Martineau Education Bulletin

February 2010

Key contact:
Smita Jamdar
Partner and Head of Education
T: 0870 763 1332
E: smita.jamdar@martineau-uk.com

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The Education Team at Martineau run three free Breakfast Briefings every term, in Birmingham, London and Leeds. Our briefings this term include DPA/FOIA update and Principal regulators, students' unions & charitable incorporated organisations. Please click here for further details.

Contents

Strategy, Students and Governance

Draft Additions to the HEFCE Financial Memorandum | read
The new draft HEFCE financial memorandum now goes far beyond financial matters and includes the principles of governance and academic standards. This article comments on some of the implications of, and reactions to, the proposed changes.
Corporate Manslaughter - potential penalties defined | read
The Sentencing Guidelines Council has recently published guidance on the level of fines for corporate manslaughter and for situations where a breach of health and safety legislation was a significant cause of death. We examine the main provisions.

Finance, Technology and IP

“Boilerplate Clauses”: Contract Disputes | read
The latest in our series of articles looking at “boilerplate” clauses in commercial contracts, this article highlights the various dispute resolution clauses available.
Be Sociable, Be Careful | read
The increased use by universities of social media and digital archives brings with it certain risks. We consider what universities can do to protect themselves against reputational damage and infringing other parties’ rights.

Estates

The opportunities and pitfalls of Nominations Agreements | read
In this article we examine the pros and cons of “Nominations Agreements” for student accommodation and what universities should be thinking about when drawing up such agreements, particularly in relation to the termination provisions.
Certificates of Lawfulness: Calculating developer cons Local Planning Authority out of planning permission | read
We report on a recent case in which a developer who deliberately deceived the Council when applying for planning permission was still entitled to a Certificate of Lawfulness once the four-year time limit for enforcement action had expired. We examine whether there might be any scope for universities to exploit this apparent loophole.

Human Resources

Right to legal representation at disciplinary hearings - update | read
In our October 2009 issue, we reported on two cases dealing with employees’ right to legal representation at internal disciplinary hearings. This article updates readers following the recent appeal against the High Court judgment in one of those cases.
No such thing as an “old flame”, and are some dentists too long in the tooth? | read
The European Court of Justice has recently ruled in two separate cases on the extent to which age discrimination can be objectively justified. We consider what was decided and the implications for universities.

Full article details

• Strategy, Students and Governance

Draft Additions to the HEFCE Financial Memorandum| back to top

Reporting in June last year on lessons to be learned from the London Metropolitan University case, KPMG noted that HEFCE now had a deeper understanding of its legal powers in respect of heads of universities and members of their governing bodies. One of their recommendations for dealing with weaknesses identified in HEFCE’s procedures was consideration of whether its present powers are sufficiently effective to engage with universities requiring particularly intensive support.

The bruising encounter between HEFCE and London Met, still to be subject to further scrutiny by the National Audit Office, casts a long shadow over the new draft financial memorandum, out for consultation until 5 March. The issues are presented as matters of public accountability, but clearly this is about the extension of the Council’s regulatory role. The proposed changes will apply to all publicly funded universities, regardless of the likelihood of their needing support.

There is no HE equivalent of the statutory powers of intervention held by the FE funders/regulators, present and future, triggered by evidence of defined shortcomings in colleges’ performance. The Secretary of State’s power in the Education Reform Act 1988 to dissolve universities constituted as statutory corporations, like the parallel power applying to FE corporations, has never been used in anger, but only by consent in relation to mergers. However, an entirely new factor in any future dispute of London Met proportions will be the power under the Charities Act 2006 to intervene in a university, however constituted, for the protection of its assets and beneficiaries, exercisable by the Charity Commission after consultation with HEFCE as principal regulator after 1 June this year.

HEFCE’s power under the Further & Higher Education Act 1992 to attach such grant conditions as it thinks fit is the key to the extension of its funding role into regulation. Partly because, in a reciprocal gesture, HEFCE also sets out its own responsibilities to institutions, the memorandum is far more than a list of financial conditions. The law requires conditions to be reasonable, and that the regulator’s requirements should clearly be made known in advance to the regulated. HEFCE uses the memorandum to put universities expressly on notice of matters which it will take into account in reaching decisions. The memorandum is financial in the sense that compliance is a condition of eligibility for public finance, but its function as HEFCE’s means of control has broadened its content far beyond financial matters.

It seems likely that HEFCE concluded its existing powers are inadequate, and that securing greater statutory powers would be difficult. The result is a proposed widening of the terms of the financial memorandum to include the principles of governance and responsibility for academic standards, even though the document acknowledges universities’ institutional autonomy and their acceptance of their public accountability.

