In Brief – January 2015
Print newsletter09/01/15

A UK energy first as Walker Morris team advises on data centre power project
Late September saw completion of the UK’s first combined cooling, heat and power plant at […]
Late September saw completion of the UK’s first combined cooling, heat and power plant at a data centre in a drive by Citi Bank to reduce energy demand whilst cutting both greenhouse gas emissions and energy costs. The project was led by Walker Morris client Sustainable Development Capital Limited (SDCL), whose cornerstone investor is the Green Investment Bank (GIB), using private equity funds matched by GIB lending.
Energy savings
Energy efficiency should be one of the most compelling investments any organisation can make but surprisingly opportunities to cut energy demand by up to 20-30 per cent are often not taken up owing to the up-front capital costs and know-how required. At the same time energy costs are forecast to rise significantly above the rate of inflation (despite the current low in crude oil prices) so savings will go straight to the bottom line.
SDCL holds a mandate from GIB to operate the UK Energy Efficiency Investments Fund consisting of £104m in capital and is building a pipeline of projects that include building retrofit (LED lighting and improved environmental controls); combined heat/cooling and power (CCHP); renewable heat (of particular interest to off-gas grid industrial users) and outdoor lighting (car parks and street lights). As the deliverability of these projects becomes better understood in the market, additional sources of finance are likely to become available from the traditional banking community as well as from asset finance houses. Major contractors and utility companies already offer a range of energy improvement measures deploying their own capital and recovered through an energy performance contract linking payments to contractual targets for savings. Typically such solutions are designed to be off balance sheet.
The project
The Citi Bank project involved the provision of a combined cooling and power (CCP) plant on a very restricted site adjacent to the bank’s key UK data centre in Lewisham. The data environment is a major user of power and producer of heat and the design solution involved the provision of two power plants fuelled from a new gas grid connection which could offer cooling at a modest impact to overall efficiency. The size of the plant is scaled to the client’s demand and the nature of the gas engine market is that it is highly modular, compact and capable of operating in sound sensitive locations with appropriate attenuation. The solution will deliver over 70 per cent of the centre’s electricity requirement. Compared to a conventional power plant the gas-fuelled power plant reduces generation losses from 65 per cent to 10 per cent and avoids transmission losses associated with grid-delivered power. The CHP’s energy efficiency is therefore 90 per cent compared to 33.5 per cent for grid power. Depending upon the type of technology used and its configuration, savings in CO2 well in excess of 40 per cent can be anticipated whilst reducing the primary cost of power delivered substantially.
In this case, SDCL provided a special purpose company (SPV) to fund and implement the project whilst Citi took the role of Host for the project. A bespoke SPV was created which negotiated an Energy Services Agreement (ESA) with the Host for the financing and delivery of the power, heat and cooling services to guaranteed performance and availability standards for each element in return for a service charge calculated as a fee per MWh of electricity generated. The ESA addressed both the construction and operation phase, apportioning key risks to the SPV whilst others were retained and managed by the Host. To maintain operational flexibility the Host retains the right to terminate on notice on payment of agreed compensation. Provision is included for the right of the Host to retain the asset on expiry or termination and if appropriate for the decommissioning of the equipment. The length of the ESA is tailored to the requirements of the Host but usually the life expectancy of the plant is such that it provides the opportunity for an extended term or management directly by the Host. The site of the CCP solution was leased to the SPV for the duration of the ESA.
The SPV will work closely with its supply chain, typically a specialist energy services contractor (ESCO) which will usually be an experienced manufacturer/supplier of proven power technology with an operations and maintenance capability. The commitments in the ESA for delivery and performance of the energy solution and the liabilities associated with its non-performance are passed down to the ESCO through the terms of the energy performance contract (EPC). The SPV may require additional security in the form of bonds, retentions and parent company guarantees to manage its financial exposure to the ESCO.
The CCHP opportunity
Commercial and industrial companies, utilities, landlords and public sector bodies are increasingly attracted to the CCHP opportunity – delivering early financial savings and non-financial benefits in the form of carbon savings. It also allows clients to retain medium-term flexibility in their power requirements as the term can be typically negotiated between 7 and 15 years. Schemes can be delivered quickly with the minimum of disruption to on-site services. Clients considering this option will need to appreciate their liability under the limited obligations imposed on them in the ESA and the strength of the performance and financial terms imposed on the SPV as well as careful choice of partner and technology to assure the clear benefits that can be achieved.
The Walker Morris team was led by David Kilduff, Partner, and supported by Michael Taylor and Katie Raftery (Finance Commercial).

Access all areas – dealing with access issues when acquiring land
While there is no clear statutory definition of a highway, at common law, a highway […]
While there is no clear statutory definition of a highway, at common law, a highway is a route along which people can pass and re-pass at all times as frequently as they wish without hindrance or charge. As, by definition, a highway must be open to all, a private highway cannot exist and all highways are therefore ‘public’ [1]. A highway can be unadopted and therefore privately maintainable but the rights of the public to use such a highway are the same as if it were adopted and therefore maintainable at the public expense. There are also various classifications of highway, with the most commonly encountered being roads, footpaths and bridleways [2] but there are well over 30 classifications, including the quaintly named ‘quiet road’.
