A Register of Home Reports

The Home Report came about as a result of the findings of the Housing Improvement Task Force which was charged with investigating various matters with a view to seeking to identify ways in which Scotland’s housing stock could be improved. It was formed in 2001 and its report can be found at www.scotland.gov.uk/Resource/Doc/158826/0043128.pdf 

It is fair to say that the Home Report has not been without its critics since being introduced on 1 December 2008 with some criticisms being focused on cost, shelf-life and its alleged negative effect on the house buying/selling process. The timing of the introduction of the Home Report was very unfortunate in terms of coinciding with impact of the economic recession.  This coloured many people’s minds as to the fact that they were not a good idea. The Government has recently undertaken a review of the Home Report with a view to assessing its efficacy. Although the findings of the review are not yet public, it is suggested that it is unlikely that the Home Report will be abolished. Although there have been issues surrounding its effectiveness generally, it has had a positive  effect on the house buying/selling process in that prospective purchasers now have much better information about a property which they are interested in buying. That has to be a good thing. A fact that is often overlooked is that prior to the introduction of the Home Report over 90% of prospective purchasers relied on a Mortgage Valuation – the cheapest of the three survey options available in the market. The Home Report has also had an effect on the fixing of more realistic asking prices given the inclusion of a valuation in the Report. Only after a further review in say 10 years time will it be possible to carry out  a full objective assessment as to whether the Home Report has had a positive effect on improving the quality of Scotland’s housing stock. At present, it is questionable if there has been any material effect and, even if there has been, there is no effective means of measuring that.

One of the reasons for this is that Home Reports are not collated and held anywhere. Unfortunately, the then Government did not make it a requirement that Home Reports be held in a central database or register – unlike the position in England and Wales at the time. Property prices are in the public domain once titles have been registered and there is no reason why the information contained in Home Reports should also not be publicly available.

The Home Report has three constituent parts: the survey; the Property Questionnaire; and the Energy Property Certificate. There is a register of EPCs. This is held by the Energy Savings Trust – https://www.epcregister.com 

Given the absence of a Register of Home Reports, it is unfortunately the case that the system can be abused. A hypothetical example of how this could happen is as follows:

Seller A wishes to sell his flat and a Home Report is instructed. This produced a valuation of £165K but approximately £15K of essential repairs are identified. Seller A pays for the Report and decides to commission a second Report. This Report values the property at £175K with £5K of essential repairs being identified. Still not satisfied, Seller A pays for that Report and instructs a third surveyor. The third surveyor values the flat at £185K with no essential repairs being identified. Seller A pays for the survey and instructs the flat to be marketed at Offers over £180K. As an aside, this potential problem is exaggerated when one bears in mind that the RICS Red Book provides that a difference of up to 10% between surveyors' valuations is acceptable.

Such circumstances may never occur but the fact is that the system can be abused in this way and the loser is the prospective purchaser. In such circumstances, prospective purchasers have no way of knowing about the previous Home Reports and will generally proceed on the basis of Home Report 3 without instructing their own private survey over the property. So, for an outlay of less than £2K, it is possible that Seller A may secure a higher price than might otherwise be the case and the property will not have had essential repairs undertaken to it. That would be the case even if the purchaser’s solicitor followed the growing practice of inserting a clause in the Missives that the seller confirms that they have only instructed one Home Report over the property. This is all well and good, but without a Register of Home Reports how would a purchaser find out the true position without calling round every surveyor in the area? This potentially makes the clause in the missives of little value.  In what way is that fair? What contribution has been made to the goal of improving the quality of Scotland’s housing stock in such circumstances? The system was arguably fairer when lenders retained a proportion of mortgage funds until repairs identified in their mortgage valuation report had been undertaken to the satisfaction of the surveyor who undertook the survey. At least that way, the repair work was done. Such retentions still occur but are not so common as they once were.

Such unfortunate outcomes could be avoided if there was a Register of Home Reports. This would require it to be compulsory to register Home Reports at the same time as the Report is made available to the instructing party. It would then be registered and the Register would be open to public scrutiny. That way, prospective purchasers and their advisers could quickly ascertain how many Home Reports of the property there had been and when the most recent one was undertaken. This would, by necessity, lead to greater transparency in the housing market.

It is suggested that the creation of a Register would not be a difficult task. Such a Register could be held by the Energy Savings Trust along with EPCs or, indeed, by RICS or some other body. The Home Reports could be linked to properties via their Unique Property Reference Numbers and ultimately linked into the cadastral map maintained by Registers of Scotland. Such a  Register would then be searchable by way of address; name;  UPRN; Address Database; and/or  Title Number. Ideally, the Register of Home Reports would be map-based.

