Terms of Engagement

Introduction
These terms set out the general terms on which we provide services to you. When you instruct us to advise on a new matter we will normally send you a retainer letter confirming your instructions. The terms of that letter (if any) and these Terms of Engagement will together form the contract between us for that matter.

Our appointment
When you appoint us to act for you in relation to a particular piece of legal work:

• you will be authorising us to take all measures we believe appropriate to protect your interests unless you instruct us specifically to the contrary; and
• you will be authorising us to incur reasonable expenses on your behalf.

Your requests to us for work to be done are called "instructions".
Our advice is provided to you and may not, without our prior written consent, be disclosed to any other party. You will not refer to us or our advice in any public document or communication without our prior written consent.

Communication
We operate a primary contact system so that you will always have one lawyer here with an overview of all the work that we may be doing for you. That lawyer may not be directly involved in all of your work as we aim to provide the services of the most appropriate specialist lawyer or lawyers to deal with each piece of work.

We will ensure that further issues raised in your matter are explained to you and that you are kept informed of progress. From time to time and as necessary, we will review and advise you as to whether the likely outcome of your matter will continue to justify the likely charges, expenses and risk involved.

For the sake of convenience, we are happy to communicate with you using normal, non-encrypted email. This form of email is not secure and there is a risk to you if we communicate confidential information to you in this way. We cannot accept liability for any communication which is intercepted or otherwise falls into the hands of those other than the intended recipient.

We will assume that we have your consent to communicate with you by this method, unless you advise us otherwise.

Fees
We are flexible and are willing to consider many different ways of charging fees. These include fixed fees, fees subject to a fee limit, percentage fees based on the value of the transaction, retainer fees or fees calculated by reference to hourly rates. However, unless we have specified another fee structure, we will charge fees primarily by reference to the amount of time spent by individuals at Harbottle & Lewis LLP on your work.

In setting our fees and our hourly rates we take into account:

• the nature and complexity of the work;
• the amount of time spent, knowledge required and responsibility involved;
• the type and nature of the documents involved; and
• the value of the transaction, property or subject matter.

Time spent on your matter will include, but is not limited to, meetings with you and others in relation to the matter, time spent travelling and waiting, considering and preparing papers, making and receiving telephone calls, correspondence, sending and receiving e-mails, attendance at Court or Tribunal and documenting the arrangements on which we will provide legal services to you.

The amount of time spent on a matter will also be influenced by the manner in which you respond to our requests for information. Timely provision of up to date information will help us to spend less time on your matter than would be the case otherwise.

Estimates we give are a guide to assist you in budgeting, but should not be seen as a definitive quotation unless this is specifically agreed in writing.

In some types of work we may be willing to agree a fee structure which depends on the outcome. We are not generally able to do this for litigation.

If a transaction or other matter does not proceed to completion, our fees (together with disbursements and VAT) will still be payable.

Any special fee (such as a fixed or capped fee) agreed for a matter will not cover additional work not identified when the arrangement was agreed.

Limits to Fees
You may agree with us an upper limit for the fees and expenses that may be incurred by us without further authority in a particular case. This means that you must pay those incurred up to the agreed limit without our needing to refer to you further. Depending on the nature of the work, it may be necessary to review that upper limit with you as the case or transaction progresses.

Changes to Fees
Our hourly charge-out rates are reviewed with effect from 1 June each year. We will notify you of the rates if they change and you will then be bound by them. If you do not accept the new rates after review, we reserve the right not to continue acting for you from 31 May.

Expenses
Our fee estimates do not include any expenses or payments to third parties which we may have to incur on your behalf. These are known as "disbursements". Examples of disbursements are travel, phone call, fax and photocopying expenses, experts' (including costs draftsmen) and Counsels' fees, stamp duty and search fees. These will generally be billed at the same time as we invoice you for our fees, but may sometimes be billed at another time.

If we have to incur additional expenses for staff other than lawyers working overtime on evenings or weekends in order to provide an effective service to you, we may include these expenses as a separate item on our invoice to you.

