Schedule 7: Special Measures Paragraph 7: Effect of special measures order on relevant contracts and legal proceedings Effect
Paragraph 7 enables the Special Measures Manager to take over relevant contracts that the Accountable Person has in place. So, the Special Measures Manager "steps into the shoes" of the Accountable Person for duration of the special measures order in relation to relevant contracts.
	Paragraph 7(3) sets out the criteria of when a contract is a "relevant contract" for the purposes of this paragraph and includes provision that to be a relevant contract it must be specified as such or fall within a description of contracts in the Special Measures Order. Sub-paragraph (3)(e) sets out that the special measures manager must also give notice to the parties of the contract which it is assuming control over. This notice must state the relevant rights or liabilities of the contract which the manager is assuming control of (sub-paragraph (5)).
	Paragraph 7(4) sets out that a relevant right or liability that the Special Measures Manager can assume under a contract, is one that relates to a function of an accountable person for the building under Part 4 of the Act or regulations made under that Part.
	The special measures manager has the discretion to bring, continue or defend a cause of action as set out in paragraph 7(6).
	Paragraph 7(7) provides the circumstances in which a Special Measures Manager may rely on its right with regard to causes of action in paragraph 7(6). Namely, if a cause of action is accrued to or against the Accountable Person of the building before the special measures order is made; if it relates to a relevant function of the Accountable Person prior to the special measures order being made; if the cause of action is detailed in the special measures order pursuant to this paragraph; and if the requisite notice is given by the Special Measures Manager to any person that the manager considers would have an interest in the (paragraph 7(6)) cause of action.
	Where the Special Measures Manager for the building is liable to pay damages incurred prior to their appointment as a result of any act or omission by the Accountable Person, then the said Accountable Person is liable to reimburse the manager.