Now this may all seem far-fetched but is it really?

There is a flaw in the present system which it is in the public interest to rectify. It is possible to go further however. This would involve the Home Report Register being part of a National Land and Property Information Database. Such Land Information systems exist in other jurisdictions eg New Zealand and Norway. In Norway, the national land information company, Ambita AS (www.ambita.no) maintain a national database called Infoland (www.infoland.no). Infoland is a searchable database of all relevant information on land and property and over 80% of Norway’s Municipalities subscribe to it with net profits being returned to the Municipalities for them to spend on further improvements in local service provision. Put simply, it works and it works well.

The introduction of a Register of Home Reports gives us an ideal opportunity to establish a Scottish Land Information Service and create a timetable for full integration of all data on Scotland’s land and property. This will deliver benefits for citizens and for the economy as a whole. It will also provide a searchable database to interrogate in order to ascertain movements in valuation and the history of the state of repair of the fabric of the property. This would also allow an assessment of  whether or not the Home Report has delivered on one of its key objectives – that of improving the quality of Scotland’s housing stock.

(c) Stewart Brymer 2014

The provision of legal services in a digital world

In the last 35 years during which I have practised law, I have seen many changes - mostly for the good it has to be said. There has, quite frankly, been a revolution in the way in which legal and other business services can be provided. 

The world of legal service provision has undergone what can possibly be described as a perfect storm. Unfortunately, some solicitors appear to think that they are immune to the wave after wave of change that has affected all aspects of business and private life. Others, however, have embraced change and have adapted their methods of service provision accordingly. No one is saying that everything that is known must be put to one side and be replaced with something new. Far from it. There is definitely a place for solicitors to continue to be viewed as the trusted adviser in the legal process. Good communication is the key however - as it has always been.

The world of legal services is diverse, ranging as it does from the huge international law firms (who just seem to get bigger and bigger) to small local firms. There is a place for most but, increasingly, those firms who occupy the mid-ground are coming under pressure from all sides. Some of these firms have gone down the route of merger as a means of expanding their businesses. In some cases, these mergers have been the consequence of strategic planning and those firms will hopefully reap the benefits of their new structures as they deliver more specialised legal services to existing and potential new clients. Others have embarked on what can only be described as defensive mergers however and their prospects are not so good. It is not always the case that an amalgamation of more people with the same or similar skills leads to a more efficient and better respected legal firm. In such cases, firms generally accumulate more bricks and mortar and more people but do not necessarily increase their specialisation levels. With all due respect to those who wish to go down this route, why would you want to do that? Unfortunately, the result is often a dilution of the brand. The legal-services buying public are much more astute than was the case even 10 years ago and they do not accept that big is necessarily beautiful. On the contrary, they often view large firms as being more likely to charge higher fees and less likely to provide an individual service.

Clients shop around for legal services these days and think nothing of using one firm for one type of work and others for different disciplines. Increasingly, however, they also gravitate towards individuals rather than the firm. Those who manage and promote legal firms would do well to remember the principle of delectus personae. A good large firm, and there are a number who are very successful, tend to be very well managed by people who understand business and who encourage the principle of the business operating as a “large small firm” with the focus being on the client. This is best achieved by individual solicitors being encouraged to communicate well with clients as individuals rather than viewing them as a source of billable hours. In other words, the individual solicitors are recognised for their legal skills (which should be a given) and are given the freedom to make decisions and, if necessary, spend time which would otherwise be billable on building relationships with clients – both existing and potential. That is what we value when we are a consumer of a particular service. Why should the provision of legal services be any different? 

(c) Brymer Legal Limited, 2014

What is the Law in your Life?

5 things you need to know about Alienation under a Lease:

1.   This is an assignation of the tenant's interest in a lease or sub-letting of the leased subjects.

2.   Alienation of part only is generally prohibited.

3.   The lease will invariably provide that there is to be no alienation without the prior written consent of the landlord which consent shall not be unreasonably withheld. This introduces an element of subjectivity to the otherwise subjective discretion of the landlord.

4.   There is no implication of reasonableness in Scots law.

5.   An assignation is only completed when a formal intimation of assignation is served on and acknowledged by or on behalf of the landlord.

What is the Law in Your Life?

5 things you need to know about The Intellectual Property Act 2014:

The Intellectual Property Act 2014 came into force on 1 October. The Act includes various changes to UK legislation – mainly in the areas of patents and designs:

1.   A new legal framework for ratification of the Unified Patent Court Agreement in the UK.

2.   Extension of grounds on which the UK IPO can provide an invalidity opinion on a patent.

3.   It is no longer necessary to put a patent number on a product. All that is now required is a link to a webpage listing the patent(s).