There seem to be two main responses to the extension of the memorandum’s requirements to virtually every aspect of university life. Some see it as an unexceptionable restatement of existing obligations, and the inevitable consequence of the accountability that goes with receipt of large amounts of public money. Others like Jon Baldwin, registrar at the University of Warwick, regard the proposals as an over-reaction and a further step in the erosion of critical freedoms, “asking if we would not mind surrendering our academic autonomy” by submitting to “a list of new regulations that seek to micromanage a range of activities and processes, including our governance structures, the quality of our degrees, how we actually teach, our carbon footprint, and who we can place in the most accountable positions within our own institutions” [THE, 14 January 2010].

If the head and accountable officer of a university loses the confidence of HEFCE, the institution would have either to change its head, or get HEFCE’s agreement at board level to appoint someone other than the head as accountable officer. So the vice chancellor’s tenure is in effect at HEFCE’s pleasure; no mechanism for questioning its judgment is provided. There is an echo here of the proposal in what became the Further Education & Training Act 2007 (amending FHEA 1992) to extend the intervention powers of the LSC in FE colleges by adding a right to dismiss the principal. The sector (with tiny lobbying power compared with that of HE) opposed the idea and it was dropped. However the consequences of intervention by the Charity Commission, mentioned above, may include suspension of both trustees and employees, pending consideration of their removal.

If members of governing bodies are sometimes unsure of their responsibilities, this cannot be for want of explanatory material. Apart from HEFCE’s own Guide and the CUC’s 2009 Guide and (voluntary) Code of Governance, the Leadership Foundation’s note on resources for new governors lists seven other sources of information on HE governance in England. Institutions may even lay on some useful training from their lawyers. Some of this guidance represents good practice, but much of it is about the mandatory legal requirements arising from charters and internal legislation, parliamentary legislation and the law of charities.

Now the responsibilities of governing bodies are to be summarised in an annex to the memorandum. Few will disagree with the summary, or feel that in itself it represents increased responsibilities. Perhaps it is useful to pull existing duties together in a key document; or could the ground be more appropriately covered by cross-referencing the CUC Code or other documents? The reason for setting them out is presumably that a governing body’s perceived failure adequately to discharge its responsibilities is a ground for public designation of the university by HEFCE as at higher risk, leading to intervention via the support strategy.

Members of HE governing bodies considering the new emphasis on responsibility for the quality of data used for internal decision-making and external reporting, alongside the Melville and Deloitte reports on London Met, are likely to feel uneasy. Being required to resign in such circumstances may be as damaging to the individual as for the institution. London Met’s governors are suffering the consequences of what they were not told and failed to ask to see, as well as of what they were told and failed to follow up. Deloitte’s references to large agendas for meetings, bulky papers and limited time for discussion may seem familiar to some. Cynics will say that, for even the most conscientious member, being in the wrong place at the wrong time is a risk which governing bodies cannot always manage.

The proposed requirement for governing bodies and accountable officers to assure themselves about academic standards is another rolling up into the financial memorandum of existing obligations, certainly of post-1992 institutions and probably of all universities. The post-1992 articles of governance fix the governing body with responsibility for determining educational character and mission, whilst the CUC Code makes all governing bodies “unambiguously and collectively responsible for overseeing the institution’s activities”, although academic governance is usually delegated to the senate. Even though governing bodies have seen their role as dealing principally with financial and corporate affairs, it seems unlikely that any would disclaim all responsibility for academic matters, regardless of what may be said in the memorandum. Again the point is in the consequences of failure.

The fourth consultation question, on the new methodology for consent to long-term borrowing commitments, is more traditional territory for the memorandum. The general requirements in the main document for financial management and sustainability are supplemented by a consent framework “designed to be risk-based and light touch”, so that the need for consent to long-term commitments arises where a university is informed it is at higher risk, as well as under gearing and liquidity formulae.

The inclusion in the financial memorandum of a requirement for universities to have carbon management plans may not be controversial in practice, but is another illustration of the Secretary of State paying the piper and therefore calling the tune. This provision, jointly with the new capital investment framework, will implement the government’s plan to link capital funding to the target of reducing carbon emissions by at least 26% of 1990 levels by 2020. Perhaps all universities would as a matter of their own corporate responsibility seek to reduce greenhouse gas emissions by having a carbon management plan, but there is no statutory requirement for them to do so. The government is making its own departments work to carbon budgets, which will be extended to the HE sector via the memorandum.

According to Simon Jenkins (Guardian, 26 January) governing bodies, “ notorious for their conservatism and pusillanimity to government ”, should take back control over fees and teaching: no public funding, no financial memorandum. More realistically, Jon Baldwin’s THE article is a plea for the sector to make its own voice heard about its future direction, rather than meekly to submit to successive waves of external policy initiatives. The difficulty with HEFCE’s approach is that whilst it distinguishes between normal contact with universities and ‘support’ applied to those perceived as medium-term or higher risk, the ramping up of the memorandum’s requirements applies across the board. Legal requirements and precepts of good practice which institutions already take for granted, as a matter of autonomous corporate responsibility, are to be externally imposed and monitored as a consequence of public funding. The Russell Group is said to be working on a hostile response, and some other universities including post-1992s are also preparing to resist the proposals.

