Newsletter October 2008 No.16

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A Cocktail of Changes – Raphoe Collins

The Intoxicating Liquor Act, 2008 (‘the Act’) came into force in July 2008. The Act has far reaching effects for both Licensees (the Licence holder) and their customers.

1. Off Sales Trading Hours
Due to the new trading hours which have been imposed, if you want to buy alcohol to take away (off sales) you must do so before 10.00 p.m. The general hours of trading for off sales are Monday to Saturday - 10.30 a.m. to 10.00 p.m., Sunday - 12.30 p.m. to 10.00 p.m.

2. New Provisions
Two of the most controversial sections of the Act, Section 9 (structural separation of Off-Licences) and part of Section 14 (the test purchasing of Intoxicating Liquor) have not yet come into force.

Section 9 will require the separation of intoxicating liquor from other goods sold in supermarkets and/or convenience stores where there is mixed trading. It is believed that this will come into effect on the first anniversary of the commencement of the Act in July 2009. Therefore, Licensees will have one year to make the necessary changes required to comply with the Act.

Section 14 permits a Garda to send a person who is at least 15 years of age, but under the age of 18 into a licensed premises for the purpose of that person purchasing intoxicating liquor. This “test purchasing” may amount to the entrapment of Licensees by allowing them to be prosecuted for doing something which was in fact sanctioned by An Garda Siochana.

3. Wine Retailer’s Off-Licence
A new Wine Retailer’s Off-Licence cannot be granted unless an application is made to the District Court. Previously an application was made to the Revenue Commissioners only.

4. Garda Powers Increased
Section 14 of the Act also gives increased powers to members of the Gardaí to seize alcohol. A Garda can seize alcohol from a person under the age of 18 whether they are alone or accompanied, whom they believe, with reasonable cause, is in possession of alcohol. The Section also allows a Garda to arrest the person without warrant.

5. Late Licences
A Special Exemption Order (SEO) entitles the Applicant to an exemption on a special occasion from the provisions of the Licensing Acts, which relate to prohibited hours. SEO’s are granted by a District Court Judge to the holder of an On-Licence or the holder of a Theatre Licence.

Under the terms of the Act, both holders of On-Licences and Theatre Licences are now required to apply to court for each SEO. The cost of this order has increased to €410 (court fees and excise duty) per SEO date. The Act enforces a closing time of 2.30 a.m.

In addition to the existing proofs required to obtain a SEO, the Act imposes some new requirements:

• The Licensee will require a Certificate from a Fire Consultant or Architect that the premises complies with the Building Control Act, 1990 in relation to fire safety or if the building pre-dates the Building Control Act that the premises complies with the Building Regulations (Part B Fire) 1997;

• The Fire Consultant or Architect also has to confirm whether there is CCTV attaching to the premises and that the CCTV is in working order;

• the Licensee must confirm that An Garda Siochana will have free access to the CCTV;

• If there is private security contractor (“bouncers”) on the premises, within the meaning of Private Security Service Act, 2004, a copy of their Licence must be produced. If there is no security on the premises, the Licensee must give a certificate to this effect.

The Minister for Justice is expected to publish a Bill later this year, which it is believed will introduce a new Nightclub Licence.

Social Peace-keeping – Helen H. Whelan and Killian O’Reilly

Pat Kenny and Bernard McNamara are two people who have been involved in mediation this year. Alternative dispute resolution (ADR) techniques such as mediation allow parties to negotiate a real solution to their dispute instead of getting locked into the logic of conflict and confrontation with a winner and a loser at the end. It is used increasingly in complex commercial disputes where the parties, whilst wishing to resolve a conflict, also wish to retain as far as possible a continuing commercial relationship. Mediation is usually faster and cheaper than court proceedings.

The European Commission has now adopted a Directive on Mediation in Civil and Commercial Matters (2008/52/EC).The object of the Directive is to facilitate access to ADR and promote amicable settlement of disputes by encouraging the use of mediation. It establishes rules to ensure a clear relationship between mediation and judicial proceedings. The Directive only applies to mediation in cross-border disputes but there is nothing to prevent an individual Member State such as Ireland adopting the provisions for dispute resolution within the State.

The Directive is short (just 14 Articles) and is intended to establish a framework within which Member States can encourage the resolution of cross-border disputes, both civil and commercial. There are five key provisions in the Directive.

1. Ensuring the quality of mediation
Member States are obliged to encourage the development of mediation through training, the adoption of codes of conduct and quality control mechanisms. The aim is to preserve the flexibility of the mediation process whilst ensuring that its conduct is effective and impartial.

2. Recourse to mediation
The Directive gives a judge the right to invite parties involved in a dispute to engage in mediation if he considers it appropriate. The judge may also suggest that parties attend an information meeting on mediation. At present, parties to disputes in the Commercial Division of the High Court are strongly encouraged and may even be directed to mediate their dispute.

3. Enforceability of agreement arising from mediation
Member States are obliged to ensure that parties to a written agreement resulting from mediation can have the content of the agreement made enforceable by the Courts. This will give a mediation agreement similar status to a court judgment without the need to commence court proceedings.

