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Coronavirus (COVID-19) Legal Support

Coronavirus (COVID-19) is having a significant impact on every aspect of our lives. Businesses are facing a wide range of practical, commercial and legal challenges associated with the spread of the virus. Understandably we have received a large volume of calls from clients who are seeking legal advice about how to deal with circumstances brought on by the recent COVID-19 outbreak.

Our solicitors have prepared responses to common questions asked by our clients and have provided some guidance below. This page will be updated regularly to reflect the latest guidance.

Our teams have developed a range of fixed fee services designed to support businesses through the disruption caused by COVID-19.

Coronavirus fixed fee legal services

Clients can also access services designed to help clients take advantage of various government schemes, including:

The Coronavirus Job Retention Scheme  (CJRS)

The Coronavirus Business Interruption Loan Scheme (CBILS)


LAST UPDATED 03/04/2020


 

Employment and Restructuring

The Coronavirus Job Retention Scheme

The Coronavirus Jobs Retention Scheme (CJRS) was announced by the government on Friday 20 March 2020, following the instructions that all bars, pubs, clubs, gyms, theatres and restaurants (other than takeaway services) should close “as soon as they reasonably can” and in any event, from Friday night.

The CJRS is a government scheme whereby employers, who would have been forced to lay off workers as a result of the Coronavirus, will be able to ‘furlough’ workers during the affected period. The employer will then be able to access support from the government through a government grant which will assist the employer in paying the workers during the period in which they are furloughed.

HMRC will reimburse employers 80% of the wage costs of a furloughed worker, up to £2,500 per month.

Find out how to access the Coronavirus Job Retention Scheme Here


General Employment Advice

With many staff self-isolating, we have had a number of queries regarding staff working from home. We can check over your contractual terms and help you update your policies in this regard, as appropriate.

Flexible working is more likely to come to the fore as schools and nurseries close, with staff having to care for their children as well as trying to work from home. We can talk you through how to adapt to these situations as an employer, and again update your policies if necessary, to cover this situation.

Pay is of course a big area of concern, and we can advise you as to what pay your staff are entitled to receive in certain situations. For example, when they are self-isolating but not actually ill, or if they have been on holiday and now can’t get a flight home.

We can also guide you through reducing working hours, laying staff off or following a redundancy process.

There are a number of support schemes currently available from central and local government and the banks and new ones being proposed and issued every day.  A lot are being rushed through and so information provided has been sketchy and the process to make the most of the schemes available has proved difficult for some of our clients whilst trying to deal with every day business contingency.  We are up to date with what is available and assisting our clients with benefiting from the provision from the help available.

We are working with our client’s accountants and other advisors in respect of what can be done in respect of the costs of their businesses to provide some headroom for those that need it.

As well as our advice on staff arrangements matters, corporate restructuring of our clients’ business structures is another area we are being instructed to assist with.

We are reviewing contractual terms and making contact with creditors to attempt to negotiate extended payment terms.  Consideration should also be given to any specific requirements to be complied with to vary the contractual terms and ensure these are met.  Consider the broader implications of a failure to comply with payment terms, for example a right to terminate, contractual interest or accelerated payment clauses which could cause the amount due to increase significantly beyond what is already overdue. Consideration too any personal guarantees which have been given for such facilities.

For advice on employment or restructuring please contact Kate Shawcross on kate.shawcross@harrison-drury.com or call 01524 952718


 

Property

We are dealing with a huge amount of enquiries from Landlord and Tenants (commercial and residential) in respect of their leases:

  1. Temporary variations to leases including rent deferrals, concessions and payment holidays to include other rental payments (service charge and insurance) as well as the headline rents are being put in place.  It is essential these arrangements are put in place with care to avoid issues such as inadvertent permanent variation or other unintended consequences.
  2. Impending break clauses and renewals need careful consideration in light of suspected implications on values.
  3. Agreeing changes of uses with landlords to enable new lines of business to be undertaken during a dip in demand for other servicesInterference with tenant’s rights.  Communal buildings or buildings and communal areas on wider estates can be an issue given government advice which is changing all the time but the tenant’s rights under the lease have to be carefully considered before closures or other restrictions are imposed and where this is happening we are being asked to advise on damages for business interference and injunctions.

Click here to find out how we can support landlord and tenants

Planning is being relaxed in certain circumstances to enable businesses to adapt to the restrictions placed on gatherings and the like.  We are advising on this and assisting our clients in joint ventures with other operators to enable business to continue or to diversify.

Transactions – urgency to get deals done has heightened due to funding offers having deadlines and uncertainty over whether those will be extended as is often the case in normal circumstances.

Contracts – there are issues with self-isolation requirements which are requiring contractual obligations to be relaxed and we are putting provisions in place for these circumstances for our clients.

