscores. These datasets are derived from avariety of sources including social media,browser history, online purchases, etc. In theretail sector, Big Data is increasingly beingused to create “sector of one” profiling - abespoke profile created for each individualshopper enabling retailers to target them withspecific products and offerings.

What are the concerns?The Information Commissioner’s Office (the “ICO”) has highlighted the key area of concern as being where Big Data usespersonal data within the meaning of the DataProtection Act 1998 (the “DPA”). Personaldata is, broadly speaking, data which alone or in conjunction with other data can be usedto identify the individual to which it relates.Where such personal data is beingprocessed, the eight data protectionprinciples from the DPA will apply.

By Sam Jardine & William McCullough

The eight Data Protection Principles state that personal data must be:

• Processed fairly and lawfully• Retained for a specified and lawful purpose• Adequate, relevant and not excessive• Accurate and up to date• Not kept any longer than necessary• Processed in accordance with the relevant data

subject’s rights• Securely kept• Not transferred to any other country without

adequate protection in place

BRIEFLY LEGAL: Big Data: Big Questions


There are a number of tensions between Big Data and the eight data protection principles. For example, the requirement that personal data held is not excessive can be at odds with theenormous amount of data being processed. Similarly, the requirement that the personal data isobtained for a specific purpose can clash with Big Data analytics that determines a range ofoutcomes, depending on the subject matter.

Issues also arise when data is “repurposed”; or used for something other than that which was communicated to the individual at the point of collection. This can cause controversy,particularly where sensitive personal data is in question, for example with the NHS’ Care Data initiative.

4. Organisations should reconsider their privacypolicies/notices in light of Big Data. Theoverriding objective with privacy notices isthat the processing is explained in a fairand transparent way allowing people tounderstand how their personal data isgoing to be used. The ICO acknowledgesthat many users do not fully read privacynotices prior to clicking “accept” however,it confirms that this is merely an additionalchallenge that organisations must adapt to.Businesses need to find new ways to ensurethat data subjects are fully aware of theproposed processing of their personal data.

1. The complete anonymisation of personaldata can take it out of the reach of the DPAas the ICO is primarily interested in BigData when it includes personal data. If thedata held cannot be linked back to theindividual from which it was derived thenthe proposed use of such data is likely tobe acceptable. However, such anonymousdata will be of limited use in the context oftargeted advertising etc.

2. Organisations should consider undertakinga privacy impact risk assessment todetermine the benefits/risks of a particularBig Data project. This is particularlyimportant where proposed Big Dataanalytics involve novel, complex orunexpected uses of personal data and can help to demonstrate that the eightdata protection principles have beenconsidered.

3. Another way to increase compliance is toenact ‘privacy by design’ in new Big Dataprojects. This is where an organisationuses privacy enhancing technology toensure ongoing privacy. This can includeanonymisation techniques, technical andorganisational measures, access controls,audit logs, data minimisation, datasegregation and purpose limitation andseparation.

What can be done?There are a number of steps which organisations using Big Datacan take towards compliance with the DPA:

What is the mainchallenge?The ICO has stated that Big Data can beeffectively regulated within the existing dataprotection framework and is not “a game thatis played by different rules”.

This means organisations themselves need to become more flexible to accommodate theuse of Big Data and will need to find increasinglyadaptive ways of ensuring the transparent andfair processing of personal data.

An ethical solution?The ICO has made positive noises aboutorganisations that seek to go over-and-abovecompliance with the DPA. These organisationsare endeavouring to develop the trust of datasubjects by implementing “ethical policies”that set out their ethos in relation to Big Dataand data processing. This development oftrust could increase user-traffic, leading tomore accurate analytics, data reliability andultimately targeted sales.

If you use or provide services on Big Dataand would like to discuss any of these issues,please do not hesitate to get in touch with ourCommercial team.

Find out how ourtechnology team can help you by getting in touch withSam Jardine

0845 901 [email protected]

Find out how ourtechnology team can help you by getting in touch withWilliam McCullough


BRIEFLY LEGAL: In my experience


In my experienceRoy Stanley, Non-Executive Director at Tanfield Group on his experience of Initial Public Offerings (IPO)

2014 has so far seen a record number of IPOs listedon the London Stock Exchange. In fact there weremore flotations in the first half of this year than inthe boom time of 2007. According to data fromThomson Reuters, 40 companies raised a combined£5.7 billion between January-June 2014. But withthe media reporting that IPO activity is slowingdown, should companies hold tight or forge aheadto float and get that much needed injection ofcash for their business?



oy Stanley, an entrepreneur based in the North East of England, has been involved intaking four companies to the AIM Market and four others to the ISDX market. He hasbeen chairman of two AIM listed companies, including Tanfield Group PLC, which he

helped to develop into the world's largest manufacturer of commercial electric vehicles; andOptare PLC, a bus manufacturer.

Here Roy talks about his own experiences of embarking on an IPO, offers invaluable advice toany business owner considering this route of finance and gives his views on the current marketplace.

don’t over delegate to your advisors. While it’scrucial that you are surrounded by a goodgroup of advisers; a NOMAD broker, lawyerand accountant, you are in charge! If I couldturn the clock back to any of the IPOs I led, Iwouldn’t have changed any of my advisersbut I would have spent more time looking atdifferent broker categories and understandinghow they operate.

Also don’t underestimate the costs of takingyour company to market. If you are looking toraise money on the AIM market, you shouldfactor in a figure between £500,000 – £1millionand between £75,000 – £100,000 on theISDX market. Whilst most of the money istaken out after the money is raised, lawyersand accountants may ask for a proportion of the money upfront.

When my first IPO completed, the business hadraised £7million and was valued at £28 million.It’s fair to say the float exceeded my expectations– there’s no doubt that the process developedme as a person and raised my sights as to whatthe business could go on to achieve.

“My first IPO was back in 2001, in the midst ofthe dot.com bubble. I was looking to raise atleast £4million to take the business to the nextstage. I was introduced by a friend at Deloitteto a local Nomad/Broker and really progressedit from there. If you are looking for some initialinformation and advice, pick up the phone andreach out to your contacts whose opinion youtrust. Do your homework on who the expertsare - as a first port of call you may want to getin touch with specialised accountancy andlaw firms such as Deloitte, Baker Tilly, GrantThornton or Watson Burton.

My advice to anyone considering an IPO is to persevere and don’t be daunted by theprospect of an IPO. If you are a small ormedium sized business do look at listing onthe ISDX (formerly OFEX) market. ISDX isdesigned for companies looking to raise up to £10million, but typically up to £2million. Ithas less onerous admission requirements thanAIM and the main markets.

