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Scales-of-Justice

Transparency is coming to legal fees …

11th August, 2016 No Comments


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Our latest Guest Blog from LawyerFair, the on-line law services platform, reviews how pricing in the industry looks set to be revolutionised:

LawyerFair recently delivered a presentation to 80-100 business owners and opened with a simple question … “How many of you, when instructing lawyers for your business, had advanced knowledge of your fees?”

Remarkably, but perhaps not surprisingly, the show of hands was zero.

Not one business owner, in a room of relatively sophisticated and regular buyers of legal services, had forward visibility of costs on their legal fees.  And this anecdotal experience of how lawyers still charge, has been endorsed by a recent report from the Centre for Policy Studies – The Price of Law – which accused law firms of “using a lack of transparency on fees to distort the free market in a way that creates inefficiencies and undermines the wider economy.”

The report continues “The high level of legal fees is an efficient drain on commerce. British industry is forced to suffer a deadweight loss as excessive amounts of time and money must be spent dealing with legal issues.”

Jim Diamond, former lawyer and author of The Price of Law, revealed in an article in the Daily Mail that firms typically bill in six minute units of time, and that “for typing ‘yes’ or ‘no’ and hitting ‘send’ on an email, the partner might count it as a six-minute time unit and bill £110 for 30 seconds’ work.”

To those who know how the traditional solicitors model works, this report is hardly a surprise. Law firms continue to measure success, by the growth of their hourly rate … an anachronistic charging model, that places all commercial risk on the shoulders of the buyer.

But, there are shifting sands in the legal market, and the era of guesswork surrounding expertise and cost is coming to an end.

We’re addressing some of these issues with my own platform at LawyerFair, where we pre-approve all panel lawyers and insist that quotes are fixed, but other services are emerging that help shine a light into this opaque market.

One particular service that’s starting to ruffle legal feathers is Premonition. Co-founded by a Brit, now based in Florida (Toby Unwin), the service utilises big data and Artificial Intelligence, to expose which Lawyers win the most cases, and in front of which Judges.  It’s ground breaking transparency and, having already caused a stir in the US, it’s expanding into the UK and beyond.

Buyers of commercial legal services – from start up to general counsel – have suffered from a lack of transparency in legal services, but in this new era of legal procurement, a variety of services have emerged that have started to shift the balance of this industry from supply led, to demand led.

You might say that historically when it comes to fees, it’s the land of the blind where the one eyed lawyer is kind but …. in the future landscape of legal services, consumers with market intelligence will be King.

Written by Andrew Weaver, CEO & Co-Founder of LawyerFair

If you would like to compare legal fees, LawyerFair can do an audit of fees for free, as well as offer legal advice, so please do get in touch.

 

Scales-of-Justice

3 Key Legal Considerations for Online Publishers: Copyright/Plagiarism, Defamation and Misrepresentation

15th July, 2016 No Comments


Businessman using digital tablet computer

As Cavendish Enterprise trials the services of an interactive platform hosted by JournoLink which supports our Start & Grow clients in the management of their own PR and gives them access to journalists, broadcasters and bloggers, we’ve asked LawyerFair to highlight some of the legal issues around publishing content online.

This article will briefly discuss three key legal considerations which apply to the publication of material online. Firstly, the issue of copyright/plagiarism, secondly, the laws applying to defamation on the internet, and lastly, laws relating to misrepresentation online. Note, this general overview is not legal advice, and is provided for information purposes only.

1. Copyright/Plagiarism

Breach of copyright is a common issue which applies to material posted online, and can present significant risks for an online publisher. Broadly, copyright infringement relates to the unauthorised replication of a substantial part of another person’s work. Copyright infringement can relate to any form of artistic or multimedia work, including written materials, images, video, and sound recordings. Software code itself is also considered an artistic work and is therefore subject to copyright. Copyright arises automatically without registration, although it can be useful to provide a copyright notice in the format of © [Year], [Owner name] in order to assert your ownership.

