Working For Private Individuals – Or How To Get Blood From A Stone

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Domestic jobs – extensions, roofs, basements etc, are in my view far more difficult than commercial work. There are a number of reasons for this:

1.    There is unlikely to be any contract between the parties, at best there will be an exchange of emails or a single page draft which is in any event often forgotten once the work has begun. As a consequence, there is often no clear description of what is to be done, how long it is to take and how it is to be paid for.

2.    Domestic clients have unrealistic expectations of what is to be done, the standard of work they can expect and the time in which the work has to be carried out.

3.    Domestic clients are quick to withhold payments realising that the contractor will have little choice but to commence long and expensive proceedings if they want to get paid and will probably settle for less than they are entitled to if forced to do so.

4.    Because there is no proper contract between the parties there is often no dispute resolution mechanism, such as adjudication, which would allow the parties to resolve their disputes quickly and inexpensively.

5.    Finally, Contractors are often asked to undertake additional work which is not properly recorded and the value of which is not agreed.

There are other factors that a Contractor must bear in mind when contracting to undertake domestic works. In particular, if the Contractor agrees the terms of the contract at the customers house, as is often the case the Contractor will have to comply with the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013.  These regulations require that the Customer is given a notice advising that they have the right to cancel the contract in 14 days. The Customer must be given the notice form to send to the contractor and has to be given some prescribed information about the contract and the Contractor.

If the Contractor does not give the required notice then,

1.    It commits a criminal offence

2.    It cannot receive payment for any works undertaken in the 14 days cooling off period.

3.    If the Customer discovers that it has the right to cancel the contract within 1 year and 14 days, it can cancel the contract and may be entitled to repayment of all sums it has paid to the Contractor.

It is therefore essential that the Contractor gives the proper notices before it starts the work if it is not to fall foul of the regulations.

So, faced with the difficulties of working for private individuals with limited funds and un realistic expectations and who are given extensive rights by the law, what should the small contractor do to protect itself as much as possible.

The first and obvious starting point is to have a contract with the customer.

There are a number of off the shelf contracts available for use from the FMB, JCT and others.

I often recommend the JCT Minor Works Contract. That contract provides for the appointment of an independent Contract Administrator whose job it is to monitor the works, issue instructions and issue a certificate valuing the works every 28 days. The advantage of the contract is that the Employer does not deal with the Contractor directly and the Employer does not value the works.

The JCT Minor Works Contract also includes an Adjudication clause which provides that disputes can be referred to an Adjudicator for resolution. Adjudication is a quick and inexpensive dispute resolution mechanism that avoids the expense and cost of court proceedings. Adjudication is not available for domestic contracts unless there is a right to adjudicate in the contract between the parties.

If you do not wish to use a standard form of contract you can get a bespoke form drafted for you by a solicitor. I often draft simple contracts for clients to use. They have the advantage of being shorter than the standard contracts as they provide for the essential clause required in a contract rather than the wider clause in the standard contracts.

A bespoke contract will set out the work to be undertaken, the cost of the work and the manner in which the Contractor will be paid. It will set out a mechanism for completion and for the claiming of additional time by the contractor. Importantly the contract will provide for the resolution of disputes by Adjudication proceedings.

Quite apart from the building contract a Contractor needs to check whether he has to give a notice of the right to cancel the contract and if he does needs to provide the required documentation to be issued to the customer. This includes a schedule of required information, the Notice to Cancel the contract (that has to be given to the Customer) and if works are to commence within 14 days an authority to be signed by the Customer confirming that they will pay for work done within the 14 day cooling off period.

A solicitor can provide the cancellation documents which, like the contract will not cost a great deal. Once obtained they can be used repeatedly and will help reduce the risk of contracting with private householder customers.

David Jackson, Solicitor, National Legal Consortium www.nlc.net or 0800 085 7772.

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Construction Lawyers – why are they so expensive (and what can be done about it?)

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Lawyers often charge well over £200 an hour with no guarantee of success. Taking a large claim to court will often cost more than £50,000 and even adjudication, the cheap and cheerful option often costs more than £5,000.

Lawyers have high salaries to pay, pay expensive insurances, run expensive offices, etc. Nothing new in any of that. But what can a company do to limit its exposure to legal costs?

There is now a new solution available to construction companies. The National Legal Consortium offers a monthly subscription service that provides unlimited legal advice (within the scope of the scheme) to its clients. Clients can issue debt letters, take or defend proceedings, obtain telephone advice, get advice on contracts and notices and get to use the scheme’s logo all for the cost of the monthly subscription.