Remember there is a clear process. That said,do make sure that you lead this process and

R

“There are definitelyups and downsinvolved in goingfrom a privatecompany to a PLC


If I could turn the clock back to any ofthe IPOs I led, I wouldn’t have changedany of my advisers but I would havespent more time looking at differentbroker categories and understandinghow they operate

There are definitely ups and downs involved ingoing from a private company to a PLC. ButI’d say the plusses far outweigh the minuses.The profile of your business is raised instantlyand you suddenly have funds to develop thebusiness and take it to the next exciting level.You get more credibility as a PLC and as aresult you can expect a significant increase innew business contracts.

You also get the opportunity to create morejobs and share your success with yourmanagement team by giving them shareoptions. This definitely helps to make themfeel part of the business and its growth.



If you are consideringflotation then please get in touch withDuncan Reid


If I could push for any change in the marketplace, I would call for regional stock exchangesto be set up. In the North East of England alone, there are so many businesses in need offinance. There are opportunities for businesses to get funding from the Regional GrowthFund and other publicly funded bodies but it can be a laborious and long process. Manybusinesses can’t afford to wait up to nine months and the scale of the finance is often notenough.

Until that time comes, do look at getting a full, AIM or ISDX listing on the London StockExchange. Don’t be put off by everything you might have read or heard about in recentmonths that the flotation frenzy is waning.

While a few companies have pulled their IPO plans in the last few months - this is largelybecause these companies are controlled by the decisions of their private equity investors.Likewise don’t believe the hype that the 2015 General Election could slow down investorsentiment.

We are coming out of a recession and businesses are in a prime position to grow and geta listing. As I see it if you have a good business and can find a good nomad/broker to takeyou on, then you should find there is a healthy investor appetite.


BRIEFLY LEGAL: Construction 2025: Building momentum?


Construction 2025:Building momentum?

esigned to provide a vision for “long-term strategic action by governmentand industry to continue to work

together to promote the success of the UKconstruction sector”, the Construction 2025strategy set out far-reaching ambitions onsustainability, efficiency and internationalgrowth. The 76-page document promises to radically transform the sector over the next decade, outlining ten joint commitmentsbetween industry and Government as the two strengthen their relationship and beginworking together to create long-term andprosperous opportunities.

Headline targets for 2025 Four key targets were identified to beachieved by the UK construction industry and Government, listed as follows:

• 33% reduction in the initial cost of constructionand the whole life costs of built assets(based on 2009/2010 figures)

• 50% reduction in the overall time, frominception to completion, for new build andrefurbished assets (based on 2013 figures)

• 50% reduction in greenhouse gas emissionsin the built environment (based on 1990figures)

• 50% reduction in the trade gap betweentotal exports and total imports for constructionproducts and materials (based on February2013 figures)

So what progress has been made in themission to achieve these targets over the pastyear? Probably one of the most promisingaspects of the 2025 strategy is the formation of the Construction Leadership Council (CLC).With an impressive line-up of industry leadersand government representatives, the CLC hasthe opportunity to capitalise on existingopportunities for the sector whilst ensuringthat the strategy’s aims and objectives areachieved within the timeframe.

The strategy documentfocuses on five clearareas: people, beingsmart, sustainability,growth and leadershipOne area that the CLC has been particularlyvocal about is that of payment practices in the industry. This resulted in the creation ofthe Construction Supply Chain PaymentCharter which was launched in April 2014.The aim of the initiative is to reduce standardpayment terms in construction to 30 days by2018. Whilst concerns have been raised thatthe charter will reduce cash flow for contractorsand force them to increase prices, the initiativehas been largely welcomed by the CLC withnine of its representative firms opting tosupport it. Whether or not the charter will beadopted by the wider industry remains to beseen with businesses being asked to followthe process internally rather than physicallysign up to it.

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With initiatives such as Help to Buy and Funding for Lendinggathering pace, the pressure has increased on the Governmentover the past couple of years to formalise plans for growth in theconstruction sector – and more importantly, to deliver. In July2013, it did just that as the Government Construction Summitplayed host to the unveiling of an industrial strategy documententitled Construction 2025. More than a year on from theannouncement, Construction and Engineering specialist SarahWilson looks at how the strategy has been implemented and itsimpact on the wider industry.


BRIEFLY LEGAL: Construction 2025: Building momentum?

Find out how ourconstruction group can help you by getting in touch withSarah Wilson


Drive for efficiency Payment practices form part of wider discussions in the CLC’s mission to increase efficiencyand lower costs across the industry. The use of technology is going to be a key factor inhelping achieve this, with some of the strategy highlighting BIM as a means of drivingefficiency throughout the project life cycle. Reducing gas emissions will also help driveefficiency. Sustainability and low carbon design has improved immensely in recent years but itneeds to spread further into practices and processes undertaken across the wider industry.The Government’s renewed commitment to investing in the energy sector will help with thisover the coming years as the UK’s energy strategy develops further.

Improving the image of construction One of the main challenges set by Construction 2025 is to improve the image of industry withthe aim of plugging the existing skills gap. The central recurring themes focus on investmentin skills and training and the need for a more diverse work force.

There are a number of initiatives underway to help with this. The industry’s training and skillsbody, CITB has pledged to dip into its reserves over the next two years to pay more traininggrants and the Council is engaging with business leaders to look at key drivers for identifyingopportunities to increase capability in the work place.

What’s next? The next two years will play an integral role indefining the success or failure of Construction2025, with the general election looming andthe industry keeping an ever watchful eye ondevelopments and actions that arise out ofdiscussions.

Much of this vision relies upon a hugeamount of people power and willingness ifthe industry is to truly get on board and backthe strategy. Monitoring ongoing efforts andmeasuring success will be something of aslow burner. With the industry welcomingplans for growth and sustainability with openarms, if enthusiasm continues, the UKconstruction sector will be well placed totake advantage of opportunities movingforward.

BRIEFLY LEGAL: Focus on house building


Focus on house building

Ross Smith,NECC Director

of Policy


BRIEFLY LEGAL: Focus on house building

he byzantine evils of sub-primemortgages and the levels of debtlinked to property were two major

themes in explaining the downturn and thepain it caused.

Six years later, it is hard to find a descriptionof the recovery that doesn’t make heavyreference to the impact of the Help to Buyscheme, and in particular the disputed housingmarket bubble in London. This, many peoplepostulate, is the “wrong kind” of recovery.

In the meantime, a variety of associated issuesloom large in political debate – whether it’s the‘bedroom tax’, green belt development disputesor what have been dubbed separate ‘poordoors’ for affordable housing.

So while in one respect it is surprising thatthere is relatively little mention of housing indiscussions around economic strategy in theNorth East, it is also easy to understand why it has become something of a hot potato.

Nevertheless, the North East Chamber ofCommerce has reached the view thateconomic policy must be complemented byan effective housing policy in the region. Weare therefore delighted to be working withWatson Burton LLP to consider what thatmight be, and how it would help achieve thegoals the region is working towards.