Value Added Tax
All quotations or estimates of fees that we give are subject to the addition of Value Added Tax. Most expenses that we pay on your behalf will also be subject to the addition of Value Added Tax.

If our services are subject to Value Added Tax, you hereby indemnify us in full on demand for any interest, penalties or legal costs incurred as a result of any information you provide to us in relation to your Value Added Tax status not being correct.

Billing
To help clients budget for their legal expenses, we generally bill monthly. This means that work done to the end of each month will be billed early in the following month together with any disbursements we have incurred on your behalf. You must pay the bill within 30 days from its date.

In certain types of work, for instance property transactions, our account would normally be sent on completion.

Payment
Our invoices are payable no later than 30 days from the invoice date unless we have agreed with you otherwise in writing. If an account is not paid within that period we may charge you interest from the date of the invoice until the date the bill is paid at 8%, or such percentage equivalent to the statutory rate of interest prescribed for judgments from time to time in place. In the alternative and where appropriate, we reserve the right to claim interest pursuant to the Late Payment of Commercial Debts (Interest) Act 1998.

If an account remains unpaid and we decide to commence legal proceedings against you in order to recover the sums you owe us then we will be entitled to recover from you the legal costs that we incur in connection with those proceedings at our standard hourly rates, together with all disbursements (including fees of Counsel and any overseas lawyers engaged by us in our attempts to recover payment from you).

Where an account is overdue we are entitled to exercise a lien over files and documents belonging to you until our account is settled. We also reserve the right to cease continuing work for you.

If instructions for a piece of work are given by more than one person or company, we may recover our fees, disbursements and Value Added Tax from any one or more of them. This includes situations where one person or company instructs on behalf of another.

If arrangements are made for a third party to pay any of our fees or disbursements, or a court orders a third party to pay any part of our fees or disbursements, you remain liable to pay them to the extent that the third party does not pay them when due.

Payments on account
There may be circumstances in which we will expect you to make payment to us on account of our fees and any expenses that are to be incurred in connection with our work. We will tell you in advance if this is the case.
Any money that you pay to us on account will be held in our client account and you will be entitled to interest on it. We will offset that money against your bills, although our total fees and expenses may be greater than any advance payments.

Litigation: your costs and those of the other party
If we act for you on a contentious matter and you are successful you will be responsible to us for all the legal fees and expenses that you incur although you may be able to recover some of them from your opponent. In some cases, particularly where your opponent is legally aided, they may not be ordered to pay or may not be able to pay any or all of your fees and expenses, even if you are wholly successful in your action. You will also be responsible for paying the charges and expenses of seeking to recover any charges and expenses that the Court orders your opponent to pay. The court may order your opponent to pay some or all of your charges and expenses and, in that case, interest can be claimed from your opponent from the date of the Court Order. To the extent that you have paid our charges or expenses on account, we will account to you for such interest but otherwise, we are entitled to the remainder of that interest.

If you are unsuccessful the court may order you to pay all or a significant proportion of your opponent's fees and expenses (together with interest) as well as your own. You may also have to make payments in respect of your opponents fees and expenses at various stages in the course of the action. If you withdraw from a case your opponent may be entitled to apply to the court for an order for you to pay its fees and expenses.

Litigation: 3rd party cover
Your liability for our charges and expenses and for your opponent's charges and expenses (and, in some cases, liability for damages) may be covered by insurance which you may already hold. Please check your insurance policies to ascertain whether or not you have any cover, including any relevant Directors and Officers indemnity policy, household, motor, or credit card policies. Alternatively, you may wish to obtain "after the event" insurance cover for some of the costs of the dispute. Appendix 2 sets out some details of this type of insurance, although please note it is by no means an exhaustive list, nor can we recommend any particular product, supplier or broker to you. Please review the details carefully and contact your lawyer if you wish to discuss the matter further or take out such a policy.
You should also consider whether your liability for both your own costs and the costs of your opponent are covered by your employer/trade union.

Litigation: access to documents
Documents filed at Court such as the Particulars of Claim, Defence and Reply, together with orders made in open court are available to the public. This does not apply to any documents attached to statements of case or to such orders.

