Emma Cordiner on real estate legal skills for data centre acquisition

In this episode of Inside Data Centres, Emma Cordiner talks about the real estate legal skills required for data centre acquisition.

If you would like more information, please contact Emma Cordiner.

Cyber Security Interview with FMJ

Interview

The Queen’s Speech May 2021 – Legal Update

This year’s Queen’s Speech contained several points that are relevant to our clients and the sectors we operate in. We have pulled together a list of the relevant legislative proposals, some of which were already known about, or carried over from the previous parliamentary session. We will continue to monitor the progress of these and provide timely updates.

ADVANCED RESEARCH AND INVENTION AGENCY BILL

This Bill is about developing the Life Sciences sector so it attracts people and business from across the world. This includes increasing public expenditure on research and development to £22 billion and creating an Advanced Research and Invention Agency which will be focused on funding high-risk, high-reward research and development.

PLANNING REFORM

Reforming planning laws and improving building safety were central to the Queen’s Speech. The change in planning laws to increase the number of new houses being built was announced proposals for areas which will be designated for growth, protection or regeneration, with developments in growth areas being harder for local opponents to block. The speech also made reference to the ongoing overhaul of the Building Regulations system in the UK with The Building Safety Bill still going through parliament.

PRODUCT SECURITY AND TELECOMMUNICATIONS INFRASTRUCTURE BILL

This is designed to ensure that smart consumer products, including smartphones and televisions, are more secure against cyber-attacks, protecting individual privacy and security. It also includes a commitment to the roll out of 5G mobile data coverage and gigabit-capable broadband to support better telecommunications coverage and connectivity.

TELECOMMUNICATIONS (SECURITY) BILL

This will give the Government new powers designed to ensure the long-term security and resilience of the UK’s telecoms networks and infrastructure and minimising the threat of high-risk vendors. It will also strengthen the security and oversight of technology used in telecoms networks including the electronic equipment and software used across the network which handle internet traffic and telephone calls.

ONLINE SAFETY BILL

The Online Safety Bill has been highly publicised and aims ‘to make the UK the safest place in the world to be online’, improving protections for users, especially children, whilst protecting freedom of expression, making companies responsible for their users’ safety online, and supporting a thriving and fast-growing digital sector. This will likely mean working with the industry to ensure there are clear legal definitions of what constitutes harmful online content, setting out the responsibilities that companies of different sizes have to observe and establishing clear codes of practice.

GDPR Update – April 2021

The government has recently discussed reforming data protection law and diverging from the EU’s GDPR regulation. This move is designed to allow information to flow more freely and drive growth in the global digital economy. This is good news for anyone dealing purely with UK data as it should make reaching adequacy agreements with other non EU countries easier . However, anyone holding EU data will still have to manage their compliance with the EU regulation. Those companies that hold both EU and UK data (and this is not always a simple question to answer) will likely need to run a dual system, which may be complex and time consuming. Knowing which rules apply to your data sets and transfers will have never been more important.

HOW CAN CONEXUS LAW HELP?

Businesses and individuals will need legal advice to help them understand the risks they may face and the options that may be open to them.
We are available to assist in reviewing the laws in many jurisdictions across the world, and to review specific contracts. We are also available to provide practical, business-orientated advice on how to best protect yourself from the ongoing commercial effects of Covid-19.

Contact

For further advice on GDPR or pursing your contractual rights, please contact Philip Brown.

T: +44 (0)20 7390 0289
M: +44 (0)7887 538308
E: [email protected]

What to Consider if Your Contractor Goes Bust

As a result of the pandemic, we have seen, and advised on, numerous instances where main contractors have downed tools or closed sites. In some cases, this has been a temporary hiatus to construction works as we and our client employers have persuaded or assisted main contractors to return to site. However, we have unfortunately seen occasions where the contractor has gone bust and never returned to site.

If faced with contractor insolvency, we set out below what you need to consider and those matters with which you may need to deal:

If you have a funding agreement, notify your funder of the contractor’s situation. Buy yourself some time with your funder to give you breathing space to work out how any outstanding works are to be completed. Remember that most funding agreements will contain obligations requiring you to provide information (such as news of insolvency) to the funder in a timely fashion.

