High Court rules in favour of struggling firms in Business Interruption Insurance Case
Insurers may have to pay out to hundreds of thousands of British businesses whose had business interruption insurance claims rejected during the Covid 19 pandemic following a High Court decision in a test case brought by the Financial Conduct Authority (FCA) which found in favour of policyholders.
The judgment doesn’t determine every single issue raised, and some points were found in favour of insurers, but it does give guidance in identifying which claims are covered in the wake of the Covid 19 pandemic.
“The Pandemic and subsequent lockdown were a really unprecedented situation for British business and also insurers, it is great that the FCA moved so quickly to try and find some clarity in how insurance policies should respond for the businesses who have some form of pandemic or authority shut down cover included in their business interruption insurance. This case is really important for those businesses who did have this sort of cover in place and also for insurers to be able to respond appropriately, and also look at ways to deal with this sort of situation in the future should it happen again.”
With the recent upheavals and disruptions to business caused by Coronavirus, we have seen an increasing number of our clients moving to the online sale of goods and services.
Whether you’re selling goods or services via your website or just marketing your products online, it’s essential that you have a robust set of T&Cs outlining the rights and obligations of the parties.
If you sell via your website your customers will need to accept your terms and conditions every time they place an order. Your terms and conditions should include details of your business (e.g. company name, company number and registered address), payment details, delivery, returns, cancellation/termination, any limits on liability and what happens in the case of delays or non-performance due to events outside of the parties’ control. If you sell to customers outside England and Wales you should also include provision that English and Welsh law applies and that any disputes have to be referred to the English and Welsh courts.
If you sell to consumers your T&Cs are even more important as you will be subject to more stringent laws and you must comply with consumer legislation including the Consumer Contracts (Information, Cancellation and Additional Charges) Regulations 2013 and the Consumer Rights Act 2015. This legislation sets out the quality and standard of goods and/or services, cancellation rights, returns and refunds. You cannot exclude these rights. You should note that the definition of “consumer” includes sole traders and certain types of partnerships so don’t assume that someone buying goods or services for their business falls outside of the rules.
Don’t forget that aside from T&Cs relating to online sales you will also need a privacy notice and cookies notice.
If you need help with your e-commerce terms and conditions get in touch with us on info@clearlybusinesslaw.co.uk or 01980 676875.
Beautiful Client Comms helps busy business owners to create engaging content so that they are increasingly visible on social media and building trusting relationships with their target client. Based in Southampton and works remotely with clients throughout the country.
Challenges
Prior to working with Clearly Business Law, I did not have any terms and conditions or contracts. Although this has not been a huge risk with a small client portfolio, the goals are to grow the business and service offerings and therefore have become more important and a higher priority.
Solutions
As a result of working with Clearly Business Law, I now have a contract template and terms and conditions to use for the services I offer. I found it really easy to brief Emma on what my company does and my plans to grow, we did everything virtually. I didn’t expect to need different T&Cs for my 121 clients and my membership club clients, so I was really pleased she highlighted this. I instantly felt relieved that I have these legal documents in place to protect me as a I grow.
Results
I’m currently launching a membership club (the Beautiful Content Club) and I have my legal documents in place and ready to go. My terms and conditions clearly outline how the membership works and I believe will save me a lot of time and hassle in the future as I grow the membership. It also means any new clients I take on through my 121 services, I can trust that I have legal documentation in place to protect me from an financial loss.
Personal Quote
Clearly Business Law has given me confidence that I can focus on growing my business knowing I have the right legal documents in place. I also feel more professional for having this type of paperwork. It wasn’t as scary as I thought – Emma took care of everything and I felt in safe hands. I will be recommending her to everyone!
Pod Landscapes Grounds Maintenance Ltd are a professional grounds maintenance business based in Farnborough, Hampshire. Our clients include Property Maintenance Companies, Retirement Villages, Business Parks and Retail premises based in Surrey, Berkshire and Hampshire.
Challenges
We had terms and conditions documents in place which we had been using for a few years. These needed to be updated to ensure they adhered to all current laws and regulations to be certain we protect our clients, and our business.
Solutions
The team at Clearly Business Law are so approachable and friendly. Previously the whole legal world seemed very daunting! Knowing our network of business contacts already use their services, it was a no brainer to discuss our requirements with Emma. Emma took the time to understand our business and our services in order to draw up the right documents for us. It was an easy and enjoyable process and I felt we were in safe hands throughout.
Results
We now have Terms and Conditions that I understand and feel completely reassured by.