As noted above, the test for copyright infringement is whether a substantial part of the work is taken, without a licence. Primary copyright infringement only requires actual copying, but secondary copyright infringement (i.e. dealing with or hosting copyrighted works) requires knowledge. The definition of “substantial” is a question of quality not quantity. Therefore, it is possible to infringe copyright even if a small part of a work is copied, if that part represents the “essence” of the work that may have required considerable labour, skill or judgment to create. Conversely, if a copyright work lacks originality (such as a contractual agreement using standard terms), it is more difficult to establish that copyright has been infringed.

Plagiarism could be considered as related to copyright infringement, but is more relevant in an academic context. Broadly, plagiarism is the passing off of some else’s ideas as one’s own. It may not involve copyright infringement at all, as there is no copyright in ideas, rather, copyright only attaches to the expression of ideas on a particular medium. For example, it is difficult to allege copyright infringement for stealing the “plot” of a novel (although creating an unauthorised “derivative work” is copyright infringement, such as where a novel is converted into a film). However, taking ideas without attribution could breach an academic plagiarism policy. On the other hand, if someone copies written work verbatim (rather than the idea) this would be considered copyright infringement.

A common misconception is that copyright is not infringed as long as appropriate acknowledgement of the source or a citation is provided, however, this is not the case. Quoting material in an academic or journalistic context can confuse the issue, for example a research paper can cite another paper and may reproduce sections of that paper, provided that there is an appropriate citation. The reason is not because this would not be considered copyright infringement, but due to defenses to copyright infringement, such as fair dealing and use for the purpose of criticism, reporting of public affairs, or research. It is important to note that such defences vary by jurisdiction, for example, fair dealing is called “fair use” in the USA is much broader than fair use in the UK, which is limited to a few narrow categories. Therefore, it is not wise to rely on fair use as a defence to copyright infringement.

The safest option for a publisher of online content who is wary of copyright infringement is to ensure that they have a licence to copy other materials (especially images, which can be obtained royalty-free) and to ensure that their materials are not being copied, except as permitted. For example, authors may wish to consider using a creative commons licence e.g. use with attribution (CC BY 4.0), non-commercial use (CC BY NC 4.0).

The main risk that copyright infringement presents to a publisher of online material is not necessarily the risk of litigation (which could be significant, particularly in the USA, where “statutory damages” are available for each instance of infringement or website “hit”). Rather, the main risk is that the website is taken down. In the UK, a web host can be liable for copyright infringement if they do not remove the offending material “expeditiously” if they have “actual knowledge” of infringement (see Reg 19 of the Electronic Commerce (EC Directive) Regulations 2002). If a website is hosted in the USA, it is possible to issue a DMCA takedown notice, which can force the host to remove the offending website. It is also possible to inform search engines of the copyright infringement (e.g. Google, Yahoo, Bing etc) which will lower the search engine rankings of the website.

2. Defamation

The laws regarding defamation online are complex and also vary by jurisdiction. In the UK, the main laws involved are the Defamation Act 1996 and 2013, the Defamation (Operators of Websites) Regulations 2013, and the Electronic Commerce (EC Directive) Regulations 2002.

Defamation is divided into two aspects, libel, which is defamation on some permanent medium (e.g. writing or posting on a website) and slander, which is more temporary, such as speech, or posting on a chat or bulletin board. The legal test for defamation requires that the statement tends to lower the claimant in the estimation of right-thinking members of society generally and must have caused or be likely to cause serious harm to the reputation of the claimant (e.g. allegations that they have broken the law).

There are exemptions and exceptions, such as truth, honest opinion, public interest, and privilege (e.g. solicitor-client, judicial or parliamentary). If a publisher exerts some control over content then could be deemed a primary publisher, otherwise they could also be a secondary publisher if they passively made the content available to others. It is difficult to determine in advance what level of involvement may incur liability. For example, providing a hyperlink to defamatory article could be deemed defamation as a primary infringer, but is not clear whether linking to the home website would also incur liability.

There is a one year limitation period to bring actions of defamation (see s 4(a), Limitation Act 1980). However, the Courts have a broad discretion to extend this limitation period if they deem it equitable. This limitation period runs from the date of publication, and in the online context, each new “hit” on a website constitutes a fresh publication. However, there is a “single publication rule” under s 8 of the Defamation Act 2013 which can limit this effect. In particular, a publication by the same publisher which is substantially the same and in the same form, will not renew the limitation period.

