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JCT Design and Build Contract 2024 – the first in the next generation of building contracts

Posted on: May 17th, 2024 by Natasha Cox

The JCT 2024 Design and Build Contract (JCT DB 2024) represents the first major update of the JCT forms since 2016.  The underlying structure has not changed, but the JCT has taken the opportunity for a comprehensive refresh of the JCT DB main contract and sub-contract forms.

A number of changes have been made, including the following:

New Relevant Events:  For the first time, JCT DB 2024 expressly entitles the Contractor to an extension of time if practical completion is delayed by:

  • a shortage of labour, services or materials caused by an epidemic which first occurs after the Base Date or whose effects change after the Base Date – this is the JCT’s considered response to the Covid-19 pandemic; or
  • a change in primary or secondary legislation or in guidance published by the government or other specified bodies which affects the execution of the Works – this would, for example, capture guidance by the Construction Leadership Council which is not legally binding.

While the principles seem fair, the new Relevant Events are broad in scope and we anticipate that many employers will seek to exclude them or limit their scope by making appropriate amendments. 

New optional Relevant Matters:  To complement each of the new Relevant Events noted above, there is an option in the Contract Particulars for an equivalent Relevant Matter. This would entitle the Contractor to recover the loss and/or expense it as a result of these events.  

We expect that a compromise position will be agreed in many cases allowing the new Relevant Events to apply (albeit perhaps with amendments to limit their scope), but not the optional Relevant Matters.

Termination:  If the relevant events/matters described above cause the works (or substantially the whole of the uncompleted works) to be suspended for a longer period than that identified in the Contract Particulars (the default period being two months), this is potentially grounds for termination by either party.  It is safe to assume that, had this provision been included in the JCT 2016 suite, the consequences of the Covid-19 pandemic would have been much harder for developers and their funders to manage.

Other changes have been made which impact on the parties’ rights to terminate, including the extension of the definition of insolvency. Changes have also been made to the provisions relating to payment on termination, reflecting the not so recent Construction Act notice requirements.

Limitation of the Contractor’s design liability: clause 2.17 has been comprehensively redrafted to make it clear that the Contractor has no greater duty in relation to design (to the extent permitted by the Statutory Requirements) than to exercise reasonable skill and care.   To drive the point home, there is an express exclusion of any obligation that the Contractor’s design must be fit for purpose.  While this was undoubtedly the intention behind the 2016 edition, employers and their advisory teams will no doubt look to close the gap between ‘reasonable skill and care’ and fitness for purpose without losing the benefit of the Contractor’s PI insurance which will not cover unqualified fitness for purpose liability.

Extension of time and liquidated damages:  Detailed changes have been made to the liquidated damages regime (reflecting recent case-law) and the timescales which apply to the extension of time procedure. 

Other changes: Provisions relating to collaborative working, sustainable development and environmental considerations, and the notification and negotiation of disputes have now been elevated into the core Articles and Conditions.  These were previously optional supplemental provisions so these changes represent an evolution of the JCT form rather than being radical changes.  

Various other detailed changes have been made and we recommend that users of the form purchase the tracked change versions published by the JCT to accompany the new forms which shows the changes in redline.

Template schedules of amendments need to be updated to address the changes in the JCT DB 2024 forms.

At Lawrence Stephens, our Construction & Development Finance team can advise on how best to navigate and use this new suite of contracts. 

Please contact Tom Pemberton if you have any questions regarding your project or the JCT forms.

Lawrence Stephens advises Blue Shield Capital on £25million facility loan

Posted on: May 17th, 2024 by Yvonne Uzoka

Lawrence Stephens’ Banking team recently advised Blue Shield Capital on a £25m facility loan provided by OakNorth.

The £25m loan will be used to empower Blue Shield to expand its real estate bridging loan portfolio at speed.  Our dedicated Banking team played a crucial role in supporting this deal. Their expertise and commitment ensured a smooth process despite the complexity involved.

