When RFDs come unstuck

0101Gun dealers can often end up in difficult scenarios just by offering to help a customers, says Stuart Farr. Make sure you’re not left liable for something that’s not your fault

Having worked with members of the gun trade for some years, I think it is fair to say that registered firearms dealers (RFDs) can be praised for their overall willingness to help their customers cope with the statutory legal framework that affects the movement, sale, buying and storage of guns. Those restrictions, which essentially require customers to deal ‘in person’, can so easily prove an inconvenience, and it is a credit to RFDs that they have stepped up to the mark to help make the process workable. That said, it is not unknown for RFDs to come unstuck. In my experience, two scenarios commonly arise where, in particular, RFDs have lost out when problems have arisen.

The first scenario involves RFDs who have endeavoured to assist customers with the storage of guns. For instance, I have been approached by RFDs who have assisted long-standing customers who, having experienced difficulties with renewal of either their shotgun or firearms certificates, have consequently arranged for safe storage of their guns with an RFD while their problem was addressed. They may, for example, have taken this step to prevent the seizure (and possible damage or destruction) of their guns by the firearms department of the relevant police authority. I have, in particular, received enquiries from RFDs who have agreed to store guns, in return for a fee, on behalf of customers, who have then defaulted on payments to the RFD. This left the RFD uncertain what to do with the guns in their possession.

Often in such cases the relevant shotgun or firearms certificate has not been renewed or the owner of the guns has moved away and cannot be traced. In one instance I have been aware of a cache of guns worth £15,000-£20,000 being left in storage at an RFD. In that case, the storage bill had mounted up to several hundred pounds over some months.

The problem arises out of the fact that many of these arrangements are not committed to writing or, if they are in writing, the rights and responsibilities of the parties are not sufficiently clear to provide an obvious remedy.

As a matter of basic legal principle, an RFD who is in possession of a gun and is owed money in respect of its storage can exercise what is commonly known as a lien over the gun in question. A lien is simply a legal right that entitles a party to hold on to assets in his possession pending payment of a debt owed. It normally arises under the law of equity and sometimes, less commonly, as a matter of contract between the parties. The problem a lien creates, however, is that it does not automatically confer on the RFD a right to sell the gun. The RFD does not become the legal owner of the gun and must therefore continue to keep hold of it for the benefit of the legal owner until such time as the debt is paid. In doing so, he can continue to add the storage cost to the debt but, eventually, the size of the debt will exceed the value of the goods.

If the legal owner is traceable then, of course, pursuing full recovery of the debt by way of either a small claim in the County Court or statutory demand is an option available to the RFD. However, if the debtor is not reasonably traceable then the question arises as to what can be done to sell the guns to mitigate the loss incurred by the RFD.

Unfortunately, the legal remedy is not straightforward and the only realistic option for the RFD is to pursue a claim in the County Court seeking an order permitting him to sell the assets. This can take several months, and while the incidental costs of those proceedings could be added to the debt, the RFD is left with the cost and disruption such proceedings may cause, plus the risk that the legal owner may turn up before the order for sale is made and demand his guns back.

The best and most cost-effective way around this is to ensure that any agreement to store the guns is properly set out in writing and, importantly, that it contains an appropriate contractual lien that entitles the RFD to sell the guns in his possession after a specific period of time if the debt remains unpaid. A contractual lien is enforceable, and provided the RFD has taken appropriate steps to ensure he can legitimately transfer the guns to a third party on a sale, this should enable him to recover all or part of the debt. A contractual lien requires careful drafting, and input from a legal adviser is sensible if an RFD wishes to protect himself in this way.

Finally on this scenario, while the prospect of handing the guns to the police on the grounds they have been abandoned may appear to be an obvious solution this does not, of course, provide a remedy for the RFD in relation to the debt incurred. Nor does it assist the RFD if the legal owner at some point in the future seeks to claim back his assets. The RFD is potentially exposing himself to a claim in tort for conversion of the goods in his possession unless a contractual lien is in force that entitles him to dispose of the goods as he sees fit.

UnknownThe other situation is where a friendly RFD agrees to act for a customer as the receiving party for a gun the customer has bought via a third party. The RFD may agree to do this for a modest fee but often will not be directly involved in the sale of the gun in question. The problem arises when the gun in question proves to be faulty. I have come across situations where the customer asks the RFD to return the gun to the seller, at which point the gun gets lost, seized or delayed in customs. The customer, understandably, becomes frustrated because the resolution of the fault is delayed. The intended recipient of the gun equally becomes frustrated because they cannot help the customer remedy the problem. The unfortunate RFD becomes stuck in the middle even though he has had nothing to do with the transaction other than to help the customer deal ‘in person’.

So how can an RFD protect himself? Once again, the answer lies in ensuring there is a clear written agreement setting out precisely what the responsibilities of the RFD are and, importantly, what his responsibilities do not involve. By acting on behalf of the customer, the RFD is, in essence, forming a contract with that person, particularly in circumstances where the RFD may levy a modest charge for the service. As such, care should be taken to ensure that the agreement is made clear in the sense that the RFD confines his obligations to the transportation of the gun and no more.

It should be made abundantly clear that, for instance, he is not a party to the transaction nor is he responsible for any issues arising out of the quality of the gun or its fitness for purpose. In that context it is entirely appropriate for the RFD to restrict or limit his liability to compliance with his very limited role and no more.

It is also advisable for RFDs to ensure they are adequately insured for guns transported by them by a third-party carrier. By doing this, an RFD can avoid becoming involved in a situation that is not of his own making. While we all recognise that RFDs provide invaluable assistance, disputes regarding an apparently faulty gun can and do arise, and in that sense it is sometimes a natural reaction for the other parties to ‘shoot the messenger’.

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Posted in Features, Legal
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