How long does a claim take?

 Aside from the CBILS Scheme, the Government have, or are in the process of, implementing several different schemes to support businesses financially through the Covid-19 outbreak.

If changed circumstances mean that a business wants to exit from a contractual arrangement, then before trying to terminate it, a careful review should be carried out to see whether a right to terminate actually exists. For example:

• Not every contract for the sale of goods contains the right for the buyer to terminate in circumstances where the supplier hasn’t done anything wrong. If a business has entered into a contract on the supplier’s standard terms, it is unlikely to contain any such provision
• A contract for the provision of services is unlikely, if drafted by the customer, to contain a provision that allows the supplier to walk away from the arrangement at short notice, or perhaps at all

If a party tries to terminate a contract when it doesn’t have the right to do so, the other party will likely claim breach of contract and could sue for damages. In the case of a long term or high-value contract, this could amount to a very significant liability.

Even if the right to terminate the contract does exist, there might be particular rules about the following:

• How much notice has to be given
• How such notice has to be served (for example, it might have to be in writing to a particular address)
• When the notice can be served (perhaps on an anniversary of the start of the contract)
• How much a party has to pay if it cancels (for example, for raw materials, for work done to date, or even the whole contract price)

All of these factors must be taken into account, and any contractual processes for termination are followed.

Yes but the sponsor must report this on the Sponsor Management System within 10 working days and must follow normal employment law principles.

If this results in the sponsored worker’s falling below the minimum required salary the usual position is that they cannot continued to be sponsored. However the government has implemented a concession for sponsors who have ceased trading or temporarily reduced trading which allows the salary to be reduced to 80% of the figure stated on the Certificate of Sponsorship or £2,500 per month, whichever is lower.

The government has announced a number of measures to try to protect businesses during the current period of uncertainty. However there is no outright ban on creditors being able to take legal action to recover money they are owed, though there are temporary restrictions on some forms of legal action, like winding up petitions.

However, it is important to note that these measures only relate to winding up proceedings. Creditors will still be free to commence county court claims.

The new Corporate Insolvency and Governance Act 2020 brings in a new “moratorium” procedure. Businesses in financial difficulty that are viable and can be rescued will now be able to work with an insolvency practitioner to obtain at least 20 business days’ breathing space from creditors to allow the business to formulate a plan to deal with its financial problems.

For more information on the Corporate Insolvency and Governance Act, click here

As part of the raft of measures put forward by the government over recent months, there are also restrictions on landlords taking action to evict commercial tenants who miss rent payments. Various payment holidays and forbearance have been put in place in respect of certain tax liabilities and some business rates.

If your business is going to go into an insolvency process like administration or a company voluntary arrangement, there is the ability to obtain a freeze on creditors taking action whilst those procedures are put in place. However, these sorts of moratoriums will not be available to everyone and in any event not unless an insolvency process is being instigated.

Regardless of whether a business has formal protection from creditors or not, engagement with creditors and trying to reach agreement with them to deal with the debt is therefore vital. Much of the protection measures that the Government has introduced like curbing the ability of landlords to evict a commercial tenant, do not wipe out the debt. They simply prevent action being taken or a payment becoming due for a short time. All businesses should use that time to consider how those debts can be dealt with and engage with the relevant stakeholders sooner rather than later.

The Business and Planning Act 2020 entered the statute books on 22 July 2020. Section 18 of the Act includes provisions for the extension of the date by which a reserved matters application must be submitted where the original date falls between 23 March 2020 and 31 December 2020. Where the original time limit for the submission of reserved matters is on or after 19 August 2020, the relevant conditions will be automatically read as requiring the reserved matters application to be submitted by 1 May 2021.

Where the original time limit for the submission of reserved matters is before 19 August 2020, an application will need to be made to the LPA for an Additional Environmental Approval (“AEA”), which the LPA must determine within 28 days otherwise the approval is deemed to be provided. The purpose of the AEA is to consider whether the environmental assessments carried out at the time of the original outline determination remain valid and up to date, and where that is not the case, the AEA will be refused. In such circumstances a new planning application will be required where an application is now out of time to comply with the original date for submission of reserved matters.