Extent of a highway
The main access issues encountered on land acquisitions relate to the extent of a highway with the predominant concern of many buyers being whether their land abuts, or takes access directly from, an adopted highway. Whilst this seems a relatively straightforward question, it is not always as easy as one might think to ascertain the exact extent of land to be acquired and where the adopted highway begins.
The legal boundary of land in private ownership is often difficult to ascertain primarily because ‘boundary’ has no specific legal meaning. To determine a boundary two matters must be considered, first the legal boundary, which is unlikely to be accurately identified in the deeds to a property and, secondly, the physical boundary, be it a fence, wall or other feature. Title plans obtained from the Land Registry are of little help in determining the legal boundary since almost all Land Registry title plans are prepared under the ‘general boundaries rule’ [3] which provides that a boundary of a registered estate is a general boundary unless it is shown as having been determined by an application to fix the boundary.
In many cases the most that can be done is a comparison of the title plan for the land to be acquired as against plans provided by the highway authority showing the extent of the adopted highway. If in doubt, inspection of the site and the highway is imperative as it can provide information that could not be obtained from reviewing plans alone. For example, where it appears that land adjacent to the highway itself is being maintained by the highway authority then it is probable that it was part of the land that was dedicated, and therefore forms, part of the highway. Boundary features at the sides of the highway may also provide an indication that everything between those features forms part of the highway. It should also be borne in mind that where a highway adjoins land the adjacent land owner is presumed to own the subsoil of the highway to the midpoint (the ‘ad medium filum’ presumption). This presumption may be helpful in certain circumstances, albeit it can be rebutted and is not a universal panacea to access issues.
As to the vertical limits of a highway then, notwithstanding the ad medium filum presumption, statute confirms that not only is the surface of the road vested in the highways authority, but also sufficient soil beneath it and air above it to provide for the highway [4]. Overhanging a highway is prohibited without consent and, as such, when developing land adjacent to a highway it is important to ensure that not only the footprint of the building, but also anything which may project from it, for example gutters or balconies, are kept within the boundaries of the development site.
Formation of a highway
There are a number of ways in which a road can attain the status of a highway, with one of the most common being by dedication pursuant to a section 38 agreement [5] as a result of the development of new residential or commercial estates. Highways can also be dedicated pursuant to section 37 of the Highways Act 1980 (HA 1980), by express or presumed dedication at law, utilising the highway or local authority power to construct under section 36(2) of the HA 1980 and also by ancient use.
Dedication pursuant to a section 38 agreement occurs when a developer agrees to construct roads to adoptable standards as part of a development and the highway authority confirms that it will accept the dedication and become responsible for future maintenance of the road at the public expense.
A section 38 agreement generally contains step-in rights allowing the highway authority to carry out works and recover the costs of doing so in the event that the developer defaults. The agreement is usually supported by a bond from a bank or insurance company to ensure that if the step-in rights are exercised the highway authority can recover the costs of undertaking the works. Agreements can also contain wide obligations as to payment of expenses that have been used to allow highway authorities to recover commuted sums for the estimated costs of future maintenance [6].
A person who wishes to dedicate a road as a highway maintainable at the public expense, provided that they own the road in question, can do so voluntarily by serving notice to the highway authority under section 37 of the HA 1980. This provision, which can be useful if a developer and a local authority have been unable to agree the terms of a section 38 agreement, permits a developer to give notice to the highway authority not less than three months before the proposed date of dedication that it wants the highway to be adopted. The authority then has two options. First, it could certify that it has been dedicated and constructed to satisfactory standards and provided that the developer then keeps it in repair for a period of 12 months and the highway has been used in that period it will become maintainable at the public expense. Alternatively, the authority may object in the magistrates’ court on the basis that the highway will be of insufficient utility to the public to justify its adoption. If authority does not certify that it accepts the dedication the developer may itself apply to the magistrates’ court against the refusal and the court has the discretion to make an order deeming such a certificate to have been issued.
Highways can also be created by dedication at law. Such dedication can be express, albeit presumed dedication either at common law or by statute under section 31(1) of the HA 1980 is more common. There are two stages to such dedication, the dedication by the landowner and subsequent acceptance by the public. The common law presumption is that land will have been dedicated as a highway if it has been used by the public ‘as of right’ and ‘without interruption’. Use does not have to be for a defined period of time, but must be sufficient to justify an inference that the owner intended to dedicate it as a highway. Hence where an intention to dedicate can be proved, short periods of use may lead to creation of a highway.
The statutory process under section 31(1) does not replace the common law but does provided that dedication will be presumed if the highway has been used by the public as of right and without interruption for 20 years and it is not of such character that public use cannot give rise to a presumption at common law of dedication.