4. Confidentiality of mediation
The Directive also ensures that mediation takes place in an atmosphere of confidentiality. Any information given or submitted during the mediation cannot be used against that party in any subsequent court proceedings should the mediation fail. For the same reason, the mediator cannot be compelled to give evidence about what took place during mediation in any subsequent proceedings.

5. Effect of mediation on limitation periods
During the period when parties are engaged in mediation, any limitation period within which parties would be required to take court proceedings would be suspended.
This means that the Directive protects the parties’ access to justice in the event that mediation does not succeed.

Information for the general public

The Commission wishes to encourage greater use of mediation and to that end is encouraging Member States to make available to the public information on how to contact mediators and organisations providing mediation services. There is particular emphasis in the Directive on internet access to such information.

The Directive must be implemented in Ireland by May 2011. However, mediation services already exist in Ireland and mediation is actively encouraged by both statute and the Courts. In addition, parties to commercial agreements are more frequently adopting mediation for dispute resolution instead of costly judicial proceedings and arbitration.

Risks Relating to Tenancy – Asma Tufail

The recent case of Harvey-v-Bamforth heard in the Sheffield County Court in August this year highlights the risk to landlords who do not comply with the provisions of the Housing Act 2004 (“the Act”) in relation to tenancy deposits.

The Act requires landlords to place tenants’ deposits for all assured shorthold tenancies in a prescribed scheme and to provide details of the scheme to their tenants within 14 days. Failure to comply with these provisions enables tenants to apply to court for an order requiring their landlord to pay a penalty, which is three times the original deposit.

In the Harvey case, the deposit was placed in a scheme but the information was not provided to the tenant within the prescribed time period. The omission came to light when the landlord initiated proceedings for rent arrears. Although the landlord subsequently provided the information prior to the hearing, the tenant continued with his application for a penalty payment from the landlord.

The court’s decision in the first instance was in favour of the tenant but this was reversed on appeal. The appeal judge was of the view that the provision of the information prior to the hearing was sufficient to comply with the legislation and hence no damages were payable.


A or G – Your Energy Rating – The Commercial Property Department

From the 1st January 2007, Building Energy Ratings (BER) were introduced for all new and existing buildings (when sold or let). There has been a two year lead-in period for these regulations. The ratings run on a scale of A1 to G, with A1 being the most energy efficient and G the least efficient. The ratings scheme is similar to that which operates on all household appliances such as fridges.

Domestic Dwellings
All dwellings for which planning permission was applied for on or after the 1st January 2007 must have an energy rating certificate provided by a certified BER assessor. The certificate verifies the energy consumption of the dwelling for prospective purchasers. Along with the BER certificate, an advisory report is given by the assessor on any suggested improvements to the energy rating of the building. However, neither the seller nor the purchaser is under any obligation to make the improvements listed in the report. Likewise there is no requirement by law that a building must achieve a certain minimum energy rating.

Dwellings for which planning permission was applied for on or before 31st December 2006, received a transitional BER exemption on condition that the dwelling is substantially completed on or before 30th June 2008. A provisional BER certificate is also necessary if the vendor is selling from the plans. This provisional certificate expires on the completion of the building or the passing of 24 months; whichever occurs first.

Non-domestic Dwellings
New non-domestic buildings for which planning permission was applied for on or after 1st July 2008 also require a BER certificate. Non-domestic buildings for which planning permission was applied for on or before 30th June 2008 can receive a transitional BER exemption provided that the necessary work is completed by 30th June 2010. Once your provisional certificate has expired, a full assessment will need to be carried out if you wish to sell or let the property.

Who will carry out the assessment?
Specially trained BER assessors who are registered with Sustainable Energy Ireland (SEI) will carry out the assessments. The assessors must have signed up to the BER Assessors Code of Conduct. A list of the registered BER assessors is available on the SEI’s website at

How is the BER rating calculated?
The calculation is based on the wall, roof and floor dimensions, the size of the windows and doors along with the construction type, ventilation and insulation levels, and the heating and lighting systems. The BER is only an indication of the energy performance of a building and is not related to the actual energy usage of the building, as this is dependant on how much electricity or gas people actually use.

When do you need a BER certificate?
A BER certificate will be required for all buildings, domestic or non-domestic that are offered for sale or letting on or after 1st of January 2009. The onus at all times is on the seller to provide a BER certificate to the purchaser. However, if as a purchaser you do not receive a certificate, it would be advisable that you ask for the building’s BER certificate, particularly if you think you may consider selling the property in the future.

How much does a BER cost?
There is no set fee for the assessment and you should shop around for the best price. The lifespan of a BER certificate is ten years and after this certificate has lapsed, another certificate is required for the property if you intend to sell or let the property. However a valid certificate maybe invalidated if the building has deteriorated, the property has been extended or there has been a change in the fuel used in the heating system or in the system itself. If any of these changes occur to a property, the seller or the agents involved in the sale have breached Article 7 (2) of the regulations if they do not give the purchaser a BER certificate. This article imposes the obligation on any ‘person who offers for sale or letting’ a property and extends to ‘any agent acting on behalf of such person’.