Immediately secure the site and materials on it. Ascertain what you have paid for in full, what is part paid for and what are contractor or sub-contractor assets on site.

Prepare a detailed valuation of the works and, if you have one, request the contract administrator to undertake a formal valuation. Ascertain the works to be completed (including any defects not yet rectified), revise any works programme (including ascertaining what is on the critical path), calculate the costs to finalise the works, whether extra funding will be required to finalise them and any disputes about the works already existing.

Check insurance coverage and insure the site, the works and check the insurance position in respect of any third party assets to remain on site. The contractor will likely have carried public liability, employers liability, professional indemnity insurance (if providing design) and contractor’s all risk insurance. These may come to an end with its insolvency or termination of the building contract (see below). Decide what insurances you will need in place for the future of the project. Also check any insurances you have in place in respect of the project and whether they require you to inform your insurer of the main contractor’s insolvency.

Check the contractual documentation:

  • Be it a JCT contract, NEC form of contract or bespoke agreements, they should set out provisions for termination on insolvency of the main contractor. Follow the provisions of your contracts to the letter to formally bring your contract with the main contractor to an end, especially where you want to engage a new contractor to finish any works or oversee their completion yourself.
  • Is there a parent company guarantee or performance bond you can claim under?
  • Have the trigger events in such agreement occurred?
  • Do you have any collateral warranties from subcontractors? These may assist you and give you step in rights to take over vital supply chain contracts.

Make immediate checks to ensure that documentation for which the contractor was responsible can be located and is up to date (eg health and safety records, drawings, test certificates, manufacturers’ warranties etc).

Unless commercially imperative, do not make any further payments to any party about the works until you know your full position.

Decide how any outstanding works are to be completed after formal termination of the main contractor’s contract. Generally, the options will be a new main contractor or the employer or a construction manager to manage the existing or new sub-contractors. Agree a new contract with a new main contractor (likely to be on a cost plus basis) or with a construction manager.

Take advice as to whether you have any claims against the main contractor and whether these are commercially worth pursuing.

The first days after a main contractor has entered into some form of insolvency procedure are critical and it will be an intensive time of information gathering and decision making. It is however hoped that you will have seen some of the warning signs that your main contractor may be in difficulty (eg less activity on site, slow or late deliveries, plant or equipment disappearing from site, requests for accelerated payments, programme issues, persistent rumours about the main contractor’s financial position including sub-contractors and suppliers not being paid, late filing or qualified accounts being filed at Companies House and a new evasiveness in communications) before they go bust and you have been able to undertake some pre-planning before their insolvency occurs.

HOW CAN CONEXUS LAW HELP?

If you would like advice on your options where you believe that your main contractor may be in financial difficulties or after it goes into insolvency, please contact Ian Timlin or Ed Cooke whose details are below.

Ian Timlin
Main: +44 (0)20 7390 0280
Mobile: +44 (0)77 6742 7332
[email protected]

Ed Cooke
Main: +44 (0)20 7390 0281
Mobile: +44 (0)7535 123000
[email protected]

Arbitration – Why have an Arbitration clause in your commercial contract?

In recent months, we have written about using mediation and adjudication as dispute resolution tools. But let’s look at another option open to you, when you engage in your commercial contracts.

Below we consider Arbitration, and what benefits it might have for you in resolving conflicts arising from your commercial contracts instead of using Court proceedings.

First, unless a party has agreed to arbitrate you cannot force them to do so. It is a private binding form of dispute resolution conducted before an impartial Arbitration body.

So why have an Arbitration clause in your commercial contracts to resolve disputes?

Well, litigation in England is a public proceeding before a Judge or Tribunal. It is not just public if the dispute eventually goes to trial. For example, many publications/journalists keep a watching brief at the High Court in London in respect of any Court claim issued. They can obtain copies of the pleadings (the Particulars of Claim, Defence and Reply) and often their attachments filed in any Court proceedings on payment of a small fee. This is without obtaining the Court’s permission to do so and without notice being given to any of the parties.