Legal Aid
It is not our policy to carry out legally aided work.

Document storage
It is our policy to store files and papers relating to your matter for a minimum of seven years from the date the matter was completed. This does not apply to any papers that you ask to be returned to you.

After seven years, we may dispose of them in accordance with the procedures recommended by the Law Society. This policy does not apply to the storage of title documents, title deeds and other valuable documents which you specifically ask us to keep in safe custody.

If we retrieve papers or documents from storage in relation to continuing or new instructions to act in connection with your affairs, we will normally charge you for the cost to us of that retrieval. We may also make a charge based on time spent producing stored papers or documents to you or another at your request.

Conflicts
Conflicts between your interests and those of another client may arise. If there is a conflict of interest, we might have to cease acting for you. Conflicts may arise (amongst other reasons) because:

• we have discovered information while acting for another client which we would normally be bound to disclose to you; and
• such disclosure would conflict with our duty of confidentiality to that other client.

If that happens we have the right to withhold that information and terminate our engagement with you. We may also cease to act in a particular matter for the other client involved.

All fees and disbursements and VAT up to the date of termination will be charged and become due.

Confidentiality and Disclosure
We have a duty to keep the affairs of our clients and former clients confidential except where disclosure is required or permitted by law or by the clients or former clients concerned. In certain circumstances, such as in order to comply with Money Laundering Regulations and law relating to terrorist financing from time to time in force, we may be required, as a matter of law to provide information relating to a client or former client to regulators, including the Serious Organised Crime Agency. We may also be prevented from informing such clients or former clients that a disclosure has been made or of the reasons for it because the law prevents "tipping off".

Should we receive requests, either directly from you, or from your accountants and/or auditors, for confirmation as to whether we are instructed on your behalf, our response shall always be addressed directly to you for onward transmission. Such requests may require us to confirm whether any matters are of a litigious nature, whether any deeds or documents are retained by us on your behalf and also whether there are any outstanding bills owed by you to us or any work in progress at any given point in time.

You also agree that we may, when required by our insurers or other advisers, provide details to them of a matter or matters on which we have acted for you.

We reserve the right to charge on a time basis for work undertaken in responding to such requests.

Data Protection Act 1998
As a controller of personal data we are under an obligation to comply with data protection law set out in the Data Protection Act 1998 and any other regulations made under that Act. By giving us your personal information you consent to us processing and storing your information so that we may provide you with legal services and generally administer and take care of our relationship with you. We may disclose your information to our third party service providers or agents for these purposes.

In addition we may contact you from time to time to let you know about our services which may include sending you newsletters and news on training events or changes in the law which may affect you. Please remember that you can elect not to receive such marketing material at any time by writing to our Marketing Manager or to the lawyer responsible for your work.

We can send you our full data protection policy on request.

Termination
You may, except as set out in "Restrictions to Termination" below, terminate our engagement at any time on reasonable notice. To do so you should notify the lawyer with responsibility for your matter and confirm the position in writing.

We reserve the right to terminate our engagement by you on notice to you which we will confirm in writing. However, we will only decide to stop acting for you with good reason, for example, if you do not pay a bill or comply with our request for a payment on account or you fail to give us the co-operation which we are reasonably entitled to expect. We must give you reasonable notice that we will stop acting for you.

All fees and disbursements and VAT up to the date of termination will be charged and become due.

Restrictions to Termination
Where the Consumer Protection (Distance Selling) Regulations 2000 apply to the work we undertake for you (for example if you have instructed us over the telephone or by email), you acknowledge that on our commencing that work you will be incurring fees attributable to that work. Because we will have commenced work at your request, you may not cancel your contract with us in relation to the work that has been done (or expenses and charges incurred) and our fees for that work will be payable by you.

With respect to contentious matters, if we are on record at Court as acting for you in any proceedings the consent of the Court may be required before we can be removed. To that extent your right to terminate our engagement may be restricted.

