Category: Blog Posts in English

With authorisation (or Power of Attorney, PoA) one can decide who takes care of one’s matters and supervises one’s interests when one is not able to do so due to, for example, because of one’s illness or non-conscious state. One can be surprised that even a close relationship to a person does not automatically entitle one to take care of other person’s matters even if they are not able to cope themselves or have access to non-public information concerning the authorizing person. 

One can include precise orders to the PoA regarding how one wishes one’s matters to be taken care of or how one wishes one’s property to be managed. One can also deny the authorised person not to take a certain action or require them to seek an approval to act in certain way (for example a sale of certain asset or assets). The PoA should always be tailored to the needs and wishes of the authorising person. Authorised person can be, for example, an adult child of the authorising person provided that they accept the task. 

The original PoA must be stored carefully and government authorities can’t store it on one’s behalf. One can give the PoA to the authorised person or it can be kept in a trustworthy location like safe deposit box in a bank and ensure that the authorised person can access the PoA when needed. 

The PoA can be drafted any time but recommended practice is to have it ready well before it is actually needed. Suffering a serious injury in an accident or of a memory illness may obstruct one to give the said authorisation. In worst case scenario, one may lose one’s capability to make legally binding decisions very fast. Authorisation can only be given by a person whom understands the content of the PoA and what it means. 

One should notice that the PoA must always be done in writing and it has to fulfill certain formalities. For example, the PoA must be signed neutral witnesses. The witnesses must know that the document is a PoA but one is not obligated to inform the witnesses of the scope of the PoA.

The PoA can and should be updated if and when the circumstances change within time. The old PoA can be destroyed of one can have a new one drafted with a clause revoking the old one. When the PoA is needed, Digital and Population Data Services Agency must verify the PoA. The authorised person also needs a medical statement finding the authorising person incapable to take care of their personal matters. 

One can draft a PoA by oneself but it is recommendable to have an expert draft it instead. If done in a do-it-yourself -method, the worst outcome may be that the PoA may not be verified for instance due to the use of unneutral witness or witnesses.

Jouni Aarnio
Associate

The President of the Supreme Court Tatu Leppanen commented recently in public (HS 19.8.) on the significancy of legal fees for the legal security of the Finnish people. The Secretary General of the Finland Arbitration Institute (FAI) Santtu Turunen, under the Finland Chamber of Commerce, wrote in an article published on FAI’s website (4.9) noting that legal fees do not constitute the entire legal fees in a case. Turunen notes that the length of the trial is a factor as well.

Sometimes, people or business decision-makers’ perceptions of the cost of lawyers’ services, or of years of legal battles, can cause a person in need of expert help not to obtain a service. This is the case even if there is a real need for expert assistance and a strong case may be at hand. This article focuses on the latter, which is why you should contact an expert.

In can be an alluring idea save legal fees by resorting to a do it yourself -solution and resort to utilizing old document templates or old document templates found on the Internet when drafting important or economically significant legal documents. However, one should approach these aforementioned DYI-solutions with criticism.

Legal document templates may be useful but one should always understand that the original author of the template is not not and cannot be aware of one’s or one’s company’s circumstances, backgrounds and other relevant aspects which may lead to the outcome that the legal document entails something that should not be there or a material clause for one’s company is not included in the document. Consulting a lawyer and asking a lawyer looking in to the case may in the best case lead to the outcome that one’s risks are eliminated or at least greatly reduced.

In some cases the lawyer’s main task might be outlining and clarifying the legal risks concerning a potential contract may include. The risk assessment regarding a (business) transaction should be in a right proportion to the assumed value or benefit of the transaction especially when talking about far reaching business decisions. Business transactions contain legal risks and these risk should be known and understood before a business decision is made.

Occasionally a person or a decision maker inside a company may have the problem that they are in need of legal advise but for some reason the threshold to obtain said advice is too great. Maybe she or he does not know a good lawyer or they think that the price of even a short consultation is too high, for example when the employer is considering terminating an employee’s employment with the company. The employer may have a legally justifiable grounds to terminate the employment (or in exceptional cases even terminate the employment without notice). If the process of termination is performed incorrectly, it may lead to a considerable bill, possible after a lengthy legal battle despite the employer having a justifiable reason of letting the person go in the first place.