Failure to comply with these regulations is an offence, which is punishable by a fine and/or a term of imprisonment.


The End is Nigh for Rigsby – The Private Client Department

In an effort to upgrade the standard of the rental accommodation in Ireland, new minimum legal standards will come into force in 2009. More Government and local authority resources will be allocated for the inspection and policing of the private rented sector to enforce this new legalisation. The new standards are as follows:

Sanitary Facilities
• A toilet with dedicated wash-hand basin adjacent to WC, with hot and cold water
• A fixed bath or shower with hot and cold water
• Safe and effective drainage and ventilation systems
• These facilities must be separated from other rooms by a wall and door and containing separate ventilation

Food Preparation
• A four ring hob with oven and grill with adequate extraction and ventilation
• A fridge and freezer
• A microwave
• A sink with a draining area
• A sufficient number of presses for food storage

A fixed appliance heating system capable of providing effective heating which is properly ventilated.

A washing machine, either within the accommodation or access to a communal washing facility within the building. If there is no garden or yard, a dryer has to be provided.

Refuse Facilities
The provision of proper pest and vermin proof refuse storage facilities. The use of communal receptacles, where appropriate, will be considered.

Outside the Property
The maintenance by the landlord of the façade of the building, gardens, paths, driveways and hedges where applicable.


Law Firm for Sale? – Noelle McDonald

The U.K. Legal Services Act 2007 (LSA) sets out to revolutionise the legal services market by allowing outside investors own law firms. The LSA permits solicitors via an Alternative Business Structure (ABS) to amalgamate with other businesses such as accountancy firms, supermarkets and other large high street retailers. Law firms could soon find themselves competing against established consumer brands who will be able to offer a ‘onestop shop’ by operating legal services in their stores, hence the phrase ‘Tesco Law’. It is envisaged that the ABS will be up and running by 2011 when we can expect to see non-lawyers in professional, management or ownership roles.

The Goverment’s Objectives
Section 1 of the LSA sets out the British Government’s regulatory objectives which include improved access to justice, promoting the interests of consumers of legal services, promoting competition in the provision of legal services, encouraging an independent, strong, diverse and effective legal profession, and increasing public understanding of the citizen’s legal rights and duties. A new Legal Service Board will be responsible for ensuring that the regulatory objectives are promoted and observed. The Board will be broadly representative and will include a consumer panel. The Act creates a new office called the Office for Legal Complaints and Ombudsman Scheme which will provide redress for consumers through an independent service. The Law Society in England and Wales will no longer be responsible for regulation or complaints and redress.

Reserved Legal Activities
Under the LSA only an authorised or exempt person may carry out a reserved legal activity. A legal activity for the purposes of the Act is defined as either a reserved legal activity or as the provision of legal advice, assistance or representation in connection with or with any form of resolution of legal disputes. Some examples of reserved legal activities include the exercise of rights of audience before courts, conduct of litigation and probate activities.

Alternative Business Structure
Before this Act, in England and Wales, as in Ireland, solicitors could only practice as sole traders or in partnership. In order to generate finance to improve their business, they either had to increase fee income or borrow, potentially restricting opportunities for growth and development. Under the LSA, law firms can utilise more traditional business financing including sale of shares, investment capital and mergers or joint ventures with non-legal businesses. The new ABS will allow partners to realise their share in the business which until now has been prohibited. The British Government hopes that by accessing capital markets, law firms will be able to take on more high-risk cases and more low-income clients.

The Act mirrors similar changes in the state of Victoria, Australia. A firm based in Melbourne, Slater & Gordon became the world’s first law firm to float on a stock market. The personal injury firm raised A$35 million which it used to acquire two law firms. Lawyers worldwide are curious to see how the international legal services markets will react and adapt to the new changes. Personal injury or employment law firms with predictable income streams are expected to be the most attractive to potential investors. Whilst many lawyers are sceptical of the changes, a number of market dominant multiples and retailers are thought to be keen to capitalise on these changes. An independent valuation of the world’s top law firms and professional services institutions is currently being carried out in order to benchmark brand values for future investment in legal services. The valuation will take account of profit margins, client quality and loyalty, strength of management and people. Law firms will soon be able to benchmark their performance against other professional service firms.

What Impact will LSA have on the Legal Services Market?
It is thought that the ABS will mainly impact large firms and hence the number of large firms will drop due to firms merging and the consolidation of their interests. It is unclear what firms will benefit most, as not all firms will be able to take advantage of the Act. For instance, international firms are banned from outside investment under Irish, German and Italian law. Some banking and private equity solicitors have raised concerns regarding potential conflicts of interests and the consequences of relinquishing power to shareholders.
Others are of the opinion that outside investors may influence lawyers to place financial targets over the needs of clients. Under the Act outside investors will be able to take advantage of their media exposure and superior IT programmes to provide more online legal services to the consumer, thereby reducing consumer costs and increasing their market share. There is concern that the new entrants to the market will cherrypick profitable areas of work and thus threaten the business of long established local and high street firms who offer a full range of services to a community in the same way as multiples are threatening traditional high street shops.

With challenging economic times ahead we can only speculate as to how the market will react to the Legal Services Act 2007.


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