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Don't just hope for the best

Now you don't just have to hope for the best!

The new FMB legal protection scheme which will benefit all members is to be launched 1 January 2010.

You will be aware, following the recent FMB member survey and the article in the November Master Builder magazine that the FMB has been working on a major new member benefit.

It is clear that our members are facing more legal issues than ever before as clients and employees have increased awareness of their rights. Legislation changes with increasing regularity and procedural requirements appear to make matters more complicated to handle. The economic climate has added to this, with more debt related problems and a rising number of employment disputes.

4,000 small business failures were caused by late payments in 2008
Many small businesses are waiting up to four months to be paid
151,000 employees made a claim to an employment tribunal in 2008
82 percent conviction rate for HSE prosecutions, with an average penalty of £12,896
39 percent of employers have faced at least one tribunal claim in 2008
Average employment awards were:

- £7,959 for unfair dismissal

- £11,025 for sexual discrimination

- £27,235 for disability discrimination

- £32,115 for race discrimination

£1,845 billion was collected from businesses following VAT interventions in 2007/08.

IT’S NOT JUST THE WINNING, IT’S THE TAKING PART This is the unfortunate thing with legal cases. You may feel that you do everything possible to avoid disputes, but there is always someone willing to ‘have a go’. Furthermore, a successful defence does not automatically mean that you will be able to recover your costs. Many disputes, particularly employment tribunal matters, do not entitle the successful party to recover their costs from the other side. With legal costs still to be paid, winning a case might not be a completely successful outcome.

WHAT IS LEGAL EXPENSES INSURANCE?

Legal expenses insurance helps you to meet the cost of taking legal action or defending your rights if you have a dispute with another party, by providing insurance designed to meet these costs. The cover goes well beyond the limited legal defence cover that you may find under your liability insurance. Aon Insurance Brokers has negotiated a tailored product with leading specialist insurer DAS Legal Expenses Insurance Company.

DAS was the first company to market legal expenses insurance in the UK, and has more than 30 years experience in the field.

PROVIDING PROFESSIONAL REPRESENTATION

DAS will appoint a solicitor or accountant to act on your behalf, so you can be assured that the necessary expertise is on your side. The solicitor will first review the circumstances of your case and advise whether you have a good chance of taking matters forward. Most elements of the cover carry a £100,000 limit of indemnity to cover the legal costs involved.

DON’T WALK AWAY FROM BAD DEBTS

Assistance with overdue debts and customer complaints. We all encounter difficulties with certain customers, some relating to non-payment and others who choose to complain over the service they have received. The policy provides Debt Recovery assistance in resolving uncontested debts with customers. Overdue payments soon have an adverse effect on the cash flow of a business, and representation by a DAS appointed solicitor can help to bring matters to a swift conclusion.

FMB ADJUDICATION PROCEDURE

This tailored policy will also provide support alongside the FMB’s RICS Adjudication Procedure, indemnifying costs which may be awarded against you. You can therefore be confident about committing to the service knowing that any apportionment of costs (up to £1,100) will be covered under this policy. Furthermore, if RICS rule in your favour, but your customer refuses to accept their adjudication, DAS will take action to enforce the decision through a summary court judgement.

365 DAYS A YEAR DAS BUSINESSLAW ADVICE

During your period of insurance, this advice service is available 24 hours a day, 365 days a year to provide an on-line business support system giving free access to over 600 model business documents, specimen letters and business guides on a range of subjects from employing someone to writing a marketing plan. www.fmb.org.uk/legalprotection

Claims Example - Property Protection

Following a period of heavy rain, a warehouse rented by our insured became flooded. The roof had been reported to the landlord as leaking several months previous to this. Our insured, a building company, filed a claim for flood damaged building materials to the value of £19,000. We appointed a solicitor to act on their behalf. The solicitor entered negotiations with the landlord and liability was admitted resulting in full payment for the damaged materials being made to our insured.

Claims Example - Debt Recovery

A policyholder contacted us after they were unable to recover £1,156 for renovation work they carried out on a hotel. Despite numerous demands for payment, the debt had not been settled. We appointed a solicitor to pursue the debt on their behalf. The hotel settled the debt as soon as court proceedings were served on them. The legal costs of £941 were paid by DAS.

What you say:

Here are a few of your comments, which we have taken from the survey we carried out in the autumn about the new FMB Legal Expenses insurance scheme.

I think this is a useful contribution to the membership package
I wish you had done this before! I am in dispute at the moment and paying legal and expert fees running to thousands of pounds
Great idea in collectively making it affordable
Our premium for this insurance cover is £250.00 a year, so we will certainly see a benefi t from the FMB cover
Massive plus for FMB and all the members. If you have never been in a court situation you would not know how much we need this cover.
This insurance is a real benefit for all members, especially the debt recovery. Even when you do a fantastic job customers never want to pay that final payment.
Many disputes, particularly employment tribunal matters, do not entitle the successful party to recover their costs from the other side
Overdue payments soon have an adverse effect on the cash flow of a business, and representation by a DAS appointed solicitor can help to bring matters to a swift conclusion

What your FMB National Councillors say:

Ann Nash, FMB National Councillor:
We all hope, of course, that we won’t need it. But when we do, legal expenses and representation can fi nancially cripple a small company. This move is most welcome and is being provided for a fraction of what individual companies could achieve.
Derek Bostock, FMB National Vice President and Chairman of the National Council:
Possible savings achievable by this forward-thinking move by the FMB could far outweigh the cost of membership and it shows that once again, the FMB is looking after the interests of its members.
Geoff Lister, FMB Immediate Past President:
This is a fantastic additional benefit. This cover will benefi t members’ businesses of all sizes.
Neal Etchells, National Council member (London):
In forty years of running a building business we have always felt that our company is on the losing side when a commercial relationship breaks down or goes sour; most especially when an invoice is disputed by the person ordering the work. The new FMB insurance scheme offers a very cost effective way of pursuing the kind of debts that you may not have contested in the past because of likely cost or complications. I have every reason to believe that this very valuable additional service will help FMB members to secure legally owed payments in these very tough trading conditions.
Mick Quickfall, National Council member (Yorkshire & Trent):
I believe this will become as important as steel toecaps in our boots as a personal protection to all.
Julian Weightman, National Council member (Northern):
At Border Craft this will result in cost savings well in excess of our membership fees alone. What a fantastic product for members of the FMB.
Arthur McArdle, National Council member (Midland):
Once again the FMB comes up trumps with a great addition to the membership pack. The legal protection cover will undoubtedly be a winner.
Dave Bentley, National Council member (Yorkshire & Trent):
The new FMB insurance scheme means you get all these professionals on your side, it’s got to be a members’ dream come true.
Brian Sutherland: National Council member (Eastern):
Providing Legal Protection Cover is a significant addition to the benefits of membership and working towards an all encompassing membership will encourage other companies to see the benefits of being part of the FMB.
Ken Farnham: National Council member (South West):
I’ve had legal expenses cover for many years and never had the need to use it until three years ago, my premium (which is almost the same as my annual FMB subscription) was returned many times in paying my defence fees...the FMB scheme is an absolute must for all.