Can I still take legal action to recover money that is owed to the business?
You will need to check the terms of the contract you have with the debtor to make sure you are still entitled to be paid (including checking any force majeure clause).
It is also important to remember that the current exceptional circumstances might also affect your contractual rights in other ways too – please see our commercial & contracts site for more information.
Depending on the type of debt you are owed, there might be some additional restrictions in place that you will need to consider. For example there are certain restrictions on landlords being able to forfeit leases, evict tenants or send High Court Enforcement Officers to collect outstanding rent.
Assuming there are no sector-specific restrictions in place then you should be able to start county or high court proceedings to recover the debt.
As an alternative to starting court proceedings, if the debt is undisputed a creditor can usually opt to issue winding up proceedings against a debtor instead. However, the recently introduced Corporate Insolvency and Governance Act introduces a temporary suspension on the ability of creditors to present winding up petitions to recover money unless the reason why the debtor cannot pay is not related to covid-19. For more information click here.
Often taking firm action is the right thing to do, particularly given that it is a sad reality that it is the creditor who shouts the loudest that will often get paid first. However, one important consideration is the commercial reality that many businesses (and indeed individuals) now find themselves in.
Whether taking legal action is likely to result in payment is always a question any creditor should ask themselves. Some creditors might also want to try to support their customers during these difficult times and/or have concerns about their long term reputation if they pursue the debt too aggressively. However, even if that is the case it is still possible to engage constructively and positively with those who owe you money to try to reach the best possible outcome. This could include:
- Having clear and consistent credit control processes in place
- Obtaining statements of means to help understand what a debtor can afford to pay
- Agreeing realistic payment plans
- Negotiating formal payment holidays
- Putting in place voluntary security to secure the debt
- Identifying those debtors who can’t pay as opposed to won’t pay and targeting resources accordingly
- Looking at what other options might be available, including recovering under parent company guarantees
Related FAQs
With the loss of face-to-face meetings in the current situation, video conferencing has taken centre stage. But how do you do that in a compliant way? Here are some of the main high-level data protection issues to consider when selecting and implementing a new third party provider’s video conferencing system.
- Make sure you do your due diligence on the security measures offered by the provider. Clearly you can’t visit them, so look at the information offered publicly by the provider and read good quality, reliable, third party sources and ask the provider questions directly. Also ask any other organisations you know that use the provider. Document all this.
- If personal information is being sent outside of the UK/European Economic Area, make sure that transfer complies with GDPR. If it’s a US provider, is it registered in the EU-US Privacy Shield list or does it offer a model clause contract (you’re likely to need the 2010 version)? Or is the service provided from a country whose data protection laws offer equivalent protection to those in Europe? Look at the support service as well as the hosting. Document this.
- Make sure you put a compliant processor agreement in place. The provider should offer one as part of the contract terms. Check it meets GDPR requirements.
- You’re likely to need to update your privacy notice, particularly if you’re going to record calls. Provide participants with a short message and link to the privacy notice in the meeting invite and on any registration page.
- Create or update other GDPR-mandated documentation – for example, depending on your use, you may need a legitimate interests assessment and to update your record of processing.
- Finally, configure and use the system in a secure and compliant way. Look at the settings/options carefully and think through the security and compliance implications of each. That could include deciding who in the meeting can share their screen; whether or not you use passwords for participants; whether or not to record, and if you’re going to record, where to store the recording. Document your decisions and the reasons for them.
The ICO has said it understands that resources, whether they are finances or people, might be diverted away from usual compliance work during the pandemic. However the last thing you need at the moment is to create a bigger problem than the one you are trying to solve. So do the best you can, ask for help from one of our specialists if you need it, and keep the whole thing under review.
On 16 April 2020, Ian Hulme, the ICO’s Director of Assurance, posted a blog for business owners, employers and managers about how to safely roll out the latest video conferencing technology.
On 21 April 2020, the NCSC published security guidance for organisations on choosing, configuring and deploying video conferencing services.
Those individuals who are already exempt from the existing face covering obligations, will continue to be exempt from the new rules. These include:
- Those unable to put on or wear a face covering because of a physical or mental illness or disability
- People for whom wearing or removing a face covering will cause severe distress
- Anyone assisting someone who relies on lip reading to communicate
The Town and Country Planning (Use Classes) (Amendment) (England Regulations) 2020 were laid before Parliament and come into force on 1 September 2020. They apply in England only.
