On 24 April 2012, the County Court issued a decision on data-protection issues that will be readily identified by many universities – (i) how to respond to very wide subject access requests and (ii) whether those subject access requests can be refused on the ground that their sole purpose is simply to embark on a fishing expedition to further threatened litigation (i.e. for an improper, collateral purpose).

Background

The case concerned a Mr Elliott, who had submitted complaints to Lloyds Bank in relation to his companies which had been placed into administration and who threatened to sue Lloyds (Elliott v Lloyds & Anr Case No. OLS51908). Mr Elliott’s attempts to obtain pre-action disclosure of documentation by Lloyds were unsuccessful. He subsequently submitted a very broad subject access request for all his personal data held by Lloyds from 1 June 2008, in response to which Lloyds bank submitted a large volume of information. Lloyds disclosed more information ten months later when Mr Elliott made a further subject access request for all his personal data held by Lloyds over the previous six months. Mr Elliott sought a court order under the Data Protection Act (DPA) requiring Lloyds to disclose all his personal data in response to both requests.

Reasonable and proportionate searches for personal data

Lloyds had identified six senior members of staff whose files had not been searched in response to Mr Elliott’s requests. The reason they were not searched was because those individuals were unlikely to have had any day-to-day involvement in Mr Elliott’s companies and information held by them would either not be relevant or would have duplicated information held by other staff which had already been disclosed to Mr Elliott. Mr Elliott required that the further searches be conducted. The court agreed with Lloyds’ defence i.e. that such a search would not be reasonable or proportionate. Interestingly, the court also concluded that, contrary to the Information Commissioner’s guidance, the provision in the DPA which absolves a data controller from providing a copy of personal data in permanent form where the provision of a copy amounts to disproportionate effort (DPA s8(2)) also extended to the search for the data.

Lloyds were therefore only obliged to supply such personal data to Mr Elliott as was found after a reasonable and proportionate search. Universities, often toiling with very broad subject access requests, will no doubt take solace from this element of the judgment.

Improper, collateral purposes

Lloyds claimed that Mr Elliott sought access to his personal data simply as a fishing expedition to further his claims in respect of his commercial interests. They insisted therefore that the court proceedings seeking disclosure under the DPA were an abuse of process and improper. The court accepted that if Mr Elliott’s only motive in bringing proceedings under the DPA was to obtain information or documents to assist his other claims, there would be no obligation to comply with the request and the application would amount to an abuse, which should be struck out. A more difficult question was how to deal with the current proceedings if Mr Elliott’s motives were mixed i.e. a combination of concern that his personal data had been misused by Lloyds and a desire to service the other litigation. The court indicated that if it found that Mr Elliott had such mixed motives, the application under the DPA would not be an abuse unless it could be shown that, but for the collateral purpose (i.e. the other potential commercial claims), the application for an order to disclose his personal data would not have been brought at all. The court accepted Mr Elliott’s evidence in his witness statement and provided under cross examination that he had mixed motives. It was not satisfied that, but for the collateral purpose, the DPA proceedings would not have been commenced. Mr Elliott’s concerns about his personal data were sufficient to enable him to commence the current application for access to his personal data.

This case makes it tempting to refuse any request for access to personal data where a member of staff or a student is threatening or has commenced litigation and where it is suspected that the access request is made simply to circumvent the restrictions of the pre-action disclosure rules. This case also, however, illustrates that, if challenged and the court finds that the individual is an honest witness, it may accept that the individual was motivated by concerns of privacy and data protection, as well the collateral wish to pursue an unrelated claim. Proving a state of mind is always a challenge and establishing that, but for the collateral litigation, the student or member of staff would not have sought a data-subject access order, may be a challenge too far.

Costs – a salutary warning

Though Lloyds won the argument on conducting only reasonable and proportionate searches for personal data, the court required the bank to pay a substantial part of Mr Elliott’s costs. A factor influencing the court’s decision was the fact that Lloyds disclosed a significant amount of new data following commencement of the claim by Mr Elliott. This indicated that initial searches carried out by Lloyds were not sufficient to discharge Lloyds’ obligations under the DPA and that Mr Elliott was justified in proceeding against Lloyds at least until he was supplied with that information and costs incurred up to then should be awarded to Mr Elliott.

