Stephen Attree, Author at MLP Law

Robot Solicitors…Is there space for Al in the legal sector?

Wondering what is going on in tech developments and how it is changing working practices for solicitors and law firms as well as changing service delivery for clients?  The piece below was written by AI tool ChatGPT…

The legal services sector in the UK has undergone a significant change in recent years, with the advent of new technologies such as artificial intelligence (AI) and chatbots, including ChatGPT. These technologies have the potential to revolutionise the way legal services are delivered to clients, making them more efficient, cost-effective, and accessible to a wider range of people.

One of the key ways in which AI and chatbots are changing the legal sector is through the automation of certain tasks. For example, AI can be used to analyse large amounts of data, such as legal documents, in a fraction of the time it would take a human to do the same task. This can significantly reduce the time and cost associated with legal research, making it more accessible to a wider range of clients. Similarly, chatbots can be used to automate repetitive or routine tasks, such as answering frequently asked questions, which can free up lawyers’ time to focus on more complex and nuanced issues.

Another way in which AI and chatbots are changing the legal sector is by making legal services more accessible to a wider range of people. However, it’s important to note that while these technologies have the potential to revolutionise the way legal services are delivered, they also present some challenges and concerns. For example, the use of AI and chatbots raises questions around the accuracy and reliability of the advice they provide. Additionally, there are concerns that the use of these technologies could lead to job losses in the legal sector, as certain tasks become automated.

In conclusion, the advent of new technologies such as AI and chatbots, including ChatGPT, is changing the way legal services are delivered in the UK. These technologies have the potential to make legal services more efficient, cost-effective, and accessible to a wider range of people. However, it’s important to consider the challenges and concerns that arise with the use of these technologies, and to find ways to address them in order to fully realize their potential benefits.

New Year – New start: Setting up a business in the UK

Living in a post pandemic world, coupled with the effects of recession, appears to have driven many more people to consider the benefits of being their own boss and starting their own business.

Got the idea and motivation to succeed?

Stephen Attree, Managing Partner of MLP, explains the next steps.

Starting a business in the UK can be a challenging but rewarding experience. There are a number of important legal, accounting, and employment law considerations to keep in mind, as well as the process of finding suitable premises.

First and foremost, it is important to choose the right legal structure for your business. The most common options in the UK include sole trader, partnership, limited liability partnership (LLP), and limited company (Ltd). Each structure has its own set of pros and cons, so it is important to consider factors such as personal liability, tax implications, and administrative requirements. A sole trader, for example, has complete control over their business but is personally liable for any debts. A limited company, on the other hand, offers limited liability for the shareholders but requires more paperwork and reporting.

Once you have chosen the legal structure for your business, unless you are setting up as a sole trader you will need to register it with Companies House. This process involves providing information such as the business name, registered office address, and details of the directors and shareholders. It is also necessary to obtain any necessary licenses or permits depending on the nature of your business. For example, if you are planning on selling food or drink, you will need to register with your local council and comply with food safety regulations.

Next, you will need to consider accounting and tax requirements. As a business owner, you will need to keep accurate records of your income and expenses, and file regular tax returns with HM Revenue and Customs (HMRC). It is important to keep up with these obligations to avoid any penalties for late or incorrect filings. You may wish to consult with an accountant to ensure compliance and also to maximise tax efficiency.

Another important aspect to consider is employment law. This includes things like minimum wage regulations, working hours, and holiday entitlements. You will need to ensure that you are providing a safe and healthy working environment for your employees, and that you are adhering to any other relevant laws and regulations. You will also need to keep records of employment contracts and employees’ details for legal compliance.

Finally, one of the most significant and practical aspects of starting a business is finding suitable premises. This can be a challenging task as it involves balancing factors such as location, cost, and size. You will need to consider things like accessibility, parking, and the needs of your business. Some businesses are able to operate from home, but other require a physical shop or office. It’s important to take into consideration all your business need when selecting a location, whether that’s footfall, the cost of the rent or even the need for a specific type of location such as a warehouse, factory or even storage space.

Starting a business in the UK can be a complex and challenging process, but with the right planning and support, it can also be incredibly rewarding. It’s important to consider all legal, accounting, and employment law aspects in addition to finding suitable premises. It’s always a good idea to seek professional advice from lawyers, accountants, and other experts to ensure you are fully compliant with all relevant regulations, and to give your business the best chance of success.