The NLC scheme is like having a Construction Solicitor on your staff at a fraction of the cost.

In practise this means that adjudications and court proceedings cost no more than the monthly subscription so that concerns about whether they can be afforded disappear starting at £150 plus vat per month.

http://www.rcimag.co.uk/digitaledition/rci-may-2018/page_19.html

For more information about the NLC scheme go to www.nlcuk.net or call 0800 085 7772.

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How do you protect a business when faced with a "Carillion" situation

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http://www.rcimag.co.uk/digitaledition/rci-mar-2018/ Page 19

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NLC Reports 100% Repeat Subscription To Unique Legal Service

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The National Legal Consortium (NLC) has reported a near 100% repeat take up by existing clients of its unique subscription based legal service.

Recently celebrating its first year in business, the fast growing legal service has seen all members sign up for a second year.

The NLC is a unique legal firm developed specifically to meet the needs of the subcontractor with fees paid based on turnover.

David Jackson, Founder and Solicitor at the NLC explained: “Having worked in the legal industry and focusing on the construction sector for almost 30 years, I have come across the same issue time and time again and that is the smaller contractor or sub-contractor unable to legally challenge the larger more powerful customer, often the main contractor. This service ultimately allows them to do that by effectively providing an insurance, paid through a monthly fee agreement.

“It’s testament the success of the scheme that we have seen a near 100% repeat subscription rate and demonstrates the belief our customers have in the service. The only exception has been a client considering retirement. We are looking to grow further this year, ultimately doubling the business size, as we continue to take on the smaller builder or subcontractor who are business savvy and forward thinking in their approach.

“All of our costumers agree that the scheme makes huge sense and they are confident in the support they have access to when facing a legal situation, that perhaps in any other circumstance would need significant resources to support and challenge.”

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Carillion Liquidation

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Nobody knows how many companies will be affected by the liquidation of Carillion, the true numbers will not become apparent for some time.

Most of my clients are small to medium sub contractors. Whilst they are unlikely to have contracted with Carillion directly many will have contracted with companies that look to Carillion for payment.

Most sub contract terms will include a clause that provides that should the Employer, or whoever is responsible for paying the Contractor become insolvent, the Contractor will only have to pay the sub Contractor if it receives payment for the Sub Contractors works from its Employer.

Many small Sub Contractors will never get paid for their works unless the responsibility for payment is taken up under a Collateral Warranty or the contact is novated.

Many people were surprised at the speed of Carillions collapse. Carillion went straight into liquidation and did not enter into Administration as many commentators had anticipated. It would have been difficult for any company trading with Carillion to protect itself once the wheels had started to come off.

If there is a lesson it must be that small Sub Contractors have to be careful not to take on too many contracts for any one Contractor. I have seen many Sub Contractors whose customer base consists of one dominant supplier.

If a Sub Contractor works for one dominant supplier it can find it difficult to take steps to obtain payment for fear of offending its paymaster and any disruption in the relationship can have far reaching effects often out of proportion to the issues in dispute.

If a large Contractor fails as happened to many in 2008 and as has happened to Carillion those Sub Contractors who have accepted too much work from the Contractor may well fail with them – through no fault of their own.

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The NLC’s unique subscription service celebrates its first birthday

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The National Legal Consortium is celebrating the first anniversary of its unique legal subscription service.

Having spent many years wrestling with legal costs and writing off many thousands of pounds due from clients who were simply unable to pay their bills David Jackson, Solicitor and MD of the NLC decided to change the way his company charged for legal services

Clients pay a monthly fee based on the turnover of their business which can be as little as £150 plus vat per month for a small business.

David Jackson explains: “In return for the monthly fee clients get unlimited Construction Law advice – it’s as simple as that. They can take proceedings, defend proceedings, get advice on contracts, problems on site – whatever they need.

“There are some sensible restrictions on the service – for example clients must pay court fees and other disbursements, the service pays for the solicitor’s time – but the service is popular with the clients who join the scheme.”

The scheme provides access to proceedings to companies that would not otherwise be able to afford them. It allows companies to take advice at an early stage so that proceedings may be avoided all together. Clients know that they will not be charged for doing so and can seek advice without worrying about the costs of doing so. Clients also get to use the scheme’s logo on their notepaper and website to show others that they are part of the scheme.

The growing number of testimonials on the NLC’s website show that the service is popular and new clients are joining every month.