Personal Quote
Emma and Louise are absolute professionals in their industry, with the experience and knowledge to help us meet all our legal requirements as a growing business. They are also completely clear on what they are asking and do not use jargon or terms that are not relevant for me to know! Pricing is very competitive and fair, expectations are set from the start and also timing of the work was completed very fast. I will have no hesitation in reaching out to Clearly Business Law for all our legal needs.
Louise Le Poidevin, Director, Pod Landscapes Grounds Maintenance Ltd
Board Meetings & Shareholder Meetings In The Virtual World
As the pandemic continues to keep us in lockdown, there are many businesses trying to return to ‘business as normal’ – albeit in a new kind of normal. For many people, this means holding meetings online using software like Skype, Zoom or Microsoft Teams, with each board member or shareholder safely tucked away in their own homes. After all, directors have a duty to carry out their management responsibilities, and a pandemic doesn’t change that!
There is no doubt that these remote meeting technologies will form the foundation of a lot of meetings, both now and in the future. Being able to discuss things in a group setting while seeing everyone’s face is essential for businesses that want to keep everything operating efficiently while employees are still working from home. And if teams become permanently remote, then it will become an integral part of the work day for them.
But many business owners have some concerns about relying on these technologies. Mainly – what is their legal position in company law if they hold more formal, important meetings like board meetings or shareholder meetings using things like Zoom or Skype? Luckily, there is some pretty clear guidance available on this, so you can put your mind at ease.
Holding Board Meetings Online
The good news is that company law in England and Wales does permit directors to hold board meetings remotely through the appropriate electronic means. However, it will depend on your company’s articles of association as to whether this is allowed by your company or not. Some businesses decide early on that they don’t want any board meetings to be done electronically, in which case you have to follow your articles of association.
On the legal side of things, the key requirement is usually that the directors can hear and be heard, which means that reliable video conferencing software can be used. It should, however, be noted in the minutes of the meeting how each director is participating, and how they proved that they are who they say they are. If your articles of association haven’t been updated in a long time and you aren’t sure, it’s worth getting some legal advice first. After all, some articles require in-person only meetings, and if your business has these restrictions then you will need to amend them properly.
If you are going to hold board meetings via Zoom or Skype, a few best practices to follow include:
Ensure all directors that are entitled to receive notice have given their express consent to the meeting being held online, and not in person.
The solution chosen is tested beforehand to ensure all directors can hear each other clearly.
Any voting or resolutions made during the meeting should be done one at a time, so that there is no confusion.
The minutes of the virtual meetings are still taken and circulated to each director for approval, to ensure they are correct. If you are opting to record your meetings, this does make things slightly simpler.
Holding Shareholders Meetings Online
Shareholder meetings are a slightly different kettle of fish, as physical shareholder meetings are actually not as common – especially since the requirement for private companies to hold AGM’s was removed. In bigger companies, shareholders can number in the dozens or even hundreds, so meeting in person isn’t always practical. So instead, resolutions are normally passed by written resolution, with each shareholder ‘voting’ by signing a written copy of the resolution proposed.
Understandably, holding a shareholders meeting goes against all government advice at the moment. The advice from the Chartered Governance Institute is that businesses should review their articles of association, and if there are any meetings scheduled they should be cancelled (or adjourned if notices have already been sent out).
The difficulty comes if you actually want to hold a shareholders meeting now. The law states that all shareholders should be able to actively participate in a meeting, which means they need to be able to speak, raise questions and interact in a clear and understandable way throughout the meeting. This in turn means that whatever software you choose, it needs to have these capabilities for everyone, so that each shareholder can participate. Again, we recommend you seek some legal advice here to ensure that your articles of association allow for virtual shareholder meetings, and to ensure any resolutions passed during those meetings are valid and legally binding.
If you’re not sure where you stand with holding virtual meetings, or you just want someone to look over things and make sure you’re in the clear, we’d be happy to help. Just get in touch with us on info@clearlybusinesslaw.co.uk or 01980 676875.
Melp Co is a specialist mental health and well-being company. We provide mental health support and education in clinic, to schools and into companies. We’re based in Farnham, Surrey and also offer our services virtually.
Challenges
Like most businesses we need to make sure we have the correct contracts in place which are regularly reviewed and updated. In the past I have come across some very frustrating lawyers that want to over-complicate everything and speak only in technical terms and jargon…. This is not helpful! They also seem to take weeks/months to do the simplest of tasks.
Solutions
The benefit of working with Clearly Business Law is that I have never had any of the above problems. Louise has always explained things clearly so that I can gain a full understanding of what is in the contracts. This is essential as when I am asking people to sign them they always ask questions and it is a lot easier all round if I know the answer.