Arbitration is however private and confidential (unless you need to enforce an Arbitration award but even then the minutiae of your dispute is likely to remain confidential). Using Arbitration, it is easier for the parties to avoid damaging publicity and to preserve sensitive commercial information from entering into the public domain.

It also gives the parties greater variety and flexibility in how they resolve any dispute. The parties are free to choose their own tribunal – usually one or three arbitrators from one of the leading Arbitration bodies such as the International Chamber of Commerce (ICC), London Court of International Arbitration (LCIA) or The International Centre for Dispute Resolution (ICDR). That provides focused expertise (factual and/or legal) and you get one panel dealing with all aspects of an Arbitration from the start to end of the process.

Arbitration rules are flexible and streamlined and parties are not bound by national Court rules. Flexibility extends to the choice of law, venue for and language of resolving the dispute. So if your counterparty is based abroad and not keen on English law or the English Courts dealing with any dispute, you could as a compromise suggest that your contract have an Arbitration clause stating, say, that any dispute between the parties, be governed by English law but heard in Geneva[or any other locality you and they agree on], will be resolved pursuant to the ICC Rules with three arbitrators and the language of the Arbitration will be English. That gets around a party not wanting to submit to the jurisdiction of the other party’s local/national court.

The parties are also given autonomy to shape the form and scale of the Arbitration. Arbitrators can be selected by the parties for their familiarity with commercial and trade matters and may not necessarily be lawyers (although at least one on a three member Arbitration panel is likely to be). That circumvents the problem in some jurisdictions of judges not having relevant experience of a particular area.

As a client, you can be represented by lawyers and/or technical experts at an Arbitration hearing and not just limited legal advocates having particular rights of audience in a particular jurisdiction.

An Arbitration award is normally final and binding. The grounds for challenging an award are limited. As such, an appeal of an Arbitration award is difficult and it potentially cuts down on years and years of litigation to different appellant courts.

In some countries, the national courts are over‐burdened and it can take up to 10 years for a matter to come to trial. Arbitrating a substantial dispute usually takes 14-18 months to get to a final hearing. So whilst roughly on a par with the current length of English High Court proceedings getting to trial, the speed of Arbitration can be an advantage when compared to litigating in some jurisdictions.

The New York Convention provides for the enforcement of Arbitration awards. As of March 2021, 168 countries are a party to it and agree to enforce Arbitration awards made in other countries in their country. So Arbitration awards are more widely and readily enforced than Court judgments.

In our experience, the major disadvantage of Arbitration is its cost. Each of the Arbitrators needs to be paid on a hourly rate basis plus the administrative expenses of the Arbitration body setting up the Arbitration and the hiring of a venue for hearings. This is usually opposed to a one off Court fee or relatively low Court fees paid during a Court action (up to and including a trial) and no Court venue charges.

It is also not particularly workable where you want to join third parties into disputes where your relationship with that third party is not governed by Arbitration or you have agreed to arbitrate with that third party using a different Arbitration body/clause to the one in which the primary claim against you is being made.

Arbitration will not be right for every commercial agreement and should be considered on a case by case basis. In respect of high value contracts with international elements (either in respect of one or both parties or the subject matter), it will be worth detailed consideration.

If you would like more advice on whether you should consider having an Arbitration clause in your contract, and the form of it, please contact Ian Timlin whose details are below.

HOW CAN CONEXUS LAW HELP?

For further advice on adjudication, please contact Ian Timlin via his contact details below. Ian has been a CEDR accredited mediator since 2000.

Ian Timlin
Main: +44 (0)20 7390 0280
Mobile: +44 (0)77 6742 7332
[email protected]

Adjudication – Be Ready

Organisations in the construction sector are being warned to expect a rise in the number of adjudications around contracts as government support comes to an end and cash becomes scarce for many businesses.