Smita Jamdar
Partner and Head of Education
T: 0870 763 1332
E: smita.jamdar@martineau-uk.com

© Martineau 2010

Corporate Manslaughter - potential penalties defined | back to top

After a long wait, the Sentencing Guidelines Council has published its guidance for the courts when considering the level of fines for organisations facing a corporate manslaughter prosecution or where a breach of health and safety legislation was a significant cause of death.

The guidance provides that the fine on conviction under the Corporate Manslaughter and Homicide Act 2007 will rarely be less than £500,000 and may well be millions of pounds. Historically, fines of this level were reserved for public disasters, such as explosions or rail crashes, but this is no longer the case.

The guidelines also provide that where there has been a breach of health and safety legislation that has led to a person’s death, the fine will usually be at least £100,000 and may well be hundreds of thousands of pounds.

The guidelines come into play almost immediately and apply to all sentences, rather than offences, after 15 February 2010.

When deciding on the level of fine, the court will consider the seriousness of the offence, in particular:

Whether it was possible to foresee death or serious injury;
How far short of the relevant standard the organisation fell;
Was there widespread non-compliance or was it an isolated incident; and
How far up the management chain the breach went.

Other factors could include whether there were multiple deaths, any failure to heed warnings or advice, cost-cutting at the expense of safety, failure to comply with relevant licences which have a health and safety element or injury to vulnerable persons.

In the case of corporate manslaughter, the fact that unauthorised acts of an employee may have contributed to the offence will not significantly reduce the fine. Where the unauthorised act forms the entire health and safety offence, the responsibility of the organisation for that act will be assessed. This could include whether there has been inadequate supervision or training.

These aggravating factors should be weighed up against mitigating factors such as prompt acceptance of responsibility, high level of co-operation with enforcing authorities, genuine efforts to remedy the defect, a good health and safety record and a responsible attitude.

The guidelines recognise that the financial means of an organisation are relevant in deciding the appropriate level of fine. The court should look carefully at both turnover and surplus/profit to assess the organisation’s resources and the fine is intended to be one which inflicts painful financial punishment and yet is one which the organisation is capable of paying. If the organisation fails to provide financial information to the court, the court may make adverse assumptions in assessing the organisation’s ability to pay.

The court will also consider the effect on the organisation’s employees, shareholders and directors not involved in the incident. Although public organisations (i.e. local government or the emergency services) are to be treated the same as commercial companies where standards of behaviour are concerned, a different approach may be justified. The extent to which services funded by the taxpayer will be adversely affected is a relevant factor. It remains to be seen whether this consideration will be deemed appropriate for universities.

A further penalty available in respect of corporate manslaughter offences is the publicity order. This requires publication by the convicted organisation, in a specified manner, of:

the fact of the conviction;
specified particulars of the offence;
the amount of any fine; and
the terms of any remedial order.

It is envisaged that the terms of the order will specify the precise particulars to be published, the place the announcement is to be made, its size, and that notification is given to shareholders or local people, in the case of public bodies. Consideration will also be given to whether there should be notice on the organisation’s website or in a newspaper. The court should endorse the form of the order and will take specific account of any comment the organisation may make and seek to publish alongside the announcement.

The sentencing guidelines demonstrate the severity with which the courts are likely in the future to view breaches of health and safety legislation and instances of corporate manslaughter. Although fatalities in the HE sector are rare, prudent risk management may require a review of how health and safety is managed within the institution to ensure that if the worst does happen, the university is well placed to mitigate the harsh penalties that the courts will have in mind.

Smita Jamdar
Partner & Head of Education
T: 0870 763 1332
E: smita.jamdar@martineau-uk.com

Nicola Cardenas-Blanco
Solicitor
T: 0870 763 1328
E: nicola.cardenas-blanco@martineau-uk.com

© Martineau 2010

• Finance, Technology and IP

“Boilerplate Clauses”: Contract Disputes | back to top

Introduction

Continuing the “boilerplate” theme of our last two articles we now focus on dispute resolution clauses. We will introduce some possible provisions and their respective advantages and disadvantages. Later articles will look at these in greater depth.

Like all boilerplate clauses, we would all sooner ignore dispute resolution if we could. At the start of a contract, when looking forward to a mutually profitable relationship, the last thing the parties want to consider is the apparently unlikely event of a major disagreement. But sometimes these do arise, and the dispute is usually less painful if it is envisaged in the contract.

Types of clauses

One size does not fit all. It is important that dispute clauses are carefully thought through in the context of each contract and, in particular, the type of dispute they are to resolve. Only the most appropriate dispute mechanisms should be adopted.