There are several reasons why we considerthis so important. The first is about ensuringskilled workers have good reason to stay inthe North East. This could start right from thepoint they leave university. With the market forstudent accommodation changing so muchover recent years, it’s not clear that sufficientthought is going into ensuring people have thekind of choice they might want locally oncethey become graduates.

Later in life, they will require family homes witha very different set of characteristics, and themarket must support this transition. If we aresuccessful in creating the kind of better paidjobs the region is aiming for through its economicstrategies, many people will want to use theirextra income to move up the housing ladder.So the right kind of property needs to beavailable – or they will look elsewhere.

A second issue is attracting people here fromoutside the region. The National BiologicsCentre now being built in Darlington is anexample of a big opportunity to do this, ashighly skilled people will require use of thisunique facility. If we want them to stay andestablish businesses here, that means alsoconvincing them there are houses here inwhich they will want to raise their families.

Given relative house prices in the North Eastto many other parts of the country, that shouldbe a strong selling point – but only if the righttype of housing is available in the right location.

A third is maintaining and improving localservices, and regenerating communities. Aflow of young families is needed to keepschools viable, while local shops needcustomers with disposable incomes. Thereforeit can be detrimental to local residents if thepopulation of an area stays entirely static.

Fourthly, as people live longer, and are healthyand active for longer, our housing stock needsto keep up. If older people stay in large familyhomes for decades after their children havemoved on, this will cause bottlenecks in thehousing market. But the right alternativesneed to be available to make ‘downsizing’more attractive.

Finally, housing is an important element inaddressing environmental goals. With a thirdof UK carbon emissions coming from housing,failure to improve energy efficiency here willmean even tougher requirements on businessesin order to hit the country’s overall targets.

A large part of this has to be addressedthrough making the most of our existinghousing stock. But it is clear that newdevelopment will also be needed, and at afaster rate than is presently being delivered.

Our project will identify the barriers to achievingthis, which largely fall into two categories ofplanning and finance, and suggest approachesthe region should consider to overcome them.Already, NECC has successfully argued for amore supportive national planning regime andfor greater housing numbers to be included inseveral local plans.

Some of the issues are for government bodies– central, regional or local – to address. Someare without doubt for the housing industry.Others require a much broader coalition andtherefore hearts and minds need to be wonover around the North East.

An Englishman’s home is his castle, or so theold saying goes. But we need to realise thateveryone else’s home could have a bearing on our economic fortunes too. It’s time to givehousing the focus it needs.

T

In the various analyses surrounding the onsetof recession six years ago and the nature ofrecovery now, the role of the housing markethas been a central feature.

“With a third of UK carbon emissionscoming from housing, failure toimprove energy efficiency here willmean even tougher requirementson businesses in order to hit thecountry’s overall targets

Ross Smith, NECC Director of Policy

@NECCRoss

BRIEFLY LEGAL: Whistleblowing and employment law – what both sides need to know


Whistleblowing and

On paper, reporting a concern about arisk, wrongdoing or illegality at work, inthe public interest should be a relativelyeasy matter. Yet, when it comes downto whistleblowing, employees are stillhesitant to speak up - for fear of badblood between their employer and thepossibility of being fired.

employment law - what both sides need to know

he tide is slowly changing and there is more acceptance around blowingthe whistle in the workplace. The 1998

Public Interest Disclosure Act has played amajor role; encouraging disclosures to bemade internally to the whistleblower’s ownemployer or a person designated to them.Intended to reassure staff and forewarnemployers, The Act affords organisations theopportunity to deal with the problem internallyand, crucially, avoid reputational damage oreven public scandal.

T


BRIEFLY LEGAL: Whistleblowing and employment law – what both sides need to know

More recently, the Enterprise & RegulatoryReform Act 2013 means that there is now a greater emphasis on making disclosures in the public interest – workers must believethat their admissions are made to publicadvantage before any protection fromdismissal or detriment can be reached.

Nevertheless, blowing the whistle is a somewhatrisky pursuit and despite revised legislation,there remains a complex balance between thepersonal interests of the individual employeeversus the commercial or organisationalinterests of the employer. It’s important forboth organisations and staff to take steps toprotect themselves, be clear what steps arerequired to make a disclosure and how tomanage the legal risks.

When and how does someone acquire the status of whistleblower?Not everyone will automatically qualify for protection. Organisations such as MI5 and MI6 forinstance are exempt and it is not possible to make disclosures on matters concerning nationalsecurity.

There are also a number of stipulations when making the claim itself. In order to achieveprotected disclosure, a number of conditions must be satisfied in accordance with thestatutory framework.

- It is a common misconception that information needs to be something that was previouslysecret or unknown, when a protected disclosure simply involves bringing information to theattention of the employer or some other prescribed person.

- If the employee makes a disclosure they now need to provide as much information aspossible and convey all the relevant facts – complaining, expressing opinions or evenmaking a claim may not be enough.

- The potential whistleblower must now be able to back up the facts upon which theallegation is based and confident that the claim is being made in the public interest and beable to highlight that one or more of the following failures has occurred; a criminal offence;failure to comply with any legal obligation to which a person is subjected; a miscarriage ofjustice; endangering the health or safety of any individual; damage to the environment, or thedeliberate concealment of any of the above categories.

It has undoubtedly become more difficult for an employee to acquire protected status. Employersare now able to argue that the disclosure was not made in the public interest as well as allegingthat the worker did not have a reasonable belief. So taking steps to make a genuine disclosurethat serves public advantage cannot be stressed enough.

What next?If an employee qualifies for protection as awhistleblower, it is open to them to pursue anemployment tribunal claim following detrimentor dismissal – the former includes suspension,disciplinary action or failing to investigate thecomplaint, whilst the latter can compriseredundancy as well as straight-forwardtermination of employment. Importantly, there is no cap on the compensation which an employment tribunal can award and anorder for re-employment is a realisticprospect.

The worker will of course have to establish a link between the fact that they made aprotected disclosure and the way they weretreated at work. In practice however, muchweighs on the employer’s explanation andwhether they can demonstrate a reason fortheir actions unrelated to any protecteddisclosure.

Managing the legal risksWhere someone has made a protecteddisclosure, the risk of compensation can beconsiderable. Whistleblowers typically arguethat they find it difficult to mitigate their lossesby securing employment elsewhere becauseof how they were treated at the hands of theiremployer. Equally, the risks should not beoverstated.

It’s important that employers do not shirkaway from whistleblowing and face the factsin order to mitigate the risks. Implementing awhistleblowing policy is a good place to start.Not only does it provide an early warningsystem but also allows the organisation todeal with serious failures in-house, removingany unwanted publicity. From a commercialperspective, this can even help to increasemarket confidence.

With a policy in place, there is no guaranteethat workers will not present employmenttribunal claims, but it does manage the risks.Where an employer can show that they areconcerned to deal effectively with anymalpractice, it is difficult for a worker todemonstrate that they behaved reasonablywhere they have failed to follow internalprocedures.