Ian Timlin, a dispute resolution specialist at Conexus Law, is urging companies that might have a claim in a construction contract or might be on the receiving end of one to consider whether adjudication might apply to it. If so, they need to be prepared and either understand how they intend to initiate their own claim or ensure that they are not ambushed by an adjudication claim against them. “Given the tight timescales, a referring party often takes a responding party by surprise,” he concludes.

Ian explains: “Adjudication is the very quick (often 28 day) private and cost-effective procedure of resolving disputes in construction contracts. You cannot contract out of it and it applies to a construction contract which is an agreement with a person for any of the following:

• The carrying out of “construction operations”.
• Arranging for construction operations to be carried out, whether under a sub-contract or otherwise.
• Providing labour (either his own labour or others’ labour) for the carrying out of construction operations.

It also includes contracts with construction professionals.

“Traditionally used by contractors, adjudication is also a quick and cost-effective solution for an employer or building owner to obtain payments to resolve defects with a building that the contractor cannot or does not want to rectify or to resolve payments due to a contractor. We generally see adjudication used to resolve disputes in respect of the final account, interim payments, defects, delays and disruptions, as well as with works and extensions of time for the completion of works. All of these have been made more likely as a result of the impact of Covid-19, as many companies have struggled to deliver.”

Finally, Ian comments that a party to a construction contract can refer a dispute to adjudication at any time before or after construction works or operations have been completed, so used mid contract, it may offer resolution to a dispute with limited disruption to an on-going project or relations.

HOW CAN CONEXUS LAW HELP?

For further advice on adjudication, please contact Ian Timlin via his contact details below. Ian has been a CEDR accredited mediator since 2000.

Ian Timlin
Main: +44 (0)20 7390 0280
Mobile: +44 (0)77 6742 7332
[email protected]

Conexus Law Launches New Service to Help Organisations Mitigate “Brexit Risk”

Conexus Law, the specialist provider of legal advice to businesses operating at the intersection of the built environment, technology and people, has launched a Brexit Contract Management and Audit Service. It is designed to help address the many unresolved issues following the Christmas Eve Agreement.

The new service will help organisations manage any potential contract risks and assess existing contractual arrangements that may require attention to ensure continuity of commercially viable relationships post BREXIT. It will include a full audit of all contracts including a review of standard terms and conditions (both signed and those under negotiation), and any bespoke contracts with both suppliers and customers, together with business contracts which touch every business area whether it be IT, purchasing, product, sales and marketing, office services, facilities maintenance, logistics or outsourcing.

In addition advice will be given as to whether a contract has a mechanism or opportunity to exit or re-negotiate its terms should this be necessary. While the service will focus on arrangements with EU suppliers or customers, it can include the full suite of contracts globally (including UK to UK contracts and UK to non-EU contracts).

Brexit will also impact trade between the UK and global markets and between the EU and global markets, with likely increased customs and duty requirements and costs. All of this will be taken into account when setting the scope of the contract audit.

Ed Cooke, Founder at Conexus Law, said: “Although The Christmas Eve Agreement gave some clarity, businesses continue to be faced with uncertainty. There are clear implications for many areas such as supply chains, imports and exports and employment that will affect the technology and datacentre sectors and our service will ensure full visibility of the commercial impact of Brexit on the business.”

HOW CAN CONEXUS LAW HELP?

Businesses and individuals will need legal advice to help them understand the risks they may face and the options that may be open to them.

We are available to assist in reviewing the laws in many jurisdictions across the world, and to review specific contracts. We are also available to provide practical, business-orientated advice on how to best protect yourself from the ongoing commercial effects of Brexit.

Contact

For further advice on mitigating Brexit risks, please contact Ed Cooke.

T: +44 (0)20 7390 0281
M: +44 (0)7535 123000
E: [email protected]

Ed Cooke talks to Data Centre Solutions

Our Founder Ed Cooke has spoken to Datacentre Solutions about the potential impact of Brexit on the industry.

 

 

Season’s Greetings from Conexus Law

Season’s Greetings to all our clients, colleagues and friends around the world.