The changes include the revocation of the following Use Classes;
- A1 – shops
- A2 – financial and professional services
- A3 – restaurants and cafes
- A4 – drinking establishments
- A5 – hot food takeaways
- B1 – business. Also revoked are the sub parts of B1;
- B1(a) – offices
- B1(b) – research and development of products and processes
- B1(c ) – industrial process
- D1 – non residential institutions
- D2 – assembly and leisure
The changes include the amendment of the following Use Class;
- B2 (industry)
The changes include the introduction of the following Use Classes;
- E – commercial, business and service
- F.1 – learning and non-residential institutions
- F.2 – Local community
There are no changes to the following Use Classes;
- C1 – hotels, boarding and guest houses
- C2 – residential institutions
- C3 – dwellinghouses
- C4 – small HMO
From 1 September 2020;
- Small retail shops (not more than 280 sq metres net sales area) selling essential goods including food and at least 1 kilometre from another shop will cease being an A1 use and will become a F.2 (local community) use;
- Other A1 shops will become an E (commercial, business and service) use;
- A2 uses will become an E (commercial, business and service) use;
- A3 uses will become an E (commercial, business and service) use;
- A4 uses will not be in a Use Class, they will be sui generis, ie not in any use class;
- A5 uses will not be in a Use Class, they will be sui generis, ie not in any use class;
- B1 uses (included B1(a), B1 (b) and B1 (c) will become an E (commercial, business and service) use;
- B2 uses will either be B2 uses or will be Class E uses.
- Clinics, health centres, creches, day nurseries and day centres (previously D1 uses) will become an E (commercial, business and service) use;
- Schools, non residential education and training centres, museums, public libraries, public halls, exhibition halls, places of worship, law courts (previously D1 uses) will become an F.1 ( learning and non-residential institutions) use;
- Cinemas, concert halls, live music performance venues, bingo halls and dance halls (previously D2 uses) and will be sui generis, ie not in any use class;
- Gyms, indoor sport, recreation or fitness not involving motorised vehicles or firearms principally to visiting members of the public (previously D2 uses) will become an E (commercial, business and service) use;
- Hall or meeting place for the principal use of the local community (previously D2 uses) will become an F.2 (local community) use;
- Indoor or outdoor swimming baths, skating rinks, outdoor sports or recreation grounds (not involving motorised vehicles or firearms) (previously D2 uses) will become an F.2 (local community) use.
Changes of use within a Use Class do not constitute development. That being the case, provided the Order is applicable, its operation not having been restricted by planning condition, Agreement or Article 4 (1) Direction for example, planning permission would not be required, development as defined not happening. If legally binding confirmation is required that planning permission is not required this can only be obtained by way of a successful application for a Certificate of Lawfulness. In the absence of such, there is some risk.
It remains the case that planning permission may be required for operational works to buildings. It also remains the case that other consents and permissions may be necessary for example licenses. Furthermore amendments to leases may be required if the property is rented.
The Regulations additionally include transitional arrangements because of permitted development rights for changes of use in the Town and Country Planning (General Permitted Development) (England) Order amongst others. To respond to this Regulations introduce a ‘material period’ which is defined as meaning the period beginning 1 September 2020 and ending 31 July 2021. It is expected during the material period the Orders giving permitted development rights for changes for use which do constitute development will be amended / updated to reflect the new use classes.
Click here to view the Regulations.
The above is based on our understanding of the new Regulations at the time of issue and in advance of planning practice guidance being issued.
The NHS Test and Trace service is operated by the NHS in England to track and help prevent the spread of COVID-19. Where an individual displays symptoms of coronavirus they can be tested to determine whether or not they have the disease. Those with the disease will then be contacted by NHS contact tracers and asked who they have come into close contract with.
Close contact is defined as:
- Face to face (within 1 metre)
- Spent more than 15 minutes within 2 metres of another person
- Travelled in a car or on a plane with another person
The contact tracer will then contact those people with whom the individual has come into close contact and tell them to self-isolate for 14 days.
As an occupier of premises, you owe a duty of care to your visitors to take reasonable care to see that the visitor will be reasonably safe in using your premises.
It is therefore essential that you are taking reasonable steps and strictly adhering to up-to-date Government advice in all aspects of your business to avoid any potential liability.
Failure to follow Government advice could leave you vulnerable to claims for compensation for pain and suffering should a visitor on your premises contract Covid-19.
However, each case will be fact-specific and it would be very difficult for a visitor to establish that they contracted Covid-19 specifically from those premises (as opposed to being exposed to the virus anywhere else).
If someone suggests that they are going to make a claim make sure that you report matters to your insurer or insurance broker immediately.