Whistleblowing law is still relatively new andhas only been part of our legislation for 16years. It is also a complex area of law.Depending upon the facts of any particularcase, different considerations may well apply.Gaining an understanding of how the legislationworks is key to enable both employers andthe employee to understand and effectivelymanage the risks.

Find out how ouremployment group can help you by getting in touch withChristopher Graham


“It’s important thatemployers do notshirk away fromwhistleblowingand face the factsin order to mitigatethe risks

BRIEFLY LEGAL: Is the North of England on track to be the energy capital of the UK?


Is the North of England on track to be the energycapital of the UK?Adam Lovell, Editor of YorkshireBusiness Insider takes a look athow the region is shaping up



he latest pledge by Government toback plans for a £450million energypark in the Humber will see Yorkshire

compete with internationally renowned areasboth in the UK and further afield. Aberdeen inparticular has historically been recognised asthe Energy Capital of Europe, housing overone thousand businesses in the energysector. However recent investments meanthat the North of England is catching up fast.Based at North Killingholme, the Able MarineEnergy Park (AMEP) will deliver state of the artport facilities specifically designed to supportthe North Sea's offshore wind industry. Withmore private sector funds for energy projectssince 2012 than in the past decade, it’s clearthat the North of England means business.

Inward investment surgeInternational companies, notably Siemens and Vivergo Fuels, are making substantialinvestments in equipment and processimprovements in the region, helping to makethe area a real contender against internationalcompetition. In the past 18 months, the regionhas received more than £500million of inwardinvestment, as international industry giantsnow view the region as an appealing locationto develop their global energy strategy. Concreteplans are now underway to build a £160millionwind turbine factory in Hull as well as a£350million biorefinery – which will be thelargest in the UK.

Sizing up the businessopportunity The North of England’s manufacturing heritage,coupled with its passion for innovation, is the perfect formula for businesses to seizeopportunities, particularly those available inthe supply chain. The Vivergo plant whichopened in Hull during July of this year employsapproximately 80 full time staff and is expectedto provide over a thousand additional jobs viaits supply chain, with businesses supplyingeverything from valves and loose parts tocritical engineering equipment.

Britain’s manufacturing industry is boomingand will only continue to grow with theemergence of Siemens’ site and the AMEP.Businesses of all sizes are set to capitalise on opportunities across manufacturing andassembly, with greater access to the supplychain also set to expand, as the regionexplores opportunities within foreign marketsand international export trade, all of which can only serve to benefit Yorkshire’s GDP.

Added to this are the opportunities for youngpeople. Speaking recently about Siemen’sdecision to build in the area, David Cameronstressed the importance of local apprenticesin delivering a workforce that is trained andavailable to take on jobs. Engineering andconstruction are prime areas as well as roleson the shop floor and across projectmanagement. An expected 1,000 roles will beup for grabs between now and 2017 whenSiemens’ plant will open for production.

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It’s easy to see why the North of England was marked out as aprime strategic hub for the offshore renewables energy market - for its geography, experience, infrastructure and technicalcapabilities, and the potential to deliver comprehensive, all-encompassing supply chain solutions. Yet having all the credentialsfor large scale energy projects and realising the ambition can beanother matter. Just how far would Government and the privatesector embrace the region with investment?

The North of England’smanufacturing heritage,coupled with its passion forinnovation, is the perfectformula for businesses toseize opportunities



With more private sector funds forenergy projects since 2012 than inthe past decade, it’s clear that theNorth of England means business



Future opportunities – the importance of a compelling argument Businesses are now looking ahead to what’s next for clean energy, with fracking high on theagenda. Much of the debate around techniques used to extract shale gas has been blown outof proportion; partially due to an element of misinformation, but with many businesses alsoblinded by pure emotion.

A recent survey carried out on behalf of UK Onshore Oil and Gas found 57% of people in theUK would be happy to see shale gas production go ahead on the proviso that it makes up amix that includes renewable energy sources. This would suggest that, despite initialcontroversy, opinion now seems more balanced with businesses open to discussion.

If the North is to build on its recent growth in the sector, then it has to be part of an honest andopen on-going conversation between local businesses and energy suppliers. A crucial elementto this lies with local buy-in. Companies set to carry out hydraulic fracturing are largely removedfrom local communities, making it easy to see why certain areas and populations are still sittingon the fence – there is currently very little dialogue or communication that would convincethem otherwise.

As plans for fracking inch forward, it is essential that the industry works together to implementa long-term strategy that outlines proposed developments for the next forty or fifty years. Thecurrent fragmented system, which sees five year plans latched on to two year plans, is simplynot sufficient. If businesses begin to get an understanding of the potential benefits, then currentattitudes may change.

Thousands of jobs, the opportunity to become less dependent on imported energy suppliesand the continuing support of manufacturing are all huge benefits that the region would do wellto tap into.

For the moment, the North is steaming ahead and on target to become both a domestic andglobal hub for the offshore renewables industry.

Adam Lovell, Editor of YorkshireBusiness Insider

@AdamInsider

BRIEFLY LEGAL: Energy and politics don’t mix


These are challenging times forgovernments when it comes to energystrategy. The difficulties are all theharder because political posturing cansometimes get in the way and over-complicate matters. The issue of cross-border politics playing a role in thesecurity of energy supply (or moreaccurately, the lack of security ofsupply) is an example of this.

he UK government’s strategy is builton three broad priorities: security ofsupply; reduction in emissions; and

affordability for the consumer.

The need to reduce emissions and the desire tohave affordable energy are inevitably interlinked.Energy from fossil fuels has been historicallycheap to produce and we can all understandthe need to develop carbon capture andstorage technologies to ensure compliancewith European Union emissions regulations.Anticipating the need to develop thesetechnologies to stay ahead of the curve is not always a political priority, however.

There is arguably a lack of a political will toprovide a short to medium-term place for coaland other fossil fuels in our energy strategy,which means that we are losing the ability touse these fuels as bridging sources of energyas we move towards greener and more reliabletechnologies. This leads to uncertainty overmedium to long-term supply, short-termpricing for the consumer and fairly substantialprice increases, which is already placing somedomestic consumers in fuel poverty.

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BRIEFLY LEGAL: Energy and politics don’t mix

Energyand politicsdon’t mix

Europe and nuclear powerNuclear energy is highly emotive, particularlysince the 2011 tsunami-sparked catastropheat the Fukushima nuclear plant in Japan. Thenegative public perception of the industry hasinevitably been exacerbated by the disaster.This sapping of confidence has played asignificant role in energy markets in Spain and Germany, where there has been a shift to green energy away from nuclear power and fossil fuels. In Germany for example, thegovernment has sought to move the costsubsidies for green energy across to theconsumer, resulting in a rise in energy prices – and much consternation.