Construction –The extent of the exposure to contractors will depend on the specific wording of the contract parties have entered into to carry out works. The majority of standard form contracts, such as JCT’s and NEC3’s contain standard provisions relating to the exercise of statutory powers which may give rise to an extension of time. However, these clauses could have been removed from the standard form contracts for some reason and therefore each contract will need to be considered in order to give diligent advice on the correct position and the necessary action to take in the circumstances. It may also be possible that the events would amount to force majeure which is also provided for within most standard form contracts. Practically speaking though, given that construction projects often include a number of contractors in a chain, it is hoped that, given this pandemic will affect all parties, all will try to reach practical resolutions to the issues that will arise in the coming weeks and months. We are able to assist with any disputes that may arise and also with any advice and preparation of supplemental agreements or notices which may be required to be served under the relevant contract.

For advice on property matters please contact Hayley Bamber on hayley.bamber@harrison-drury.com or call 01772 428537


 

Commercial Matters

A lot of our clients are have required us to urgently review and redraft of the terms and conditions upon which you trade with suppliers and customers. We’re also helping with improved financial and credit control functions. Outside of government and banking facilities we are also looking at and negotiating facilities which allow for flexibility to assist your cash requirements.

Consideration of steps to improve business’ cash flow, including reducing non-essential overhead and reducing payment terms for your customers and improving credit control processes to collect debt. These may improve your prospects of being able to pay creditors.

Directors must also consider the rights of creditors as well as shareholders where the directors know or should know that the company is or is likely to become insolvent (including circumstances where the company is unable to pay its debts as they fall due). There may also be personal liability to directors of a company that has continued to trade whilst insolvent and even the possibility of director disqualification proceedings.

Some of our clients are diversifying to assist with the crisis and we have been instructed on a number of commercial contracts to facilitate this.

For advice on contractual matters please contact Nick Booth on nick.booth@harrison-drury.com or call 01772 429025


 

Frequently Asked Questions

If your contracts give you the right to do so, you can rely on this to implement short-time working , or lay staff off for a temporary period.

If you do not have the contractual right to lay off, or put staff on short-time working, you should consider having an open conversation with your staff and seek their agreement to working reduced hours/reduced pay. You could also ask for volunteers to take unpaid leave.

Note. Any member of staff who is already unable to work, for example due to sickness or (arguably) medically-advised self-isolation, cannot be laid off.

If it is possible for the employee to work from home, then in those circumstances, the issue may be resolved by agreement and the employee can do their usual job from home, and continue to be paid as usual.

If not, you would need to consider the current government advice, the specific reason that the employee is self-isolating (for example, is a family member displaying symptoms, or do they have an underlying medical condition which places them in an ‘at risk’ category), and whether it would be discriminatory to refuse home working, take disciplinary action, or withhold pay in light of the employee’s refusal. Depending on the circumstances, the employee may be entitled to receive SSP from the first day of absence. Alternatively, they may choose to take holiday (which is payable as usual), or it could be dependant’s leave, which subject to your own contractual terms, would be unpaid leave.

Considering all of the above circumstances, if the employee’s leave is deemed to be unauthorised, they would likely not be entitled to pay. as they are not willing to attend work.

Now we know about the self-isolation measures, we can draft provisions to incorporate into a contract before it is exchanged in the hope that it prevents a notice to complete being served and to extend the completion date until such time as vacant possession can be given.

In this situation the Seller and Buyer need to avoid having a Notice to Complete being served on them which then makes time of the essence to complete. Additionally, if you are self-isolating, it is unlikely that you will be able to give vacant possession of the property on the day of completion and so effectively this will lead to a breach of the contract conditions and maybe a litigation claim. Protection provisions such as those we can draft go some way in providing protection to cover these risks.

As a Landlord we can give you advice on the provisions of the lease and guide you to agreeing a way forward with the Tenant. It is better to agree a rent concession or payment holiday with the tenant as he will be more likely to stay in the Property and you will not be left with an empty property when the pandemic is over.

Please note: We are offering to review existing leases, draft the rent concession letter and provide the appropriate advice for clients for £350 plus VAT.

As a tenant: We can provide the necessary legal advice by reviewing the Lease and advising on the forfeiture provisions. We can liaise with the landlord and agree a rental concession if need be.

Where possible your should take all reasonable steps to ensure you can pay your creditors. This could include consideration of steps to improve business’ cash flow, including reducing non-essential overhead and reducing payment terms for your customers and improving credit control processes to collect debt. These may improve your prospects of being able to pay creditors.

Where it becomes clear that this is not possible we advise that you take legal advice early. You should review contractual terms and where appropriate make contact with creditors to attempt to negotiate extended payment terms.

Consideration should also be given to any specific requirements to be complied with to vary the contractual terms and ensure these are met.

Consider the broader implications of a failure to comply with payment terms, for example a right to terminate, contractual interest or accelerated payment clauses which could cause the amount due to increase significantly beyond what is already overdue. Consider too any personal guarantees which have been given.

Directors must also consider the rights of creditors as well as shareholders. Where the directors know (or should know) that the company is or is likely to become insolvent (including circumstances where the company is unable to pay its debts as they fall due). There may also be personal liability to directors of a company that has continued to trade whilst insolvent and even the possibility of director disqualification proceedings.


 

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