For more information or to request a copy of our guide to starting your business, please get in touch:

commercial@mlplaw.co.uk

Stephen Attree – stephena@mlplaw.co.uk

 

Employee Ownership Trust – Is it an option for you and your business?

With the news that Carlton Bingo becomes the latest well known company to become employee owned, is it an option to consider for you and your business?

Employee Ownership Trusts (EOTs) are an established mechanism aimed to promote employee ownership by giving business owners the opportunity to sell their shares to an employee owned trust free from capital gains tax.

In summary, a company seeking to transition a controlling (more than 50 percent) ownership to an EOT can consider three methods:

Indirect employee ownership – the employees do not own shares in their employer company directly, they are beneficiaries of the trust which owns the controlling shareholding. This method of ownership is suited to businesses with higher staff turnover and a larger number of employees who desire tax-efficient profit-share.

Direct employee ownership – the employees directly own shares, typically in conjunction with a statutory tax advantaged share plan over shares in the ultimate parent company.

Hybrid Model – This is a combination of trust ownership and employee direct share ownership. Typically, retiring vendors sell their share interests to the EOT when it is first established and then over time some of this interest is transferred to employees. The hybrid model suits businesses where the emerging new managers desire a real ownership stake in the business but there is a desire by original founders to preserve independent control of the business.

Why set up an EOT?

  • Allows an exit where there is no obvious third party purchaser.
  • Can provide a quick and streamlined exit route for shareholders.
  • Allows a tax free disposal by UK individual shareholders.
  • Owner can retain some involvement (up to 49%).
  • Share capital still available to incentivise management and key employees.
  • Aligns the goals of stakeholders and employees.
  • Improved employee retention and morale.
  • Encourages innovation at all levels.
  • Improved business performance by driving growth of stakeholder values.
  • Employee ownership encourages employee engagement

Tax benefits:

  • Owner: Disposals into the trust can be made free from capital gains tax and inheritance tax.
  • Employee: The EOT can pay annual bonuses of up to £3,600 to employees free of income tax.
  • Company: A corporation tax deduction for the value of the bonuses will be available to the company.

For a copy of our guide, please email leanner@mlplaw.co.uk. If you wish to speak to our experts at MLP Law for more information and professional guidance please contact our employment and business teams on corporate@mlplaw.co.uk

Are your “UK made” products – actually made in the UK, or are you potentially misleading your customers?

To label your products as being made in the UK, you will need to demonstrate that there is either a ‘substantial transformation’ and/or that at least 50% of the manufacturing of / value added to such products is completed in the UK.

Please read through our guide below and let us know if you would like us to advise on the origin / labelling requirements for any products you sell. (NB: Our guidance is based on the law as it applies in the UK. The destination countries of any products you export to are likely to have their own product labelling laws.)

  1. Origin of Goods

There is extensive guidance on both Preferential rules of origin and Non-Preferential rules of origin. In summary however, Preferential origin is used to provide duty benefits through free trade agreements. Non-Preferential origin will apply when countries wish to identify the origin of goods for other reasons, such as for statistical reasons or trade control purposes.

(a) Preferential Origin

To qualify for “Preferential Origin”, at least 50% of a particular product’s value must be added in the country to which it is claimed the product originated from. Therefore, if less than 50% of the value of the products you supply has been added in the UK, they would not qualify for preferential origin. The scope for misinterpretation of these rules is clear and can cause difficulty and it is always better to discuss individual or borderline cases.

(b) Non-Preferential Origin

Non-Preferential rules of origin are decided by each country to which they are being imported to, and are generally based on two criteria:

(i) Wholly obtained: these are products which are obtained entirely in the territory of one country without the addition of any non-originating materials.

(ii) Last substantial transformation: in a case where more than one country was involved in the production of the products, the country where the last ‘substantial transformation’ took place determines the origin of the products. Therefore, if your products are manufactured in the UK, whether they qualify for Non-Preferential Origin or not would depend on the level of manufacturing which took place in the UK before being finalised.