You may already know that there are different approaches to resolving disputes and the agreement provisions depend on which are selected. The most common dispute resolution processes are:

courts;
mediation;
arbitration;
expert determination; and
escalation clauses.

These are not mutually exclusive: provision can be made for all, or a combination of them, if appropriate.

Courts

Generally, time consuming and expensive but good for dealing with legal issues. Whilst not perfect, the courts do produce the most predictable results. They are the default mechanism and have jurisdiction automatically in any arrangement which has no dispute resolution provision.

Mediation

This involves using an independent third party, the mediator, to help both sides reach an agreement. Mediation is quicker, cheaper and less stressful than litigation or arbitration. Details of the mediation will be kept strictly confidential and the agreement, should one be reached, will be binding. Whilst most mediations do result in agreement, nothing forces any party to reach agreement so there is no guarantee of a successful outcome.

Arbitration

A third party acting in a judicial manner will attempt to resolve the dispute. The process is private and the decision is binding on the parties.

The key advantage of arbitration is privacy, so keeping sensitive information from public scrutiny. In contrast, most court proceedings are public. The main disadvantage is that arbitration can be excessively expensive and lengthy.

Arbitration is formal and is closer to litigation in nature than other forms of dispute resolution. The Arbitration Act 1996 provides a mandatory statutory basis for many aspects of the process.

Expert determination

An expert settles the dispute, giving a binding decision. Generally, expert determination is appropriate where a valuation or an expert opinion to resolve a technical issue is needed e.g. in an outsourcing situation. Expert determination is cheaper, quicker and less formal than arbitration and litigation as well as being more likely to preserve the relationship between the parties. However, the outcome is less predictable than arbitration or the courts and there are no rights of appeal – unless (unusually) these are provided for in the contract. It is not ideal for legal issues.

Escalation clauses

These clauses enable the parties to escalate a dispute through various stages. There are many options but, for example, the parties might first be required to hold negotiations perhaps at more than one level, move on to mediation and then to arbitration until a solution is found.

The main advantage of escalation is that it offers the best opportunity to avoid arbitration and litigation. However, this can cause delay by allowing for prolonged negotiation or numerous steps.

Conclusions

The right choice and combination of dispute resolution provisions can make a real difference in facilitating and accelerating resolution of disputes and difficulties. However, making the wrong choice may have the opposite effect with lengthy and costly results. Tailoring these provisions to each contract is a prudent investment of effort.

Peter Manford
Partner, Commercial
T: 0870 763 1390
E: peter.manford@martineau-uk.com

© Martineau 2010

Be Sociable, Be Careful | back to top

Universities are embracing new media, and are actively engaging with social media and digital archives to enhance their outreach and accessibility, and to document and preserve the wealth of information held within the university.

Social media (such as YouTube, iTunesU and Facebook) have revolutionised the way in which we communicate. Over the past few years they have stormed headlong into the mainstream.

Although YouTube and iTunes have been around for some time now, their use by universities in the UK is now taking off in a big way. This has been accelerated by the launch and promotion of the YouTube EDU and iTunesU sub-sites which allow universities to set up distinct channels of their own. Most universities are also creating or maintaining an online community using Facebook.

Engagement with open access digital repositories is increasing too. These aim to make research and learning and teaching content readily discoverable and accessible. It is fast becoming a standard requirement of educational funding arrangements that funded project deliverables are made accessible in an open digital repository.

However, the majority of content on university social media sites or in digital repositories tends to be created by individuals within or connected with the university, such as students or academic staff, and is not created specifically by or on arrangement with the university. In some cases, users can also post content on behalf of the university or other stakeholders. Therefore, controlling new media or repository content can be difficult. This is even more so because if universities actively edit or approve the content, then they can be found equally liable for any legal issues ultimately found with the content.

Universities need to ensure that the use of content on social media sites or in digital repositories does not cause reputational damage. In addition, the content submitted should not infringe the rights of others. In most cases, the intellectual property in the content will not belong to the university automatically. The materials may include the intellectual property of other people, for example in the artwork or text or music contained in the content. The materials may also feature people who may not have consented to the inclusion of their image, performance, or commentary.

So what can universities do to protect themselves? University IP policies, and/or the terms and conditions of submission of content, should clearly state rules for submitting content. At a bare minimum the terms should ensure that the content is suitable to be associated with the university, that the university has ownership or a sufficient licence of the rights protecting the content, and that release forms are required in respect of any person featured in the materials.

Where the university is responsible for the administration of the new media or the repository, it would be wise to include a clear take down or removal policy. The grounds for take down or removal should be drafted widely to include infringement of intellectual property rights, failure to obtain releases from featured persons, and more subtle issues such as the quality and acceptability of the content itself.

Finally, many social media sites or digital repositories require the university to sign up to take ultimate liability for all content submitted. In these cases the university should consider whether stronger protection should be obtained from contributors in the form of appropriate warranties or indemnities in any IP policies, and/or the terms and conditions of submission of content.

