CPA Bulletin

www.cpa.uk.net CPA Bulletin > May 2022 41 Q&As: 2 Within the Model Conditions - clause 36 in the 2021 version, or clause 35 in the 2011 version - refer to ‘Dispute Resolution’. This can be triggered where two parties are in dispute on any issue within the hire agreement, and rather than go to court, they look to appoint an adjudicator - normally this would be either a barrister, solicitor or engineer - depending on the nature of the dispute. That person would act as the ‘judge,’ and make a decision based on the facts presented to them. This process (usually taking only a few weeks) can be a quick way to obtain a resolution to the dispute. The process though, can be expensive, based on the ‘judge’s’ fees; and there will need to be agreement between the parties on how the adjudicator’s fees will be paid. Some procedural steps to consider and a nomination form can be found on the CPA website at www.cpa.uk.net/legal-insurance-theft/legal/adjudication . The form is used in those instances where the parties cannot agree on an adjudicator themselves, and the CPA is asked to appoint one instead. The CPA charges for this service. There is a list of the adjudicators which can be found on the CPA’s website that both parties could consider. The use of an adjudicator may not be appropriate if the sums under dispute are relatively low due to the adjudicator’s costs. We have been in dispute with a customer for some time now, and we are unable to reach an amicable solution on this. The customer must have submitted a county court claim, as we have just received notification of it. When I spoke to you some time ago, you suggested that we could get someone to arbitrate the case. Please could you let me have a littlemore detail on this. This resonates with queries concerning refilling the fuel tank after the hire had ended, and whether to charge the customer 5% VAT or 20% VAT; but according to HMRC, the customer should be charged 20%. I see no difference from the above point, to the one you are experiencing with the new build project - 0% VAT. The refilling is not connected to the new build project – although a machine was supplied to it - as the charge relates to after the hire had ended, and the machine returned to the depot. This to me, mirrors the HMRC viewpoint to charge 20% VAT. You may wish to ask your accountant or HMRC for confirmation. We supplied a machine to a customer for a new build project that they were working on. When the hire ended, the customer failed to refill the fuel tank, so we charged for the refilling, and included VAT at 20%. We are now having reservations on whether we should charge 20%, but instead - due to the machine being used on a new build - should have charged 0% VAT instead. I would welcome your thoughts on this. As the end-user has unfortunately gone into administration, the machine cannot be collected from site, and so clause 23 would take effect, i.e. the machine would be deemed to be still on hire. However, as the machine would not be working during this time, then I would suggest that clause 25 of the Model Conditions would also apply, and the customer should be charged two-thirds of the hire rate instead. If you would like to discuss this in more detail, then please get in touch. Could you help clarify a situation for me. We hired a machine to another member company under the Model Conditions. The hire was terminated in March. At the same time, our customer’s customer - the end-user - went into administration. The machine could not be collected from the site. We are looking to put themachine back on hire - as per clause 23 - and charge the full rate. Our customer is querying this, so we are contacting you to help resolve this issue. We obtained some independent technical advice from Daniel Marsh regarding your views on the above. Daniel is a Programme Manager at the Centre for Low Emission Construction, at Imperial College London, and his thoughts are below: “As far as I am aware there is no evidence that using an HVO fuel as a direct diesel replacement allows an engine to meet a different EU stage and our own research has indicated that there is very little quantifiable emission reduction at the tailpipe. https://assets.publishing.service.gov.uk/government/uploads/system/ uploads/attachment_data/file/1021082/Imperial_College_London_-_HS2_ Alternative_Fuel_Trial__BBV_.pdf “There is, however, huge emission reduction potential in using newer machinery that meets the Stage V limit values either through OEM or retrofit after exhaust technology. Neither Transport for London (TfL) nor the Greater London Authority (GLA) will accept use of an alternative fuel to give an exemption for use of older machinery with the NRMM low emission zone.” With Transport for London (TfL) introducing the Low Emission Zone (LEZ), and the Ultra-Low Emission Zone (ULEZ) in recent years, I would be interested in your views of using Hydrotreated Vegetable Oil (HVO) as an additional method to reduce emissions. We understand that HVO can, in effect, bring a Stage IIIB engine, to the equivalent of a Stage V engine. This could be a cost-effective alternative to retrofitting Diesel Particulate Filters (DPFs). If you have any information on this would be appreciated.