2. Sale of Goods Act 1979

If you unwittingly mislead your customers as to the origin of your products, you risk being in breach of the Sale of Goods Act 1979 (SGA) to the extent that the sale of your products is governed by this act (i.e. if you are selling your products in the UK). You may also be at risk of equivalent laws in your products’ destination country.

Section 13 of the SGA states that if there is a contract for the sale of goods by description, there is an implied condition that the goods will correspond with the description. As such, if a customer makes an order from you on the basis that their product of choice originates in the UK, it would be misleading to provide them with a product which originates elsewhere, as it would not correspond with its description as advertised.

In addition, some customers may be more comfortable with purchasing or leasing products which are UK made due to a perceived standard of quality and regulation. For example, the British Standards Institution (BSI) publishes standards, guidelines and specifications to help companies meet certain technical standards for their products.

How we can help

To determine whether or not your products can/should be labelled as being “made in the UK”, a full analysis of the manufacturing and production processes which take place in the UK will need to be undertaken.

If you think you require advice on this and if you would like us to advise on the origin / labelling requirements for any products you sell, contact our Commercial and IP team on 0161 926 9969 or commercial@mlplaw.co.uk  to receive expert legal advice for your business.

What is Intellectual Property and how do I protect it?

Intellectual Property (IP) is a term used to describe a range of legal rights that attach to certain types of ideas and information and to their form of expression.  It is crucial that businesses are aware of different IP rights to ensure that they: protect what they create; maximise their competitive position; and avoid infringing the IP rights of other businesses.

 

Types of IP

Copyright

Copyright protects original artistic, musical, dramatic and literary works, including computer programs, sound recordings, films and broadcasts.  Copyright protects the expression of an idea (rather than the idea itself).  It protects against actual copying of another’s work.  It does not protect against independent development of the same idea.  Copyright arises automatically on the creation of the work.  It generally lasts for 70 years following the death of the author.

 

Trade Marks

A trade mark is a sign or symbol used by a business to distinguish its products or services from those of another.  It can be a brand name, company logo or trading style.  To be registrable, a trade mark must be capable of: being represented graphically; distinguishing goods or services; distinctive and not excluded by statute.  Trade mark owners can apply for a UK or an EU trade mark.  Both registrations initially last for ten years and are renewable.

 

Passing Off

The goodwill in a business’ name or brand can also be protected by an action for passing off.  It is based on the principle that goods and services are not to be sold under the pretence that they are the goods and services of another.   It requires: a goodwill or reputation attached to the relevant goods or services; a misrepresentation that could mislead the public; and evidence of damage.  An action for passing off can be both difficult and expensive which is often why businesses choose to register a trademark.

 

Patents

Patents provide inventors with a legal monopoly over inventions by protecting new and inventive technical features, products and processes.  To qualify for protection, an invention must be: new; involve an inventive step; be capable of industrial protection; and not specifically excluded from protection.  In most countries, patents last for 20 years.

 

Design Rights

Design rights protect the appearance of the whole or part of a product.  They can be registered or unregistered:

 

  • Registered designs – must be: novel; of individual character; and not excluded by statute. Design owners can apply for a UK or an EU registered design.  Protection lasts for 25 years with registrations renewed every five years.

 

  • Unregistered designs – protection arises automatically on creation of the design and provides protection against copying of the design.

 

Confidential Information

It is possible to protect sensitive information through rights in confidential information e.g. know-how and trade secrets.  To be enforceable, the information must be: confidential in nature; disclosed in circumstances in which an obligation of confidence arises (e.g. relationship of employer and employee); and its unauthorised use must be detrimental.  Whilst not strictly an IP right, confidential information protects commercial and technical information and does not need to be registered.

 

Get in touch

If you would like further information about protecting your IP, or believe that your IP is being infringed by another business, please do not hesitate to contact us on 0161 926 9969 or by email hello@mlplaw.co.uk

 

 

MLP Law – COVID-19 – Frequently Asked Questions

Answers to some of the frequently asked questions we’re seeing across our practice areas.  If we can help and you need advice tailored to your particular circumstances, please get in touch.
 
As this is a fast moving area the advice is correct as at 24th April 2020. 