Given the contribution to our energy supplymade by nuclear power stations, we in the UKare forced to acknowledge that they are comingto the end of their natural lives and a plan mustbe put in place to either replace them withupdated nuclear technology or find a reliablealternative.

This situation was brought to the media’sattention during the third quarter of 2014

following the temporary closure of two nuclearpower stations; Heysham 1 and Hartlepool.Offline due to a series of discovered faults,EDF Energy revealed that these powerstations were likely to be out of action until the end of the year, with a potential electricityshortage on the horizon as a result. Tocombat this possibility, the National Gridpromptly began to explore options aroundsourcing from other suppliers. Perhaps thiswill be one of the triggers for further action as we look to alternative solutions, with arising number of old plants due to retire.

Thrown into the mix is the government’sagreement with EDF and its back-upconsortium made earlier this year regardingthe construction of a new power plant atHinkley Point in Somerset. While it has nowbeen agreed that construction will begin, thiswas not before the guaranteed minimum pricewas closely examined by the European Courtsto ascertain whether such support would fallshort of European state aid rules. This all addsto the ongoing debate as to whether this istoo politicised and perhaps, not completelygeared to the national interest.

The arguments presented here focus on oneor two big political hot topics and ignore someof the wider issues currently under discussion– but in many respects a consideration of thebroader national and international politics atplay would serve only to reinforce the view thatenergy security should be a matter of nationalinterest not subject to short-term politicalinfluence. It is unsettling and not a little bemusingthat in these sophisticated times and againsta backdrop of the history of the twentiethcentury, we and other nations should findourselves in this position on something ascritical to the national good as energy.

The need to reduceemissions and thedesire to haveaffordable energy areinevitably interlinked

Find out how ourenergy team canhelp you by gettingin touch withTracy Hall


BRIEFLY LEGAL: Investing in a bright future


Investing in abrightfuture Figures released by the Office of NationalStatistics (ONS) earlier in 2014 provided apositive outlook for funding into UK companies.Not only did the first quarter of the year seefunding rise to the highest level since 2008,investors ploughed an estimated £32.8 billioninto businesses across the country. As theeconomic recovery gains pace, venture capitalexperts Ian Richards of Northstar Ventures andPaul Wigham, Associate in Corporate at WatsonBurton answer questions on the North Eastinvestment market post-recession.



In your experience, does the venture capitalmarket in the North Eastreflect the positivenational picture portrayedby the ONS statistics?Ian Richards: Yes, we have seen an increasein deal flow, together with an improvement inthe financial performance of the underlyingbusinesses within our portfolio. We spend alot of time with businesses, and CEOs aresaying that things are getting better. Trading is looking more positive and a lot of peoplearound our region seem to be busy workingon deals.

Paul Wigham: I agree. We have seen anincreasing number of active business angelinvestors in the market as well as theemergence of new angels who have exitedtheir businesses and are re-investing some oftheir exit proceeds and their experience intostart-ups. There has also been an increase inM&A activity as previous recipients of Financefor Business North East Funds look to exit;and an increase in the number of mergersand corporate re-organisations, as peoplestart to put in place the plans that they havebeen formulating over the past four or fiveyears.

Do you think the investment market has changedpost-recession? If so, in what way?Paul Wigham: The availability of seed capital for technology businesses has changed.Although I’m not sure that this is necessarily an effect of recession, it’s now easier to fund techbusinesses and they don’t need much capital to get their products through a proof of conceptphase. We are seeing a much higher number of seed capital deals which is partially beingdriven by the increased willingness of business angels to invest. The Finance for BusinessNorth East funds have certainly played an important role in helping to unlock that privateinvestment.

Ian Richards: It would be fair to say that investors and venture capitalists became far moreselective as we concentrated much more on the quality of the team – we have always believedthat if you have a good team you can get through most business issues. Co-investment is alsosomething that we encourage, because by increasing the amount of cash into a business wegive it a greater chance of success. Business angels are particularly of interest to us here,especially those angels that can add something to the board of a business. When therecession hit, a lot of the angels stopped investing in early stage businesses, but we have beenencouraged by a solid, steady improvement in the market over the last couple of years.

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We have always believed that if you havea good team you can get through mostbusiness issues



What is the main piece of advice you can offerstart-up organisations in the region trying tosecure equity investment?Ian Richards: Talk to a venture capitalist early on in the process. We are more thanhappy to talk to businesses before they prepare a business plan and we are quitewilling to provide input into the process so that we help the entrepreneurs in any waywe can.

Paul Wigham: I would agree with Ian in that speaking to the venture capitalists fromthe outset is important. Start-ups should also be realistic on the valuation of thebusiness and take on board the advice available from the region’s professionalcommunity. There is a whole host of services available to start-ups and my advicewould be to capitalise on these.

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What do you thinkinitiatives like the Ignite100 business acceleratorprogramme bring to theregion?Paul Wigham: The main thing is profile. Ignitehas really raised awareness of the tech scenein the North East and brings investment intothe region. The current Ignite programme isbacked by a number of business angels whodon’t necessarily have a primary connectionto the region, but are buying into what isbeing done here. It shows that you don’t haveto be in London to make connections, raisemoney or to be successful.

Ian Richards: The North East has alwayshad a strong network of advisors andproviders of assistance for businesses, butprogrammes like Ignite help to provide a morecoordinated approach and we are delightedto be an Investor and Partner on Ignite 100.

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It shows that youdon’t have to be inLondon to makeconnections, raisemoney or to besuccessful



Find out how ourcorporate group can help you by getting in touch withPaul Wigham


What one thing would make the biggestdifference to the investment market in theNorth East?Ian Richards: The region has benefitted greatly from the £125million Finance for Business North East suite of funds which has supported many businesses. In order for this momentum to be maintained, additional funds need to be madeavailable for investment after 2015. It is encouraging that the two Local EnterprisePartnerships are working together to provide successor funds be invested from2016.

Paul Wigham: Wider engagement of business angels. The culture of angel investingis probably taking longer to take hold in the North East than elsewhere, but it ischanging quickly. I think if the pace of that could be continued then there will be aneven more thriving investment community in the region. Access to funds in the £1mto £5m range is also difficult so having a fund dedicated to providing this would makea big difference and allow companies to realise their strategies quicker.

Q In your opinion, what willthe future hold for theNorth East investmentmarket?Ian Richards: The market is strong. We havebeen investing for 10 years and there aremany other venture capitalists now andincreasing numbers of providers of otherfinance. We have the funds to invest and astrong pipeline of deals and access to whatwe think are good people to help thesebusinesses, so the outlook for investment inthe North East is looking very positive.

Paul Wigham: We are going to see anincreased number of investment deals in thetechnology sector. Over the next two or threeyears the number of exits will grow as themarket picks up and the businesses thathave been built up over the last five years areacquired by other companies. The Financefor Business North East funds and the LocalEnterprise Partnerships are going to play avery important role in securing the next phaseof the programme. If we can build on thesuccess of the current programme then Iwould say the future of the investment marketin the North East is looking very good.