The Banking team from Lawrence Stephens was led by Director and Head of Banking  Ajoy Bose-Mallick, with assistance from Senior Associate Ashley Wright and Trainee Solicitor Alex Ruder.

Ajoy commented: “Blue Shield Capital’s recent £25 million loan arrangement marks a significant milestone in our partnership. We’re thrilled to support their growth across various real estate sectors, and we look forward to witnessing their continued success”.

Empowering and supporting women in Real Estate Finance

Posted on: May 2nd, 2024 by Yvonne Uzoka

Despite their significant contributions as leaders and trailblazers, women remain underrepresented in the real estate finance sector. Lawrence Stephens recognised this disparity and launched the Women in Real Estate Finance (WREF) initiative last year to push for gender equality in the field.

Our WREF initiative has ambitious goals, including:

  • Acknowledging achievements: Our initiative sheds light on the incredible work done by women in real estate finance, inspiring others and recognising their achievements across the sector.
  • Creating opportunities: By providing a platform for like-minded women to share experiences and learn from each other, our WREF initiative aims to overcome obstacles faced by women and foster growth within the field.
  • Challenging the status quo: Committed to balancing out the male-dominated sector, the WREF initiative takes a proactive and effective approach to challenge the status quo and enable real change in the industry.

There are a number of key components to the WREF initiative, including:

  • Panel discussions: WREF hosts panel discussions, such as the upcoming event titled “Building resilience on both sides: are allyship and mentoring the key to levelling the playing field?” These discussions highlight the value of women in leadership positions, recognising achievements and sharing experience of women in the real estate finance industry.
  • Addressing systemic hurdles: Recognising that challenges faced by women are rooted in educational and cultural biases, WREF takes a holistic approach to tackling systemic issues.
  • Demystifying entry: To bolster the sector, WREF is developing a mentoring program that demystifies entering real estate finance, including a walk-in clinic to provide guidance to young women facing barriers in the industry.

In addition, Lawrence Stephens has established the Gender Equality Network to advocate for broader women’s empowerment.

With our WREF initiative, we aspire to pave a wide path for brilliant women to pursue rewarding careers within the real estate finance sector. 

Senior Associate Rachel Coulthard recently discussed Lawrence Stephens’ WREF initiative in BCL Legal’s The Brief, which can be found here.

Lawrence Stephens completes £3.9m loan with Butterfield Mortgages

Posted on: May 2nd, 2024 by Natasha Cox

Our  Real Estate Finance team have recently completed their first deal for Butterfield Mortgages Limited – a £3.9million loan over a property in West London.

The loan has a five-year term and was secured over a Knightsbridge property with a value of £6million. The transaction involved the refinance of several leasehold titles

Butterfield Mortgages provide specialised mortgage solutions for domestic and international high net worth clients.

Gregory Palos was assisted by Lawrence Molloy and  Sophie Morton who worked tirelessly to ensure a swift and successful completion of this loan which pleased all parties involved.

Lawrence commented: “A complex matter which required careful consideration from all parties, we are delighted to have secured this loan and navigated the multiple refinances involved in this deal. It was a pleasure to work alongside the team from Butterfield Mortgages on our first deal together, and we look forward to strengthening our relationship over the coming months.” 

Lawrence Stephens launches new Borrower Real Estate Finance team

Posted on: April 24th, 2024 by Yvonne Uzoka

We are excited to announce the launch of Lawrence Stephens’ Borrower Real Estate Finance team. 

Led by Director, Nisha Saigal, our specialist team offers a comprehensive understanding of the complex and diverse elements of real estate financing from a borrower’s perspective.

All members of the team have considerable experience in acting for lenders previously which allows us to better understand and deal with the requirements of lenders commercially and efficiently. We work collaboratively with brokers to achieve the best outcome for our clients.