Limitation of Liability
As we are a Limited Liability Partnership ("LLP"), the work carried out for you will be carried out by Harbottle & Lewis LLP and your contract is with Harbottle & Lewis LLP only, and not with any member, employee or consultant of Harbottle & Lewis LLP. Should you need to make a claim (whether in contract or otherwise) against us in relation to any piece of work we carry out on your behalf or otherwise, that claim may only be brought against Harbottle & Lewis LLP, and none of the members, employees, consultants or agents of Harbottle & Lewis LLP would have any liability in respect of any such claim. You agree that you will not make any claim against the members, employees, consultants or agents of Harbottle & Lewis LLP, and you will only make any claim against Harbottle & Lewis LLP.

Although we are an LLP which has "members" and not "partners", we have decided to maintain the title of "partner". We use the title "partner" for members and certain senior solicitors who are not members, but who are consultants or employees of Harbottle & Lewis LLP with equivalent standing and qualifications to the members.

We limit our liability to you for claims:

1. for breach of contract;
2. for breach of duty;
3. for negligence (except insofar as the Solicitors Act 1974 s 60 (5) provides that liability for negligence cannot be limited in contentious business); and
4. for claims otherwise arising out of or in connection with our engagement or the services we provide,

in the two ways described below.

First, our liability shall be limited to that proportion of the loss or damage (including interest and costs) suffered by you, which is ascribed to us by a Court of competent jurisdiction allocating proportionate responsibility to us having regard to the contribution to the loss and damage in question of any other person responsible and/or liable to you for such loss and damage. Secondly, our liability to you is limited to the higher of:

1. £3 million; and
2. 10 times the amount of our fees billed on the matter in question.

For the purpose of these Terms of Engagement the word 'damage' has the same meaning as in the Civil Liability (Contribution) Act 1978, which provides a mechanism for liability sharing where there is a claim against more than one person for the same damage.

For the purpose of assessing the contribution to the loss and damage in question of any other person pursuant to the preceding paragraph, it is agreed that no account shall be taken of any limit imposed on the amount of liability of such person by any agreement made before the loss and damage in question occurred.

If you start proceedings against us for loss or damage and there is another person (for example, another adviser) who is liable or potentially liable to you in respect of the same loss or damage, then you will if we so request join them into the proceedings. This is subject to any legal prohibition against your joining them in that way.

The exclusions and limitations in this section shall have no application to any liability for death or personal injury, any other liability which cannot lawfully be excluded or limited or to liability arising as a result of fraud on our part.

Financial Services and Markets Act 2000
We are authorised by the Financial Services Authority to undertake non-mainstream regulated activities. We provide investment services only as part of the professional services we have been engaged to provide. If during a transaction you need advice on investments, we may refer you to someone who is authorised by the Financial Services Authority to advise on investments.

Independent Services
When we are asked to recommend the services of a third party (such as an advisor authorised by the Financial Services Authority, a surveyor, trade mark agent, accountant or foreign lawyer) we shall always do so in good faith. However, no warranty is given in respect of the standing, ability or the quality of the services of a third party. We do not accept liability for that third party's services and you will have a contract with that third party, but not with us in respect of that third party's goods or services. You will be responsible for the fees and expenses of that third party.

Excluded Advice
Unless specifically agreed with you in writing in our retainer letter our advice to you will not extend to advice on the tax or pensions' implications of the work on which we are advising you.

English Law
All of our advice is given on the basis of the laws of England and Wales. To the extent we advise on documents governed by the laws of other jurisdictions, we will not be advising on any specific implications of the laws of those jurisdictions.

Force Majeure
We shall not be liable to you if we are unable to perform our services as a result of any cause beyond our reasonable control. In the event of any such occurrence affecting us we shall notify you as soon as reasonably practicable.

Application of these terms and amendments
These Terms of Engagement supersede any earlier terms of business we may have agreed with you and, in the absence of express agreement to the contrary, will apply to the services referred to in any retainer letter accompanying these Terms of Engagement and all subsequent services we provide to you.