There are additional defences to defamation relevant to to website operators. Firstly, the intermediaries defence under section 1 of the Defamation Act requires the website operator to fulfil the following conditions:

• they were not the author, editor or publisher of the statement complained of;
• they took reasonable care in relation to its publication; and
• they did not know, and had no reason to believe, that what they did caused or contributed to the publication of a defamatory statement.

Secondly, there is a “website operators defence” under s 5 of the Defamation Act 2013, which is broader. In essence, if a website operator did not post the offending article, they have a defence, provided that a notification procedure is followed under the Defamation (Operators of Websites) Regulations 2013 with specific time limits. Broadly, the complainant must send a notice of complaint to the website operator, setting out why they believe a particular statement is defamatory. The operator must contact the poster within 48 hours with a copy of the complaint, and ask them whether (a) they consent to removal of the statement and (b) whether they consent to their identification being provided to the complainant. If the poster is not available the operator must remove the statement within 48 hours. Otherwise, the poster has 5 days to respond, and can refuse consent to removal and identification to the complainant (although they must provide their name and address to the operator). In that case, the complainant will have to seek a court order to obtain the posters details from the operator and remove the statement. It is notable that mere moderation does not make an operator a poster of the material in accordance with s 5 of the Defamation Act 2013. However, the defence does not apply if the operator has acted with malice in relation to the posting of the statement concerned.

3. Misrepresentation

Misrepresentation can be an issue for publishers of online material, particularly where there are undisclosed conflicts of interest. For example, the fact that a reviewer will receive a commission for sales of a reviewed product via the website should be disclosed. Conversely, it is important to ensure that when mentioning other brands or trademarks on a website that there is no implied endorsement or suggestion of a commercial relationship that could be deemed trade mark infringement, e.g. including an Apple logo or branding on a website that is selling software products which are not approved by Apple.

A publisher should also be aware of consumer protection laws such as the Consumer Rights Act 2015 and Consumer Protection from Unfair Trading Regulations 2008, which outlaw misleading practices in trade. For example, an action by a trader is misleading if it contains false information or if it is likely to mislead the average consumer in its overall presentation. Therefore, a publisher making statements in a commercial context should be careful not to be misleading or provide false information.

Conclusion

Online publishers should be aware that material published online has legal implications. Firstly, they should ensure that no copyright is infringed and that contributors know what is permitted and agree not to publish copyright material in breach of a licence. Secondly, they should protect themselves from liability for potentially defamatory material by ensuring that they fall within the exemptions when they post the material or otherwise follow the notice procedures specified in the Defamation (Operators of Websites) Regulations 2013. Finally, publishers should ensure that they do not provide misleading statements online, particularly in a commercial context such as where goods or services are being sold.

If you require any specific assistance regarding the publication of online material and advice regarding their particular circumstances, do not hesitate to get in touch with LawyerFair.

Click here to learn more about the Start & Grow business support initiative and how you can receive the support of JournoLink (currently available in the North West, South East, and East of England) through the programme.

Written by Savva Kerdemelidis, Principal Legal Adviser at EULAW Online, and a member of LawyerFair

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Start-up money is too tight to mention …. so spend wisely on legal documents

15th April, 2016 No Comments


A wooden judge gavel and soundboard isolated on white background in perspective

Running a business start-up, particularly at an early stage, is like being on a runaway decision train … every day requires business critical decisions, often based often on minimal visibility and even less money.

With so many decisions and so little time, an easy victim of the cost cutting process is the legals – often a false economy as getting solid legal foundations in place can be the difference between survival and failure, and these foundations will also be underpinning the (hopefully) growing value of your business.

But this is not a lawyer talking, instead it’s to provide a brief analysis of what you really, really need and … what can be left until later (or not required at all).

Overview

Take a pragmatic view on what is required:

Is it business critical?
Will it be underpinning crucial elements of the operation?
Is it likely to help cement value into your business?
Is it worth spending a little extra to get it right today, than suffer the risk of a problem with it tomorrow?

