Is there anything I can do to try and settle my claim?

Ward Hadaway in conversation with Begbies Traynor webinar was recorded on Tuesday 16th June.

The business spotlight is firmly on Directors. Difficult, sometimes drastic decisions need to be made in unprecedented times. But the consequences of those decisions have long shadows, and Directors need to consider their future position through the lens of their creditors, shareholders, funders, HMRC and even the courts.

In conversation with leading business rescue and recovery specialists, Begbies Traynor, we focused on the proactive approach Directors can take in these exceptionally challenging times. We discussed very practical advice about the quickest routes to funding, how to bolster cash flow, protecting the Board, and ultimately how to be proactive and in control of the process if you think there is no way back for your business as a result of the pandemic.

It is important to note that the changes to insolvency law currently before parliament only deal with wrongful trading – all other duties remain the same. So Directors must still ensure they are acting in the best interests of the company, its shareholders and creditors. In this context, the webinar discussed funding options for keeping a business solvent, and how to manage the process if this is not possible.

Ward Hadaway partner Emma Digby talked to fellow partner and insolvency specialist Jane Garvin and Kris Wigfield and Matthew Cluer from Begbies Traynor about these issues.

This webinar is the first of our Yorkshire “In conversations with…” where we explore with other experts how businesses can get on the front foot in #gettingbacktobusiness.

Yes unless you are self-isolating, infected with Covid-19 or within a vulnerable group.

The Government has issued updated guidance on 13 May providing comprehensive advice to reflect the move to relax lock down restrictions and encourage house sales. The advice can be found here:

https://www.gov.uk/guidance/government-advice-on-home-moving-during-the-coronavirus-covid-19-outbreak

Key points to note

Unless you are self-isolating, infected with covid 19 or vulnerable, the guidance states that you can move house, provided you comply with social distancing measures at every stage, whether visiting a seller’s house or accepting visitors or professional for viewings, surveys and removals.

All businesses such as surveyors, estate agents and removals, linked to the housing market may now operate, provided that social distancing measures are observed and safe working procedures (see link below) are followed.

https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19/homes

House viewing should be conducted virtually wherever possible, and open-house viewings should not be conducted. Houses should be cleaned before and after visitors come, and home owners should vacate during viewings and surveys to minimise the chance of contact. Doors and windows should be left open, and sinks made available for hand washing.

Agents can supervise, provided they maintain social distancing.

New homes show houses should be operated on an appointment basis, and cleaned between viewings, with hand washing facilities made available. Staff should adopt safe working procedures. Housebuilder sale-staff, tradespeople, fitters and NHBC inspectors can all attend to facilitate viewings, fit out, commission equipment and inspect completed homes.

Solicitors and Estate Agents remain unable to open their premises to members of the public, for the time being. Government guidance advises that solicitors adopt special covid 19 clauses to permit flexibility on completion dates where parties become unable to move or complete for reasons connected with the pandemic.

The Law Society in conjunction with other trade and professional bodies in the sector, has published links to pan-industry guidance on the re-opening of the housing market:

https://www.lawsociety.org.uk/news/press-releases/industry-issues-guidance-kickstart-housing-market/

Although an employer is obliged to conduct consultation “with a view to reaching an agreement”, it is not required to actually agree to any counter proposals made by the employee representatives. Merely to consider them in good faith.

During these unusual times, we are all having to adapt to what has become the ‘new normal’ and implement changes in how we carry out civil cases. If you are to give evidence in a remote hearing, whether this is by Microsoft Teams, Skype for Business or the Cloud Video Platform, we have pulled together a quick and useful guide below on what would be expected by the courts:

Before the hearing

• Make sure that you have access to the video-conferencing software that will be needed for the hearing. We will tell our clients and their witnesses in advance which platform will be used. The courts have increasingly been using Skype for Business to conduct the hearings (but you may find other platforms being used)
• Test that your camera and microphone are working and it is clear to see/hear you.
• Dress appropriately, as if it was an in-person hearing, and use the same formalities.
• Ensure that the background which is visible on your screen is appropriate and allows for your face to be clearly seen. A ‘blur background’ option may also be available on your settings which you may prefer.
• Make sure that your mobile phone is on silent and you are in a location where there will be no/minimal distractions. You should be on your own in a room when giving evidence, however, as we have all experienced with working from home, sometimes interruptions such as children appearing cannot be avoided.
• Join the call ahead of the allocated time, in order to allow for any small technical difficulties.

During the hearing

• Have a copy of the hearing bundle to hand, so that you can follow the proceedings (this may be in hard copy or soft copy). You are not allowed any other notes or papers, whether hard copy or electronic, in front of you when giving evidence.
• Unless addressing the Judge or you have been directly asked a question, keep your microphone muted.
• When giving evidence, you must make sure both your camera and your microphone are switched on.
• Remote hearings can be difficult and if you do not understand or you do not hear a question properly, then do ask for the question to be repeated/re-framed.
• You should not move away from the screen without permission from the Judge. The Judge will allow time for breaks.
• Address the judiciary and other advocates the same way as you would if you were in a physical courtroom.
• It is permitted to drink water throughout the hearing, but mugs of tea and/or coffee are probably best avoided. It is also not permitted to eat food during the hearing.
• Don’t panic if someone walks into the room or the dog starts barking because there is a knock at the door. Judges are only too aware about what might happen. Communication is key and if the interruption has interfered with your train of thought or the evidence you are giving then do say so.
• Be aware that all evidence is recorded and that a transcript of all evidence can be obtained at a later date.

In the event that the worst happens and contractor insolvency occurs, there are a number of steps which the employer should take immediately:

• Confirm that insolvency has actually occurred and the type of insolvency (for example liquidation or adjudication) – actions taken based on rumours can have adverse consequences
• Secure the site and carry out an audit of the plant, equipment and materials present – this may extend to changing the locks on site in order to prevent overzealous contractors and sub-contractors seeking to return and take what they see as their possessions. The building contract may contain a provision that these are the employer’s property, but they can be difficult to recover if they are not within the employer’s possession – possession is 9/10ths of the law!
• Ensure that there are adequate insurance and health and safety arrangements in place for the site – these would usually be dealt with by the contractor and therefore may no longer be in place, so alternative arrangements may be required
• Ensure that any further payments to the contractor are stopped pending a more detailed review
• Consider whether any off-site materials have already been paid for and can be secured. This can however be difficult in practice where the materials are not physically within the employer’s possession

In addition, there are also a number of further actions which the employer should consider in the slightly longer term:

• Investigate the options available and ascertain the cost of completing the works to assist in deciding how best to proceed
• Consider whether termination of the contractor’s employment under the building contract is required, and if so take the necessary steps in accordance with the building contract
• Consider whether there are any bonds or guarantees in place upon which the employer can rely, and if so assess their terms as to whether and how to make a claim
• Make arrangements to complete the works – as a general rule of thumb the cost of completing the works may increase by around 30% if it is necessary to get a replacement contractor
• Consider whether direct payment to subcontractors is possible or desirable
• Although we would say this(!) we would strongly recommend taking legal advice, as insolvency and its implications are complex and it is easy to inadvertently fall foul of the various different requirements