For both the common law and statutory presumption to arise, use must be as of right. As with prescriptive easements use must be without force, stealth or permission [7]. Therefore, if a landowner maintains a notice which is inconsistent with dedication of a highway this will generally be sufficient evidence to rebut an intention to adopt as a highway. In addition, landowners can use the procedure in section 31(6) HA 1980 to deposit a map showing any roads which the landowner admits to having been dedicated. Lodging a statutory declaration within 20 years of such a deposit confirming that no additional dedication has taken place, in the absence of any evidence to the contrary, is then sufficient to negate the intention to dedicate any other roads as highways.
Finally, it should be noted that any road constructed by the highway authority becomes a highway maintainable at the public expense. A highway authority cannot compel a landowner to dedicate a right of way across its land and therefore the authority must either acquire the land by agreement or by exercising its power to compulsorily purchase.
WM comment
It is clear that whilst the question ‘does my land have adequate access’ is a simple one, the answer is often difficult to establish. The application of the general boundaries rule means that it can be very difficult to confirm accurately whether land to be acquired actually abuts the adopted highway. Circumstances surrounding maintenance of land adjacent to the highway, and the application of the ad medium filum presumption may provide some comfort but it may not always be possible to provide a conclusive answer to the very simple question asked. Should it be necessary to consider the dedication of a new highway to provide access to land that is being acquired this can be done in a number of ways. The most common is an agreement under section 38 of the HA 1980 but there are other ways in which a highway can be dedicated, for example under section 37 HA 1980 or by presumed dedication.
[1] Roads and footpaths unlike highways can be public or private and it is, of course, possible to have a private right of way.
[2] A road is defined by statute as a highway or other road to which the public has access and includes bridges over which roads pass (section 142 Road Traffic Regulation Act 1984 and section 192 Road Traffic Act 1988). A footpath is a way over which the public have a right of way on foot (and is not a footway) (section 66, Wildlife and Countryside Act 1981). The public have rights of way on foot, bicycle and on horseback over bridleways and may also lead horses over them and some bridleways include a right to drive other types of animal along them (statutory definitions of a bridleway are contained in both sections 329 of the Highways Act 1980 (HA 1980) and section 66 of the Wildlife and Countryside Act 1981 with cyclists rights to use bridleways being contained in section 30 of the Countryside Act 1980).
[3] See section 60 of the Land Registration Act 2002
[4] Section 263 HA 1980
[5] Section 38 HA 1980
[6] See Redrow Homes Ltd, R (on the application of) v Knowsley Metropolitan Borough Council [2014] EWCA Civ 1433 where the Court of Appeal determined that provisions in section 38(6) HA 1980 allowed the recovery of future maintenance costs.
[7] Nec vi, nec clam, nec precario.

Development Consent Orders and procedure for discharge of planning conditions to follow technical consultation
Background As part of continuing attempts to ensure greater efficiency and streamlined processes, the Department […]
Background
As part of continuing attempts to ensure greater efficiency and streamlined processes, the Department for Communities and Local Government (DCLG) launched its technical consultation on proposed planning reforms on 31 July 2014 (the Consultation). Under the auspices of the Government’s ‘Red Tape Challenge’, the Consultation highlighted plans to:
- improve the use of planning conditions.
introduce new environmental impact assessment (EIA) thresholds.
modify the planning application consultation process.
extend certain permitted development rights.
refine the determination process for nationally significant infrastructure projects (NSIPs).
alter the neighbourhood planning regime.
Following an eight-week ‘window’ for responses, which expired on Friday 26 September, DCLG has now considered the feedback received and confirmed the action to be taken in relation to planning conditions and Development Consent Orders (DCOs).
Planning Conditions
While acknowledging that planning conditions are important in shaping developments, the tendency for some local planning authorities (LPAs) to impose numerous conditions at the decision-making stage and then delay discharging these has been noted. A key Consultation proposal was the suggestion that, going forward, LPAs would have to share draft conditions with applicants for major developments prior to decision-making. It was also suggested that written justification would have to be given for any pre-conditions – that is, those requiring action before commencement of on-site development work. No further progress has seemingly been made regarding these proposals.
However, DCLG has confirmed the practical procedures and exemptions it will carry forward as secondary legislation (linked with the Infrastructure Bill) for ‘deemed discharge’ of conditions where a LPA has not made a timely decision following a discharge request. Over 70 per cent of the 478 respondents agreed with the Government’s proposed approach vis-a-vis exemptions. An exemption will therefore apply for conditions:
- attached to development subject to an EIA.
- relating to development likely to have a significant effect on a qualifying European site.
- designed to manage flood risk.
- requiring entry into a section 106 Agreement or a section 278 Agreement.
- requiring the approval of details via a reserved matters application.
Additional exemptions will also apply where the matter relates to the protection of public health and safety or areas of high sensitivity. So conditions will be exempt relating to:
- investigation and remediation of contaminated land.
- highway safety.
- Sites of Special Scientific Interest.
- investigation of archaeological potential.