Contacting a lawyer for consultation as early as possible generally has at least two perks: it saves legal fees and improves one’s legal security. Early support from a lawyer may lead to the outcome that the original risk or dispute is terminated before it escalates further, increasing legal fees on the side.

One cost effective method is to have a lawyer on a retainer. The advantage is that the threshold to contact a lawyer is greatly lowered. An added bonus is that above mentioned good lawyer is just a phone call or an email away.

In closing, consulting a lawyer does not always have to be expensive. At least, it is usually much less expensive before than after the fact.

Jouni Aarnio
Associate

In the sale of a second-hand flat the responsibility and liability of the seller is extensive. The scope of the responsibility of the seller is extensive both with time and subject matter. According to the Finnish Land Code, the buyer has five years to notify the seller of a defect in quality or other mistake in the contract. Those five years are counted from the moment of transfer of possession.

A restriction on this right of the buyer is that the notification of a mistake must be done within a reasonable period from the actual notice of an error. According to case law what is meant by a reasonable period here is a couple of months, which can be extended if the situation has special circumstances. It is clear however that the notification of an error should be done as soon as a mistake or error has been noticed. The notification should specify accurately what the mistake is and what the buyer is expecting or demanding from the seller as compensation, when the amount of repair costs or other damage is found out. Thus, when the decision of drawing up a notice of a mistake is made, it is recommended to seek legal counsel so that any loss or legal rights due to a mistake would not happen.

The liability of the seller is also extended to mistakes which the seller did not know about or should not have known about. This is called a hidden defect. The seller is however protected from these kind of mistakes by a “threshold of significance”, which requires that the hidden defects should be significant enough. The determination of significance happens on a case-by-case basis, but as a common rule if the repair costs of the hidden defect are over 5 % of the selling price the defect is deemed significant enough. This 5 % threshold however can only be thought of as an overall guideline as there are many things that determine the threshold of significance in the end.

According to the Finnish Land Code governing all sale of property in Finland, the ground rule is that there is contractual freedom in the sale of property in Finland. According to the principle of contractual freedom, the seller and the buyer can freely decide what they are contracting on and with what clauses. However, in the sale of property, the contractual freedom is not absolute, meaning that some of the aspects of the sale come straight from legislation. For example, according to case law, it is not clear whether a natural person acting as a seller can limit their liability of a hidden defect. The starting point here is that the seller should not be able to limit their liability in such a way, but even here the determination is taken on a case-by-case basis. Some opinions in favor of allowing liability limitation point to the common understanding and agreement of the contractual clauses by the seller and the buyer as a justification of limitation by the seller.

Effective and legal use of liability limitation clauses usually requires help from experienced lawyers. Practice has proven seeking help from legal counsel usually mitigates and lessens the need and costs of further conciliation and investigation, which naturally can be very expensive. 

You can expect experienced expertise from Autio Attorneys regarding the sale of property. Contact us for example if you have noticed that there is a mistake or defect in a property you have bought, or if you are selling a property and would like to take precautions limiting your liability and potential responsibility.

Ville Peurasuo
Associate

The lawyer’s most important task is to help one’s client to achieve the best possible outcome in a case. The best possible outcome sometimes depends on the client – whether it is seeking full remuneration, partial win or reaching an agreement. An experienced and competent lawyer can present multiple different options to the client aimed to solve the problem from which the client can choose the best to their liking.

Choosing conciliation may be the best option for a lot of reasons. Usually it is because of two major ones: risk management or to avoid a longer dispute. From risk management perspective the cause of the dispute can for example be a legally ambiguous question of interpretation. Then both parties have valid and sound arguments backing them up, prompting the question how should the situation be solved from economic perspective. In this situation both parties have a risk of being on the wrong side of argument. This is because law and legal texts can be abstract, and thus prompt interpretations of their meaning. This is true especially when there are no precedents by the courts or the existing precedent is not sufficient in a certain case. It needs to be said that if interpreting law and legal texts would be easy and without risk of misunderstandings, the whole dispute might not exist in the first place.

Solving legal disputes in district courts can sometimes last for years. From the client’s perspective the legal process is usually nerve-racking and seems to be endless. Even after receiving a decision from a district court the opposite party might appeal the case to higher courts – no matter how the issue was resolved in the district court. Conciliation can therefore be justified and reasonable just from the perspective that the legal process can be ended swiftly and the question of appealing the case can be forgotten. It is also possible that in some cases the different instances of court would hold different opinions on the verdict of the case, causing even more work, time, and fees to the client. One could relate the situation to Finland’s loss against Sweden in the 2003 hockey championship tournament where first there is a lead of 5-1 but in the end you lose 5-6. When the buzzer rings there is nothing to be done other than feeling bad.