If the answer to these questions is “yes”, then get it drafted properly and without delay.

If the answer is “no”, then you might like to undertake the task yourself,  or just shelve it.  Classic example of documents that don’t need much legal input are NDAs, Heads of Terms, Low Value Contracts.  With these types of documents it will be quicker and much cheaper, drafting something yourself and/or going for a low cost downloadable version.

But there are fundamental considerations and documents that you should definitely ask a solicitor to help you draw up.

Business Status:

One of the first things to agree upon is the type of business entity you wish to trade from – sole trader, partnership or company?  Some types of business are more onerous than others and there are different legal, administrative and tax implications for each so it’s best to take advice early on.

Shareholders Agreements:

For companies, it’s good practice to first consider whether you need special terms to suit the circumstances of your business. You can deal with these in your company’s articles of association or a shareholders’ agreement. Whilst there is no legal requirement to have a shareholders’ agreement, it is pretty crucial if you are planning on more than one shareholder, even if that other shareholder is family, friend or blood brother.

A carefully drafted shareholders’ agreement ensures that you formalise key strategic issues in your business. Areas worthy of mention include additional funding strategies if you need more money down the line and what will happen if someone wishes to leave the company – this latter issue is really important and has been the cause of serious friction between previously good friends.

Partnership Agreements:

For partnerships, consider whether you will trade under the names of the partners, or use a separate business name. You’ll need to advise HMRC and then look at entering into a partnership agreement.

Failing to prepare a partnership agreement can be disastrous.  The parties will have to rely on the Partnership Act 1890 (yes that’s right, 1890 … Queen Victoria’s era!) which provides that the partners are entitled to share equally in the capital and profits of the business, regardless of how much time or capital each has actually put into the business.

Under the Act, a partner can withdraw from the partnership and this could lead to business closure if the partner insists on the return of their capital.

A partnership agreement looks at how the business is to be financed, how profits are to be divided, how decisions are to be made (and what to do if you fall out!) and what happens if a partner wishes to leave the partnership.
The agreement is also a prime opportunity to agree on broader issues, such as your business strategy. You should also agree on issues like holiday entitlements, whether you will employ members of your families – seemingly trivial at the outset but common cause of attrition if not organised at the outset.

Many partnerships structure their businesses under the limited liability framework since it offers the benefits of a traditional partnership (including taxation) but with limited liability.  The process is more complicated as LLPs are registered at Companies House and annual accounts are required, but this option is particular popular with professional businesses such as solicitors and accountants etc.

Standard Form Contracts:

A standard form contract is another legal agreement to consider at the outset. The contract should succinctly deal with issues such as pricing, payment dates and penalties which will be incurred if payment isn’t made on time. You’ll need to deal with limitations on your liability, breach of contract and how to deal with disputes.

Employment Documentation:

Start-ups often fail to create adequate employment documentation from the outset. Take on staff and you’ll need internal policies and procedures. You will also need to register for PAYE and organise employers’ liability insurance.

Intellectual Property Rights:

You will definitely need to consider IP rights. Do you have a business or brand name that you can protect as a trade mark? Are there any designs or inventions that you can protect via registration? Prevention is definitely better than cure.

So that’s just a quick gallop through the legal elements that you should consider.

The other thing to look at is how you procure these services of a lawyer. Sticking with what (or who) you know is not always a the best idea. If your current legal team are not delivering on value, cost and expertise, then maybe it’s time to think about reviewing your legal strategy.

You can approach law firms individually, or you could use a company, such as LawyerFair which puts you in touch with numerous law firms in one easy step.  You submit your legal requirement, time scale, and budget to the LawyerFair website and within 24 hours three fee proposals will be generated from different lawyers competing for the work.  The choice is then yours to make.

Comparing the services and costs of law firms on a regular basis ensures you are getting the best value for money for your business, putting you in control of the process …. in the driver’s seat where you belong.

A guest blog written by Andrew Weaver, CEO, LawyerFair

Find out more about LawyerFair and the services they offer.

 

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