4.   There is a new criminal offence for the deliberate copying of a registered design.

5.   When an unregistered design is commissioned, the commissioner will no longer be the owner of the design unless there is a contract to assign in place.

“Registers of Scotland – the Clue is in the Name.”

A brief comment on the Registers of Scotland - 2012 Act Roadshow

On Tuesday 30 September, I attended the first 2012 Act Roadshows which was held at the Carlton Hotel in Edinburgh run by Registers of Scotland (“RoS”). It is worth saying straight away that the venue, content and speakers were all thoroughly engaging and it is evident that everyone at Registers of Scotland is extremely knowledgeable on the Act and its effects. What’s more is they embrace the questions being asked of them and are happy to provide transparent answers.

There were a few hundred of my fellow professionals in the room with me and this certainly wasn't an event which people were attending just to get the CPD hours.  Given the importance of the topic and the changes which will occur in conveyancing in Scotland, neither should it be.

After a short video presentation, showing key world milestones in the years since the 1979 Act, the key message was delivered by Registers and then, in turn, Ross McKay on behalf of the Law Society.  This message is that the 2012 Act is designed to put conveyancers back at the heart of the conveyancing process and to remove the “crutch” that RoS have become to some practitioners over the years.  We are being asked to certify the title and the forms to RoS and, if there is anything wrong with either, the application will be rejected.  I felt that it was important to remember that this key message was the common theme running through the Roadshow and if you go to such a seminar also, bear that in mind while you are listening to the various presentations.

Heads in the Sand

At times I was left wondering if my fellow professionals had switched on to that key message because a number of questions had an unspoken common theme: “What do you mean you won’t be doing that any longer?”, “That will never work”, “How can we be expected to do that?”

This was never more evident than in the breakout session that I attended  on Prescriptive Claimants.  Under the 2012 Act, RoS will require you to have made all relevant enquiries and used all reasonable endeavours to work out who owns a piece of land to which you want to make a prescriptive claim to.  You must also provide sufficient evidence to RoS otherwise they will reject the application.  The person making the claim must also have occupied the piece of land for one year prior to making an application.  Once an application is made, the proprietor will be marked as “Provisional” on the Title Sheet.  What does that mean in practice?  In essence, it gives the true owner of a piece of land (if one exists) an opportunity to come out of the woodwork.  As we were told, that might result in a true conveyance of the land being completed which is better for all concerned.  Clients may not like it but if the land is owned by someone else, is it not fair that a price should be paid?

Taking that back to the key message again, what a number of my professional colleagues seemed to miss was that essentially this is what we should be doing anyway.  

A few of the key changes

Here are a  few of the key changes that will come into force on the Designated Day on 8th December 2014:

• Register of Sasines – this will be closed to all transfer deeds.
• Rights of Way, Common Areas, Shared Parking spaces etc will all have their own individual cadastral title.  Therefore, if you have a property with a right to a shared parking space, you would have the cadastral title for the sharing property and a cadastral title for the shared property.
• Cadastral Map – “No registration without mapping”.  The Cadastral Map is a representation of the registered geospatial data which cover Scotland. Piece by piece it will be completed as each title is registered.  For the first time, this will also include the seabed up to 12 miles from the coast. There will be no overlapping cadastral units.
• Advance Notices – in place of the Letter of Obligation, the seller (or person who will validly grant a deed) can now lodge an Advance Notice against the property which protects the incoming purchaser.  It lasts for 35 days so the timing of when to lodge an Advance Notice must be given some thought in case settlement moves. http://www.ros.gov.uk/2012act/media/Advance_notice_FAQs.pdf 
• There will only be one Application Form to complete.  This is best done online as it is an automated system with intelligent questions which will adapt to your responses.
• Burdens – if you feel that particular burdens no longer apply, make that clear to RoS on the Application Form and they will not include them.  If you supply any old burden writs, they must have a plan.  If they don’t have one, you must find one.
• You will no longer receive a paper Land Certificate.  Once the Application is complete, you will receive an email with a hyperlink taking you to a downloadable PDF which has the same effect of a Land Certificate. http://www.ros.gov.uk/2012act/media/Notifications_FAQ_sections%20A_and_B.pdf 
• Once a Standard Security is registered at Companies House, there is no longer a requirement to send in the Certificate of Registration of a Charge to RoS.
• Forms 10 and 12 cease to exist and will be replaced by Property Reports.  These will be in place from Monday 27 October so that people are used to the new form.
• There are a new range of fees for the forms and for rejection.  However, the rejection fee will not be charged until February 2015 to allow the profession time to get used to the new system.

