Does this apply to bankruptcy petitions?

Remote mediations have become increasingly popular as a way of settling a dispute before it goes to court. There are a number of ways in which you can mediate remotely, but the most common platform is Zoom, due to its easy-to-use nature and the ability to have ‘break-out rooms’. We have answered some FAQs and set out a quick guide to remote mediations below.

What is remote mediation?

• Mediation is a form of assisted negotiation, in which a neutral 3^rd party mediator seeks to help the parties resolve their dispute. The process on the day is managed by the mediator and adopts certain key ground-rules. These are that discussions are private and cannot be referred to in court; and the process is entirely voluntary and non-binding, if and until a settlement is finalised. In the current pandemic mediations are now usually conducted remotely by video conference, instead of an in-person meeting.
• The structure of the mediation will depend on the matters that are in dispute. Before the mediation the parties will exchange their views in position papers and prepare a bundle of the key documents.
• Generally the parties will start the mediation in the same ‘room’ as the mediator, where they will be invited to set out their positions. The mediator will then put the parties into ‘break-out rooms’. These rooms serve as your own private ‘room’ which the mediator will join. You will therefore be able to have private discussions with the mediator without the other side being able to hear those discussions. The mediator will go between the ‘break-out rooms’ to discuss a party’s position further in order to attempt to reach a settlement.
• If an agreement is reached, at the end of the mediation the Settlement Agreement will be drafted. The Settlement Agreement works as an enforceable contract. The Settlement Agreement will outline the details of what has been agreed and the intentions of the parties, such as any actions required, payments to be made and appropriate timescales. Each party will sign the Settlement Agreement, which can be done electronically.
• It is not always possible to reach a resolution/agreement by mediation, but the mediator serves as an impartial third party in order to aid the process. If no agreement has been reached, the mediation may still prove useful as it will give you a better understanding of the other side’s position.

What should I do before the mediation to prepare?

• Ensure that you are in an area with minimal distractions. Mediation is a confidential process, so make sure that you are in a private location.
• Ensure that your microphone and camera work and that you have access to the online platform that will be used. We send our clients a link to the website in advance so that this can be tested out.
• Consider any agreed dress code and dress appropriately.
• Have a copy of the mediation bundle to hand, whether in hard or soft copy, and be aware of what documents are in there.

Any tips on what to do on the day?

• Remember to make sure that before you have any private conversations with the mediator you are in your break-out room.
• You may contact the mediator whilst being in the break-out room. On Zoom there is an ‘Ask for Help’ button on the screen. The mediator will then be prompted to join your room.
• Ensure that you inform the mediator if you or others enter/leave the room. It is important that the mediator knows who is present.
• Be mindful of body language and facial expressions as these can appear more enhanced on the screen, and they are easier to pick up in a remote mediation.
• Stay calm and focussed at all times. When you have a dispute it is sometimes tricky to maintain a calm manner, but this is always vital in attempting to reach an agreement.
• When engaging with the mediator avoid any external distractions such as text messages and emails, as it may come across that you are not interested in the process. It is important to pay attention so that you do not miss any dialogue which may be key to any agreement that is reached.
• When you are in the break-out room without the mediator make sure that you take breaks and keep refreshed, as virtual mediations can be tiring.

It could be possible depending on your contract. If there is no force majeure clause in a contract, it may be possible that the contract may have been “frustrated” by emergency legislation. In legal terms, a contract can be frustrated where an event occurs after it is entered into which was not contemplated by any party at the outset, is not due to the fault of any party, and which makes the performance of the contract impossible.

If this is the case, the contract could be “discharged”, meaning that the parties’ obligations under the contract are no longer binding.

It is possible that a contract could be frustrated within this particular legal doctrine by a change in the law that makes performance of a contract illegal. However, if it simply becomes more difficult, or more expensive, then the legal tests for frustration might not be satisfied. There are also limits to the application of the rule if the frustrating event was already known about at the time the contracted was entered into.

Again, careful legal advice will be required at an early stage. The rules about force majeure or frustration might help businesses that find themselves unable to perform a contract because of the coronavirus outbreak.

Any new contracts that are concluded should expressly deal with the possibility that performance might become more difficult, more costly, or impossible to perform.

Yes. The Health and Safety Executive has stated (as quoted from the Gas safe register site):

“Landlords have a legal duty to repair and maintain gas pipework, flues and appliances in a safe condition, to ensure an annual gas safety check on each appliance and flue, and to keep a record of each safety check.

“If you anticipate difficulties in gaining access as the Covid-19 situation progresses, you have the flexibility to carry out annual gas safety checks two months before the deadline date. Landlords can have the annual gas safety checks at their properties carried out any time from 10 to 12 calendar months after the previous check and still retain the original deadline date as if the check had been carried out exactly 12 months after the previous check.

“You are encouraged to arrange your annual gas safety checks as early as possible, as a contingency against tenants being in self-isolation for 14 days (in line with current guidelines), or gas engineers being unavailable due to illness. The two-month period to carry out annual gas safety checks should provide adequate resilience in most situations.

“In the event you are unable to gain access to the property, e.g. persistent refusal of access due to vulnerable tenants self-isolating, you will be expected to be able to demonstrate that you took reasonable steps to comply with the law, and that you are seeking to arrange the safety check as soon as all parties are able. This will need to include records of communication with the tenant, and details of your engineers attempts to gain access.”

Many Registered Providers have been suspending all gas and electrical testing where internal access is required, continuing checks in communal areas and are carrying out emergency repairs only, whilst void works are suspended and staff are working from home. This does not comply with the legislation, or the guidance.

Commercial leases generally prevent a tenant from withholding payments of rent. If a tenant stops paying rent there will be a breach of the tenant’s covenant to pay rent which, strictly speaking, will entitle the landlord to forfeit the lease and/or seek to recover the arrears in the courts. 

However, on 23 March 2020, the Ministry of Housing, Communities and Local Government announced that all commercial tenants in England, Wales and Northern Ireland missing rent payments are to benefit from a government ban on forfeiture of their lease. This change, which will prevent landlords from terminating leases and evicting commercial tenants, is included in the Coronavirus Bill. It will come into force very shortly (once the Coronavirus Bill receives Royal Assent, which is expected to be in a matter of days) and will last until 30 June 2020, with an option for the government to extend this deadline.

It is anticipated that many commercial tenants will take advantage of the reprieve and withhold their rent. Importantly note the rules will apply not only to principal rent but to “any sum a tenant is required to pay”, leaving the burden of supplying services and insuring the premises on landlords.

It is also important to note however that the protection offered by the government is from the threat of forfeiture should tenants withhold rental payments. The liability to pay the rent however remains an interest on unpaid rents will accrue. Furthermore, remedies other than forfeiture may be pursued by the landlord e.g. service of a statutory demand before insolvency or ordinary litigation proceedings for arrears etc.. Tenants then ideally should look to reschedule or suspend rental payment through discussions with their landlord.       

The advantage of this being you might be able to negotiate a sensible and manageable repayment program in respect of the suspended rent, free of the threat of litigation.

The fundamentals of risk assessment remain the same as for any other foreseeable risk.

Focus on risk controls which reflect Government guidance; social distancing (2 metres) and avoiding contact with occupiers if possible, high-quality PPE – disposable overalls, gloves and fluid repellent surgical face masks, ready access to antibacterial wipes for surfaces, tools and equipment and plentiful hand sanitizer.