All the above will only be able to be discharged following a formal LPA decision. Deemed discharge will not automatically be available, but will be activated by an applicant serving notice on the relevant LPA. Once six weeks have elapsed, the relevant applicant must then submit a notice informing the LPA of the situation and its intention to use the deemed discharge procedure. The condition in question will be deemed discharged if nothing further is heard within the following two weeks. Eight weeks is therefore the ‘long-stop’ for the full procedure.
The Consultation Report emphasises that there is no intention at this stage to extend the deemed discharge option to other consents (for example, advertisement consent). It is also not intended to act as a hindrance for local authorities, interfere with their ability to properly consider discharge, refuse approval where deemed necessary, or enforce compliance with a substantive condition when needed. LPAs will be able to agree longer timescales for discharge on an individual basis if necessary. This discretion is particularly likely to be invoked in situations where the LPA requires third party, external advice on a planning condition.
It is hoped the new approach will reduce delays in discharging planning conditions and the difficulties this can cause, both for developers and communities with legitimate expectations of a development completing. The Consultation Report states it “will make a significant contribution to unblocking much needed development, including new homes, that the country badly needs”. However, the new process in itself is not without several stages which create the potential for procedural delays and heightened administrative burdens. An LPA’s flexibility to instigate discussions and agree extensions with the applicant also reduces the extent to which there will be any improved certainty regarding the time-frame in which decisions can be expected.
Development Consent Orders
Section 6 of the Consultation proposed improvements to the planning regime for NSIPs, particularly ways to ensure a more proportionate approach for making alterations to DCOs. A total of 189 responses were received relating to the NSIP changes.
Following analysis of the feedback, DCLG now intends the following:
- Guidance will be introduced on whether a post-consent change to a DCO should be considered as a material or non-material amendment. A change will be more likely to be material where (amongst other factors arising on a case-by-case basis):
– there are to be significant effects on the environment, necessitating an updated Environmental Statement.
– a Habitats Regulations Assessment or new / additional European Protected Species licence is needed.
– compulsory acquisition of any land is required that is not already authorised.
- Developers are expected to undertake preparatory work from an early stage before an application for a change is submitted, including discussions with the Planning Inspectorate.
- Changes will be made to the Infrastructure Planning Regulations 2011 (the 2011 Regulations) relating to the process for making a non-material change to a DCO, so that:
– the applicant (not the Secretary of State, SoS) will be responsible for publicising and consulting upon a proposed non-material change.
– a more appropriate scale will be required when submitting maps for offshore development applications.
– the applicant will no longer be required to cover the SoS’s costs in publicising the application.
– the applicant will have to submit a copy of its publicity notice and statement explaining how it has fulfilled the publicity / consultation requirements to the SoS.
- Changes will be made to the 2011 Regulations to ensure a smoother, faster and easier process for making a material change to a DCO. Amongst the alterations to be introduced:
– the applicant will be required to consult only parties who could be “directly affected” by a proposed change rather than every person originally consulted.
– a Statement of Community Consultation will no longer be required.
– an examination into proposed changes will not have to be held if the SoS deems this unnecessary.
– reduced timeframes will be applied, with guidance emphasising these as the maximum time within which decisions should be made.
The Consultation’s proposals for changes to DCOs therefore largely come forward unaltered. Subject to the Infrastructure Bill’s successful passage through Parliament, the alterations should be introduced during the current parliamentary term. It is hoped these will enable NSIPs requiring later alteration to be progressed with greater speed. However, the Consultation Report notes that the newly-produced guidance will not be exhaustive or be able to cover every eventuality. It therefore remains to be seen whether this will suitably clarify a number of the uncertainties of the current system.
For more information on the possible impact of the changes and the timetable for these taking effect, contact the Planning and Environment team at Walker Morris.

Developments in the waste and resources sector
Green Investment Bank Residual Waste Report GIB recently reported that there is an opportunity to […]
Green Investment Bank Residual Waste Report
GIB recently reported that there is an opportunity to invest approximately £5 billion in UK energy from waste infrastructure (estimated between 4 and 7.7 million tonnes of merchant capacity), with an emphasis on processing commercial and industrial (C&I) waste. The report follows an assessment of the UK waste market and identifies a need for additional infrastructure in the UK to 2020 (to meet EU landfill diversion and recycling targets) and beyond.
Following the end of the PFI programme for local authority waste treatment facilities, the market for ‘merchant’ projects in the UK is developing, encouraged by the Government’s support for advanced thermal conversion technology (such as gasification). The report highlights that for investors looking to provide capital, understanding the future size and shape of the UK waste market is a vital element in assessing the overall risk/reward profile of these projects as well as the expected green benefits that they may provide. The availability of long-term waste supply contracts is likely to remain one of the key challenges to merchant projects.