As a people business, we at Lawrence Stephens work to ensure a collaborative and dynamic approach, spanning the firm’s wide range of departments and experience. Drawing on our depth and breadth of experience in the market, we also deliver advice on real estate financing trends and potential opportunities, to help our clients realise their commercial objectives.  

Bringing a wealth of expertise on matters such as refinances, buy-to-let acquisitions and portfolio properties, our Borrower team will work closely together to provide clients with a world-class service, while maintaining a uniquely personal touch.

Click here to learn more about our team’s capabilities.

New duty imposed on employers to prevent sexual harassment in the workplace

Posted on: April 10th, 2024 by Natasha Cox

A new duty will be imposed on employers to prevent sexual harassment in the workplace from October 2024.

Currently workers are protected against sexual harassment carried out at work by their employer or its employees under the Equality Act 2010. Sexual harassment is defined as unwanted conduct of sexual nature which has the effect of violating the victim’s dignity, or creating an environment that is intimidating, hostile, degrading, humiliating or offensive.

Employers are also liable for sexual harassment carried out by their employees during the course of their employment, even if the employer was not aware of their actions.  However, employers may have a defence if they can show that they took “all reasonable steps” to prevent the harassing employee from acting unlawfully. However, the new rules will go further, placing employers under a duty to consider what steps can reasonably be taken to ensure that sexual harassment does not occur in the first place. This represents a shift from the current post-harassment liability to a proactive duty, and employers must therefore prioritise the prevention of sexual harassment in the workplace.

However, employees will not be able to bring standalone claims in the employment tribunals for a breach of the new duty. Instead, an uplift to compensation of up to 25% may be made to successful sexual harassment claims where an employer is found to have breached the new duty.

It is currently unclear what proactive “reasonable steps” employers are required to take, but the government has confirmed that further guidance will be published later this year. The Equality and Human Rights Commission will also issue a Code of Practice. We consider that  reasonable steps are likely to include implementing anti-harassment policies and procedures and training the workforce appropriately.

Although the new duty does not come into force until October 2024, employers should review the current suite of relevant policies to ensure they offer as much protection as possible. Contact us if you need assistance with such policies, or in dealing with complaints of sexual harassment.

Lawrence Stephens advises Blue Shield Capital on £3.4m bridge loan

Posted on: April 10th, 2024 by Maverick Freedlander

Lawrence Stephens’ Banking and Real Estate Finance team recently advised Blue Shield Capital on a £3.4 million 12-month bridge loan for the borrower – an ultra-high net worth family office.

The loan will enable the borrower to achieve new planning consent on an industrial asset in London’s Alexandra Palace. The team worked hard to ensure that all aspects of this deal were completed swiftly and thoroughly and achieve the best result for the client.

The Banking team from Lawrence Stephens was led by Director and Head of Banking  Ajoy Bose-Mallick, with assistance from Senior Associate Ashley Wright and Trainee Solicitor Alex Ruder. Senior Associate Rachel Coulthard led on the real estate aspects of this transaction.

Ajoy commented: “Collaborating with the team at Blue Shield Capital, we are delighted to have expedited another swift and successful bridging loan for our client. The team worked hard to get this deal across the line and the team at Blue Shield Capital once again demonstrated the utmost professionalism and efficiency.

“Well done to all those involved, as their commitment and contributions led to a fantastic result for all parties involved.”

Ricardo Geada to moderate panel about novel foods at ICBC Berlin

Posted on: April 9th, 2024 by Maverick Freedlander

Director and Head of Regulatory Solutions Ricardo Geada will moderate a panel at ICBC Berlin about the implementation and enforcement of the regulation of foods with cannabinoids in the EU.

The panelists, the European Medicinal Cannabis Association’s General Secretary Sita Schubert and Founder of Cannactions Consulting Ltd Constant Ma, will discuss complex regulatory frameworks involving regional regulations and overarching EU guidelines, noting how novel foods are treated differently within the European Union.