Des Burley
Partner, Intellectual Property & Technology Team
T: 0870 763 1107
E: des.burley@martineau-uk.com

Joanne Flack
Solicitor, Intellectual Property and Technology Team
T: 0870 763 1613
E: joanne.flack@martineau-uk.com

© Martineau 2010

• Estates

The opportunities and pitfalls of Nominations Agreements | back to top

In the December issue we provided a step-by-step introduction to the problem of collecting student rent arrears. We considered this in the situation where a university has a direct contractual relationship with a student in relation to his or her accommodation.

However, increasingly, universities have entered into Nominations Agreements with private sector providers (“Provider”) of accommodation and, in these circumstances, the contractual relationship is between the student and the Provider. Nevertheless, the university still has a stake in the success of the accommodation. This may be because it has guaranteed a certain occupancy level and/or it has agreed to guarantee the payment of rents by students whom it nominates. Even without this exposure, the university has the welfare of students as a key priority and cannot simply allow them to be housed in poor standard accommodation.

Most Nominations Agreements continue for a considerable period. If the accommodation has been provided primarily for the university, it could be for up to 30 years. Even if a Provider has speculatively built or refurbished accommodation it may require a term in excess of 10 years to recover the costs.

The benefits of a nominations arrangement are that the university is divested of the responsibility for managing, operating and maintaining accommodation and can concentrate on the business of education and research. But these arrangements are not without risk. The key risks arise from the long term nature of the arrangement, particularly where there is any guarantee, and the fact that the university has no direct contractual relationship with the students in relation to the accommodation.

If you are about to embark on a student accommodation project, you can address the likely problems from the beginning. If you are in an arrangement already, you should be ensuring that you are getting the best out of the arrangement and that, if the worst comes to the worst, the university puts itself in the best possible position to terminate the arrangement and/or claim damages.

As mentioned above, the university will be keen to ensure that the accommodation is of a high standard, both because of the need to look after the students and in the light of any occupancy guarantee given by the university - students will not want to live in poor accommodation and so voids may be high, triggering the occupancy guarantee. In addition, usually the university will advertise the accommodation alongside its own accommodation and so may be tainted by the poor performance of the Provider. It follows that it is necessary to ensure that the agreement places clear and detailed obligations on the Provider. This sounds easy, but devising a services specification, service standards and sanctions in the event that the services fall below the standards can be time consuming and laborious.

Usually the university will guarantee the payment of rents by students that it nominates into the accommodation. However, the tenancy agreement is between the Provider and the student. If the Provider chooses not to collect the rent for any reason it is in no worse a position because it simply obtains payment from the university. The university is left high and dry. It cannot sue the student for non payment of rent and neither can it withhold a degree on this basis. The simple solution, but sometimes overlooked, is to make sure that the Provider is obliged to take all necessary steps to collect the rent during the term. Alternatively, the university could be appointed as the Provider’s agent to enforce the terms of the tenancy agreements. This is particularly useful where the Provider does not have a credit control function as the university will already have the mechanisms in place for chasing payments from students.

Without placing clear obligations on the Provider in relation to standards and rent collection, the university will be left in a very difficult position should it wish to terminate the agreement later down the line.

Having ensured that the obligations on the Provider are clear within the agreement, the next step is to make sure that the termination provisions are too. Nominations Agreements tend to have very long terms and you do not want to be tied into an arrangement which is not working for you. The Provider will need to be assured that it has a regular predictable income stream and so will resist termination triggers that it considers are too sensitive.

Some examples of things to think about when looking at termination provisions are:

Ensure that the duration clause is linked to any right to terminate early;
Add a right to terminate immediately should the Provider materially breach its obligations and should such breach be irremediable;
Where a material breach is capable of remedy, add a right to terminate once a specified reasonable amount of time has been allowed to remedy the breach and the breach remains unremedied;
Make sure that ‘material’ breaches include a series of more minor breaches, so that if the Provider continues to under-perform but any failure is, of itself, not a material breach, you will still have the right to terminate;
Include rights to terminate if the Provider becomes insolvent and, possibly, if it is bought out by another company (which will protect the university in the event that an incoming provider is not suitable);
You may also wish to include the right to terminate where the Provider is not at fault, or so called “termination for convenience”. It is unlikely that a Provider will agree to such a right being exercised other than at the end of an academic term and following a substantial amount of notice. If the Provider has provided the accommodation at the university’s request or relying on the university’s occupancy guarantee then it is likely to require a significant termination payment to pay off any debt raised and to compensate it for the loss of business. Of course, dependent upon the bargaining position of the parties, the Provider may want the right to terminate without fault too;
Lastly, ensure that the notice clauses within your agreement are clear and accurate and that if the time comes to serve a termination notice, the details relating thereto are followed to the letter so that service is effective.