Rights of Third Parties
Our agreement with you is personal as between you and us and is not intended to confer any rights of enforcement on any third parties pursuant to the Contracts (Rights of Third Parties) Act 1999.

Governing Law
These terms are governed by English law and any disputes arising in connection with these terms are subject to the exclusive jurisdiction of the English courts.

Satisfaction
We obviously hope that you are happy with our work. If you are not, then of course please raise the problem in the first instance with the partner with overall responsibility for your work or, if you prefer, with our senior partner, Gerrard Tyrrell. All solicitors must attempt to resolve any problems as may arise with their services so it is therefore important that you raise any concerns with us immediately. In order to ensure that complaints are dealt with promptly, fairly and effectively, we have in place a complaints procedure, details of which are on our website. In the unfortunate event that you do wish to make a complaint, you will be informed how the complaint will be handled and given an indication about the timescale for the complaint being dealt with.

Harbottle & Lewis LLP
June 2008

Appendix 1
Civil Procedure Rules
A Guidance Note for Clients
Under the Civil Procedure Rules, initiating Court proceedings is viewed as an absolute last resort. The historical possibilities of aggressively commencing proceedings or defending them through no more than stonewall tactics are no longer tolerated by the Courts, nor is the tactic of deliberately playing procedural games in an attempt to bludgeon your opponent into settling with you.

Full factual investigations are required at the very beginning in order that we may make a fully informed legal analysis of your case and advise you accordingly.

A number of Pre-Action Protocols exist, all of which require an early exchange of information and evidence by all parties to a dispute on an open and co-operative basis. In appropriate cases, the identity of any expert witness must be agreed, and instructions are given jointly so far as may be possible. All parties to a dispute must consider the possibility of resolving it in some way other than by litigation, and all appropriate types of alternative dispute resolution must be canvassed and considered by all sides at an early stage. In order to ensure this happens, the Court will examine the parties' conduct in the initial stages and any apparent failure to comply with these obligations can lead to adverse costs awards being made against any party whose conduct is found wanting.

Once proceedings have been commenced, the Court takes over control of the process itself, and engages in active case management. Accordingly, the Court will often initiate stringent directions for the conduct of the proceedings up to trial, with tough sanctions readily applied. If orders are not complied with, or if any party's behaviour is deemed to be unreasonable, or indeed if any interim application fails, then the Court will usually make an adverse costs order. Costs awards made against a party to proceedings before trial are now invariably payable within fourteen days, and not (as used to be the case) wrapped up after trial with all of the other costs orders. This has very real cashflow implications for the running of any action. The effect of this increased risk of adverse costs orders means that any step, however desirable, must be very considered carefully in order that any risk is taken on an informed basis. If in doubt, caution and reasonableness must prevail over any other impetus. In addition, the rules require significant management involvement from clients at an early stage. The overall effect is to front load some of the costs of litigation. Because of the timetabling imposed by the courts and the cashflow implications of the Civil Procedure Rules, very careful consideration must be given before deciding whether to assert a right or defend a position which may well be entirely justified as a matter of strict law.

You must also bear in mind that the overall rate of recovery of costs is far less than 100%. It used to be that, even if a party was wholly successful, it would only be awarded an amount of costs at a maximum of around 65% to 75% of its actual outlay. The introduction of the Civil Procedure Rules in 1999 (in particular the summary assessment of costs on interim applications mentioned above), led to a further reduction of the percentage rate of recovery. The question of whether or not the unsuccessful opponent is actually able to pay that award must also be taken into account.

During the course of your action, each party is under an obligation to ensure that all relevant documents, even if they are prejudicial to your case, are preserved and in due course disclosed to the opponent. In essence, all parties to a dispute owe an obligation to the Court to preserve all documents (which description includes not only papers, but also information stored in any magnetic or other format), from the outset of the dispute and to disclose to the other parties all such documents as may be relevant. We have detailed guidelines to help our clients understand the nature of this very important obligation in full, which we will happily provide to you.

Appendix 2
After The Event Insurance
Please note that this type of insurance is only available to cover legal costs, and not any damages that may be awarded against you.