David added: “Once I offer to undertake work at £240 plus vat an hour or for £150 plus vat a month clients usually do not hesitate to join the scheme. Why would they pay by the hour when they can have the same service for a small monthly fee?”

The scheme is only available from the National Legal Consortium and you can find details of the scheme at www.nlcuk.net or by calling David Jackson on 0800 085 7772.

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The problem with lawyers – and the answer!

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Most clients believe that their lawyers are well trained, disciplined and professionally regulated. They are entitled to expect a high standard of professional service. Most dissatisfaction arises not from the service received but from the cost of that service.

Solicitors cost more than £200 plus vat an hour and specialist solicitors, advising on matters such as Construction Law can often charge a lot more.

It is not unusual to hear stories of clients being charged £500 “to send a letter” and of cases that cost more to prepare and present than the sums in dispute.

My view is that the problem stems from the fact that lawyers are following a traditional model of costing. They are set up to charge by the hour and as it is very profitable they have no incentive to change the way they charge.

This causes problems as complicated proceedings will inevitably cost a great deal of money to prepare and present if they are charged by the hour.

But matters are made worse by the fact that in some proceedings, for example Small Claims proceedings (for sums less than £10,000) and Adjudication a claimant cannot claim any costs from its opponent even if it wins. The costs of the preparation and presentation of the case must be written off!

In other court proceedings costs recovery will be limited and subject to set limits depending on the amount in dispute. The Claimant will always lose an element of the sums to be paid for the preparation and presentation of the case.

Add to this that the costs of the case in the small claims may be a significant proportion of the sum claimed and in the higher courts will be very significant sums which need to be paid as the case progresses and it is easy to see that Claimants face an unhappy choice when considering whether to take proceedings or settle on the best terms available.

Governments have tried to address the costs of legal proceedings but have been unable to do so. Clients have very little choice and nowhere to go but to solicitors who perpetuate the problem.

Having spent many years wrestling with legal costs and writing off many thousand of pounds due from clients who were simply unable to pay their bills I decided to address the problem.

The National Legal Consortium takes a different approach.

Clients pay a monthly fee based on the turnover of their business. It can be as little as £150 plus vat per month for a small business.

In return for the monthly fee clients get unlimited Construction Law advice – it’s as simple as that. They can take proceedings, defend proceedings, get advice on contracts, problems on site – whatever they need.

There are some sensible restrictions on the service – for example clients must pay court fees and other disbursements, the service pays for the solicitor’s time – but the service is popular with the clients who join the scheme. Have a look at the testimonials at www.nlcuk.net.

The scheme provides access to proceedings to companies that would not otherwise be able to afford them. It allows companies to take advice at an early stage so that proceedings may be avoided all together. Clients know that they will not be charged for doing so and can seek advice without worrying about the costs of doing so.

I must ask why any company would continue to pay £250 plus vat an hour for legal services when it can get the same service for £150 plus vat per month. I believe that the National Legal Consortium represents an important development in legal costs which makes access to justice affordable to all.

The scheme is only available from the National Legal Consortium and you can find details of the scheme at www.nlcuk.net or by calling David Jackson on 0800 085 7772.

 

 

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Ask and ye shall receive.

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Although the law relating to Payment and Pay Less Notices has been with us for more than 5 years I still meet people who do not understand the law and what it means for the small sub contractor.

Essentially a Sub Contractor or Contractor working on commercial work (not for an owner occupier unless a written contract provides otherwise) will usually have its work valued every month or make an application for payment by its Employer.

When the Contractor/Sub Contractor makes an application for payment, the Employer must issue a Payment Notice setting out its valuation of the application with grounds for the valuation within 5 days of the due date of the application (unless otherwise altered by the contract).

The valuation in the Payment Notice is known as the “Notified Sum”. The Notified Sum will be paid to the Contractor/Sub Contractor unless the Employer serves a Pay Less Notice indicating what sums it intends to deduct from the Notified Sum when making payment to the Contractor/Sub Contractor and the grounds on which such deductions are to be made. The Pay Less Notice must be served no later than 7 days before the Final Date for Payment (unless otherwise altered by the contract).

If the payment mechanism requires the Employer to issue a valuation and the Employer fails to do so then, any time after the Employer could have issued the valuation the Contractor/Sub Contractor can send to the Employer its own valuation as a “Default Payment Notice”. If the Employer does not issue a Payment Notice in respect of the Default Payment Notice it will be payable in full unless the Employer serves a Pay Less Notice in respect of the Default Payment Notice.