Summary – the Clue is in the Name

Turning to the reason behind the title to this blog post - “The Clue is in the Name”.  Put simply, RoS are there to register documents in the Land Register, no more.  We, as conveyancing solicitors are there to do the necessary legal work and conveyancing.  It is essential that this is remembered and that may, by necessity, require more work. The 1979 Act was a poor piece of legislation, relatively speaking, that we have made the best out of over the years.  However, it is not a case of “if it ain’t broke, don’t fix it”.  Here what we have is more a case of “it was never working, so replace it with a new one”.

This is not a case where we as a profession can sit and put our hands on our ears and say “la la la, I’m not listening” and hope the changes won’t happen.  The consultation is done, the time for discussion is over and preparations have to be made because come the Designated Day, everything will change.  Things may indeed be difficult and challenging under the 2012 Act.  Fees might have to increase slightly but a well informed client is a happy client so, if there is any issue about a fee, engage with your client and keep them appraised of fees.  Inaccurate applications being submitted to RoS slow the whole process down and can be seen to give an unfair preference due to retaining the original date of registration.  

Hopefully, the above list of key changes gives you enough of an idea of how much of a shift change the 2012 Act will be and I encourage you to read further on the topic. The slides from the Roadshow will be put online in due course - http://www.ros.gov.uk/2012act/index.html. I would urge anyone who didn’t go, to either read up online or speak to a friend or colleague who did attend. 

Scott Brymer

What is the Law in Your Life?

5 things you need to know about de facto company directors:

You have probably heard the term “de facto director”, but what does that expression mean?

1.   When a person is appointed a company director, their appointment is usually made by the company’s board of directors (or, sometimes, by the shareholders). Notification of the appointment should always be made to Companies House.

2.   However, a person may be deemed a company director without ever having been formally appointed as such or without their position being notified to Companies House. This is because such person has acted as a director, so as to become a director “in fact”- i.e. a de facto director.

3.   This is confirmed by the Companies Act 2006, which provides that the definition of a director includes “any person occupying such a position, by whatever name called”. A person occupying such a position without expressly being named as a director is referred to as a de facto director.

4.   The Court of Appeal in England has confirmed recently that there is no one definitive test for whether someone is a de facto director. In determining the matter, the court will ask whether that person was part of the corporate governance system of the company and whether that person assumed the status and function of a director so as to make himself responsible as if he were a director.

5.   It is important to note that if someone is deemed to be a de facto director, such person will be subject to the same duties and responsibilities (and face the same potential personal liabilities) as if they had been formally appointed a director.

What is the Law in your Life?

5 things you need to know about Insurance Obligations under a Lease:

1.   The landlord usually accepts the obligation to insure the leased subjects for specified insured risks.

2.   The tenant reimburses the landlord in respect of the premiums paid.

3.   The definition of the insured risks should be considered carefully so as to ensure that all relevant risks are insured against and that there is no element of double insurance.

4.   The landlord will generally have the obligation to reinstate the leased subjects in the event of damage to or destruction thereof - provided that said damage or destruction has not been caused by the act or default of the tenant.

5.   During any period of reinstatement, there should be rent abatement with the landlord receiving the benefit of loss of rent insurance effected in terms of the lease. The lease may provide for the termination of the lease if the leased subjects are not reinstated within a specified period. The common law of rei interitus is usually excluded from operation.

Completion of the Land Register in Scotland

Scottish Ministers have asked Registers of Scotland to complete the Land Register in 10 years, and have committed to registering all public land within 5 years. This follows on from the Land Registration (Scotland) Act 2012. 

Completing the Land Register will be a major undertaking and will require collaboration across the private, public and charitable sectors. A public consultation is now underway which will be completed later this year. See:

http://www.ros.gov.uk/consultation/consultation_land_register_completion.html

In order to complete the Land Register, additional levers for registration are likely to be required on top of voluntary registration and “Keeper-induced” registration under the 2012 Act. A fully transparent Land Register is a laudable goal and, although there will likely be challenges along the way of achieving it, Scottish Ministers are to be congratulated for giving this priority. There can be no doubt that this will have economic as well as social and legal benefits for citizens and should fit well with the Government’s aim of ensuring that Scotland is a modern e-enabled country which can demonstrate that is a good place for businesses to be located. 