  1. Can I force employees to take annual leave during a period of furlough?
  2. What factors should I consider in deciding which employees to furlough?
  3. Can my employees on furlough leave do any work or training?
  4. What is Force Majeure and does it apply to my supplier or customer agreements?
  5. Do I need to agree a variation to an agreement in writing?
  6. Our business is struggling to pay rent as a result of the Coronavirus outbreak.  What options do we have?
  7. I have heard that our landlord cannot evict us from our business premises at present due to the Coronavirus outbreak.  Is this correct?
  8. Can I take a payment holiday from each of my suppliers?
  9. Why can’t a will be witnessed via video-conferencing or Skype?
  10. Can I still apply for a grant of probate during the coronavirus lockdown?

Employment FAQs 

Q. Annual leave – can I force employees to take annual leave during a period of furlough?

 Although the law isn’t crystal clear here, we are of the view that you can enforce annual leave during furlough, as you could under normal circumstances.  It should, however, be paid at 100% (rather than the 80% of normal salary associated with furlough), so employers should top up furlough pay during any annual leave to full pay.

To enforce annual leave you must provide double the amount of notice compared to the leave i.e. 1 week’s annual leave will require you to give 2 weeks’ notice to the employee. 
Employees are also to be allowed to carry over up to 4 weeks of their annual leave entitlement for up to 2 years.

Q. What factors should I consider in deciding which employees to furlough?

 It would appear that employers are being given huge leeway in determining which employees to furlough.  Provided an employee meets the criteria of the scheme (primarily requiring that they were on your PAYE system on or before 19 March 2020) and your reasons for choosing that employee are not discriminatory, you can tailor the benefits of the furlough scheme to suit the needs of your business.  It should be noted that records relating to employees who are furloughed should be kept for 5 years.

Q. Can my employees on furlough leave do any work or training?

 You can ask employees to help with any questions they have from team members still working. You can’t ask them to do anything that could give financial gain to the company. You can ask your employees to attend training sessions.

Corporate and Commercial FAQs 

Q. What is Force Majeure and does it apply to my supplier or customer agreements?

 A clause that allows the contract to be temporarily suspended in certain circumstances, isn’t always labelled force majeure though usually is.  Whether you have the right to exercise the force majeure clause in a particular circumstance is very strictly dependant on the exact wording of the clause.  Some refer to acts of government (or can be deemed to include acts of government) and even epidemics and pandemics. Some don’t.  If a force majeure clause failed to mention pandemics /epidemics as a force majeure event, then it is arguable that the force majeure clause would not apply. There is likely to be much discussion as a result of the Covid -19 pandemic on the construction of force majeure clauses: for instance  is a pandemic an Act of God? Our advice is that it is unlikely Corona virus will be held to be an act of God.  Unable to obtain a delivery of material due to borders closed and government enforced lockdowns can be said to be an act of Government.  In any case, a party relying on force majeure event must be subject to circumstances beyond its control  in which  no reasonable steps could have been taken to avoid or mitigate the supervening event e.g. a failure to follow COVID-19 government guidelines could be an example of a party not taking reasonable steps to mitigate risk of the supervening event. We have also advised clients to Consider Frustration (a supervening event affects the performance of the contract or the reason the contract had been put in place) and Supervening Illegality (a contract is discharged if its performance becomes illegal by English law) 

Q. Do I need to agree a variation to an agreement in writing?

 You’ve agreed, new delivery dates, timescales, pricing or the suspension of service for a month or two (subject to review).  How do you record and ensure that is formally recorded and binding on all parties?  This will depend on the terms of the original agreement.  Many (most) Agreements require any variations to be agreed and signed in writing by the parties.  In most cases if the parties behave and agree in accordance with the agreed variation then they will be deemed in high value / high risk contracts the variation would need to be put in writing and signed.  For most agreements, an agreement via email and or electronic signature will be enough.  Deeds and signatures required to be witnessed must still observe the rules of “being in the presence of”.   For most documents (except Wills and Property Contracts) doing this via video will be acceptable.  Particular formalities need to be observed for Wills and certain Property Contracts to be signed and witnessed.  We’ve attended a number of clients to witness documents using social distancing, glass doors and windows as appropriate and practical to keep all involved safe.  