Insurance is available on the market to cover most of your charges and expenses incurred with us, and your possible liability for your opponent's charges and expenses. This type of insurance is known as after the event insurance ("ATE Insurance"). Our investigations show that at present most ATE Insurance policies for commercial cases will only usually cover your liability to meet your opponent's charges and expenses, but this is a matter you will need to discuss with any insurance provider.

Recoverability
The cost of taking out ATE Insurance (i.e. the premium you pay) may be recoverable from your opponent should you be successful in your action, and have a costs order made in your favour. To be able to recover any premium, however, the existence of the policy must be disclosed to the other side. Once the policy has been disclosed, should you be successful in your action and have a costs order made in your favour, the Court can consider the cost of the premium as part of your costs of the action. However, you should note that although you may obtain an order that your costs be paid by another party, enforcing that order and having those costs actually paid to you is a separate question and can be difficult.

Independent Brokers
In order to obtain ATE Insurance you may well consider it best to go through an independent insurance broker. This should help to ensure that you receive competitive quotes for insurance, which will be particularly important if you are trying to claim back your premium under a costs order. We have obtained the details of several insurance brokers who we understand will take details of your case (which may include a risk assessment), and then put those details to the insurance firms they deal with to see if they can obtain a policy for you. You should note, however, that our investigations show that most of the brokers in the ATE Insurance market will also charge you a non-refundable fee for obtaining a quote.

Other products
You may wish to consider some other products in addition to ATE Insurance, including premium loan funding and premium insurance, both of which you may wish to take out to cover the initial costs of the premium for your ATE Insurance (which can run into many thousands of pounds). Premium payment arrangements may also be available in some circumstances whereby the premium for your ATE Insurance can be paid in instalments over about 10 months. You should note, however, that in relation to premium loans if you were to take out such a loan and be successful at Court, the other party would not be liable in an adverse costs order to pay the interest on the premium loan. The interest payments will need to be met by you.

The loan provider may also require that further insurance (called Litigation Funder's Indemnity Insurance) be taken out by you with a third party insurer to provide security for the premium loan. However, if you were to take out a loan but were not successful at Court, the main insurance policy can cover the costs of the premium and the interest payable on the premium loan as well.

Details of brokers
We enclose details of three brokers which we understand operate in the ATE Insurance market. We have only included insurers that provide full cover, not those who only provide ATE insurance in conjunction with a Conditional Fee Agreement, as our policy is not to provide our services on a conditional fee basis.

You will appreciate that we are unable to provide you with any recommendation or advice as to which policy or broker you should use (there are likely to be many more in what is a relatively young but growing insurance market), and if so, which product(s) would be suitable for you. You should contact the brokers yourself to determine whether you wish to proceed. However, if you do decide to proceed we will gladly provide you with assistance on matters such as the case and/or risk assessments should you require it.

Some ATE Insurance Brokers:

1. FIRST LEGAL INDEMNITY: http://www.firstlegal.co.uk

• Litigation Costs Insurance
  (i) Opponent's costs and disbursements;
  (ii) Insured's costs and disbursements;
  (iii) Deferred Premium
• Litigation Funding Loan (arrangement only)
  

2. LAWASSIST: http://www.lawassist.co.uk

• Comprehensive range of insurance and funding solutions in relation to Clinical Negligence, Personal Injury, Insolvency, Civil/Commercial, Employment, Defamation.

For example: Contract Dispute Insurance†

1. Low initial deposit premium with second stage premium deferred
2. Premium discount for early settlement
3. Cover available up to £250k Cover for own disbursements (including Counsel) and opponent's costs and disbursements
4. Premium cover included as standard
5. Part 36 cover
6. Assessment fee: £295

3. THE JUDGE: http://www.thejudge.co.uk

• Independent brokers specialising in obtaining after the event insurance and disbursement funding in respect of Commercial Litigation, Professional Negligence, Personal Injury, Clinical Negligence and Civil Litigation.
  
• Application Fee: £175.07 inclusive of VAT†

† Correct as of December 2007