Financial guidelines for supporting the management of Sites of Special Scientific Interest Natura 2000 sites
Annex B: Management agreements: Reimbursement of professional fees
Note to applicants: You are advised to draw the following guidance to the attention of your professional adviser before any work is carried out on your behalf. A further copy, or copies, can be made available to your professional adviser on request.
Introduction
B1. SNH may enter into management agreements under relevant provisions in the 1949, 1967 and 1968 Acts and in the 1994 Regulations 27
B2. Section 16(9) of the Nature Conservation (Scotland) Act 2004 provides that the terms and conditions of any management agreement (including provisions for payment) shall be determined as SNH thinks fit, having regard to guidance given by Scottish Ministers under section 54 of the 2004 Act. The Financial Guidelines set out in this document are guidance under section 54.
B3. These Financial Guidelines describe the circumstances in which SNH will consider it appropriate to make payments to land managers in order to support the positive management of protected areas and to sustain their special conservation interest. Management agreements offered by SNH may be either voluntary ( see Section 2) or compensatory ( see Section 3) in nature. Agreements are most likely to be offered under the terms of standard management schemes, for which standard payment rates have been established. More unusually, where the particular circumstances of a case do not fit well within a standard scheme, individually-negotiated management agreements may be appropriate.
B4. SNH will make a contribution to professional fees which have been reasonably and appropriately incurred in completing an individually-negotiated management agreement. SNH will not normally reimburse professional fees incurred in relation to standard management scheme agreements . This note (as Annex B to the Financial Guidelines) sets out SNH's current policy in this respect.
Please note in particular the following:
B5. If you employ a professional adviser this establishes a contractual relationship between you and your adviser rather than one between your adviser and SNH. If there is any difference betweenSNH's assessment of reasonable professional costs and the amount charged by your adviser the difference will not be recoverable from SNH. You will be responsible for paying any amount which SNH declines to reimburse.
B6. It is therefore in your interests to ensure that when employing an adviser their fees will be reasonable and appropriate in relation to the management agreement and the services required. The Royal Institution of Chartered Surveyors has already provided guidance to its members to this effect, which should, in appropriate cases, form the basis of your adviser's terms of appointment. In the event of doubt you should obtain quotations and seek SNH's advice.
B7. SNH will only reimburse professional costs incurred in completing certain management agreements. These will not normally include management agreements under standard management schemes.
B8. For the avoidance of doubt, costs in relation to professional work carried out in connection with the following will not be reimbursed:
Discussions associated with the notification of an SSSI;
The development and lodging of an application for consent under section 16 of the 2004 Act, including the preparation and submission of proposals such as a business plan, environmental assessment or other investigation; or any subsequent amendment; and
Negotiations following service of an application for consent under section 16 of the 2004 Act, concerning the terms and conditions to be specified in a written consent from SNH, if SNH has not at that point intimated that it would wish to conclude a management agreement.
B9. In particular, you should note that fees incurred before SNH has advised that it is prepared to negotiate a management agreement will not be met.
Standard management schemes
B10. These aim to offer standard prescriptions/payment rates and there will normally be no negotiation involved. However, there can be some variation in scheme design and the approach taken to reimbursement of professional costs will be considered on a scheme by scheme basis according to the following principles.
B11. In accordance with the overriding principle in paragraph B4 above it is normal SNH policy not to reimburse professional service costs associated with entering standard management scheme agreements. However, there may be exceptions to this. The situations in which the cost of professional services might be justified are considered below:
? Scheme consultation
B12. Where an agent acts for prospective applicant(s) in a scheme consultation this means, in effect, that costs will have been incurred before SNH has indicated that it is willing to enter into an agreement. As a result, in accordance with the rule set out in paragraph B9 above, there will be no reimbursement of costs. For some schemes, where there is a need for consultation, SNH may employ its own agent directly to facilitate a consultation exercise.
? Preparation of a management plan
B13. Where a scheme requires a management plan to be prepared applicants may require professional input or assistance in developing such a plan. SNH policy is not to reimburse these costs beyond the standard scheme payment rate offered for an acceptable plan. This rate will take account of the likely level of input or assistance required.
? Negotiation of prescriptions
B14. The design of standard schemes will seek to avoid the need to alter or negotiate prescriptions or payments, but in some situations adaptation of this kind may prove necessary. Standard payments will however be applied wherever possible. This will reduce the need for an applicant to take on an adviser. SNH's policy is not to reimburse professional costs incurred in negotiating scheme prescriptions. In exceptional circumstances, where negotiations are necessarily complex (eg as a result of not being able to utilise standard payment rates), SNH will offer to make a fixed contribution or to reimburse reasonable costs incurred, provided prior agreement is obtained.
? Examination of agreements
B15. Applicants may wish to obtain professional help in checking the implications of the management agreement contract. These contracts are normally standard for each scheme and based on a standard model across all schemes. The National Farmers Union of Scotland and the Scottish Rural Property and Business Association (formerly the Scottish Landowner's Federation) will have been consulted on the general standard terms of the agreement. Normal SNH policy is not to reimburse the costs of professional examination of scheme management agreement contracts. However, SNH may consider doing so in exceptional circumstances, providing that SNH's prior agreement to such an arrangement has been obtained.
