Coronavirus legal support hub
Corporate advice during Covid
The challenges of the Coronavirus pandemic continue to change on a daily basis. Our corporate and commercial advice aims to provide you with all the latest news and information on your legal rights and issues to support you through this challenging situation.
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At Tozers our specialist solicitors have the experience and expertise you need. With legal experts working in specialist fields across commercial, personal and specialist sectors. Call us now on 01392 207 020 or contact us online.
How can I make sure my Terms and Conditions are up to date?
If you are a business that supplies goods and/or services you will be used to trading on your standard terms and conditions, however you may have found that whilst they are comprehensive and were working well for you previously, they have not met the challenges of Covid-19.
One of the risks highlighted by the Government is a ‘second wave’ of the current pandemic. If your existing terms and conditions do not currently contain a force majeure or material adverse change clause, including one may be wise. Whether it will apply to a further wave of this pandemic, or any future ones, will broadly depend on how the clause is drafted.
Where a contract term is weighted heavily in favour of one party this may fall foul of the Unfair Contract Terms Act 1977 (where both parties are businesses) or the Consumer Rights Act 2015 (where one party is not a business).
It would be very surprising if you had not had cause to look at your refund and cancellation policies as a result of Covid-19. Whilst your terms may give you the right to retain deposits and/or your customers the right to cancel, being pragmatic and understanding of your customers’ circumstances and considering other options such as postponement or amendment are likely to serve you and your business well going forwards.
The restrictions imposed by the Government have seen a substantial increase in businesses diversifying and moving their operations online. This type of trading requires specific terms and conditions to ensure they comply with distance selling and data protection regulations. It is likely that this trading model will continue to be popular once the restrictions are relaxed, so it is crucial that your terms and conditions reflect any changes to the way your business operates currently, and in the future.
Should I consider restructuring?
We all have those jobs at the bottom of the list that never quite make it to the top because of the everyday demands of running a business; Lockdown may be the perfect time to undertake some corporate housekeeping and take stock of your business and the way it operates to navigate the challenges of the post Covid-19 economy.
If you are a sole trader or partnership you may have found that lack of a corporate structure is a concern due to the potential unlimited liability. Incorporation as a limited company may give you both greater certainty and flexibility going forwards.
Restructuring and reorganisations of companies can be an efficient way of separating elements of the business to achieve future goals, such as a sale of part of the business, review of an underperforming element of your operations, or focus on your core offering. Demergers are often used to split distinct parts of a business, however, careful planning and appropriate professional advice is key to ensure the elements of business being separated end up where you want them to be and that there are no adverse tax implications. Restructuring can also be a good way of reducing costs and streamlining your operations making your business more cost effective and profitable.
Other advantages of restructuring are, for example, creating subsidiaries and dividing the business between them meaning staff with specific skills are utilised to their best effect, ringfencing assets from what may be riskier elements of your business, or consolidating debts to free up cash where it is most needed.
How can we adapt our processes for signing legal documents if our directors / board members are working from home?
We are commonly being asked this question and it is something that needs to be considered on a case by case basis.
Although not common practice, you can, in some circumstances, authorise another person to sign a contract on your behalf. However, documents to be executed as a deed, such as leases and property transfers, cannot be delegated to another person unless there is a formal power of attorney in place.
In the current situation, a power of attorney is unlikely to significantly speed up the process unless yours is a small company where the number of available signatories are few and a prolonged period of unavailability is expected.
We suggest you consider which people within your organization are best placed to sign and return documents so papers can be sent to them as required.
Your articles of association may set out specific requirements for signature of documents, or this may be agreed by a standing order/resolution of the board. If you are unsure of your internal processes, please get in touch and we can help.
How will my ongoing contracts with my customers and suppliers be affected?
As a rule, if performance of a contract becomes more difficult or even impossible, the party who fails to perform is liable in damages. You should therefore assume your contracts will continue unaffected so you will need to continue to pay suppliers and customers should still pay your invoices.
Some contracts may include force majeure clauses which allow the parties to suspend or cancel their entire obligations under a contract where an event outside the parties control such as a pandemic makes performance impossible. Not all contracts will include force majeure clauses and not all force majeure clauses include pandemic, you need to check before relying on them. Usually, notice must be given to the other party that a force majeure clause is relied on.
