Can I require my staff to inform me should their circumstances be such that they need to self-isolate?

Hosted by The North East England Chamber of Commerce, this webinar discussed practical advice on Covid-19 and the specific challenges for International Trade.

Partner Damien Charlton along with Andrew Needham,from Haines Watts and Grant Murray from XE Finance, provided an update on the challenges and potential solutions in their field, as well as a look forward for the “New Normal”.

To watch the full recording, please click here or to view the slides, please click here.

There are four criteria which must be satisfied if an agreement is to be considered exempt:

• It must improve production or distribution, or promoting technical or economic progress – the guidance suggests that cooperation ensuring essential goods and services can be made available to the public, or an important sub-set of the public such as key workers, will satisfy this criterion.
• It must allow consumers a fair share of the resulting benefit – the guidance suggests this will be the case where the action prevents or reduces shortages.
• It must not impose on the undertakings concerned restrictions which are not indispensable to the attainment of the above benefits – the guidance suggests this will be the case where the cooperation is the only reasonable option due to the urgency of the crisis and where the cooperation is temporary in nature.
• It must not afford the undertakings concerned the possibility of eliminating competition – therefore the parties must endeavour to retain competition in respect of the products (in particular price competition).

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.

• Be alert to the fact that guidance on treating Covid-19 may change with emerging knowledge/scientific data and this may require subsequent modifications to treatment.
• Critical care staff should support healthcare professionals who do not routinely work in critical care but need to do so.

On 30th April 2020, the CMA issued a guidance note setting out its views about how the law operates in relation to refunds.

Where a contract is not performed as agreed, the CMA considers that in most cases, consumer protection law will generally allow consumers to obtain a refund.

This includes the following situations:

• Where a business has cancelled a contract without providing any of the promised goods or services
• Where no service is provided by a business, for example because this is prevented by Government public health measures
• A consumer cancels, or is prevented from receiving any services, because Government public health measures mean they are not allowed to use the services.

In the CMA’s view, this will usually apply even where the consumer has paid what the business says is a non-refundable deposit or advance payment.

This positon reflects the CMA’s previous guidance which they had issued in relation to the requirement of fairness in consumer contracts under the Consumer Rights Act 2015, which was that a clause in a contract that gives a blanket entitlement to a trader to cancel a contract and retain deposits paid is likely to be unfair, and therefore unenforceable – it would be unfair to a consumer to lose their deposit if the contract is terminated without any fault on their part, and if they had received no benefit for the payments made.

The CMA’s latest guidance therefore confirms their view that the Covid-19 outbreak does not change the basic rights of the consumer, and that they should not have to pay for goods or services that they do not receive.