A blog about the Norwegian Land and Information System

INFOLAND - simplifying the Norwegian property market

Norway has a population of five million people, with approximately 2.2 million homes and an average of two people per household. Approximately 150 000 property transactions are conducted each year. With Norway being the longest country in Europe, sparsely populated within an area of 324,220 sq km and almost one third of the land mass situated above the arctic circle, one might be led to believe that property transactions are slow and inefficient.

Norway’s property market has been more or less booming throughout the recent recession, much due to the fact that Norway’s banks reduced their interest rates on loans and mortgages in order to meet the changes to import and export markets hit by the economic downturn. This has supported a healthy economy and the average Norwegian suffered little or nothing financially, during the crisis. 

Two major players in the Norway’s property market

The property market has two major players: The real estate agent representing the seller and the bank providing the mortgage for the buyer. The various banking institutions in Norway own most of the real estate chains. In order to qualify as a real estate agency, education in business and property law is required. As the seller is represented by the real estate agent and no representation is required for the buyer, legislation demands that the real estate broker provide all information about a property to the prospective buyer before selling. This information is mainly collected from the local municipalities’ land and zoning departments, the land registry and the mapping authority. 

This could be a painstaking ordeal, but the real estate agent provides this information to the buyers through the land information portal, www.Infoland.no. This is a one-stop-shop for all information required by law in addition to other information of relevance concerning the property in question such as environmental issues, large-scale maps and much more. The largest provider of information is the local authority and the largest sector searching for information is the real estate agent, but surveyors, construction companies, architects and the private citizen also use the portal. Instead of time-consuming phone contacts or meetings, all information is searched, selected, and paid for online. The required information is usually made available within hours instead of weeks. 

High efficiency gains and quality service

Naturally, the efficiency gains are considerable. The local authorities save time and effort by handling all inquiries through one platform, and the estate agent can search for land information any time of the day or night. Infoland consists of a collection of suppliers, such as the municipalities and the land registry and the mapping authority, etc. Each supplier can follow the status of the orders through their own administration sites. Each supplier invoices Infoland on a monthly basis for the transactions that have been provided. Regular visitors to the portal can subscribe and be invoiced monthly for their transactions, whereas non-subscribers pay by credit card. 

To ensure the optimum quality of service, the supplier provides the information within the agreed upon period. Should the supplier not provide the information with the time limit, they receive no remuneration for their efforts. In this way, a true cooperation between the portal and all its suppliers is ensured.

No need to be digital to be a supplier of INFOLAND

The supplier can develop his digital portfolio as he goes and does not need to be digital to join the service. Using Infoland, the supplier responds to the orders either by providing instant pdfs or by finding paper files and posting them through the mail.

Solutions that simplify the market and make doing business quick and efficient are what spurs on a healthy economy, ranking Norway among the top 10 in the World Bank’s Doing Business Survey when registering properties. 


INFOLAND is provided by Norsk Eiendomsinformasjon AS, Norwegian Land Information, a limited company, established in 1987 belonging to the Ministry of Trade, Industry and Fisheries. The company provides the market with the digital land registry, digital document flow and conveyancing as well as other solutions that simplify the Norwegian property market. The article’s author, Trude B-J Margel, heads up the Global Enterprise Division and can be reached at: tbm@eiendomsinfo.no.

What is the Law in your Life?

5 things you need to know about the obligation for repairs under a Lease:

1.     The common law provides that a tenant repairs and maintains the interior of the leased subjects and the landlord is obliged to maintain the exterior including the roof. The common law rarely applies and is usually expressly overridden. Sometimes this is not done properly however.

2.     A repairing obligation in a lease will be interpreted strictly according to its terms so if the obligation is to include renewal and rebuilding, this should be stated expressly.

3.     The repairs clause must be read in conjunction with the insurance clause in the lease.

4.     Tenants should be advised to instruct a survey of the leased subjects before accepting a full repairing and rebuilding obligation. If there are defects, these should either be made good by the landlord prior to the grant of lease or else and exception made from the tenant's repairing obligation.

5.     An exception may be made by way if reference to an attached photographic schedule of condition evidencing the state of repair of the leased subjects.

What is the Law in your Life?

5 things you need to know about the new Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 which came into force on 13 June 2014:

1.  The Regulations apply to all consumer contracts namely, distance contracts (i.e. telephone or online sales), off-premises (i.e. door-to-door sales), and on-premises (i.e. in store sales) made on or after 13 June 2014. The Regulations replace the Distance Selling Regulations 2000 and the Doorstep Selling Regulations 2008.

2. The Regulations introduce changes affecting all consumer contracts including the following:

• The consumer’s express prior consent must be obtained before taking any additional payments (eg for insurance, premium delivery services, etc). Retailers must not use pre-ticked boxes on websites which result in payment being made by the consumer.