Individually calculated and negotiated agreements
B16. The properly incurred cost of using a professional adviser to negotiate payments under an individually assessed management agreement will be reimbursed on a quantum meruit basis.
B17. Once you have confirmed the appointment of an adviser you should inform SNH immediately and provide details of the arrangements, including those about fees, you have entered into. The cost of employing advisers without notifying SNH in this way may not be reimbursed. SNH will respond and inform you of any ceiling above which fees will not be reimbursed without further consultation and written agreement.
B18. SNH will assess quantum meruit, as follows:
That amount which represents the level required to provide appropriate professional representation reflecting the amount of work and the level of expertise commensurate with the complexity and size of the claim/payment.
In all cases the hourly rate charged should be agreed in advance with SNH and an assessment of the likely cost should be made and agreed with SNH. Accurate time records should be maintained to assist the assessment of fees;
Account may be taken of Ryde's Scale (as revised), suitably applied to annual payments, as a guide to quantum meruit as long as it is appropriate to do so.
B19. These Financial Guidelines do not include explicit provision for the reimbursement of professional fees on the review of an annual payment. This is discretionary. Where SNH agrees, reimbursement will be on the basis set out above. In many cases a payment review will involve relatively little work, often just the simple arithmetic update of a number of variable costs. In these circumstances SNH requires the fee to reflect the cost of the work actually done.
B20. SNH uses standard forms of agreement. However, where it is necessary and appropriate for an adviser to negotiate the terms, other than compensation, fees incurred in undertaking this work, providing it does not duplicate the work done by others, will normally be settled on a quantum meruit basis.
B21. If an adviser changes during the course of negotiations, the time spent duplicating earlier work by, for example, briefing themselves on the case, will only be reimbursed by SNH in exceptional circumstances.
B22. SNH will not reimburse the costs of advisers incurred in agreeing the basis on which their fees will be calculated or reimbursed.
B23. SNH will assess the reasonableness of solicitors fees on the basis of its own and its solicitor's accumulated experience in relation to the negotiation of management agreements. If SNH considers any fees claimed excessive, and an amended fee note cannot be agreed, the matter may be referred via SNH's solicitor to a Law Accountant. If the Law Accountant's assessment of the fee is not agreed then the matter may be referred to the Auditor of the Court of Session.
B24. If you propose to employ additional or other professional advisers and you intend to claim for their fees as well you should consult SNH beforehand and obtain SNH's prior consent on their terms of engagement and the basis for calculating their fees.
B25. In addition to reimbursing an adviser's fees SNH is prepared also to consider including the adviser's travel expenses and other disbursements necessarily and reasonably incurred. If travelling costs, including the time spent travelling, of a surveyor travelling long distances to undertake the case are claimed, it will be necessary to demonstrate that reimbursement is appropriate. However where the same adviser is carrying out other work on your behalf only those expenses relevant to the fees SNH is reimbursing will be eligible. Interest is not paid on professional fees.
Abortive negotiations
B26. If SNH offers to negotiate a management agreement and subsequently withdraws, it will defray your reasonable professional costs incurred up until that time. The assessment of the reasonableness of costs in these circumstances will take account, as far as possible, of guidance given above in relation to individually-calculated and negotiated agreements.
B27. If you withdraw from negotiations SNH will not reimburse your costs except in exceptional circumstances.
VAT
B28. SNH will only pay VAT on professional fees where the land manager is not registered for VAT purposes. If you are registered and able to reclaim VAT, fees will be reimbursed net of VAT with the tax being reclaimed by you in the normal way.
Payment procedure
B29. Surveyors' and other professional experts' fees will normally be paid following completion of Missives.
B30. Solicitors' fees will normally be paid following the execution and delivery of the management agreement.
B31. Advisers fee notes should be made out to and sent to their clients in duplicate; with one copy for your retention and the other for forward transmission to SNH supported by adequate time records. You will then be reimbursed upon SNH's approval of the details submitted.
B32. In exceptional circumstances SNH may be prepared to consider other arrangements but any payments will always be made directly to you.
Dispute resolution
B33. In the event of dispute over fees it will be open to both parties to seek dispute resolution through a mechanism, such as mediation, expert determination or arbitration, to be mutually agreed between the parties. SNH's preference will be to seek resolution through mediation or expert determination rather than through arbitration. Disputes in relation to fees are not covered by the statutory arrangements in the 2004 Act and do not fall within the remit of the Scottish Land Court.
Further guidance
B34. Further guidance in relation to the reimbursement of professional fees may be obtained from SNH Rural Surveyors in Area Offices or from:
Natural Care Team, Operational Support Unit,
Scottish Natural Heritage,
Battleby,
Redgorton,
Perth
PH1 3EW.
Telephone: 01738 444 177
Fax: 01738 458 627
E-mail: Natural.Care@snh.gov.uk