Court proceedings haven’t yet been issued – what should I do?

The vast majority of disputes settle without ever reaching a final hearing with something in the region of 2-5% of all cases actually ending up in court at a final trial.  So whilst it is very unlikely you would need to attend a court hearing, it is always a possibility.

The best advice is that parties should proceed as they would have done before the crisis began.

From 1 July 2020 the furlough scheme has been operating more flexibly.

The key changes from 1 July 2020 were:

• All furloughed employees are subject to the new flexible furlough rules and the new basis for calculating claims
• Furloughed employees can be brought back to work on a part-time basis for any amount of time and can work any work pattern
• Employers can claim for the hours not worked compared the hours the person would normally have worked in that period
• There must be a new written furlough agreement in place to record the agreement with the furloughed employee to return to work part-time
• The new agreement (including a collective agreement) must be made before any period of flexible furlough begins but it may be varied at a later stage if necessary. The agreement must be incorporated into the employee’s contract of employment, either expressly or impliedly
• Employers must keep a record of this agreement until at least 30 June 2025, and they must also keep a record of the hours the furlough employee worked and the hours that they were furloughed
• Employees can be furloughed from 1 July 2020 for any amount of time and more than once
• However, if you re-furloughed an employee after 10 June but before 1 July 2020, they had to be furloughed for an initial period of three consecutive weeks
• Claims for payments under the scheme must not cross calendar months so if you are claiming for the initial three week period of a re-furloughed employee who was furloughed on 12 June for example, you must submit separate claims for the dates in June and July
• Although flexible furlough agreements can last any length of time, you should only submit a claim to HMRC once a week.

If suppliers still wish to terminate the contract, they must contact the directors or the officeholder dealing with the insolvency process and obtain their approval to terminate the contract – which, of course, might not be given.

If the continued obligation under the contract to supply goods/services to the customer would place the supplier in financial hardship the supplier can apply to court for permission to terminate the contract.  This will involve time and legal expense.

You should speak to your advisors. We do not know presently how existing petitions will be dealt with by the Court. We do know that if any winding up order is made (based on a petition presented after 27 April), it could be found to be void and a creditor may face challenges. Even for petitions presented before 27th April, there is a risk that the Court will not be keen to make a winding up order so it is important that you look at the facts of your debt and weigh up all of the factors before deciding how to proceed.