• Retailers cannot charge more than the basic rate to call a customer service helpline or to discuss any issue with goods or services which have been supplied. 

• Retailers must not impose excessive payment surcharges when a consumer pays by certain means (such as credit or debit cards) and businesses will only be able to pass on the actual cost for the payment method (e.g. the actual processing fee).

• A new concept of digital content is introduced into UK law (data produced and supplied online e.g. music downloads). Retailers of digital content are bound by the Regulations.

3.  The Regulations introduce changes affecting only distance and off-premises contracts including the following:

• The list of pre-contract information the retailer must give to a consumer has been extended. The information required will depend on the way in which the sale is made.

• Consumers have the right to cancel contracts for the supply of digital content (such as a music track) up to 14 days after the contract has been entered into.

• The cooling off period has been extended from 7 to 14 days after delivery (for goods) or after conclusion of contract (for services).

• The retailer must provide a model cancellation form where the consumer has a right to cancel a contract.

• If the retailer fails to provide certain pre-contract information, the cooling off period is extended to 12 months.

• On-line retailers must make clear where there is an obligation to pay (eg through a labelled ‘pay now’ button.

4.  The Regulations provide certain consumer contracts are excluded, or partially excluded, from the scope of the Regulations. These include contracts relating to: gambling; sale of houses; rental of residential accommodation; package holidays; certain financial services; and perishable goods.

5.   What does this mean for your business?


If you sell to consumers you should review your terms of sale and website as a matter of urgency. It is very likely that changes to processes and/or documentation will be required to comply with the new rules.

Failure to comply could leave you not only with an unenforceable contract, but may also lead to a criminal conviction and/or fine.

What is the Law in your Life?

5 things you need to know about Patents:

1.   A patent protects new inventions and covers how they work, what they do, how they do it, what they are made of and how they are made.

2.   It is a monopoly right for a product or process, granted by the State as a territorial right for a limited period.

3.   To satisfy the terms of the Patents Act 1977 and, therefore, the IPO, the invention must:

(a)  be entirely new. i.e. it must not have been disclosed in any form and must not be in the public domain;

(b) take an inventive step that is not obvious to someone with knowledge and experience in that field; and

(c)  be capable of being made or used practically in some kind of industry.

4.   Not everything can be patented.  Examples of items which are specifically excluded from patent protection in the UK are:-

(a)   a discovery, scientific theory or mathematical method;

(b)  a literary, dramatic, musical or artistic work or any other aesthetic work;

(c)  a way of performing a mental act, playing a game or doing business;

(d)   anything against public policy or morality;

(e)   the presentation of information; and

(f)    an animal or plant variety.

5.  To protect yourself prior to filing for a patent, any discussions or disclosures to third parties should be done under the protection of a Confidentiality Agreement if necessary.

All Change in Conveyancing

Important changes to conveyancing law and practice have recently been introduced in Scotland. The Electronic Documents (Scotland) Regulations 2014 came in to force on 11 May 2014. These regulations were introduced under The Land Registration Etc. (Scotland) Act 2012 which comes fully into force on 8 December 2014. The regulations prescribe the requirements for electronic signatures that will allow documents covered by the Requirements of Writing (Scotland) Act 1995, with the exception of Wills and other testamentary writings meantime, to be signed by applying a suitable electronic signature and thus be legally valid and self-proving. This means that contracts for the sale and purchase of land and property, including leases, can be completed electronically instead of in writing with a "wet" signature being applied.

This represents a major step towards conveyancing transactions being completed electronically without paper so long as the electronic signature used meets the prescribed requirements.  The Law Society of Scotland is currently working on the introduction of an electronic practising certificate which will contain an electronic signature that will meet the requirements. It is anticipated that suitable electronic signature solutions will also be available commercially. For an example, see: www.yoosefultechnology.com 

Yooseful Technology™ has developed software which can be utilised to enable agents and solicitors to collaborate, share property information and digitally sign and exchange property contracts. The first release of the software is already in use.

The 2012 Act will also further enable electronic registration of title in the registers under the management and control of the Keeper of the Registers of Scotland. Additional regulations under the 2012 Act will follow once the Act is in full force and effect.

These are exciting times. Electronic signatures having full legal effect should stimulate the house buying/selling process and hopefully lead to efficiencies in cost and time which can be passed on to the consumer.