This case was to some extent a pyrrhic victory for Lloyds. While it deployed useful and partially successful tactics to refuse disclosure, those tactics ultimately cost it lot of money. Universities considering refusing a request for access to personal data because a student or member of staff is motivated by a collateral purpose will have to assess the probability that the refusal will be challenged in court and hence weigh the potential costs of complying with the request with those of refusing it. Staff and students are more likely however to submit a complaint to the Information Commissioner rather than to seek a court order, which may not have the pure financial consequences of a court case, but can be expensive to in terms of staff time and resources. Like most problems, it will require a judgment call in each case.

Geraldine Swanton
Senior Associate Solicitor, Education Team
T: 0800 763 1455
E: geraldine.swanton@sghmartineau.com

© SGH Martineau 2012

The Protection of Freedoms Act 2012 (PFA) received Royal Assent on 1 May 2012, though many of its provisions are not yet in force and no information has been issued as to when they will come into force. The Act is a melange of amendments to current legislation and below is a brief summary of some of the changes which are relevant to universities.

• SAFEGUARDING VULNERABLE GROUPS ACT 2006 (SVGA)

The amendments to the SVGA have not produced the longed-for exclusion from the definition of regulated activities relating to children, namely the exclusion of teaching/training of children aged 16 or 17 in higher (or further) education. This, we understand, was the result of lobbying by the NSPCA. The amendments that will be made are as follows:

• Regulated activities relating to children

Currently the definition includes any form of teaching, training or instruction of children (other than that which is merely incidental to the teaching of adults). The PFA will exclude from that definition the teaching etc. of children which, “on a regular basis, is subject to the day-to-day supervision of another person who is engaging in a regulated activity relating to children”.

The provision of treatment or therapy to children will also be excluded from the definition.

• Regulated activities relating to vulnerable adults

The definition of regulated activities relating to vulnerable adults currently includes:

• training, teaching, or instruction provided wholly or mainly for vulnerable adults;

• any form of assistance, advice or guidance provided wholly or mainly for vulnerable adults; and

• any form of care or supervision of vulnerable adults.

The amendments which will be effected by the PFA will remove definitions (1) and (2) above except to the extent that they relate to teaching, training etc. of vulnerable adults in personal care (e.g. toileting, washing, bathing). (3) will be removed and replaced by the provision of relevant personal care.

Effectively, the relevance of the provisions of the SVGA to universities has been removed except in the context of the provision of personal care or the provision of health care (by a health care professional).

• Abolition of monitoring

Staff and volunteers engaged in regulated activities will not be required to be “monitored” by the Secretary of State. This requirement has been suspended by the coalition government since it came into office.

• Checking

Universities will continue to have a duty to check that those they are considering appointing to regulated activities are not barred. This can be achieved by:

• applying to the Secretary of State (presumably via the new Disclosure and Barring Service – see further below) for information on whether a person is barred. The individual concerned must consent to the information being disclosed;
• conducting an enhanced CRB check; or
• a CRB check which has been up-dated (see further below).

• CRIMINAL RECORDS

• CRB checks

Currently, CRB certificates are sent simultaneously to the individual subject of the check and to universities. The changes under the PFA will require the CRB certificate to be issued to the individual only, to afford him/her an opportunity to challenge the information contained in it.

Further, currently the police are under a duty to disclose non-conviction information to universities without the individual’s knowledge if they deem the information relevant and if they believe that premature disclosure to the individual might prejudice the criminal investigation. The PFA amends this provision to enable this practice to continue but only if it is deemed justified and proportionate.

• Up-dating certificates

The PFA introduces a system of continuous up-dating of CRB checks to promote their “portability”.

• DISCLOSURE AND BARRING SERVICE

The Independent Safeguarding Authority and the Criminal Records Bureau will be merged to form a new body corporate, the Disclosure and Barring Service.

• FREEDOM OF INFORMATION

• Subsidiary companies

The PFA will amend the FOIA to remove an anomaly in the definition of “publicly-owned companies”. Currently, a company comes within the ambit of the FOIA if it is wholly owned by a public authority i.e. a university’s wholly-owned subsidiary, but not a company jointly owned by two or more public authorities. That definition will be changed to include any company jointly-owned by public authorities who are already subject to the FOIA.

• Data sets

Where a request for a data set in electronic form is submitted, universities will be required, so far as is reasonably practicable, to make it available in a re-usable format.