Q

BRIEFLY LEGAL: Exporting for growth


Exporting for growth Exporting is key to successin today’s global economy,with the potential for SMEsto operate overseasbecoming an increasinglyattractive option.

or many, trade barriers such asinternational laws, industry regulationsand restrictive practices can create

significant challenges for those entering theinternational business arena. Here we speakto corporate finance expert Andrew Franceyto find out what you need to know whentaking the first steps towards internationaltrade.

When the government recently announcedplans to increase the number of exporters by100,000 within the next six years, the topic ofinternational expansion was brought to theforefront of the business agenda. The prospectof exporting has never been as popular withmore and more businesses eyeing the scopeof opportunity and potential gain.

Despite this, there remains a level of hesitationamongst businesses, many of which are oftenapprehensive of the best strategy to adopt.Knowing where to start can be a dauntingprocess with failure a constant and potentiallydamaging threat. For businesses looking toadopt a successful export strategy whilstminimising risk, there are a number of issuesto take into consideration before treading intointernational waters.

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BRIEFLY LEGAL: Exporting for growth

1. Ask some questions: Be very clear in identifying the ‘whats’, ‘wheres’ and‘whys’ that are driving your businesstowards international expansion. Puttogether a list of questions to considerwhen approaching new markets, includingwhat your business will do to differentiateitself from the competition.

2. Have a clear plan: After asking yourselfsome initial questions, it’s essential toconsider and ultimately become clear onyour own strategy and approach,researching all the options in order to gainan accurate picture of the different routesavailable to your business whenapproaching new markets.

3. Consider potential pitfalls: It’s key that businesses weigh up internationalexpansion as a viable option versus thepotential pitfalls and hurdles. For example,differing employment laws, varyingregulatory frameworks and taxation lawsare all key areas for consideration.Research is, again, invaluable.

4. Make sure that the business is awareof available support: Funding may forma large part of your business plan. Makesure that you look around whenconsidering the available support. The UKExport Finance (previously ECGD); ExportWorking Capital Scheme and the BondSupport Scheme are all popular options.

5. The value of local partnerships:For any business approaching a newlandscape, it is key to have a partner on the ground that can give you the fullpicture before you commit. There is realvalue in partnering with a scheme thatprovides a contact on the ground, who isable to develop relationships andnegotiate deals in real-time.

6. Placing your product in the rightregion: Don’t automatically approachcertain regions just because they’vehoused success stories in the past. Forexample, companies approaching theChinese market are increasingly lookingaway from the more well-known areassuch as Beijing and Shanghai to lesser-known cities that are growing sector-specific industries. Understand your targetaudience and recognise what area willwork for you and your business.

7. Different countries do businessdifferently: Understanding the culturalspheres is extremely important andcompromise is a big part of developingbusiness relationships outside of your ownterritory – make sure that you’re preparedto meet in the middle. Learning thelanguage will also help!

8. Accreditation: Many products interritories outside the UK require specificaccreditation and certification, the processfor which can be time-consuming andcarry a cost. Businesses should take theeffects of this into careful consideration,as delays may impact on time frames andbusiness plans.

9. Finding the right match: Partner withsuppliers that are passionate about yourbusiness and protecting the brand. Theyneedn’t be the biggest or most respected– they may even be a small, relativelyunheard of family-run company. What’simportant is finding out why they want tobecome an extension of your brand aswell as understanding what they can dofor you on the ground.

10. Understand the market and adapt thebrand accordingly: Whilst there are anumber of technical aspects that arehugely important, one over-archingelement for consideration should be theimportance of adapting the brand todifferent cultures. Not all products translateand it’s essential to understand thedemand for a certain product or service,what’s already being done in the space,as well as what your competitors aredoing.

This list of considerations is not exhaustive by any means, but is highly beneficial ifimplemented as part of an export strategy.

Find out how ourcorporate group can help you withinternational trade by getting in touch withAndrew Francey


“The prospect of exportinghas never been as popularwith more and morebusinesses eyeing thescope of opportunity andpotential gain

BRIEFLY LEGAL: Codification, clarification, innovation: the new procurement Directives


Codification, clarification,innovation: the newprocurement Directives

Early next year, if the Cabinet Officesticks to its timetable, we will seethree new EU procurementDirectives implemented in UK law:on public procurement, utilitiesprocurement, and on concessioncontracts. This article takes ahigh-level look at some of themore significant features of thepublic procurement directive andbriefly outlines the concessionsdirective.


BRIEFLY LEGAL: Codification, clarification, innovation: the new procurement Directives

CodificationArticle 12 codifies the Teckal, or “in-house”, exclusion. Contracting authorities can directlyaward contracts to entities which they (alone or together with other contracting authorities)both own and control, provided that no less than 80% of the controlled entity’s turnover comes from the services it provides to the controlling authorities.

Article 12 also sets out the law on public/public cooperation, confirming that under definedcircumstances public authorities can work together under contract without going through apublic procurement. But be careful: the “defined circumstances” are restrictive, apparentlylimiting the exemption to public services the authorities have to perform, and hence excludingtasks which are necessarily incidental – so running a school is in scope but cleaning it is probablyout; maintaining a fire and rescue service is in but maintaining its vehicles is probably out.

Article 72 puts the pressetext rules on material change into legislative form. The Article is toolong and detailed to analyse in detail here; it should prove helpful in clarifying exactly when achange to a contract must be treated as so significant as to be treated as a new contractwhich must be advertised.

ClarificationThere is some clarification of the vexed question of abnormally low tenders. Article 69 specifiesthat a contracting authority does have an obligation to investigate an ALT, even if it does notintend to reject it – but doesn’t say whether, if the tenderer cannot justify the abnormally lowelements, the authority is required to reject it. The answer is probably “no” (because the Articledoes mandate that a tender must be rejected if a low price is due to the tenderer’s failure tomeet legal obligations concerning employment or the environment) but it’s not spelled out.

InnovationThe division of services into part A and part B has gone. Instead, services listed in Annex XIV tothe Directive (which include tyre-remoulding, blacksmithing and graphology) must be advertised ifthe contract value is €750k or above but not otherwise, and all other services are in scope.The big question is whether this supersedes the requirement to give some publicity to contractswhich are not caught, rendering the Commission’s 2006 Interpretative Communication redundant;the Cabinet Office seems to think it does, I think it doesn’t.

Article 57 creates some completely new powers for a contracting authority to exclude aneconomic operator from tendering. If the economic operator has performed really badly on aprevious public contract; if they have committed grave misconduct so as to “render their integrityquestionable” or if there are “plausible indications” that the economic operator has entered intoanti-competitive agreements in the past, the authority can kick them out. However the legislationoffers no help as to what sort of misconduct renders your integrity questionable nor as to whata plausible indication looks like. The authority must allow the economic operator to show thatthey shouldn’t be excluded, and in any event may not take into account matters happeningmore than either three or five years earlier, depending on the grounds for exclusion.