Generic Medicines

New drugs are generally protected by world wide patents. This is perfectly understandable given the significant cost and length of time taken to bring a drug through development, clinical trials and eventually to the market.  See the recent press coverage surrounding the cost of the breast cancer drug Kadcyla® produced by Roche – www.bbc.co.uk/news/health-27122644  Kadcyla® has been found to extend the life of a terminally ill patient suffering from breast cancer by up to six months. Once a patented drug is out of patent protection however, generic drugs become widely available at a lower price. A relatively recent example was when the heartburn and acid indigestion drug, Zantac™, came out of patent. There are now a number of generic versions of the drug on the market.

The Intellectual Property Enterprise Court in London has found two patents related to the breast-cancer treatment drug Herceptin® invalid, paving the way for generic versions of the drug to be marketed in the UK later this year. 

The case before the Intellectual Property Enterprise Court in London involved Hospira UK Limited and Genentech Inc. Hospira sells generic medicines particularly in the cancer field, and wishes to sell a generic form of Herceptin® in the UK. This could only happen after the expiry of a Supplementary Protection Certificate obtained by Genentech in respect of Herceptin®.

Genentech (a Roche company) developed and sold their drug under the Herceptin® trade mark. Herceptin® was a breakthrough in breast cancer treatment due to the way it targets the HER2 receptor, which is overproduced by cancer cells in about 20% of breast cancer patients. Hormones or other proteins can attach to the receptor, stimulating growth of the cancer cells and worsening the patient’s prognosis. 

The last remaining enforceable patent on Herceptin® expires in July this year. Pending any appeal by Genentech, the generic medicines marketed by Hospira should be available later this year.

What is the Law in your Life?

5 things you need to know about Tacit Relocation under a Lease:

1.   Tacit relocation or silent renewal is a renewal of the term of a lease for a period of 12 months.

2.   It only applies where neither the landlord or the tenant has served a notice to quit in terms of the lease.

3.   It can be a trap for the unwary and care must be taken as the expiry date comes closer.

4.   The rent payable by the tenant will be the then passing rent prior to the expiry date.

5.   Further periods of 12 months may apply if a subsequent notice is not served.

What is the Law in your Life?

5 things you need to know about a Shareholders' Agreement:

1.   What is a Shareholders' Agreement? A Shareholders' Agreement is a contract entered into among the company's shareholders which, together with the company's articles of association, creates the internal "rules" by which a company is governed.

2.   What areas does a Shareholders' Agreement cover? A Shareholders' Agreement can deal with all aspects of the relationship among the shareholders, including the rights and obligations of the parties.

3.   Specifically...? Protection of minority interests, control of decision-making at board and shareholder level, non-compete provisions, resolution of shareholder disputes, as well as defining the powers of the shareholders (and directors), and the procedures and limits within which the company operates.

4.   Anything else? A Shareholders' Agreement can also regulate share transfers - for example, if a shareholder leaves the company it is possible to have provisions in place to force such a shareholder to sell their shares back to the other shareholders.

5.   What happens to shares if a shareholder dies? Without a Shareholders' Agreement in place, the shareholder's beneficiaries may (or may not!) be able to take over the shares. A Shareholders' Agreement can provide certainty for all concerned - including allowing the surviving shareholders the right to purchase the deceased's shares before they are transferred to beneficiaries.

What is the Law in your Life?

5 things you need to know about rent payable under a lease:

1.   The rent payable must not be illusory.

2.   Rent will normally be paid quarterly, most likely on the Scottish Quarter Days. These may be the 28th of February, May, August and November if the "new" quarter days and the 2nd, 15th, 1st and 11th days of these months if the "old". Interest at a specified rate will be payable in the event of a late or non payment of rent.

3.   VAT may be chargeable on rent payments if the landlord has elected to opt to tax.

4.   The tenant may negotiate a rent free period prior to entry if market conditions so dictate or if works are required to the leased subjects.

5.   The annual rental may be subject to rent review at an agreed frequency during the period of the lease.

What is the Law in your Life?

5 things you need to know about Copyright:

1.           Copyright protects, amongst others, literary works, dramatic works, musical works and artistic works.

2.           Protection of your works is automatic; there is no need to register it anywhere. Use the copyright symbol © to show you are aware of your rights.

3.           There are three requirements for works to be capable of being copyrighted:

a.        It must be an original work;

b.        It must be borne out of your own skill, labour and judgment; and

c.         It must be recorded or fixed in a permanent form.

4.          Copyright gives the owner the right to prevent others from using their works without their permission.  This can include an action for damages in a court.

5.           For literary works, copyright currently lasts the lifetime of the author plus 70 years.  Other forms of copyright last for different periods and legal advice should be taken in relation to these.

