Can we rely upon the ‘reasonable grounds’ point to proceed with a petition?
If the debts owed to you pre-date Covid-19 and your debtor seemed unable to pay well before the Covid-19 pandemic took place, it is entirely possible that you will be able to present a petition on the grounds that the debtor would have been unable to pay its debts even if the Covid-19 had no effect on its financial position. We do not yet have any reliable precedent as to how the Courts are likely to deal with such cases. Whether you are likely to succeed will depend on the exact circumstances of the debt and your debtor. There has been one case decided in August 2020 where the Court concluded that Covid-19 did not have a financial effect upon the debtor and that the circumstances which gave rise to the petition had arisen long before Covid and would have occurred in any event. A winding up order was made in that case. What we do know about the court’s approach is that the purpose of the Act is to allow viable companies to trade through the current times and the Court is likely to set the bar high.
Please contact us if there a debt you would like to discuss. Even if presenting a winding up petition is not available for now, there may still be other forms of legal proceedings that you can use to collect money owed to you, like county court proceedings.
Related FAQs
With another lock-down in force in England, it has been confirmed that the courts will remain open. This is different to the first lockdown in March 2020, in which the majority of courts were closed and most face to face hearings did not take place. Hopefully, this new lock-down measure will ensure that cases are still being heard at a steady rate, and there should not be a backlog for your case to be dealt with.
Lord Chancellor Robert Buckland QC MP emphasised the importance of maintaining safety during the new measures: “Our courts & tribunals continue to be an essential public service, served by essential workers and meeting Covid-secure standards endorsed by public health officials. With the use of remote hearings wherever appropriate, this vital work can and should continue.”
A large sum of £110m has been spent in recent months to make courts safe and to ensure that trials should go ahead where necessary. As a result of the expenditure, hearings can now still take place both in person, whilst adhering to the rules, as well as remotely. Your case may be heard in court if it is deemed as being “necessary in the interest of justice”.
Precautionary measures, such as social distancing, will still be in place, with Judges and magistrates ensuring that this happens.
Lord Chief Justice, Lord Burnett of Maldon commented: “The next few weeks will present difficulties in all jurisdictions. But as before judges, magistrates, staff, the legal profession and others involved in the system will meet them and ensure that the administration of justice continues to function in the public interest.”
Damien Charlton, Julie Huntingdon and Chris Hugill look at the SRA Standards and Regulations (STaRS) for solicitors which came into effect late 2019, and represented a whole new regulatory landscape for the legal profession. The enhanced reporting and transparency obligations have an important impact on in-house practice, so this webinar gives you the opportunity to reflect on how the new rules impact on in-house lawyers, in both your professional and personal lives.
This webinar is part of a series designed for in-house lawyers. If you would like to register to receive invitations to future events for in-house legal counsel, please email damien.charlton@wardhadaway.com.
As above, employees must not leave their home unless they have a ‘reasonable excuse’.
It is worth pointing out that, despite all the guidance, survey results and other advice about managing Covid-19 H&S risk in the workplace, the law has not been changed. None of the guidance is codified by regulation/legislation, which means that you are managing this risk in the context of existing H&S law.
In very simple terms, HASWA74 requires employers to take “all reasonably practicable steps” to ensure the health and safety of its employees (and anyone else affected by your business).
“Reasonably practicable” means to balance risk reduction against the time, money and effort required. If measures are grossly disproportionate, you wouldn’t be expected to take them, but there is a strong presumption in favour of taking any steps which will protect workers.
As part of managing the health and safety of your people, you must control the risks in your workplaces. To do this, look for what might cause harm to people while they work and decide whether you are taking reasonable steps to prevent that harm. This related duty under MHSWR is to ensure you undertake a “suitable and sufficient assessment of risks.”
Head of Commercial, Colin Hewitt, speaks with the team at NewcastleGateshead Initiative about the complexities of event cancellations and the associated legal implications.
Click here to listen to the full podcast.