You may wish to also consider adding a dispute resolution procedure to your agreement and/or rights for the university to step in to the agreement should things go wrong, but make sure that these do not interfere with your rights to terminate should you need to rely on them.

Catherine Burke
Partner and Head of Energy, Projects and Commerce
T: 0870 763 1552
E: catherine.burke@martineau-uk.com

Paula Howells
Solicitor, Energy, Projects and Commerce
T: 0870 763 1595
E: paula.howells@martineau-uk.com

© Martineau 2010

Certificates of Lawfulness: Calculating developer cons Local Planning Authority out of planning permission | back to top

The recent Court of Appeal case of Welwyn Hatfield Council v Mr Alan Beesley ([2010] EWCA Civ 26) will be of interest to property developers, land owners, planning authorities and professionals advising on planning applications alike. The court’s judgment was issued on 29 January. It is a case which Lord Justice Mummery said in his judgment represented a “surprising outcome which decent law-abiding citizens will find incomprehensible: a public authority, deceived into granting planning permission by a dishonest planning application, can be required by law to issue an official certificate to the culprit consolidating the fruits of the fraud”. These are pretty strong words, so you will no doubt get the feeling that the interests of justice may not have been served.

So what was all this about? In December 2001 Mr Beesley was granted planning permission by the Council for the erection of a hay barn. This was in an area of green belt where development was tightly constrained. The permission was subject to a condition that the building should “be used only for the storage of hay, straw or other agricultural products and shall not be used for any commercial or non-agriculture or storage purposes”. However, Mr Beesley always intended to build and reside in the property as a house. From the outside the building had the appearance of a barn, but internally it was very much a residential dwelling. There was a garage/store, entrance hall, study, lounge, living room, kitchen, WC, storeroom, gym and three bedrooms including two with en-suite bathrooms. All, no doubt, very nice. This was in an area in which planning permission for residential development was very unlikely to have ever been granted.

What is unusual about this case is that Mr Beesley admitted that he deliberately deceived the Council, having realised that he stood no chance of obtaining planning permission for residential development in the green belt - indeed it was central to his case. He was careful to ensure that the true residential use of the building did not come to the attention of the Council: he did not seek Building Regulations approval nor enter him or his wife on the electoral register. Then, after having lived in the property for over four years, on 15 August 2006 he applied for a Certificate of Lawfulness on the basis that the time for enforcement action against the use of the building as a dwelling had expired.

Section 171 B (2) of the Town and Country Planning Act 1990 provides that “where there has been a breach of planning control consisting in a change of use of any building to use as a single dwelling house, no enforcement action may be taken after the end of the period of four years beginning on the date of the breach”.

Although clearly uncomfortable with the outcome, the Court of Appeal considered that Mr Beesley’s application did fall within the remit of section 171 B(2) and that he was entitled to a Certificate of Lawfulness. This is, in effect, as good as an express planning permission. So Mr Beesley benefited considerably from his deception: the value of the property as a residence is estimated to be somewhere in the region of £500,000. As a hay barn it would not have been worth much.

The Court of Appeal emphasised the need for objectivity in assessing the case: “the Court should not be tempted to adopt a strange construction of the section in reaction to the deliberate deceit practiced by Mr Beesley or out of concern for the difficulties that such conduct creates for local planning authorities in enforcing planning control… The question is whether the situation, viewed objectively, is one for which the statute has provided a four year time limit… If it is considered that there should be a different outcome in the case of dishonesty or deliberate concealment, it is for Parliament to amend the legislation accordingly”, said Lord Justice Richards in his judgment. The “legislation in its existing form is open to abuse” he continued. Lord Justice Richards concurred: “entitlement depends on objectively ascertaining the facts concerning the building/land and its use rather than upon the personal position or conduct of the particular applicant”, he said. Lord Justice Pill said that he saw “no place for analysis of the morality of a particular occupier” in this case.

Case comment

This case clearly highlights the problems Local Planning Authorities (LPAs) are faced with in enforcing breaches of planning control, where they are disguised. The Court of Appeal proffered some advice: LPAs should carefully look at “the inside of the building and not just the exterior” to check it is being used in accordance with the permitted use once it has been built, but it is likely that enforcement officers were already aware of that. In practice, it is more a question of resourcing: at a time when local government funding is being cut, are there enough enforcement officers and do they have time to investigate, Poirot-like, every newly constructed building? This seems doubtful. There is surely a case for the law to be amended to prohibit those who practice deceit from benefiting from their own deception.

