CPA Bulletin

www.cpa.uk.net CPA Bulletin > August 2020 43 Q&As: 2 As part of our restructuring process, we are also changing our company name and reviewing all contract terms we operate under. We operate throughout the UK and Ireland, and a few questions have been raised. I would appreciate if you can clarify, where possible, the following: • Can you please confirm if the CPA terms are applicable in the Republic of Ireland as they are in the UK? • If you have had any challenge regarding their use in the Republic of Ireland? • And if these terms are acceptable for use in the Republic of Ireland, what impact, if any, do you see as a result of Brexit? The CPA’s Model Conditions can equally apply to your customer irrespective of where the customer intends to use the plant and equipment, whether this is in the UK or overseas. I am not aware of any challenge regarding the use of the Model Conditions in the Republic of Ireland. The Model Conditions are a standard set of terms outlining the responsibilities of both Owner and Hirer. Should a dispute arise, the member’s concern can be which jurisdiction will apply - UK or overseas where the site is. Clause 35 of the Model Conditions states that the court’s jurisdiction will be wherever the site is located in the UK - so England and Wales, Scotland, or Northern Ireland. If the site is outside of the UK, jurisdiction will be wherever the Plant Owner’s Head Office is located. I cannot comment on what impact Brexit will have as negotiations are still ongoing, but I feel it is extremely unlikely to affect contractual law issues, which would cover the Model Conditions. The Model Conditions are currently being reviewed, and an updated version is planned for 1st July 2021. If you have any suggestions that you think should be included, then they need to be submitted as soon as possible. q A We cross-hired in an item of plant for one of our customers for an indeterminate period. The CPA’s Model Conditions were applicable on the plant we received from our supplier as well as on to our customer. The plant was off-hired at 3pm on Friday, but our supplier could not collect it until the following Tuesday morning, due to other transport commitments. Sometime between Friday afternoon and the plant’s collection, the plant was vandalised to the value of £1,000. The customer is claiming that as he off-hired the plant Friday afternoon, he is no longer responsible for the subsequent damage. Is this correct? No, he is not correct. If the hire was for an indeterminate period, i.e. a specific start date but no specific end date, then under clause 24(a) of the Model Conditions, the Hirer is responsible for the Plant for the next 7 calendar days after it is off-hired. So, if it was off-hired on Friday afternoon, then they would still be responsible until Thursday afternoon. As it was vandalised by Tuesday, then your customer is liable. The customer could also be charged two-thirds of the hire rate until settlement has been agreed - as per clause 13(b). Your supplier will have the right to charge you for the damage. It would be advisable to retain all correspondence concerning the vandalism as it may be helpful in agreeing any charges with your supplier. q A I have been contacted by a customer’s representative informing me that as we are supplying an item of plant with an operator, they consider the HMRC’s Construction Industry Scheme (CIS) applies, and therefore he will treat me as a sub-contractor. Is he correct? If your customer follows a strict interpretation of the Construction Industry Scheme, which they appear to be doing, then potentially you could be viewed as a sub-contractor as you are supplying an operator with the plant. Fortunately, this issue only occurs very infrequently, and the CPA has drafted a generic letter which explains that the CPA Member is a service supplier working under the CPA’s Model Conditions, which has been accepted by major contractors for a number of years. A copy of the letter can be found at - www.cpa.uk.net/clarification-on-sub- contractor-status/ - which you can send to your customer. This may help clarify the situation. A q