TEEP
From 1 January 2015 the Waste (England and Wales) (Amendment) Regulations 2012 require paper, metals, plastics and glass to be collected separately where this is (a) necessary to achieve high quality recycling and (b) “technically, environmentally and economically practicable” (TEEP). However, a number of local authorities have opted to continue with (or move to) ‘commingled’ collections of such materials after applying the two-stage test. WRAP, London Waste and Recycling Board (LWARB) and local authority waste networks published a ‘Route Map’ in April 2014 to help councils conduct an assessment of whether separate collections are necessary and ‘TEEP’. All waste authorities should keep their collection and recycling arrangements under review to ensure they and their future strategies and contract procurements continue to comply with the Regulations.
New Planning Policy for Waste
In November the Government published the new ‘National Planning Policy for Waste’, replacing PPS 10. The planning system is vital in ensuring the adequate and timely provision of facilities to meet local and national waste needs and complying with the ‘waste hierarchy’ set out in EU and national waste regulations (eg by increasing re-use, recycling and resource/energy recovery).
The policy is greatly reduced in length (just five pages of substantive policy) and includes key provisions such as:
- greater focus on local plans. Planning authorities are to develop plans based on proportionate evidence regarding local waste arisings and national waste management requirements.
- local plans must identify opportunities to meet the area’s waste management needs and recognise the importance this should be given alongside other spatial planning concerns.
- on-site management of waste: when planning for waste management facilities local authorities are to give priority to re-use of previously-developed land, sites identified for employment uses and redundant agricultural and forestry buildings.
- suitable sites outside the Green Belt should be the first ‘go to’ for development of waste facilities.
- waste management is to be considered in applications for non waste-related developments. Local planning authorities are directed to ensure there is sufficient provision for waste management in all developments.
The encouragement given to co-locate waste facilities with complementary activities where possible is significant. The re-use of heat produced is specifically advocated, echoing the Policy’s wider encouragement for use of heat as an energy source. This may favour location close to existing sewage treatment works and/or urban areas, for example.
Whether the policy will achieve the Government’s wide-ranging objectives and prove to be “an easily understood waste planning policy framework … which can be followed by local authorities, waste developers and local communities alike” remains to be seen.
Permitting and Licensing Consultation
The Environment Agency seeks views on a range of waste-related activities and associated conditions for proposed new rules. The consultation closes on 6 March 2015. Proposals include changes or new rules relating to:
- risk assessment for asbestos waste transfer operations.
- a new Fire Prevention Plan requirement for those permitted sites allowed to store combustible waste material.
the expansion of household waste packaging codes for four rule sets covering civic amenity sites and metal recycling facilities. - the requirements derived from the Industrial Emissions Directive.
- allowing metal recycling and WEEE treatment activities to take place at the same site.
Glass Recycling Targets
The Producer Responsibility Obligations (Packaging Waste) (Amendment) Regulations 2014 (SI 2014/2890) came into force on 24 November 2014 and change the recycling and the recycling by re-melt targets for glass packaging waste for the years 2014-17 in light of new evidence about the glass packaging market.

Does your CCTV system comply with the ICO’s new CCTV guidance?
The commonplace use of CCTV, camera (and video) phones and other devices which are capable […]
The commonplace use of CCTV, camera (and video) phones and other devices which are capable of recording images of individuals means that as a society we have all become accustomed to the fact that we are often being recorded as we go about our daily business.
However, the rapid development of surveillance technology together with its increased use in a more intrusive and proactive manner has given rise to public concern about the ways in which CCTV and other surveillance cameras are being used and the data protection implications.
In light of this the Information Commissioner’s Office (the ICO) has published a new and updated code of practice for the use of CCTV, In the picture: A data protection code of practice for surveillance cameras and personal information (the New Code) which provides good practice advice for those involved in operating CCTV and other devices which view or record individuals or which collect other information relating to individuals. The New Code has been extended to cover new technologies including Automatic Number Plate Recognition, body worn video, unmanned aerial systems (or drones) and other systems that capture information of identifiable individuals or information relating to individuals.
Many organisations will also need to comply with the Surveillance camera code of practice (the POFA Code) issued under the Protection of Freedoms Act in England and Wales or the CCTV Strategy for Scotland in Scotland. The New Code is consistent with the POFA Code and compliance with the New Code will also help organisations comply with the POFA Code.
Here are our top tips on what organisations need to do to ensure that they are complying with both the ICO’s new guidance on CCTV systems and the surveillance camera code of practice
- Consider carefully whether a surveillance system is the best solution to the problem
– The use of the surveillance system needs to be justified, necessary and proportionate.
– You will need to take into account the nature of the problem you are seeking to address, whether there are any better solutions to the problem and the impact that the surveillance system may have on individuals. The best way to assess the impact on individuals is to complete a Privacy Impact Assessment (PIA) and the ICO’s guidance on how to complete a PIA is available here.
– Where a surveillance system is already in use, this should be regularly reviewed to determine whether its continued use is necessary and proportionate.
- Make sure that your data protection registration with the ICO is updated to include all relevant details relating to the use of the surveillance system.
- Ensure the information collected by the surveillance system is administered effectively.