Choosing conciliation as a dispute resolution measure might be a better option from financial perspective of the client due to legal fees. Going to court is not free and usually the fees rack up rapidly when appealing the case to higher instances. If for example the client does not have a good legal insurance, or one at all, the client is at financial risk. It is better to get something, rather than to get nothing.

There are many kinds of conciliation agreements. Usually conciliation ends in a solution where both parties make compromises regarding their demands. Conciliation can also result in a payment of agreed sum or that both parties agree to cover their own legal costs from the conciliation procedure. Most legal insurances cover the costs even when reaching an agreement in the conciliation process. Conciliation can feel like giving up at first, but after a while the client usually looks at the conciliation process in a better light and as a best solution.

However, conciliation is not always the perfect solution. This is due to the fact that the legal outcome might be certain or almost certain from the start. If the legal process seems to be long, and this does not bother the client, following the legal process to the very end might sometimes be the best option. In some cases, it might be so that the opposing party does not agree to conciliation – in this case the only option is to go through with the legal process – the job of a lawyer is then to acknowledge the hidden risks and their effects to the case, and to offer options and solutions to the client based on these. In short, a good lawyer always knows what would be some of the most reasonable and first of all favorable courses of action to the client in a dispute.

Elias Rauhala ja Lauri Miikkulainen

During the last few years the world-renowned crowdfunding -phenomenon has been in mind of Finnish entrepreneurs and like-minded people. Crowdfunding is a way to seek funding for all kinds of projects, products and companies through a vast group of people, usually via online. This form of funding has been used by larger companies for years, but recently by small and medium-sized tech companies as well in order to enable fast growth. Crowdfunding has been dubbed as digitalization’s gift to entrepreneurs as it allows a relatively simple way to gather even large sums of money based on a good business idea.

Although crowdfunding seems to be a perfect solution in the ever-changing market of innovation craze, it is important to keep realities in mind when conducting business. In Finland, crowdfunding is possible even for smaller projects and without consideration. In this case the investment is handled as a gift which is more straightforward in nature than traditional business financing, although the business needs in this case a fundraising permit which is only granted to non-profit organizations and foundations. Unlike with gratuitous gifts, financing is almost always about consideration. Consideration means in this case that in exchange for funding the person gives, something is expected in return. Most common example of this is a limited liability company (Ltd / Oy), where shares can be traded openly. To simplify, the purchase price of the share constitutes the financing of the company and the share is the ownership interest in the company. The Finnish Crowdfunding Act calls this type of equity-related financing activity investment-based crowdfunding. Only a licensed crowdfunding intermediary mandated by the state can organize this kind of crowdfunding in Finland and the European Economic Area.

Crowdfunding can also work in a way that a company searches crowdfunding in order to produce and sell some kind of innovative product. Here the question is not about the funding of the functioning and future of the company (in exchange of shares), but the sale of a future product. In this case, it is not a question of financing the organization of the business in order to become proprietary, but crowdfunding can be considered as the purchase price of the product, so the main legal issue for the person seeking crowdfunding is the agreement with the financier. 

However, since crowdfunding is often a business venture, it is natural for a person seeking finance to form a company. Establishing a company can at first seem like a big step, especially if you are doing it for the first time. Yrittajat.fi is a good platform on giving basic information about different company forms in Finland. Although crowdfunding is not restricted to a specific form of company, the undersigned strongly recommends to establish a limited liability company. First, a limited liability company offers the clearest connection to crowdfunding in its own right, based on the idea of open financing. Second, the owner of a limited liability company is not liable for the debts of the company unless they are guaranteed personally. Thirdly, a limited liability company is by far the most growth-oriented form of a company, for example, by making it possible for several different owners to actively invest in it. 

Crowdfunding is clearly here to stay. This is no wonder, as companies based on fast innovation have succeeded in getting a quick and good start to their business in Finland. However, in order for this activity to continue on a profitable and sound footing, the undersigned recommends seeking legal consultation, for example from Autio Attorneys.

Nico Mesiäinen ja Jalmari Männistö