Applications have to be in the correct form otherwise there is no need to serve a notice in respect of the application. The application must show the total value of the work completed to the valuation date and the total sums actually received to that date so that the application shows the sums actually due on the valuation date. It is not sufficient to show “sums previously applied for”, unless the application shows the sums actually received it will not show the sums actually due on the valuation date.

The right to receive Payment and Pay Less Notices is implied to all Construction Contracts after 2011 whether or not they were made in writing. A verbal agreement or a contract based on an exchange of emails will have the notice provisions implied into them every bit as much as a 10 page written agreement.

If the Contractor/Sub Contractor submits an application in the proper form and in accordance with its contract which is not met with the required notices from the Employer, the Contractor/Sub Contractor can seek an award from an adjudicator requiring the Employer to pay the sums due under its application.

Adjudication is a quick, inexpensive and safe procedure. Disputes can be resolved in 4 to 6 weeks without exposing a company to a claim for legal costs if it loses the adjudication and typically at a cost of £3000 - £5000 plus vat. Adjudication is far quicker and cheaper than court proceedings.

Unfortunately it is not possible to claim the costs of the adjudication from the Employer so that the costs will have to be deducted from the sums receivde from the Employer. This can be a significant deterrent in low value adjudications when the costs can be a significant proportion of the sums claimed.

Clients of the National Legal Consortium can take (or defend) adjudication proceedings for all sums over £7500 and only have to pay the fee to be paid for the nomination of an adjudicator (typically £425). All the other work is undertaken as part of the service obtained for the monthly agreed fee of as little as £150 plus vat per month.

In this way the NLC unlocks the ability to claim for sums that would otherwise be uneconomic to pursue.

For more information about the National Legal Consortium visit www.nlcuk.net or call David Jackson on 0800 085 7772.

 

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Get it right with a contract!!

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Over the last 20 years I have come to realise that there are a number of recurring issues that many clients face.

The first of these is a failure to ensure that work is carried out under a contract.

I have lost count of clients who tell me that they have never had any problems for 20 years and have never bothered to get a contract for their works – their word is their bond etc etc etc.

What they don’t say is that they have a lifetime of compromise behind them in which they have settled for far less than they were entitled to as they didn’t feel they could press for more as they didn’t have a contract.

What they don’t say is that they have, all too often, undertaken additional works for which they have little chance of ever being paid because in the absence of a contract they cannot clearly set out the scope of the work they were to undertake.

What they don’t say is that when disputes have arisen they have had to compromise because the lack of an adjudication clause in a contract meant that the only option open to them was to take expensive and protracted court proceedings which they could not afford, and which exposed them or their businesses to claims for costs.

A contract should always be the starting point of any work. It need not be complicated or terribly long. It should set out the basic terms that the parties have agreed:

The work to be done

The amount to be paid for the work

How long the work is to take

How payment is to be made and when

How disputes between the parties are to be resolved

There are many “off the shelf” contracts available to use. Simple contracts can be drafted for relatively modest sums or the parties can record their intentions in correspondence between them.

Where a contractor is required to use its Employers terms it should ensure that it understand those terms and if there are terms it cannot accept it should seek to have them amended. As a rule of thumb if you are presented with 20 pages of amendments to a standard JCT contract they probably have not been prepared for the contractors benefit!

I recognised some time ago that contractors do not have contracts reviewed because they are concerned at the costs of doing so. That is why I introduced the National Legal Consortium Agreed Fee Scheme. Clients of the NLC get unlimited legal advice for a modest monthly fee. That means that they can pass contracts for review when they receive them and the cost of the review is paid for by their monthly payment.

Whether or not you are a client of the NLC make sure you sort out your contracts. Make sure you have a contract, that it is the right one for the job and that you understand it!

If you want to talk about the NLC or contracts call David Jackson on 0800 107 1980 or email me on dj@celawyers.com.

Felix Clarke

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New legal service will help construction ‘subbies’ fight back against the big boys

National Legal Consortium has been launched by Wirral law firm CE Law Construction Solicitors and guarantees for an annual fee open-ended access to specialist construction law advice

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Wirral law firm CE Law Construction Solicitors has launched what it claims is a “unique legal service developed specifically for the needs of the sub-contractor”.

Called The National Legal Consortium, the services guarantees for an annual fee open-ended access to specialist construction law advice. The fee is paid over 12 months with costs based on turnover.

David Jackson, director at CE Law said: “As a specialist in the sub-contractor construction industry, we are consistently faced with instances of ‘subbie bashing’.

