Western Morning News 17 July 2003

17/07/2003

Question:
I run a small manufacturing company. We have sued a supplier who is much bigger and wealthier than us. We have tried to persuade them to come to the table but they seem to be stringing things out, making us spend lots of money on lawyers, possibly in the hope that we will not be able to afford to keep the litigation going. They might well be right. What can we do to force them to talk?

Answer:
One thing you cannot do is force an opponent to negotiate a settlement. A carefully calculated offer to settle can be hard to resist and can cut short expensive litigation by forcing the opponent to carry out a cost : risk : benefit analysis.

My tip would be to offer mediation. This is a form of alternative dispute resolution (ADR). The courts have started awarding legal costs to the losers at trial where they can show that they have offered ADR to their opponent but have been turned down. That’s a pretty strong incentive to talk!

Question:
I own a successful business in Newquay, manufacturing novelty beachwear. The premises are leasehold and the lease has another year to run. I would like to stay here but the landlord is making noises about a huge hike in rent. My current High Street solicitor says that I may be able to obtain a new lease through the courts. How does that work?

Answer:
I am fascinated by the concept of novelty beachwear and would welcome a site visit one day! The answer is that provided your lease was not "excluded" from the Landlord and Tenant Act 1954 you do have the right to apply to the court for a new tenancy. The most likely sequence of events is that the landlord will serve a notice on you (called a section 25 notice) bringing the lease to an end. Until he does that you are entitled to stay in the premises on the subsisting terms. Once you receive the section 25 notice, you must serve a counter notice telling the landlord that you wish to stay.

There are strict time limits for this and for the application to court that must follow. As part of your application to court you can ask the Judge to rule on the rent for the new rent. This is a technical area and you might want to make sure your solicitor is sufficiently au fait with the procedure.

Question:
My business has a well-known name locally. My customer base is mainly in Cornwall and Devon, but I’ve got a growing number of customers from all around the country through my website. A rival business selling the same sort of products has started up with a similar name. Can I stop it?

Answer:
If you have registered your name as a trademark, you will be able to enforce this and claim damages. You might like to consider registering the name, and maybe your logo, as trademarks.

Your rival might be ‘passing off’ by deliberately or carelessly causing confusion on the part of customers and trading off your name and reputation. Your rival’s customers might think that they’re dealing with you. You might be losing trade, and the goodwill in your business might be suffering.

You can take action in the court to stop your rival from passing off. It would be best to have some evidence of confusion. Keep a diary or telephone log of customers telling you that they have called the other business by mistake, or of the rival’s customers calling you by mistake.

Much will depend on where your rival is based. The further away from your main customer base the less likelihood of passing off. Where e-commerce is concerned, location is less relevant than the name and content of the website. The nearer the name and business type is to yours, the more likely you are to succeed in seeing off the rival.

But remember, you cannot stop fair competition!

Martin Pearse, a Partner of Follett Stock solicitors, is a specialist commercial litigator, with particular experience in ADR.