Although it is clearly objectionable from a public policy perspective, clever developers and land- owners may want to take a closer look at the case and its potential for exploitation. In particular, land-owners/developers with sites where there seems to be little or no chance of obtaining planning permission may look to exploit this loophole to extract or add value to their land. However, such an approach is not without risk. It is a criminal offence to breach planning control. There may also be a limited window of opportunity to take advantage of this case. The Court of Appeal hinted at the possibility of applying more general case law to prevent such an application from succeeding, but decided not to pursue this argument as the issue had not been raised. Lord Justice Mummery said: “I am puzzled by the total absence of argument from the Council (or the Secretary of State) about the effect of Mr Beesley’s reprehensible conduct in obtaining planning permission by deception and in failing to implement it…. There are, however, areas of fundamental public policy, general principles of law and justice and established legal doctrines inhabiting the vast legal world outside the Planning Acts. In appropriate cases, the policies, principles and doctrines in the larger legal world can have an impact on the interpretation and operation of legislation, unless Parliament has expressly or implied their application… These arguments may be raised in a future case”. However, the judges were split on this point, with Lord Justice Pill and Lord Justice Richards feeling that it should be down to Parliament to amend the law if it was insufficient to deal with these problems.

It is worth remembering that Certificates of Lawfulness may legitimately be obtained without fear of the accusation of deception in situations where a property has been used in breach of planning control without deliberate deceit: for example, by a public body or institution with a large landholding or estate, where personnel have changed over time. In these circumstances Certificates of Lawfulness can help regularise the planning position and add value or development / sale potential to a site, without the need and uncertainty of going through the normal planning process where local residents and landowners may object and cause problems. We have advised upon and obtained a number of Certificates of Lawfulness for our clients in a variety of situations.

Luke Plimmer
Associate, Planning Team
T: 0870 763 1428
E: luke.plimmer@martineau-uk.com

© Martineau 2010

• Human Resources

Right to legal representation at disciplinary hearings - update | back to top

Employees have the right under the Employment Relations Act 1999 to be accompanied at formal disciplinary meetings by a colleague or a trade union official. There is no statutory right to legal representation at internal disciplinary hearings and the new ACAS Code of Practice on discipline and grievance reflects that position.

However, the Court of Appeal in G v X School ([2010] EWCA Civ 1) has held that Article 6 of the European Convention on Human Rights (ECHR) requires that a claimant should be allowed legal representation at a disciplinary or appeal hearing where it was determinative of a right to practise a profession. This follows comments made by the Court of Appeal in the earlier case of Kulkarni v Milton Keynes NHS Trust ([2009] EWCA Civ 789) which we reported on in our October issue (although in that case the Court did not need to decide on this point as the employer’s own rules allowed legal representation).

Facts

In 2007, following an allegation that G had kissed a 15 year old boy who was undertaking work experience at the School, the School instituted formal disciplinary proceedings against G for breach of trust. Prior to the disciplinary hearing G's solicitors wrote to the School seeking permission to represent him at the hearing. The School refused, saying that he could only be represented by a colleague or trade union representative. Following the hearing G was summarily dismissed and the School reported him to the Secretary of State for Children for consideration as to whether G should be listed on “List 99” under section 142 of the Education Act 2002 as unsuitable to work with children.

Proceedings

G then commenced judicial review proceedings on the basis that he had been denied the right to a fair trial (Article 6 of the ECHR) because he had not been allowed legal representation at the disciplinary or appeal hearing. In respect of criminal charges Article 6 lays down specific procedural safeguards including the right to legal representation and the right to cross-examine witnesses, but case law has established that in civil cases fairness may require a commensurate level of procedural protection depending on the circumstances.

Decision

The Court of Appeal said that the key question in the case was whether the disciplinary proceedings were a determinant of G’s right to practise his profession for the purposes of ECHR Article 6. The School argued that the decision of the various authorities as to whether to bar G would be the determinant, and not the disciplinary proceedings. The Court of Appeal did not agree with this submission on the basis that the outcome of the disciplinary process in a case like this will have a profound influence on the decision-making procedures relating to the barred list which would fundamentally limit G’s ability to practise his profession. Importantly, in terms of the application of Article 6, the Court of Appeal held that the right to practise a profession is a “civil right or obligation” as referred to in the Article.

Implications

This case is authority that where disciplinary charges are of such gravity that someone might be unable to work in the future if the charges are proved, that person has a free-standing right to legal representation at internal disciplinary hearings under Article 6 of the European Convention on Human Rights.

The potential implication of this case and the Kulkarni decision is that where an employee is facing dismissal in circumstances of serious gross misconduct, and as a result he may no longer be able to pursue his career, he could be entitled to legal representation at the disciplinary hearing. In universities this is likely to arise only in exceptional cases, such as an allegation of offences against vulnerable adults, or a finance director accused of dishonesty who might be struck off by his professional body.

To avoid facing judicial review and/or unfair dismissal proceedings in such a case, a disciplinary panel should allow the employee to bring a legal representative (at the disciplinary and appeal stages) where its decision may:

(i) have a substantial influence over the decision of a professional or statutory body as to whether that individual should be allowed to continue to practise in their chosen career; or

(ii) mean the individual could potentially never work again in their chosen career.

