Podcast - Agricultural Law- Contract Checking

Transcript

Paul

Hello and welcome to another Warners Law podcast. I’m Paul Harvey. And today we’re back with Michael McNally, who is a partner in the Litigation Team at Warners. Michael, last time we discussed agricultural law and you told us about some of the cases you have worked on. Now, I know Warners has a large agricultural team and you are, in fact, the panel firm for the NFU.

Can you tell me what this actually means?

Michael

Yes. Well, the NFU has got 16-panel firms across England and Wales. And to join that panel, we had to go through a rigorous selection process. So that was a competitive tendering where we were up against numerous other firms in Kent and East Sussex, who specialise in rural and agricultural law. And so we won that process about four years ago.

And we’ve been the panel firm for Kent’s in East Sussex ever since. So obviously we were selected based on our agricultural and rural expertise.

Paul

Can I ask how many members that kind of means over the region?

Michael

There are thousands of members. I don’t have the exact figures, but there are thousands of NFU members in Kent and East Sussex and many of them are members of the NFU’s legal assistance scheme.

Paul

So how do you help NFU clients?

Michael

Well, it’s particularly advantageous if the farmer has got legal assistance scheme membership through the NFU. And the reason for that is that the legal assistance scheme membership or LAS cover as we call it, means that the NFU is likely to contribute significant amounts to the farmer’s legal costs if he gets into a dispute or otherwise requires legal help. That could be thousands of pounds or even tens of thousands of pounds.

And to give you an example. We’re acting for a farmer who’s facing an application by rights of way organisation to turn an existing track or route through the farm into a public footpath. So I imagine this is something that many farmers have had to face. And of course, in the southeast, this is a particularly common problem. Now, these cases need to be disputed, but that’s not cheap.

The process takes a long time. And in addition to the legal fees, it’s always a very good idea to have a report from a rights-of-way consultant. There aren’t many of these people and they do charge thousands of pounds for each report. So for this particular farmer, the route went through an area of the farm that had been very much improved from an environmental point of view, had high-level stewardship, etc., and the farmer does not want a public footpath right through this land.

So one of the first things we’ve done is to get hold of a report from Rights of Way consultants. These reports cost thousands of pounds, so the farmers got that to pay in addition to our fees as well. And the NFU through the legal assistance scheme has been really good and they’ve already paid a significant amount towards the farmer’s legal costs and usually, they keep this funding up through the course of the case.

So it’s really good value for money. The legal assistance Scheme strongly recommends it.

Paul

So that particular case you’ve mentioned cost thousands of pounds.

Michael

Yes, that’s right.

Paul

And the NFU covered most of the costs?

Michael

We’re still at a fairly early stage on that case. If the case goes all the way through, it’s going to cost tens of thousands of pounds. But in these cases, it can be hugely expensive and disproportionately expensive. But if you’re faced with a right-of-way application, what do you do? You either just concede or you fight. And in this case, the farmer wants to fight it.

But the benefit is that the NFU is really helping towards her legal costs and it gives her a much better chance of winning the case.

Paul

Yeah, absolutely. And do you have any offers specifically for NFU members?

Michael

Yes. Well, if you’re a member of the nephew’s legal assistance scheme, then you always qualify for a 12-and-a-half percent discount on our fees. There’s also the NFU’s contract checking service, and we also provide a legal health check for farms. And the way that works is you provide information about your farm and your farming business and how it works, and we’ll give you advice on what you need, which could cover partnership agreements, farming tenancies, business contracts, and wills.

That’s well worth doing because often farms and farmers are not always ready in particular to transfer the farm to the next generation and to get everything in good legal order in order to facilitate that process. So taking advice on that is really beneficial.

Paul

Can you tell us a little bit more about the contract checking service?

Michael

Well, many of us, most of us enter into contracts every day by a newspaper or by a pair of socks or insurance into a contract by which you pay money in order to receive goods or services. And most of these contracts are, of course, not valuable enough or important enough to justify a written contract. But for more important contracts, a written contract is essential.

You might be spending thousands of pounds on seed for which you depend for next year’s crop, or you might be spending a six-figure sum on a new piece of crucial farm equipment. And these are really important contracts. They do need to be checked properly if you don’t check them. You may subsequently find out that the contract doesn’t deliver what you want, or it may contain terms that are hostile to you.

For example, the contract may report to limit or exclude your remedies if it turns out that the goods are defective. And that could be very important if you suffer consequential loss, such as the failure of a crop where losses may be substantial. So it’s crucial that these contracts are checked before you sign them. The NFU’s legal assistance scheme offers a very worthwhile benefit, which is the contract checking service.

And under that, the NFU will pay £250 towards each contract, checked up to a maximum of four contracts per year, so that’s a total of £1,000 off your legal costs. Warners have got many lawyers across a range of teams who can advise you of various contracts you may be asked to sign. So I strongly recommend if you’ve got a contract, get it checked and take advantage of the NFU’s contribution towards your legal costs.

Paul

So the NFU will effectively pay for your contracts to be checked?

Michael

Yes, it does depend upon how long or complicated the contracts are, and so some will be covered entirely by that £250. But if a contract is more complex, then it may need more time than that. But we’ll let you know at the start how much it’s likely to cost. And whether or not the NFU’s £250 will cover all of it or not.

Paul

And how can NFU members use this service?

Michael

All you have to do is, rather than contact us directly, you first of all, need to contact the NFU via their call first scheme. And what the NFU will then do is to contact us and authorise the payments by the NFU of the £250 towards each contract checked.

Paul

Do you have any examples of clients who have used the service?

Michael

Yes, many have. One example was a farmer who regularly sold grain at a predetermined price to a purchaser and under an ongoing contract, the purchaser was becoming difficult and things got worse. In early 2022, where the market price for the grain went up of course because of the Ukrainian war, but the price of the contract didn’t. So the farmer wants to get out of this contract and to sell the grain at market prices, but wants to know, was he tied into the contract or not?

So we had to advise on the enforceable issue of that contract. Now, the outcome of that was that the farmer was able to persuade the purchaser to agree to a substantial natural increase in price. So rather than terminating the contract altogether in the face of the farmer possibly being able to get out of the contract, the purchaser agreed to a substantial increase in the price, and so the farmer, therefore, got a much better price for his grain as a result.

Paul

A good example of the benefit to be achieved there, that’s interesting. Thank you, Michael, for that information. If somebody wants to make contact with you at Warners Law, what’s the best way they can do that?

Michael

My email address and [email protected] or on the phone 017323 75396.

Paul

Thank you, Michael. Today I’ve been with Michael McNally, who is a Partner in the Litigation Team at Warners, and we’ve been discussing elements of agricultural law.