If the contract does not include a force majeure clause the doctrine of frustration may provide an exception for contracts directly affected by Coronavirus. Frustration allows the contract to be automatically discharged when a frustrating event occurs so that the parties are no longer bound. Frustration applies even where it is not specifically mentioned in the contract.
Frustration may apply where the government has outlawed the subject matter of the contract from being performed, for example contracts which involve gatherings of people. Coronavirus is not necessarily a frustrating event for all contracts, difficulties with availability of workers, cash flow or a lack of demand is unlikely to be enough. Each situation will be different, and you should take advice before seeking to rely on it.
Almost all contracts can be amended if the parties agree. Many customers and suppliers may have difficulty meeting their obligations, so it makes sense to address this as soon as possible and if necessary, agree a variation to the date for performance or payment rather than find yourself behind other creditors waiting for payment.
What are appropriate technical security measures, for the purpose of the GDPR, when home working?
The GDPR already requires all organisations to take appropriate technical and organisational measures to secure personal data, but you may no longer be able to rely on the same measures in place for an office environment. Some home working appropriate measures include:
Creating an internal facing data protection policy describing the basics of GDPR compliance for staff. Reinforce this with regular short emails, setting out practical measures for staff to maintain security. For example, not using personal email accounts for work, keeping hard copy data in a safe place and always logging off promptly at the end of the working day.
Only transfer data over a secure network such as a virtual private network (VPN)
Audit video conferencing, cloud and software as a service (SaaS) security.
If possible, avoid staff using personal devices. The ICO have imposed fines, when cloud back-ups of personal data were made public online, via a personal device.
A data protection impact assessment (DPIA) can be useful to assess who in the organisation has access to higher volumes of data, more sensitive data or is more exposed to risks of data breach, because of home working. This should be backed up with a data audit report listing the type, location, purpose and lawful basis for data processing.
Can we use our email marketing database to tell customers about how we are affected by coronavirus?
As a business you obviously want to let people know that you are still open. There may be contacts you want to send the email to, but you cannot demonstrate consent, or they may have already opted out of receiving direct marketing communications. If consent to receive email marketing cannot be proven these emails risks breaking the law. Anything intended to promote or raise awareness for your business could be a marketing communication, there is no need for a specific offer in the email. This makes any email about coronavirus sent to an unfiltered list a significant risk.
The wise approach is to only send the email to contacts for whom you can prove consent. If you cannot, then exclude promotions, discounts or any invitation to purchase, and limit it to practical considerations such as service interruption or premises opening.
Can we collect information about employee and visitor health to help us tackle the virus?
Information about an individual’s health is special category data which is subject to additional strict processing requirements. For most organisations collecting this data is best avoided because it creates a greater risk of non-compliance.
Organisations are allowed to ask employees, or visitors to their premises, whether they consider themselves at particular risk. They can also ask if they have experienced symptoms. Rather than require individuals to disclose their specific symptoms, which will mean the organisation obtains sensitive information it does not need, tell the individual to obtain advice via NHS online resources, or if they are unable to do that, call 111.
There is no requirement to disclose knowledge of someone’s symptoms to public authorities, but if they ask this is likely to be acceptable.
When sharing that someone has experienced symptoms with others, if possible do not disclose the identity of that individual. Of course, not identifying someone may be practically impossible in many situations and in that case the need to protect others is likely to override data protection concerns.
I am the organisation’s Data Protection Officer, or the person responsible for my organisations data protection compliance, what do I need to do?
This may be a challenging time for data protection officers facing an increase in questions from IT and management. Some of your first steps should be:
Ensure the internal facing data protection policy is up to date and deals with home working, personal devices and IT usage.
Review the organisations website, and third-party facing privacy notice, to ensure it describes how the organisation will use personal data if it is going to change because of remote working. As a consequence of coronavirus, you may process health data you did not use before, make sure it describes how that will happen.
Ask colleagues in IT departments to report on any known security concerns raised from new software or IT services being used to cope with home working.
Consider a data protection impact assessment, backed up by a refresh of any personal data audits to record changes to how data is stored.
GET LEGAL ADVICE AND SUPPORT
Contact our legal experts
At Tozers our specialist solicitors have the experience and expertise you need. With legal experts working in specialist fields across commercial, personal and specialist sectors. Call us now on 01392 207 020 or contact us online.