“This when the more powerful and well-resourced main contractor falls into dispute and withholds payment.

“Many sub-contractors are forced to walk away, recognising that they simply don’t have the funds in place to tackle a potentially costly and challenging legal case.

“The scheme doesn’t just cover advice on claims but provides ongoing advice on contracts, notices or whatever else may arise requiring specialist advice.”

The idea was developed with input from the Solicitors Regulation Authority, barristers and construction professionals to ensure that it meets the strict SRA requirements.

Read the original article here

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Working with a Solicitor - Should you give it some thought?

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Giving Subcontractors a Voice and a Choice

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Unique Service Boosts Prospects for Electrical Subcontractors

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National Legal Consortium seal deal with Confederation of Roofing Contractors

The National Legal Consortium (NLC) has finalised a partnership agreement with the Confederation of Roofing Contractors offering all members access to its specialist Construction Law subscription service.

The NLC, a division of C E Law Construction solicitors, was developed to give sub-contractors and smaller contractors access to specialist Construction Law advice at a fixed and affordable cost. The NLC provides unlimited Construction Law advice for a modest monthly payment based on turnover, guaranteeing access to specialist legal advice should the need arise.

Managing Director of the NLC, solicitor David Jackson, explains: “Having advised subcontractors for many years I know that the biggest problem they face when seeking legal advice is the cost of that advice. I established the NLC to provide specialist Construction Law advice at a price that all can afford and without any hidden costs. The NLC’s services cost less than 1% of turnover for most companies and gives them unlimited access to specialist Construction Law advice for an agreed monthly payment.

“Clients can use the service to get advice on contracts, notices, problems on site and to take and defend proceedings. Most companies do not want to involve themselves in legal proceedings but clients of the NLC are comforted by the fact that they have access to specialist Construction Law advice, at an agreed cost, should they ever need it.”

The NLC membership will be open to all 700-plus members of the Confederation of Roofing Contractors at a discounted rate.

David continued: “I have acted for members of the Confederation of Roofing Contractors for many years and I am delighted to be able to offer the services of the National Legal Consortium to its members. The Confederation of Roofing Contractors is a well respected organisation that provides guidance and support for its members. I am very excited to be able to partner with them by offering legal support in a uniquely affordable and accessible way.”

Mark Williams of the Confederation of Roofing Contractors added: “ Legal fees and costs can put a huge financial strain on anyone wants to defend or fight a case against them in a court of law and can in some instances prevent them from doing so if the fees spiral out of control.

“By joining the NLC you can have peace of mind knowing that you are fully covered not only with the costs but also with any legal assistance you may need to help you in your case.

“Over the years David has given help and advice to CORC members and his input has proved invaluable and we are fully supportive of the NLC and what it stands for.”

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Unique Service Boost Prospects of Electrical Sub-contractors

CE Law Construction Solicitors has launched The National Legal Consortium, a unique legal service developed specifically for the needs of the subcontractor.

The Consortium allows clients (within the sub-contracting industry) to sign up to an annual agreed fee, guaranteeing open ended access to specialist construction law advice. The fee is paid over 12 months with costs based on turnover and fees starting as little as £150 plus vat per month.

David Jackson, Director at CE Law Construction Solicitors explained: “As a specialist in the sub-contractor construction industry, we are consistently faced with instances of ‘subbie bashing’ whereby the more powerful and well-resourced main contractor falls into dispute and withholds payment. Many sub-contractors are forced to walk away, recognising that they simply don’t have the funds in place to tackle a potentially costly and challenging legal case.

“We believe that membership of the National Legal Consortium is an ideal solution, giving subcontractors access to legal advice and support if the situation arises. It’s about protecting the business and, in a sense, insuring it against all possible eventualities. The scheme doesn’t just cover advice on claims but provides on going advice on contracts, notices or whatever else may arise requiring specialist advice”

The scheme was developed with input from the Solicitors Regulation Authority, Barristers and Construction Professionals to ensure that it meets the strict SRA requirements and addresses the needs of Sub Contractors.

David continued: “We have taken time to ensure that this new way of offering legal services meets the needs of our client. We believe that the National Legal Consortium will change the way Sub Contractors pay for legal advice. We offer the service nationally and are focusing our initial efforts on the electrical contracting industry where we know there are considerable issues.”

Services included within the membership programme include a telephone advice service, payment claims, contract advice, adjudication, court proceedings and arbitration. For further information please visit www.nlcuk.net

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