The High Court judgment, on Tuesday 15th September 2020, in the test case between the Financial Conduct Authority (FCA), on behalf of a number of policyholders, and various insurance companies over business interruption and COVID-19 has been hailed as a lifeline for SMEs.
Many SMEs will be very relieved at the result. The FCA estimated that 370,000 businesses could be affected by the test case; however not all will have been successful. Two out of 8 insurers successfully defended the claims against them.
It was sadly inevitable that the Covid pandemic would push the UK economy into a recession. Unfortunately, the money worries that result from a recession can and often do affect relationships, whether they be personal or business relations.
Even the strongest of relationships have been known to breakdown when finances are tight and the current situation may well have caused the most severe financial pressures that some business owners have ever experienced.
The moratorium on evictions for tenants who are behind on their rent has been extended until the end of 2020. The restriction was set to be lifted on 30th September 2020 but the secretary of state for housing, Robert Jenrick, announced an extension to give struggling retailers and other businesses a chance to “focus on rebuilding their business over the autumn and Christmas period”.
The June quarter day saw less than 20% rental payments made and with the next rent quarter day having just passed (29th September 2020) landlords will be bracing themselves for more of the same.
The last six months have presented significant challenges to business owners who have grappled with continuing their businesses in the face of restrictive lockdown rules imposed to combat the spread of Covid 19. Many business owners are now operating with a workforce of home workers and their typical working day differs significantly from their life pre-March 2020.
As face to face meetings, corporate events and travel have been stripped from the schedules, business owners may finally find some free time during their day to review the nuts and bolts of their business. That long-awaited review of the shareholding structure, the employee share scheme that has been in the offing for years, the review of key commercial contracts, for some there is now enough time in the working week to get around to these projects.
COVID 19 has left our city centres empty with office workers working from home and staying out of the office, shoppers shopping online with shops closed, restaurants and cafes closed or providing collection only services. As businesses have suffered a dramatic drop in revenue they have looked to reduce overheads in the short term to aid their survival.
One of the big overheads that they have been able to postpone is rent on commercial properties with emergency COVID 19 legislation ensuring that tenants cannot be evicted/leases forfeited for rent arrears.
Bermans, the North West commercial law firm founded on 4 February 1970 by Keith Berman, has marked its 50th year by posting a record turnover figure for the 6th consecutive year, with an increase in fee income from £6,876,000 in 2018/19 to £7,439,000 for the financial year ending on 30th June.
The firm had planned a number of events during 2020 to celebrate the landmark date and so far, only an event in Manchester in February has been held but they are still hopeful of hosting a Liverpool event later in the year too.
The Corporate Insolvency and Governance Act 2020 (CIGA) became law on 26 June 2020. It contains some temporary provisions required as a result of COVID-19 and some permanent provisions that have been in the offing for a while which will make sweeping changes to the current insolvency rules.
The Temporary Provisions
The temporary provisions are aimed at providing businesses with some relief from problems created by the current COVID-19 pandemic including the temporary suspension of wrongful trading laws and the prohibition of the use of statutory demands and winding up petitions.
This article outlines the ramifications, in terms of employment law, of a return to the office workplace and offers some practical steps that can be taken.
The main issues that we plan to cover are employer considerations in preparing for the return of workers to the workplace, communicating information about new working procedures to staff and employee rights on the return to the workplace. There are some tips on employees travelling to and from work and the issues this may cause. We will also provide details of the Governments latest Furlough advice, including the Flexible Furlough Scheme and how this can be implemented.
Landlords cannot at present evict their tenants due to rent arrears, as one of a number of Government measures introduced to ease the burden on businesses due to the Coronavirus. Tenants will have welcomed this measure; their landlords almost certainly less so.
It makes no difference if the rent arrears pre-date the pandemic.
There are parallel – though slightly different – restrictions on landlords of residential properties. In this article we focus primarily on commercial leases, where there is a prohibition on landlords taking any repossession action through the courts, currently until 30 September.
Future Fund – access to growth capital for high growth companies
The Coronavirus pandemic has seen a reduction in the usual funding streams for some businesses and has forced the Government to think creatively about how they can support promising, infant companies. The result is the new Future Fund.
What is the Future Fund?
On the 20th May 2020 the Government launched another Coronavirus short term rescue package to support business. The Future Fund is aimed at helping pre-revenue or pre-profit companies that were struggling to qualify for other Government rescue packages.
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