They will highlight disparate perspectives, as well as harmonization and authorization efforts in the EU, and the difficulties in establishing novel food status for hemp food ingredients and cannabinoids, including persistent challenges related to health claims, novel cannabinoids and inappropriate marketing.

The panel, titled ‘(Not) on the plate: EU’s Dilemma with Cannabinoids and Novel Food’ will take place at 11am CET on Tuesday, 16 April at the Estrel Hotel in Berlin.

Click here to learn more and register for the conference.

Tribunal compensation limits increase

Posted on: April 7th, 2024 by Natasha Cox

From 6 April 2024, new increased compensation limits for employment tribunal claims will come into force under the provisions of the Employment Rights (Increase of Limits) Order 2024.

The changes are as follows:

  • maximum amount of a week’s pay (used for calculating a redundancy payment or for various awards including the unfair dismissal basic award): £700 (increased from £643)
  • limit on amount of unfair dismissal compensatory award: £115,115 (increased from £105,707)
  • minimum amount of unfair dismissal basic award for trade union, health and safety, working time representative, pension scheme trustee and employee representative dismissals: £8,533 (increased from £7,836)
  • minimum amount for unlawful exclusion or expulsion from trade union: £13,032 (increased from £11,967)
  • maximum guarantee payment per day: £38 (increased from £35)
  • amount for unlawful inducement relating to trade union membership/activities or collective bargaining: £5,584 (increased from £5,128)

With effect in respect of claims presented on or after 6 April 2024, the Presidential Guidance on the Vento bands for making awards for injury to feelings in discrimination claims is being amended by a Seventh Addendum which increases the bands to:

  • £1,200 to £11,700 for the lower band—less serious cases (previously £1,100 to £11,200)
  • £11,700 to £35,200 for the middle band (previously£11,200 to £33,700)
  • £35,200 to £58,700 for the upper band—the most serious cases (previously £33,700 to £56,200)
  • £58,700 and above for the most exceptional cases (previously £56,200 and above)

Mohit Pasricha explores athlete trademarks and brand protection in The Times

Posted on: March 28th, 2024 by Maverick Freedlander

With Kylian Mbappé recently registering trademarks for his name and iconic goal celebration, Head of Sports & Entertainment Mohit Pasricha discusses how athletes can use the law to build their identity and protect their brand.

Mohit’s article was published in The Times, 28 March 2024, and can be found here.

Kylian Mbappé is often described as the “next Lionel Messi”; however the French football star is not just following in the footsteps of his Argentinian counterpart on the pitch. He has already taken similar steps off the pitch: by formally applying to register a black and white logo that depicts his crossed arms celebration as a registered trademark, together with other trademarks relating to his surname, initials and most famous quotes.

A nine-year legal battle ensued before the Court of Justice of the European Union finally approved Messi’s registration of an EU-wide trademark for a logo consisting of his name and a stylized letter M. The French phenomenon’s trademark applications should – in theory – be approved much faster.

Notably, the applications do not seek to prevent others from performing Mbappé’s famous celebration. They only apply to clothing, footwear, games, sports equipment, accessories, luggage, and printed matter such as books and magazines. As a result, and if registered, he will be provided with legal protection in the EU and the UK, which prevents others from trying to sell such goods if they feature the trademark of him performing the celebration.

Seeking to monetise their image and using the law to proactively build their brand, Mbappé’s move is part of a wider trend by sports stars and celebrities to protect their intellectual property (IP) rights relating to their signatures, names, and other personal characteristics. Trademarking a logo, symbol, name or other similar mark grants these owners a monopoly right over their IP assets, protecting their personal brand and stopping third parties from using their image.

If Mbappé’s widely anticipated transfer from PSG to Real Madrid happens during the summer window, then these trademarks are likely to form part of the overall financial package. Not only will Real Madrid be hiring him as an employee for his footballing services, the Spanish club will also want to exploit his image rights for commercial purposes. Since these trademarks will be owned by Mbappé in his personal capacity, Real Madrid will need to licence the right to use them in his employment contract, or via a separate image rights agreement.