Louise also works incredibly quickly! This is invaluable, especially when working to deadlines. The service is a much easier, more professional and pleasant experience than any I have had before. Thank you Louise!
Personal Quote
I recommend working with Clearly Business Law because it is easy to work with them; they are quick, reliable, professional, and above all trustworthy.
My wife Melinda and I are the Managing Directors of Bonus Eventus Maintenance Ltd based in Mytchett, Surrey. We specialise in commercial heating, gas, ventilation and air conditioning systems, including reactive (emergency call outs) and planned preventative maintenance of these assets. We work with commercial facilities including schools, care homes, offices, shopping centres, pubs and restaurants as well as residential blocks.
Challenges
We had a relatively urgent requirement that required professional legal advice. We needed to discuss this requirement promptly and get legal documentation in place to be used with immediate effect. We didn’t have the time or the expert knowledge to implement the changes ourselves. We needed someone who understood our business and was able to meet our short deadline.
Solutions
The team at Clearly Business Law created the legal documents that we required, and I would like to thank the team for the very quick and efficient turnaround. In my experience it is very hard to find other businesses like yours who are fast communicators, and who keep exactly to what was agreed. The team was very quick at understanding the type of environment we are operating in.
Results
Clearly Business Law was able to help with the legal advice we required so quickly and it really gave me peace of mind and relief to know that you were on hand. I would not hesitate to recommend you to any of our clients, friends or family in the future.
Personal Quote
Clearly Business Law is an important, additional arm to our business. It gives us peace of mind to know that we have this professional support available when we most need it.
Laszlo Daragics, Managing Director Bonus Eventus Maintenance Limited
We are a carpet & flooring company based in Farnborough, offering supply & installation of various products across the residential and commercial sectors.
Challenges
We initially contacted Clearly Business Law to write our terms and conditions around 4 years ago. As our business grew and we got busier, we found that we were dealing with more customers who required clear guidelines and therefore we needed a legal document in place to protect our business
Solutions
We were finding that a lot of customers were not aware of things such as; the time of arrival of the fitters; potential issues that could arise in the supply chain resulting in delays; that if a customer needed their old floor taken away it was an additional cost. Clearly Business Law recommended that we added some legally binding terms and conditions to cover all instances, so there was clarity for both ourselves and our customer.
Results
Clearly Business Law drew up an extensive set of terms and conditions. We clearly benefited from Louise’s experience of working with flooring companies previously. It meant that we added a clause about wood being a natural product and therefore being subject to natural flaws such as knots and resin filler. I had not even thought of adding this level of detail however we have drawn upon this particular clause several times. One particular instance, we had a client who had begun legal action due to the natural variation within their wood floor. It was inspected and found to be a natural variation and not faulty. Louise’s knowledge and suggestion prevented this particular instance from going any further than a few displeased emails.
Personal Quote
The world of business is not all friendly fun and games. At some point there will be a person or organisation who will try to take advantage of you or try to take unfair and unjust action against you. It is at a time like this that you need someone like Clearly Business Law on your side. They don’t charge crazy fees.They give a friendly, professional, helpful legal service. I wouldn’t work with anyone else for the legal side of our business.
Louise Martin,
Company Director Floor24 Carpets & Flooring Limited www.floor24.co.uk
As part of the Government’s reform of insolvency law and in response to the Covid19 pandemic it is proposing changes which will protect businesses in debt to keep them trading. Amongst other changes, it is proposing to prevent suppliers relying on termination clauses if a business enters into an insolvency or restructuring procedure. This means a supplier will have to continue to supply even though there is a real risk that payment will not be made.
The proposed restrictions won’t impact on termination events after an insolvency procedure commences (if there is a provision in the contract allowing this, or if the court allows it as it would cause hardship to the supplier’s own business) and there will also be a temporary exemption for small suppliers. A supplier is a small supplier if in its most recent financial year, at least two of the following conditions were met:
the supplier’s turnover was not more than £10.2 million;
the supplier’s balance sheet total was not more than £5.1 million;
the average number of the supplier’s employees was not more than 50.
Fortunately this will mean many suppliers are outside of this new regime but these changes do highlight the importance of knowing your clients and ensuring you do your homework before offering credit or ongoing supply contracts.
If you think you may be caught by the proposed changes, or if you want to tighten up your terms and conditions to include additional protection against non-payment please get in touch via info@clearlybusinesslaw.co.uk or 01980 676875.