As well as codifying case law the Directive takes the opportunity to overrule it, reversing themore annoying effects of Lianakis ((2008) - Case C-532/06) by expressly permitting the authorityto take into account as an award criterion the quality of the team proposed by a tenderer tocarry out a contract.

Other innovations include the abolition of the “lowest price” criterion (although it sneaks backin); the reform of dynamic purchasing systems to make them a serious alternative to frameworkagreements; the (very limited) possibility for an authority to reserve some contracts to “mutuals”;an obligation for authorities to explain why they have not divided a contract into lots; and anumber of other tidying-up modifications.

There are two new procedures for letting contracts; this is not the place to go into detail butauthorities will be interested in the considerably greater scope to include negotiation in youraward process.

The concessions directiveEver since Telaustria ((2000) Case C-324/98),authorities have worried about whether theyhad to advertise services concession contracts.They can relax: yes you do, but it is up toeach national government to pass legislationsaying exactly what you have to do to satisfyrequirements of equal treatment, transparencyand non-discrimination.

ConclusionThe Directives (2014/23/24 and 25/EU) merita thorough read by all contracting authoritieswho want to be ready for the new UKlegislation, and by any economic operatorswho expect to win contracts from the publicsector.

The Directivesmerit a thoroughread by allcontractingauthorities

BRIEFLY LEGAL: Be sure and avoid insurance risk


Be sureand avoid insurance risk

hether seeking Contractors’ AllRisk insurance in the constructionindustry, Directors and Officers

insurance in the corporate world or speciallytailored cover in the technology arena, thereare a number of considerations to make, bothbefore any insurance cover is taken out andonce the insurance is in place.

In order to mitigate against risk, directors andmanagers should not only look to understandthe policies, but ensure that employees dealingdirectly with customers also understand whatthey should be doing to comply with the terms.

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Failing to understandobligations when it comes to commercial insurance canhave catastrophic effects for business owners, but byunderstanding the commonpitfalls and knowing what tolook for in an insurer at theoutset, the risks can begreatly reduced.


BRIEFLY LEGAL: Be sure and avoid insurance risk

Avoiding the worst case scenario One of the most common reasons for insurance not covering a claim is that insurers have notbeen told quickly enough about a claim. If it is a significant claim, this can have serious or evenfatal consequences for your business.

One grey area is where a claim has not actually been made but where there are circumstancesthat could or are likely to lead to a claim. Your insurers want to know about these too and youmay have similarly onerous obligations regarding notification which you should be aware of, socheck your policy.

Expressions of dissatisfaction without the express threat of a claim can often be enough totrigger the need for a notification. Even if there is a designated person within the business whoknows the terms of the policy, it’s important to be confident that those ‘out in the field’ dealingwith customers, or managing projects, know what they need to do.

In the construction sector, where adjudication is prevalent, and timetables are extremely tight,professional indemnity insurers will usually require notification within just 48 hours, of either anotice of adjudication against your business or of your intention to bring an adjudication againstanother party which could then lead to a retaliatory adjudication against you.

People always worry that a notification will increase premiums but as a general rule, a notificationin itself will not have this effect – it’s the outcome of a claim that will affect the premium and ifinsurers/their advisers have had the chance to influence that outcome positively, that shouldbenefit, rather than penalise you.

Whilst late notification is by far the most common reason we are asked by insurers to advise on whether a policy responds to a claim, others include:

• Admissions of liability made by a policyholder

• Lack of co-operation when dealing with a claim

• Whether a claim is covered under the scope of the policy

• Whether a number of related claims can be treated as one single claim.

Choosing your insurer wiselyInsurance is an important purchase and whilethe factors you need to consider will differfrom business to business, the followingshould all feature in your decision-makingprocess:-

Claims Handling - some insurers investheavily in a bespoke claims handling functionso that, in the event of a claim you have thebest possible experience. You may also savemoney from the way a claim is dealt with.

Developing a Relationship – loyalty can paydividends, both in terms of premiums and interms of queries over whether you havecomplied with policy terms. Over time, yourinsurer will come to understand your businessbetter and you may benefit from a ‘smoothing’of premiums so that you don’t suffer a largespike in premiums in years with greater claimsactivity (although you should still ‘market-test’what your insurers offer, to ensure that theyremain competitive).

Security - although relatively rare, there havebeen insolvencies in the insurance world inrecent times so always check with your brokeras to your proposed insurer's rating.

Bulk Buying Power - are you part of aprofessional organisation or trade body thathas an insurance scheme for its members?They often can negotiate better terms for theirmembers, whether in terms of price or thescope of cover.

Price - you tend to get what you pay for.More expensive premiums often reflect thequality of claims handling or a wider scope ofcover. If a premium looks out of kilter with themarket there may be issues with that insurer’sbusiness model and might they more likely toquibble in the event of a claim? You caninfluence the premium by taking more of therisk yourself in the form of an increasedexcess and be careful not to falsely economiseby under-estimating the level of cover you need.

Your broker can advise you on the bestinsurance cover to fit the needs of yourbusiness but give some thought as to whatsuits you and make sure that you know whatyour obligations are under the policy, so thatyou can benefit from what you are paying for,when you really need it.

One of the most commonreasons for insurance notcovering a claim is thatinsurers have not been toldquickly enough about a claim

Find out how our PIIgroup can help you by getting in touch withRichard Palmer


BRIEFLY LEGAL: Energy drives great leadership


Energy drivesgreat leadershipI’ve been very fortunate to work with a number of inspirationalpeople during my career, many of whom have demonstratedtremendous depth in their leadership abilities. For the purposesof this article I’ve been trying to characterise what it is that hasmade them stand out.

ver the years I’ve read many articlesabout how ‘thinking differently’ makesfor great leaders but for me, it’s doing

things differently that has the greater impact.And, put simply, this ability to do thingsdifferently requires huge amounts of energy.

Energy is an often under-rated concept in thecorporate world but it is absolutely vital if youare to run a progressive business. In fact, ‘DoI have the energy for this?’ should be the firstquestion any entrepreneur or business leaderasks themselves at the beginning and regularlythroughout their career. The best leaders Ihave ever met have all demonstrated endlessreserves of personal energy.

In his Seven Core Qualities of Leadership,renowned US business coach Anthony Robbinsputs energy at Number One, stating that “Ittakes tremendous energy to grow and realisea vision.” While he acknowledges that there are

many different styles of energy, he believesthat all great leaders somehow bring a“...physical, emotional or spiritual energy to their environment.” He goes on toacknowledge that “…being able to tap intothat energy, even when things aren’t goingyour way, often separates those who lead atthe highest level versus those who fall short.”