Following the inevitable transfer, attention will focus on Real Madrid’s use of Mbappe’s trademarks and on how the revenue generated from the sale of products featuring his image (including the trademark) will be split. Notwithstanding media reports suggesting that this will be agreed at 80-20 in Mbappe’s favour, Real Madrid and other La Liga teams have previously adopted a distinctive approach: agreeing a 50/50 split with players on revenue generated from the sale of goods and services using their image in a club context.

No doubt, Mbappé’s progress in monetising opportunities will be keenly watched by sporting superstars and their agents, since failure to protect and enhance their IP rights could potentially result in millions of lost revenue for all parties.

 

The potential pitfalls of unlimited annual leave

Posted on: March 20th, 2024 by Natasha Cox

Many employers including LinkedIn, Netflix, Eventbrite and Dropbox are now offering their employees unlimited annual leave.

Unlimited leave reflects a significant uplift on the statutory minimum position. Under the Working Time Regulations 1998, full-time employees are legally entitled to 5.6 weeks’ paid holiday each year, which translates to 28 days, including bank holidays. Part-time staff are also entitled to 5.6 weeks, the number of days being dictated by how pro-rated their working time is.

While undoubtedly a great selling point to potential new recruits, is unlimited annual leave more hassle than its worth for an employer?

Potentially, yes. Employers need to be extremely careful when implementing an unlimited annual leave policy because failing to set appropriate expectations and creating a clear and well-structured policy could lead to significant problems. For example, how does one calculate the annual leave owing (or owed) when an employee’s employment comes to an end if this is not specified in their contract or the leave policy? Likewise with the continued accumulation of leave during a period of family leave.

No employer is likely to be content with an employee taking 52 weeks’ annual leave in a leave year, not least because they won’t be able to do the job that they’re employed to do. If you are offering unlimited annual leave, employers must ensure adoption of and adherence to minimum performance criteria, as well as having robust performance measures in place to objectively assess how well the employee is performing.

Further, employees will still need their manager’s permission to take time off, which could result in the policy being enforced differently from one manager to another. This may lead to accusations of favouritism, or differing treatment of employees in relation to any of the nine protected characteristics under the Equality Act 2010.

Lack of cover during an employee’s holiday may also discourage them from taking time off, undermining the incentive for annual leave altogether.

It is ultimately important to strike a balance between the needs of the business for employees to carry out the jobs they are employed to do, and the ability to attract and retain the right talent. While offering unlimited annual leave is certainly likely to assist with recruitment and retention, its implementation needs careful handling to avoid unintended consequences.

Talk to us if you would like to discuss the pros and cons of enhanced employee benefits.

Lawrence Stephens advises Blue Shield Capital on complex bridging loan

Posted on: March 19th, 2024 by Maverick Freedlander

Lawrence Stephens’ Banking and Real Estate Finance teams recently advised Blue Shield Capital on a 12-month bridging loan in a complicated deal structure which involved a high amount of property due diligence, multiple contemplated changes in deal structure and complex legal issues that required multi-disciplinary support from the LS team.  

The £3.4 million loan facilitates the purchase of a portfolio of 18 flats across Wembley and Harrow. The Lawrence Stephens and Blue Shield Capital teams worked seamlessly together to secure a successful completion for the client.

The team from Lawrence Stephens was led by Director and Head of Banking, Ajoy Bose-Mallick on the banking & finance aspects and Senior Associate Rachel Coulthard on the real estate finance side. They received crucial assistance from a cross-departmental team including Director Gregory Palos, Senior Associates Ashley Wright and Abtin Yeganeh, Solicitor Bola Kim, and Trainee Solicitors Electra Kallidou, Sophie Morton and Alex Ruder.

Ajoy commented: “As always, it was a pleasure to work with the stellar team at Blue Shield Capital to complete this complicated transaction for the client, which makes an exciting addition to their real estate financing loan book.”