Sian Howells
Solicitor, Employment Team
T: 0870 763 1446
E: sian.howells@martineau-uk.com

© Martineau 2010

No such thing as an “old flame”, and are some dentists too long in the tooth? | back to top

The European Court of Justice (ECJ) has recently handed down judgments in two interesting German cases on the extent to which age discrimination can be objectively justified. In one case, the ECJ held that a German law restricting applications to join the fire service to those under the age of 30 could be defended as a genuine occupational requirement under Article 4(1) of the EU Equal Treatment Framework Directive (“Directive”). In the other, the ECJ held that a law setting a maximum age limit of 68 for dentists working in the German national health service is potentially in line with the Directive as a national law aimed at protecting public health.

Wolf v Stadt Frankfurt am Main (C-229/08)

Mr Wolf applied to work as a fire-fighter in the Federal State of Hesse in Germany. However, he was informed that his application would not be considered because he was over the age of 30 and local regulations provided that recruitment to intermediate posts in the fire service was not open to anyone over that age.

He brought proceedings in the German Administrative Court on the basis that the law restricting applications to those under 30 was contrary to the general prohibition on age discrimination contained within the Directive. The Administrative Court referred the matter to the ECJ on the compatibility of German law with the Directive.

The ECJ judgment

The ECJ considered whether the direct discrimination in the age limit could be justified under Article 4(1), which stipulates that a difference in treatment based on a characteristic related to age does not constitute discrimination where the characteristic is a “genuine and determining operational requirement”, provided that the objective is legitimate and the requirement proportionate.

It held that the maximum recruitment age was proportionate to the legitimate aim, namely the proper functioning of the emergency services. In doing so the ECJ took into account the fact that fire-fighters had to complete a two-year training programme, and that an individual recruited before the age of 30 would normally be able to undertake the physically demanding duties of a fire-fighter for at least 15 to 20 years. If the fire service recruited older applicants it might be short of fire-fighters who could complete the most physically demanding duties, including fire-fighting on the ground and rescuing people, or individuals who could complete these duties for a sufficiently long period of time.

Petersen v Berufungausschuss für Zahnärzte für den Bizerk Westfalen-Lippe (C-341/08)

In this case, the German Social Security Code provided that admission to practise as a panel dentist in the German national health insurance scheme expired at the end of the calendar quarter in which the dentist turned 68 years of age. This rule was said to protect the health of patients, since it was thought that the performance of dentists (and doctors) declined from the age of 68 onwards. Outside the panel system dentists were able to practise their profession irrespective of age, although in Germany approximately 90% of patients are covered by the statutory health insurance scheme.

The German government sought to rely on the exemption set down in Article 2(5) of the Directive, namely that the principle of equal treatment does not apply to national law necessary for the protection of health.

The ECJ’s considerations

The ECJ identified two different objectives that might be considered to be necessary for the protection of health, namely:

ensuring the competence of dentists accredited to work in the national health system; and
ensuring the financial viability of the system.

It held that that whether the age limit was a proportionate means of achieving those legitimate aims was dependant on which aim was pursued. The ECJ did not consider that the age restriction was proportionate in relation to the question of competency given that it only applied to those dentists who practised within the statutory insurance scheme. The age limit was undermined by the fact that those dentists working privately were not precluded from practice after they turned 68 (presumably at no detriment to their patients).

However, the ECJ considered that the age limit could potentially be justified as a means of ensuring that the national health system remained financially viable, particularly as it provided a means of limiting the pool of dentists who could be employed within the system. It was for the German court to identify which of these aims was being pursued and to give judgment accordingly. The ECJ went on to endorse the German government’s justification argument that it might be “appropriate and necessary” to restrict older dentists from practising within the scheme in order to give younger generations the opportunity of working as national health physicians.

Comment

These decisions should be welcomed by universities.

The Wolf case is particularly interesting as it is the first reported ECJ decision to consider when age may be a genuine occupational requirement. Historically the concept of “genuine occupational requirement” has been construed narrowly (for example, where an acting role is restricted to someone of a particular age), but this decision suggests that employers may be able to justify genuine occupational requirements on a broader basis in certain circumstances.

Both cases indicate that the ECJ is prepared to accept that age-related decline in the performance of duties is a very real issue capable of justifying directly age discriminatory rules, although this argument was ultimately rejected in Peterson because of the fact that private dentists were able to work past 68.

We wait with interest to see how UK age discrimination case law develops following these decisions.

David Browne
Solicitor, Employment Team
T: 0870 763 1690
E: david.browne@martineau-uk.com

© Martineau 2010

© Martineau

The bulletin contains a summary of complicated issues and should not be relied upon for specific matters. You are advised to take legal advice on particular problems. Please contact us and we will be happy to assist.