Property and Financial FAQs

Q. Our business is struggling to pay rent as a result of the Coronavirus outbreak.  What options do we have?

 Under most leases, rent will continue to remain contractually payable in the same manner as before the outbreak.  It is also highly likely that contractually a landlord will be entitled to interest on unpaid rent under a lease.  If you are struggling to pay your rent, speak to your landlord or their agent at the earliest possible opportunity.  We are seeing a lot of landlords and tenants working together to come to a compromise which has benefits for both parties.  This could include extending the term of the lease or restructuring the rent payments in various ways.  The tenant benefits from breathing space due to lockdown restrictions and the landlord has the benefit of a tenant remaining solvent, paying rent and receiving what is owed to them under the terms of the lease.  We would advise that any terms which are agreed by a landlord and a tenant are properly documented in writing. 

Q. I have heard that our landlord cannot evict us from our business premises at present due to the Coronavirus outbreak.  Is this correct?

 Section 82 of the Coronavirus Act 2020 provides that a landlord cannot forfeit a lease (ie:  bring the lease to an end and evict a tenant) due to the tenant not paying rent at present.  Under the legislation, rent will include the annual rent, service charge, insurance rent and any other sum the tenant is liable to pay under the lease. This will remain the position until 30 June 2020, although the government will continue to monitor this timeframe as the outbreak develops. As always, there are exceptions to the rules and tenants on short leases of less than six months will not benefit from the protection afforded under section 82 of the Coronavirus Act 2020.  Landlords also do retain their other options available to them other than forfeiture, such as serving a statutory demand and litigating for the unpaid money owed.  As outlined above, we would advise you to speak to your landlord or their agent at the earliest possible opportunity to agree a compromise which works for both parties. 

Q. Can I take a payment holiday from each of my suppliers?

 In our experience most suppliers are happy to help set up a payment plan to lengthen out original payment agreements but they are not obliged to do this.  It is common and the choice is between helping and preserving the relationships where there has genuinely been a downturn in revenue for the customer(s) and protecting their own cash revenues.  Some companies are obliged to waive some enforcement options and rights such as landlords (though see above on other ways landlords may enforce the rent debt), Finance companies and Business Rates.  Even if you are not in a group benefiting from the council grants or rate reliefs it is worth asking the council to defer rate payments.

Wills, Trusts and Probate FAQs 

Q. Why can’t a will be witnessed via video-conferencing or Skype?

 There is currently no law that says witnessing a signature via video-conferring or Skype will count as “being in your presence”.  Although electronic signatures on contracts or deeds done through video or Skype are legally valid, witnessing a will is the exception.

Under the Wills Act 1837, it is not permitted to witness a Will via video conferencing facilities as both witnesses must be physically present. However, they may socially distance themselves from one another during the process as long as they are present and have clear sight of the signing process.

Q. Can I still apply for a grant of probate during the coronavirus lockdown?

Yes, you can still make applications to the probate registry during the lockdown period. With social distancing measures in place across the country, solicitors are no longer able to offer face to face appointments, however, these matters can be dealt with by telephone and postal communication.

Our specialists are still able to offer you advice and deal with your enquiries under the current circumstances. We can take instructions over the telephone, documents can be sent by post and we can also undertake a video-conference.  We will talk you through the process and what is required to get your application sorted as quickly and safely as possible. Once the application has been submitted the Probate Registry will action it and once granted, will send the sealed grant of probate to you by post.

You can then proceed to dealing with the administration of the estate upon receipt of the grant. This includes, closing accounts and collecting the funds from the estate, selling the property and paying liabilities.

If you have any questions or queries please here contact us on 0161 926 9969, or hello@mlplaw.co.uk.

Intellectual Property Rights

What are UK Intellectual Property Rights?

UK Intellectual Property Rights (IPRs) can be broken down into different categories:

  • Patents
  • Trademarks
  • Un-registered Designs
  • Registered Designs
  • Copyright

Patents protect inventions for up to 20 years for both the product and the process. To be granted a Patent your product / invention must be (a) something that can be made or used, (b) new and (c) inventive (not modified from something that already exists). It can take several years to get a Patent granted and your Patent will be published 18 months after filing the application.

Trademarks protect a business’ brand name, product or service by using words, logos, sounds or a combination of any of them. It distinguishes your goods and services from your competitors. To be effective, it needs to be registered for all the classes of goods and services for which it is going to be used. Trademarks are renewed every 10 years.