A “data set” is essentially raw data because it is defined as a collection of information:

• held in electronic form;
• where most of it has been obtained or recorded for the purposes of providing the university with information in connection with the provision of a service by it or the carrying out of any other function by it;
• is factual information which is not the product of any analysis or interpretation (other than calculation) and is not an official statistic;
• remains presented in a way that (except for the purpose of forming part of the collection) has not been organised, adapted or otherwise materially altered since it was obtained or recorded.

Where copyright in the data set is owned by the university, the re-use of the data set will be subject to a copyright licence specified by the Secretary of State set out in the Code of Practice issued under the FOIA, for which the university can impose a fee. Data sets disclosed in response to such a request should then be made available generally via the university’s publication scheme.

Geraldine Swanton
Senior Associate Solicitor, Education Team
T: 0800 763 1455
E: geraldine.swanton@sghmartineau.com

© SGH Martineau 2012

Often leases entered into in more favourable times become uneconomic as trading conditions worsen. During an economic downturn it is therefore common for commercial tenants to try and seek to extricate themselves from expensive lease obligations. This is permitted where the lease in question contains an option to allow for early termination of the lease after the service of a break notice.

It is usual for conditions to be attached to the exercise of these notices. While at face value conditions can often appear innocuous and straightforward, a failure to adhere strictly to their requirements can result in the attempt to break being invalid. If successfully challenged by a landlord, this can leave the tenant on the hook for the full remainder of the lease term or (if the tenant is lucky), until such other time as a break may be permitted by the lease.

This issue is of particular interest to universities who can find themselves in the situation of being either a landlord looking to challenge a tenant’s attempt to break; or a tenant seeking to dispose of an expensive lease to premises which are no longer required.

A recent ruling by the High Court in the matter of PCE Investors Ltd and Cancer Research UK ([2012] EWHC 884) serves as a useful reminder to tenants that the utmost caution is required in dealing with breaks; and to landlords that a tenant’s compliance with any break conditions should be scrutinised to ensure that they are strictly adhered to.

Background

PCE Investors Ltd (the Tenant) occupied premises in South London owned by Cancer Research UK (the Landlord).

The Tenant served notice on the Landlord of its intention to exercise an option to end the lease early on 11 October 2010 (the Break Date).

In order to validly exercise the break the Tenant was required to comply with the following conditions:

• vacant possession of the Premises was to be provided by the Break Date; and
• “the rents reserved and demanded by this Lease” had to have been paid by the Tenant up to the Break Date.

The Landlord’s agent invoiced the Tenant for a full September quarter’s rent due on 29 September 2010. The Tenant responded in advance of the Break Date confirming that they had paid an apportioned rent figure calculated up to the Break Date and querying whether this was the correct basis for calculating the rent due. The Landlord did not respond to this enquiry and the Tenant did not make any further payments to the Landlord.

Shortly after the Break Date passed, the Landlord’s solicitors wrote to the Tenant stating that in order for the break clause to be operative it was a requirement that a full quarter’s rent and service charge be paid by the Tenant, as had been invoiced. The Tenant sought to argue that only an apportioned sum was required; and even if this were not the case and a full quarter’s rent was due under the lease, the Landlord was prevented from requiring this due to its failure to respond to the Tenant’s query. Proceedings were issued and the matter was eventually referred to the High Court.

The decision

The High Court ruled in favour of the Landlord, confirming that the Tenant had failed to comply with the conditions attached to the break. The reasoning provided by the court was:

• a full quarter’s rent was payable in advance on 29 September 2010. As there were other conditions attached to the break, the Tenant was not in a position to know for certain that the Lease would otherwise determine on the Break Date. Accordingly a full quarter’s rent should have been paid;
• the Landlord was not under any obligation to respond to the Tenant to point out the mistake in paying the apportioned sum only. In any event, the Landlord had already previously contacted the Tenant to demand payment of the September quarter’s rent in full.

Comment

While not establishing any new law, this case serves as a useful reminder as to the established principles the courts will follow in dealing with quarterly rents and the exercise of break options. It is also a further warning to tenants in light of other recent cases that conditions attached to break clauses are strictly interpreted by the courts and a failure to comply with their requirements in any way could be sufficient to render an attempt to break ineffective.

Lessons for tenants

• Take detailed advice on compliance duties on exercising an option to break well in advance of when notice is served upon the landlord.
• Where there is any doubt as to the sums payable to the landlord in order to exercise a break, ensure that the higher figure is paid to cover the rent and any other sums due. Once the lease has been properly terminated, a tenant can at that point approach a landlord to seek to reclaim any overpayment.