What is the Law in your Life?

5 things you need to know about equity share capital in a private limited company:

1.       The term “equity” is often used as shorthand to describe a company’s share capital (as opposed to its debt or loan capital).

2.       However, it may not necessarily be correct to describe all shares in a company as “equity”. The phrase “equity share capital” actually has a statutory definition.

3.       In terms of the Companies Act 2006, “equity share capital” means a company’s issued share capital-but does not include shares which have restricted rights respect of dividends or capital.

4.       Normally, preference shares are only entitled to a fixed return by way of dividends and capital. It follows, therefore, that preference shares are unlikely to form part of a company’s equity share capital.

5.       On the other hand, ordinary shares carry full rights to dividends and to a return of capital. Ordinary shares truly represent a company’s equity share capital.

Legal battle continues to trundle on

Trunki Design and Copyright case

In July last year, Magmatic won a case in the High Court against PMS International, the developer of the Kiddee Case - Link to case. Magmatic was formed by inventor John Law after an infamous appearance on Dragon’s Den in 2006.  This decision was overturned by the Court of Appeal last week.  Link to Appeal

The legal battle is now heading for the Supreme Court as Magmatic, the company behind Trunki, has intimated that they intend to appeal the ruling. PMS International have, in turn, intimated that they intend to pursue a claim for damages against Magmatic over a previously obtained injunction. 

The original court ruling found that the Kiddee Case had breached the design rights of the inventor behind the Trunki and banned PMS International - based in Hong Kong - from selling its product in Europe. Both cases have horn-like handles and clasps resembling the nose and tail of an animal.

However, in the Court of Appeal, Rt. Hon. Lord Justice Kitchin said that the two cases conveyed a very different impression.  

Para 53: "Further, the overall impression created by the two designs is very different. The impression created by the CRD is that of a horned animal. It is a sleek and stylised design and, from the side, has a generally symmetrical appearance with a significant cut away semicircle below the ridge. By contrast the design of the Kiddee Case is softer and more rounded and evocative of an insect with antennae or an animal with floppy ears. At both a general and a detailed level the Kiddee Case conveys a very different impression."

What this case underlines is the importance of properly protecting your Intellectual Property.  In this case, it seems that "simple line drawings" may have been afforded more protection than the high quality greyscale CAD drawings which formed Trunki's Community Registered Design.

Take some time to Google Trunki and the Kiddee Case and you can make up your own mind.  In the writer's opinion, the two designs do appear quite similar, especially when considering the unique fact that the cases can be ridden on by children.  With this case heading for the Supreme Court, it will be interesting to see what happens next.

What is the Law in your Life?

5 things you need to know about Leases in general: 

1. A lease need not be in writing so long as it is not for longer than one year.
2. To qualify as a formal lease, there must be identified premises; a landlord and a tenant; a definite rental; and a duration.
3. The underlying statute in Scots law is the Leases Act 1449 (written in old Scots!). There is no equivalent Landlord and Tenant legislation of the type found up in English law.
4. Only shop tenants have a limited form of security of tenure beyond the expiry of the term - the Tenancy of Shops (Scotland) Act 1949.
5. Leases are interpreted as contracts.

What is the Law in your Life?

5 things you need to know about company (shareholder resolutions):

1. There are two types of shareholder resolution under UK company law - an ordinary resolution and a special resolution.
2. An ordinary resolution requires a simple majority (i.e. just over 50%) of the shareholders voting in favour to be passed. An example of an ordinary resolution is a shareholder resolution to remove a director.
3. A special resolution requires at least 75% of the shareholders voting in favour to be passed. An example of a special resolution is a resolution to change the company’s name or change its articles of association.
4. Shareholder resolutions may be passed at an actual meeting of shareholders (e.g. at a general meeting or an annual general meeting) or by way of a written resolution. It important to get the resolution wording right - Brymer Legal can help you with that.
5. Special resolutions require to be registered at Companies House.

What is the Law in your Life?

5 things you need to know about plagiarism:

1.   Plagiarism is defined in Oxford Dictionaries as “the practice of taking someone else’s work or ideas and passing them off as one’s own”.

2.   The policing of plagiarism in educational institutions is very topical as a result of digital communications and the scope of the internet. Plagiarism is often described as academic fraud.

3.   Software detection systems such as Turnitin are now increasingly used as a supplement to academic review.

4.   Ignorance of the law of an institution’s regulations is not an excuse – these are usually made known to students during class and/or as a condition of matriculation.

5.   Given the ease of availability of published texts on almost any subject these days, is there not a case for referencing techniques to be taught at a much earlier age in school?