- You will need to put in place a clear policy for the handling of any personal information collected by the surveillance system which needs to include:
– what information should be recorded.
– where the CCTV cameras (or other types of devices) are to be located.
– how the information is to be used.
– how the information is to be kept secure technically, organisationally and physically.
– to whom the information can be disclosed and in what circumstances.
– how subject access requests will be dealt with.
– when the information will be deleted.
- Let people know that they are in an area where a surveillance system is in operation.
The most effective way of doing this is to use prominently placed signs in and around the area covered by the surveillance system. - The signs should also contain details of the organisation operating the system, the purpose of using the system and who to contact about the system together with basic contact details, such as a website, telephone number or email address.
- Clearly document all your procedures relating to the use of the surveillance system and where appropriate provide training on these procedures to the relevant people.
- Allocate responsibility for compliance with these procedures to a specific individual.
- Carry out regular proactive checks or audits to ensure that the procedures are being properly followed.
- Make sure that the information recorded is stored securely, and where necessary encrypted.
- Access to the information should also be restricted to only those who need access.
- Carry out regular checks to make sure that information is being deleted in accordance with your policy.
- These checks should also confirm that the information has been permanently deleted through secure methods.
Ensure that there is a written agreement in place with any third parties outside your organisation who process any data on your behalf. The agreement needs to clearly set out:
– how the data is to be processed, which should only be in accordance with your instructions.
– how the data is to be stored.
– how the data is to be kept secure.
– the third party’s obligations to only use properly trained staff and to keep the data confidential.
- Review your policy regularly (and at least annually) to ensure that it remains up to date and that your procedures are being followed.
- Complete the Surveillance camera code of practice: self assessment tool to find out how well your organisation complies with the 12 principles of the surveillance camera code of practice.
Organisations which use CCTV and other surveillance devices need to review their existing policies and practices to ensure that they comply with the New Code.
If you have any questions about the new CCTV code or data protection in general, please contact Jeanette Burgess, Head of Regulatory & Compliance at Walker Morris.

Excluding liability for loss of profits
Background In Polypearl Ltd v E.On Energy Solutions Ltd [1] the claimant entered into a […]
Background
In Polypearl Ltd v E.On Energy Solutions Ltd [1] the claimant entered into a supply contract with the defendant. The contract provided that neither party would be liable to the other for “any indirect or consequential loss, (both of which include, without limitation, … loss of profit)”. The contract further capped liability for “direct loss” at £1 million.
The claimant claimed that the defendant breached the contract by buying fewer of the products than it was obliged to do under the contract. The claimant sought loss of profits of just over £2 million.
Submission
The defendant submitted that, pursuant to the terms of the contract, loss of profits were indirect losses and were therefore excluded.
Judgment
The Court held that the exclusion clause did not cover liability for direct loss of profits. However, the cap of £1 million applied.
The Court construed the exclusion clause to mean that the words “loss of profits” were subordinate to the preceding words “indirect or consequential loss” and their purpose was to indicate what could be an indirect or consequential loss. They were not an attempt to place a direct loss in the indirect loss category. Clear language would be needed if a claim for direct loss of profits were to be deemed an indirect loss and therefore within the ambit of the exclusion clause.
Commercially, the most likely damage the claimant would suffer from the defendant’s failure to buy the products was a loss of profits. It accorded with business common sense therefore for the clause to be interpreted as not excluding claims for a direct loss of profit.
Points to consider
As is often the case with judgments on exclusion clauses, the key thing is to ensure the drafting is very clear. Any departure from a “common sense” position must be absolutely unambiguous. If the intention is to exclude all loss of profit claims, this must be spelt out.
[1] [2014] EWHC 3045 (QB)

Non-disclosure of the amount of PPI commission paid to the lender rendered its relationship with the borrower unfair
Over-turning the Court of Appeal’s decision, the Supreme Court has ruled that non-disclosure of the […]
Over-turning the Court of Appeal’s decision, the Supreme Court has ruled that non-disclosure of the significant amount of commission earned by a lender created unfairness in the borrower’s relationship with it: Plevin v Paragon Personal Finance Ltd [1].
Facts
Mrs Plevin telephoned the brokers, LL Processing (UK) Ltd (LLP), having received an unsolicited flyer from them offering to refinance her existing loans. LLP then conducted a demands and needs assessment over the telephone and recommended a loan, together with payment protection insurance (PPI). LLP followed up with letter enclosing a policy summary and a key facts document, which informed her that a commission would be paid to the lender (and the broker) in relation to the PPI. Paragon Personal Finance Ltd (Paragon), one of LLP’s panel of lenders, entered into a credit agreement with Mrs Plevin after she signed LLP’s application form and Paragon conducted a money laundering compliance telephone call with her. Paragon agreed to lend Mrs Plevin £34,000 and a further £5,780 to pay for a single premium policy of PPI. The 71.8 per cent commission paid by the PPI insurer on the £5,780 policy was split between Paragon (who received £2,280) and LLP (£1,870).