Most business leaders have three keyresponsibilities where energy levels can betested. These can loosely be divided intopeople, substance and risk.

People“It’s all about the people” is a common adage– but this over-simplifies the complexities ofmanagement. The people within yourorganisation are crucial, of course, but it’show you deal with the situations that arise

between people that make a difference.Leaders can deploy endless employeeengagement strategies to encourage loyaltyand motivation but managing challenges thatwill inevitably crop up along the way requires a degree of decisiveness that too manyleaders simply do not have.

While understanding a situation is generallyintuitive for a good leader, knowing how todeal with it can be learned - and can separatethe good from the great. Not going for theeasy option of just being liked or dislikedrequires greater reserves of energy – followingthe path that is best for the business, not justfor your internal perception.

Making an energetic investment in the peoplewho you lead will often generate a long termlegacy of alignment and cohesion that in turncreates strength in depth within a business.

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BRIEFLY LEGAL: Energy drives great leadership

SubstanceEffective leadership requires an ability to maintain a clear focus on the essence of the business.The more a business grows and diversifies, the more challenging this becomes.

Good management teams obviously play a part in keeping you informed, but the best leadersstill retain some degree of involvement in the day to day operations. Only by understandinghow people within the business think and feel can you lead them effectively.

Maintaining a level of involvement while relinquishing some control to your management teamrequire levels of both energy and trust that leaders often find to be one of their most difficultchallenges.

RiskGreat leaders have the energy and courage to make decisions. You can be the smartestperson in the world, but you will always beoutdone by someone who is braver than you -courage is an essential element of leadership.

I have always admired genuine entrepreneurswho can put all their chips on black and spin the roulette wheel. There are those who areprepared to lose it all on the basis of instinctand others who take risks in a more measuredway - I consider myself more of a calculatedtaker of risks. There is no right or wrong whenit comes to the level of risk you are preparedto take in business as long as you appreciatethat, at some point, you must take some.

Younger companies generally have morefreedom when it comes to risk as they are juststarting out on their journey. Larger andmature companies have more to consider -their legacy, their shareholders and theiremployees - so risk-taking becomes moredaunting. I have great admiration for largercompanies that have stood the test of time byreinventing themselves when circumstanceshave dictated the need to do so. It may meanstripping the company back in order to moveforward, but it demonstrates a subtlegutsiness and a strong belief that they canbecome great again.

Energy might not be a typical corporatebuzzword, but if I had to pick one word tosum up the common characteristic that hasdefined some of the greatest leaders I’veworked with, then that’s the word I’d choose.It’s the ability to manage and replenish yourown energy levels, even when the going getstough, while motivating and inspiring thosearound you that makes people do thingsdifferently. Leading a business is not for thefaint-hearted, but for those who have theenergy for it, it’s immeasurably rewarding.

The people within your organisationare crucial, of course, but it’s howyou deal with the situations thatarise between people that make a difference

Find out how WatsonBurton can help your business bygetting in touch withPatrick Harwood


BRIEFLY LEGAL: 60 Seconds with… Chris Graham


60 Seconds with…Chris Graham

Chris Graham is a Partner and headof Watson Burton’s employment team.He joined Watson Burton 12 yearsago and has built his team into oneof the best regarded in the North ofEngland. Here we delve beyond thelawyer to find out more about Chrisand what makes him different.

What was the first jobyou ever had?My career is slightly unusual. Prior to joiningthe legal industry I worked in very differentbusinesses ranging from sales to an overseasposting with a holiday company. This influencesthe way I work today and gave me a goodgrounding in the ‘people’ aspects of what I do today at Watson Burton, as well as a morecommercial outlook.

Who or what has most inspired you in yourprofessional life?As the adviser to innovative and entrepreneurial clients, I’m constantly impressed andinspired by the people that I work with. They make difficult and challenging decisionsroutinely and on a daily basis. If I had to pick one person in the legal industry though,I’d say Antony White QC of Matrix Chambers. Anthony is effective in court, butpatient and polite with clients and opponents. The Chambers Legal Directorysummed him up in 2013 commenting that he is “a genius at whatever he touches”.Anthony always reminded me that we need to live up to the trust others place in us.


BRIEFLY LEGAL: 60 Seconds with… Chris Graham

What is the skill or superpower you would most like to have?It would be great to have the powers of Professor Charles Xavier, leader of the X-Men who canread people’s minds. There is a great deal of psychology involved in the tactics of litigation, so Icould use this to look into the minds of the opposition and really understand what is mostimportant to them. I’m not sure however whether that would permissible in Court…

Which word or phrase do you most overuse?I’m forever asking people to “put a number on it” because this is one of the first things thatclients want to know. I’m also keen that everyone in our team continues to develop and learn,so within the office the most overused is probably “what would you do if you were me?” Itencourages people to think for themselves rather than just giving them the answer. It’s thisapproach that has contributed to building a team of specialists in their own right and providesour clients with maximum value.

What do you like most about being a lawyer?Recognising my competitive nature, I’d have to say that winning on behalf of our clients is highup the list, but interestingly becoming a partner and then investor, my career has also affordedme the opportunity to become a principal owner with responsibility for a business that wasestablished more than 200 years ago – not many people get to say that.

If you weren’t a lawyerwhat would you chooseto do?It would have to be something in completecontrast to what I do now. I enjoy theoutdoors and if I could set up a sport-fishingbusiness in the Caribbean that would do it forme.

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What is the best decisionyou have ever made?In the previous issue of Briefly Legal, my fellowpartner Richard Palmer answered this questionby saying that his best decision had been toinvest as a principal partner in Watson Burtonand I’d have to agree. I get to do a job that Ilove - and being responsible for helping to runa commercially-focussed business means thatI better understand the needs of clients.

What would be your perfect day away from work?Sustainable fishing in Costa Rica is right at the top of the list, though I could also be temptedback to Australia. When you catch a marlin or a sailfish the idea is that you get to re-tag itbefore releasing it and when the next person catches the same fish they can see who caught it before, the weight and length at the time etc. Well, I once caught and released a Marlin inAustralia and months later received an email out of the blue from an American guy called ArtyBingerheimner saying “Hello, I caught the Marlin you caught and she is asking after you”, hesigned off his email “Yours in game fishing, Arty.” The Marlin had apparently grown quite a bittoo - by about 130lbs.

If you were marooned on a desert islandand were allowed to take three essentialitems, what would they be?I would take my springer-spaniel Tess for companionship and she wouldbe useful for finding things to eat. I’d also take a bottle of single malt towash down dinner and watch the sun go down in the evenings. The thirdthing would have to be my iPhone with a solar-powered charger, so Icould connect to the real world via satellites - and let’s face it there isprobably an app for surviving on a desert island with nothing but a dog, a bottle of whisky and an iPhone…

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Watson Burton Briefly Legal Winter Edition

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