Un-registered design rights are an automatic protection for the shape and configuration of a product, both internally and externally, providing it is an original design and that it’s a design that is non-commonplace. Protection can last up to 15 years, however in the last 5 years of protection you must give a licence of right to anybody who asks.

Registered designs protect the overall visual appearance of a product (2D and 3D), providing the design is new, is not offensive, does not utilise protected flags or emblems and is not an invention (you will need a patent for this).  Protection can last for up to 25 years but must be renewed every 5 years.

Copyright protects a wide range of written and recorded material. You don’t have to apply for copyright it is automatically applied. The scope of its protection extends to software, databases, photography, drawings, literally work and promotional material. It must be written down or recorded and the protection can last a long time.

What about European and Worldwide IPRs?

IPRs are only generally valid in the country where the right is registered. In order to get European and / or Worldwide protection for your IPR, you must either:

  1. register your right in the country where you want protection;
  2. apply to have your right protected in multiple European counties; and / or
  3. apply to have your right protected in multiple Worldwide countries.

Each application for National, European and Worldwide protection can coexist together.

Patents for European applications must be submitted through the European Patent Office (EPO). Patents for worldwide applications are submitted under the Patent Cooperation Treaty and can be done through the national IP Office or the EPO. It can take up to 4 years to be granted the patent after you make your application

Applications for a European Union Trademark (EUTM), previously called a Community Trademark (CMT), must be submitted through the European Union Intellectual Property Office (EUIPO). A EUTM is valid for 10 years and is renewable every 10 years.  Applications for a worldwide trademark must be based on an existing trademark application and can be applied for with the World Intellectual Property Office (WIPO).

As with trademarks, applications for European design rights, both registered (RCD) and unregistered (UCD) must be submitted through the EUIPO. You get 5 years’ protection for a RCD and this can be renewed every 5 years to a maximum of 25 years. International design protection is applied for with the WIPO but unlike trademarks, does not have to be an existing design.

It is not necessary to apply for copyright in most countries in order to have the protection (as it is an automatic protection), nevertheless, in some countries, voluntary registration does give the creator additional benefits such as proof of ownership.

How Important is Intellectual Property for my business?

If you own a business it’s very likely you own Intellectual Property.

Over time, businesses build up goodwill and recognition that is linked to the brand, the products and the services they offer.

It is important that IPRs form part of any business plan. IPRs can, and are valued, just like any other business asset. Having ideas, products, goods, services or any other assets that can be linked to IP (and can be protected) will raise the value of the business.

Therefore, as a business grows, IPRs become an important business asset and so should be identified as early as possible.  What might seem unimportant today may well be worth millions in the future.

The UK Intellectual Property Office (IPO) have a useful health check tool on their website which will help you identify the IP in your business.  https://www.ipo.gov.uk/iphealthcheck.

How to use the protection given?

Businesses invent products to solve problems and as IPRs are a legal form of protection to stop others using, making and importing your creation its vital to know how to use them.

  • Licence to others for use

Granting a licence permits the other person / company to use the IPR and do something usually in return for a fee.  Without this licence, anything that is done can be classed an infringement.

Licencing out is a great way to share costs and risks.  You receive revenue from that licencing but do not take all the risk of manufacturing, promoting and/or selling a product. A business may want to collaborate / work together to develop new products and services. You may licence to other businesses to sell in territories that you cannot cover.

Whoever you grant a licence to is free to use the IPRs so you will need to consider the commercial aspects of your business: will your brand be affected, could a competitor work around it and take away market share or will it restrict the growth of your business by the licensor charging royalties that are too high.

  • Confidentiality Agreement / Non-disclosure Agreement (NDA)

Before revealing details of your product / venture to other interested parties, you can ask them to sign a Confidentiality / Non-disclosure Agreement to prevent them from stealing your IPR / ideas.  These are relatively simple and straightforward to draw up but can slow down the process if the other side are reluctant to sign and / or have the Agreement looked at by a legal representative.

  • Install an early warning system

Installing software so that when any images are uploaded by someone else it recognises and compares this to your IPR giving you the chance to take action as early as possible.


If you or your Company would like any advice on protecting or licencing out your Intellectual Property Rights please call us on

0161 926 9969 or alternatively email commercial@mlplaw.co.uk.