Later, in 2010, Mrs Plevin’s PPI mis-selling claim against LLP was settled for £3,000 and paid from the Financial Services Compensation Scheme.
Claim against Paragon
Section 140A of the Consumer Credit Act 1974 (CCA) provides that a court may order the creditor to reduce, discharge or repay a loan under a credit agreement should it determine that the relationship between the creditor and the debtor is unfair to the debtor because of one or more of a list of factors, including:
“…any other thing done (or not done) by, or on behalf of, the creditor (either before or after the making of the agreement or any related agreement).” (section 140A(1)(c))
Mrs Plevin argued that owing to either:
- the things done or not done “on behalf of” Paragon by LLP, including the failure to assess and advise on the suitability of the PPI for her needs (given that she already had life insurance, adequate sickness and redundancy benefits with her employer and that the length of the PPI only covered half the term of the loan); and/or
- the non-disclosure of the amount of commission received for the PPI.
an unfair relationship existed between her and Paragon qualifying for relief under section 140A of the CCA.
“On behalf of”
The Supreme Court decided that the Court of Appeal was wrong to decide that LLP was operating as Paragon’s agent. It observed that “on behalf of” meant the creditor’s agent or deemed agent. In fact, LLP had operated as Mrs Plevin’s agent, introducing her (and other customers) to Paragon. LLP’s advice to Mrs Plevin “was not even in the loosest sense a function that they performed for or for the benefit of Paragon. It was a function which they performed, however defectively, for the sole benefit of Mrs Plevin”. The Supreme Court, therefore, held that the relationship between Mrs Plevin and Paragon was not unfair due to anything done or not done by LLP.
Non-disclosure: Harrison
The Supreme Court did consider, however, that the Plevin/Paragon relationship was unfair for the second reason; the failure by Paragon to disclose the amount of the commission received.
This required the Supreme Court to overturn the decision in Harrison v Black Horse Ltd, [2] which established that where there was no breach of the Insurance Conduct of Business Rules, either in charging commission, or in failure to disclose it, there can be no unfair relationship established under section 140A CAA. The Supreme Court thought the Harrison approach was too narrow and that other factors, not just code compliance, had to be considered, such as the characteristics and level of knowledge of the borrower, the range of choice she had and the lender’s awareness of these issues.
The non-disclosure of the amount of commission payable out of the PPI premium made Mrs Plevin’s relationship with Paragon unfair. It was reasonable to consider that a person in her position who was told that more than two-thirds of the premium she paid for the PPI was going to intermediaries would question whether the insurance was value for money and a sensible decision. Given the likelihood that disclosure would have affected her decision, non-disclosure amounted to unfairness.
As a result of the Supreme Court’s findings of an unfair relationship, the case will be remitted to the County Court of Manchester to decide what relief under section 140B CCA should be ordered.
Comment
The decision of the Supreme Court is welcomed in so far as it prevents the net of potential targets for wrongful conduct in the mis-selling of PPI from becoming unfeasibly wide. It is entirely unreasonable to hold a lender responsible for the dealings of separate and independent brokers and other intermediaries.
The case makes it clear that lenders can only be responsible for their actions and omissions and those of their agents or deemed agents. Any claims under section 140A CCA which allege mis-selling or mis-conduct by a third party that is not the creditor’s agent are doomed to fail.
Unfortunately, the Supreme Court’s decision with respect to the non-disclosure of the amount of the commission, leads to potential difficulties. Regulatory obligations require the disclosure of the existence of any commission arrangement, which did happen in this case. Previously, the fact that a lender (or its agent) had complied with its regulatory obligations, made it very difficult indeed for a customer to argue that the lender had nevertheless acted unfairly. The Supreme Court’s decision has eradicated that certainty. A lender’s compliance with its regulatory obligations is now only one of a number of factors when considering the fairness of its relationship with the borrower. The limited guidance in the judgment suggests that a court must look at the wider picture and analyse the whole relationship between the creditor and debtor to assess its fairness. It did acknowledge, however, that the relationships of the majority of private borrowers and commercial lenders will be inherently unequal and thus it would take a sufficiently extreme imbalance to invoke section 140A CCA.
But, what amount of commission requires notification to the debtor to avoid the relationship being labelled unfair? In this case it was 71.8 per cent. Would 70 per cent be deemed unreasonable and 72 per cent always unfair? Neither the Court of Appeal nor the Supreme Court could say; the Court of Appeal acknowledging that the “tipping point” would be very difficult to identify.
Finally, section 140A CCA is discretionary. It is entirely possible, that even though the Supreme Court decided that relationship between Mrs Plevin and Paragon was unfair, the County Court at Manchester may not order discharge or any reduction or repayment of the loan. Walker Morris will monitor the proceedings and report in due course.
For more advice on PPI mis-selling claims, agency relationships and lenders’ regulatory obligations, contact Andrew Beck.