Lessons for landlords

• Take detailed advice on compliance duties on exercising an option to break as soon as notice is received from the tenant.
• If the tenant enquires whether any breaches have arisen in relation to the break conditions, take advice on how to answer. In many cases you will not be under any obligation to provide a response to the tenant and silence may be the best option. In cases where a response is required any misleading response should be avoided.

Pia Eames
Associate, Real Estate Disputes Team
T: 0870 763 1350
E: pia.eames@sghmartineau.com

© SGH Martineau 2012

Later this year, universities will be able to take advantage of the government’s innovative energy efficiency programme, the Green Deal, to improve the energy efficiency of their buildings.

The Green Deal effectively creates a "pay as you save" financing mechanism, which will be available from accredited Green Deal providers, to enable a range of energy efficiency measures to be installed in homes and businesses at no upfront cost. Instead, the cost will be paid in instalments through the energy bills in respect of the property. The Department for Energy and Climate Change (DECC) has indicated that it will be available from autumn 2012, initially for domestic properties but subsequently for business premises also.

In essence, the Green Deal mechanism is straightforward. For eligible improvements, a Green Deal provider will make a finance offer based on an assessment of the estimated energy savings that will result from the measure, and the likely costs for the installation work (including finance costs). If the offer is accepted, the payments agreed in the Green Deal plan will attach to the energy bill of the property and will be paid to the relevant energy supplier through these bills, who will then reimburse the Green Deal provider as appropriate.

The fundamental principle underpinning the Green Deal – the so-called “Golden Rule” - is that energy efficiency improvements to properties should pay for themselves through the resulting savings on electricity and gas bills. However, note the word “should”; there is no government guarantee on offer that this will be the case, and critics have objected to the proposal that assessments be based on average energy usage rather than actual usage of the occupants in question.

Nonetheless, what opportunities are there for universities?

Optional energy saving measures

• Student and faculty accommodation

The Green Deal draft regulations define domestic property as “a building or part of a building intended to be occupied as a dwelling” . Therefore, universities are likely to be eligible for the first phase of Green Deal financing, for their student and faculty accommodation buildings.

Whether or not a building is eligible for Green Deal financing is determined by a two part assessment process, whereby the fabric of the building is evaluated for an Energy Performance Certificate (EPC) following which an occupancy assessment is carried out to determine how occupants use the property to provide an indication of whether the projections of an EPC are accurate.

Importantly, the Green Deal is not a silver bullet and universities should still consider other means of curbing costs, notably educating students about energy efficiency.

Assuming a building is deemed suitable for Green Deal financing, installation works could have further financial implications in terms of loss of income for summer/term time lets, particularly where buildings become non-habitable during installation.

• Non-residential campus buildings

DECC has taken an integrated approach to the design of the Green Deal, so that the scheme is broadly the same for both the domestic and non-domestic sectors. However, not all properties will adhere to the Golden Rule. For example, although a university may not find it cost effective to close the whole or part of a building in order for more substantial energy savings measures to be carried out, it might find it cost effective to upgrade boilers or fit lighting controls and low energy lights which will give a much faster return on investment and which better adhere to the Green Deal’s Golden Rule.

As the Green Deal assessment procedure for the suitability of non-domestic buildings is more complex than for domestic properties, DECC have announced a delay to the use of the Green Deal in the business sector.

Mandatory energy saving measures

Whilst Green Deal financing provides a non-compulsory opportunity for universities to attain energy efficiency, amendments to the Energy Act 2011 (the Act) will impose a restriction from 1 April 2018 on landlords to let properties with energy efficiency ratings below band E.

Interestingly, the Act imposes a similar restriction on domestic and commercial landlords. However, until Regulations to clarify the specifics are published, it is unclear whether landlords who are themselves tenants (under a commercial head lease) will be in breach of the Act or whether the obligation to make energy efficiency improvements is one that rests on the owner of the property - the framework legislation suggests the onus is simply on the ‘landlord’. Nevertheless, once the Act is in force, a landlord of a domestic property will not be able to unreasonably refuse consent to energy efficiency improvements requested by his tenant. In this way, it may be possible that the obligation is passed up the chain. For the sake of clarity and certainty, leases should be amended so that the obligation to ensure the building meets the minimum energy efficiency rests with the landlord.

