Legal Update - December 2008
Welcome to our December issue.
We trust you are weathering the challenging economic climate we have now entered and encourage readers to contact us with problems, issues or concerns arising from this. As they say, a problem shared is a problem halved and of course all questions and pointers will be changed to preserve anonymity and client confidentiality.
In recent weeks we have discussed with various businesses and clients aspects relating to administration, Woolworths, the safety of client held funds in banks, late payment interest and credit searches against various debtors and debt collection related services. Banks as we know-despite governmental advice to the contrary-are now very reluctant on any commercial lending or overdraft facility and many quite viable businesses have been suffering from this over cautious approach. With “cash is king” we have seen how numerous medium-long-term projects have been postponed to await an economic upturn but in the meantime the wheels of business does need liquidity to survive and prosper and to this end VC’s and business angels are now receiving some of the types of enquiries that used to be dealt with by the high street bank.
Some positives for business nevertheless arise from this month’s legal update despite the gloom.
Firstly business relying on reselling received a boost when a court case highlighted the difference between reselling and agency. Under reselling the manufacturer, seller or distributor would not need to pay any expensive agency fees on termination and since this could run into tens if not hundreds of thousands of pounds in many instances so this case is welcomed for allowing business to continue trading in this way without further cost. On a related note we recently advised a client on an agency matter and helped save it a six figure sum, which in these times of hard credit was much valued.
From an employer’s perspective the Opinion of the Attorney General in the age discrimination case Heyday is also favourable. Although only an opinion and non binding it does provide some comfort to employers and the Government seeking to manage and operate a viable retirement policy under EU law. The fear of many employers is of age discrimination claims arising out of the operation of a retirement policy, even where they have been only following government advice and good practice.
For corporates there have been further changes following a German case, EU law and the Companies Act 2006. The former is of relevance when dealing with consumers by way of online trading but the case and underlying law has been criticised somewhat for muddying the waters and it is hoped in future greater clarity will be provided sooner rather than later. In essence despite the criticism the EU law was well intended as it sought to clamp down on online fraudsters and scammers by forcing disclosure of key contact details and also of providing adequate consumer response mechanisms and reply times to genuine queries. If you operate an online shop for instance it is worth a read as it may force you to change working practices and online response systems. Also of note are a number of provisions under new UK company law changes including changes to the handling of corporate hospitality-so if you have been invited to a Christmas function or have received or are giving a gift it would be advised to view here.
It used to be said business was done on a handshake and though this practice does continue, particularly amongst SME’s, it is not without considerable risk as this case shows. It never ceases to amaze us how frequently businesses get themselves into hot water which could have been avoided by taking a more proactive measured approach at the outset. Getting the basics right legally in our view provides a solid foundation for future development and exploitation of opportunities and to encourage good practice we are offering readers a “recession discount/Christmas present” of 10% discount on normal costs of drafting website and/or trading terms and conditions. This offer expires on 31 December 2008.
Losses of course can be costly but if you are suffering from poor performance by a supplier do get in touch for a no obligation consultation. A recent case has shown losses on potential gains can indeed be claimed-here the lost opportunity of buying a “good” profitable business instead of a poor one-though the calculation of damages always requires careful calculation. Similarly repeated breaches of a minor nature-being classed as terms not conditions-can “add up” as the “final straw” as this case proves-especially important as the case involved non payment of invoices. Somewhat important we are sure you will agree!
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