[1] [2014] All ER 128 (Nov)
[2] [2011] All ER(D) 112

Possession orders against tenants due to anti-social behaviour caused by a family member
In Greenwich LBC v Tuitt [1] Mrs Tuitt was a secure tenant of the local […]
In Greenwich LBC v Tuitt [1] Mrs Tuitt was a secure tenant of the local authority. Under the terms of her tenancy agreement, she accepted responsibility for the behaviour of her children while in the locality of the property. It was alleged that her son was involved in anti-social behaviour, in breach of an Acceptable Behaviour Agreement that he had signed, and he was also convicted of an assault which took place on the local housing estate. He subsequently broke the terms of his bail by returning to the estate on at least four occasions and he criminally damaged the door of a property belonging to one of his neighbours.
The authority served a notice seeking possession relying on grounds 1 (rent arrears) and 2 (nuisance/annoyance caused by a person residing at the property) in Schedule 2 to the Housing Act 1985.
Before it will grant an order based on anti-social behaviour, the court must be satisfied that it is reasonable to make the order. In determining reasonableness in respect of anti-social behaviour, the court is obliged by statute to consider, in particular: (a) the effect that the nuisance or annoyance has had on persons other than the person against whom the order is sought; (b) any continuing effect the nuisance or annoyance is likely to have on such persons; and (c) the effect that the nuisance or annoyance would be likely to have on such persons if the conduct is repeated.
The judge granted the order and Mrs Tuitt appealed. Before the Court of Appeal, she argued that the judge had failed to properly direct herself in accordance with the Court of Appeal decision in Portsmouth CC v Bryant [2]. In Bryant, the Court had said that the extent of the personal fault of the tenant was relevant to the question of whether or not it was reasonable to grant a possession order and, if so, to suspend it, and that the court should explore other avenues where the tenant was powerless to rectify the anti-social behaviour of a third party.
The Court of Appeal held that, whilst the judge had clearly focused on the allegations of the son’s misconduct, that did not mean that she had ignored Mrs Tuitt’s approach to the problem of her son’s behaviour. The judge had found that Mrs Tuitt had underestimated the effect of her son’s behaviour on others and that her son’s behaviour had resulted in both Mrs Tuitt and her son falling out with their neighbours.
On the question of whether it would be appropriate to suspend the order for possession, the Court ruled that the judge had found that Mrs Tuitt had been unsuccessful in her attempts to deal with her son’s behaviour and had not properly accepted her responsibility for this. She had taken too soft an approach to her son’s misconduct which meant that it was more likely that he would continue his anti-social behaviour.
The appeal was therefore dismissed.
The case highlights the limits of the Bryant decision and clarifies that the courts are prepared to grant an outright possession order under ground 2 of the Housing Act 1985 where the anti-social behaviour in question has been carried out by someone other than the tenant, provided it can be shown that the tenant is in some way partly responsible for that behaviour.
[1] CA, 25 November 2014
[2] (2000) 32 HLR 96

Ratification of a director’s breach of duty
The High Court has held that a director of a company who had breached his […]
The High Court has held that a director of a company who had breached his fiduciary duties as a director could not then, in his capacity as the company’s sole shareholder, ratify the breach where the company was insolvent.
A director’s breach of duty can be ratified by resolution of the shareholders. Some acts are incapable of ratification, such as where the act is a fraud on the minority shareholders; where the act was dishonest or where the act was inherently unlawful, such as the payment of an unlawful dividend.
In Goldtrail Travel Ltd (in liquidation) v Aydin [1], Goldtrail, a holiday tour operator now in liquidation, had entered into transactions with other companies that were designed to divert assets away from Goldtrail. Essentially, the director, Mr Aydin, had entered into deals with third parties to purchase seats on airlines for the company’s customers. Large sums of money were paid to Aydin, enabling him to make a personal profit.
Goldtrail’s liquidators claimed against the third parties for dishonest assistance, both in relation to the misapplication of the company’s money and the breach of the statutory duty in section 175 of the Companies Act 2006 for directors to avoid a conflict of interest.
The High Court found that Aydin had breached his fiduciary and statutory duties. The issue was whether such acts were capable of prior authorisation by him as a sole director or subsequent ratification by him as the company’s sole shareholder.
The High Court answered that question by holding that once the company had gone into liquidation, the director could not then, in his capacity as sole shareholder, approve the transactions as he owed duties not just to the company but also to the company’s creditors.
The Court also considered that ratification by shareholder resolution and prior authorisation by the board were precluded by respectively section 239 of the Companies Act 2006, which prohibits shareholders from voting on resolutions to ratify breaches concerning themselves as directors and section 175(6) of the Act, which prohibits a director from authorising a conflict of interest involving him- or herself as a director. The Court also explained that the inability of a sole director/shareholder to ratify his or her own wrongdoing is not alleviated by the so-called Duomatic principle, namely the principle that where it can be shown that all shareholders entitled to vote on a resolution informally assent to some matter, that assent is as binding as a resolution in general meeting would be.
This case is helpful in highlighting the limits upon the ability to ratify directors’ breaches.
[1] [2014] EWHC 1587 (Ch)