For universities guaranteeing occupancy of buildings under a nomination agreement the matter is simple – the duty rests with the commercial landlord.

Interestingly, landlords responsible for buildings falling below the required standard may continue to let them provided they either: take measures to make improvements to the building (whether there is a minimum threshold for these is as yet unspecified), take Green Deal financing, or benefit from the Energy Company Obligation (ECO) which addresses instances in which Green Deal measures will not work – i.e. where the cost of improvements outweigh projected energy savings. The ECO is not based on carbon goals, rather it is intended to target lower income/vulnerable households or certain property types, for example those requiring Solid Wall Insulation. However, for older and/or listed buildings, substantial energy efficiency works may not be possible and the Act provides exemptions where necessary consents or permissions cannot be obtained. Essentially, this is a dilemma local authorities as enforcers will no doubt encounter.

Conclusion

The Green Deal is yet to be implemented on a broad scale, and until it is, concerns over guaranteed savings, which have been widely publicised, will remain and likely hinder the take up of energy efficiency schemes.   This is a shame, because the scheme is innovative and has the potential to spearhead the roll out of retrofitted energy efficiency measures across a broad range of buildings across university estates.

Andrew Whitehead
Senior Partner, Head of Energy & Utilities Team
T: 0800 763 1528
E: andrew.whitehead@sghmartineau.com

Sheiba Brannan
Trainee Solicitor, Energy, Projects and Commerce Team
T: 0800 763 1657
E: sheiba.brannan@sghmartineau.com

© SGH Martineau 2012

Many universities have dispensed with retirement ages altogether since the national default retirement age (DRA) was abolished last year. Others have kept a retirement age for certain groups of employees, whilst still others are waiting to see how the law develops in the “no national retirement age” era. Most of you reading this bulletin will be aware by now that the Supreme Court handed down an eagerly anticipated decision dealing with this issue on 25 April in the case of Seldon v Clarkson, Wright and Jakes ([2012] UKSC 16). The problem is some commentators are saying it makes forcible retirement more difficult, others that it makes it more straightforward. So which is it?

This is most definitely one of those times when reading the court’s decision is likely to make things more confusing. As is often the case, it leaves many key questions unanswered. What do we now know?

• A fixed retirement age is, of course, direct age discrimination; the issue to focus on is whether it is “a proportionate means of achieving a legitimate aim”.

• This means first of all that a retirement age must be designed to achieve “social policy” aims - workforce planning, keeping junior staff, avoiding the often undignified alternative of performance management, and achieving a balanced and diverse workforce. These are fairly broad categories, but the case does mean that anything outside of these parameters will not suffice.

• This isn’t a labelling exercise. You would need to be able to produce evidence that this is an aim which makes sense in your particular context. Easy example: if you have no evidence of difficulty in keeping junior staff, that won’t be a legitimate aim for you.

• Once you’re satisfied your retirement age is trying to achieve the right things, the next question becomes whether the particular age you’ve chosen is “appropriate” and “necessary” for achieving that goal. That’s where it becomes difficult. What age do you pick?

• It’s clear from Seldon that prior to its abolition in April 2011 the national DRA was a significant factor supporting an employer’s decision to pick age 65. The absence of a national DRA portends difficulty for employers whatever age is chosen in the post-April 2011 world.

• The Supreme Court also said you have to consider other options. This might mean other ages than the one you’ve chosen, though except in certain manual jobs it is going to be difficult to get evidence of why a particular age is required.

• It will also mean looking at whether alternatives to retirement – such as offers of flexible working or alternative roles – would be equally effective, given that they are likely to have less of an adverse impact on staff. Trying those kinds of arrangements first, and then weighing up a fixed retirement age if they don’t work (for example if you start to encounter problems in retaining junior staff), is likely to be the best evidence you could hope for if you find yourself in Tribunal explaining a decision to enforce a retirement.

In summary, Seldon has probably made it more difficult to force employees to retire, not least in the short term because of the considerable publicity the case has generated. But don’t write off the possibility of a fixed retirement age altogether, particularly if other measures don’t deliver a balanced workforce, staff retention, effective planning and the like. And if you do re-examine the retirement option, make sure it’s more than a tick-box and labelling exercise. Then, just maybe, retirement ages won’t be ancient history after all.

David Faulkner
Partner & Head of Employment Team
T: 0800 763 1385
E: david.faulkner@sghmartineau.com

© SGH Martineau 2012