What can suppliers of goods and services do to minimize risk?

Given the impact the Coronavirus is going to have upon the commercial property market, landlords will undoubtedly, as a matter of good commercial sense, will have to seriously entertain approaches from tenants seeking a rent suspension – notwithstanding there is no entitlement to the same under their lease.

Some landlords may decide it is better to waive or suspend rental payments over the short term rather than face their tenants going out of business and leaving them with an empty building in a flat or dead market.

A measure falling short of a rent suspension would be for the tenants to negotiate with their landlord’s monthly payments of rent rather than quarterly and for those monthly payments to be in payments arrears, rather than in advance.

• Employee pensions contributions are often paid by way of salary sacrifice arrangements.
• Use of such arrangements may reduce the amount of wage an employer can claim under the Coronavirus Job Retention Scheme, as the reimbursement is calculated by reference to an employee’s actual pay as at 28 February 2020, hence post sacrifice pay.
• Using the Coronavirus Job Retention Scheme does not in itself bring a salary sacrifice arrangement to an end, but where an employer wishes to maximise the amount of an employee’s pay that will be covered by the CJRS, the employer and employee(s) concerned may agree to terminate the salary sacrifice arrangement as part of furlough. HMRC has recently announced that the Covid-19 pandemic will be considered a “life event” (i.e. one of the permitted reasons to break a salary sacrifice arrangement mid-term), if the employment contract is updated accordingly.

The guidance is non-statutory and is not binding on business. However, businesses should be aware that there might be reputational consequences if they do not follow the guidance; we have already seen in the context of taking advantage of furlough funding that not being in breach of the law is no protection against negative publicity. Further to the extent a contract expressly requires parties to act reasonably, it could be expected that this guidance is one of the factors a court would consider in determining what is reasonable.

• Delays in preparing and submitting applications to comply with pre-commencement conditions. In this respect there can be lengthy timescales gathering evidence to support applications to comply with pre-commencement conditions, ecology, contamination and archaeology are examples of matters which can require significant periods of survey work
• Following on from the above the ability to get required experts on the site necessary to undertake the required survey work
• Delays in the determination of applications to comply with pre-commencement conditions. In this respect whilst there are deemed discharge provisions/procedures concerning certain matters, the provisions cannot be used to discharge all types of conditions
• The ability to get people on site to undertake material operations

In the circumstances, it is advisable to start considering the implementation of the planning permission early and the earlier the better. Under current legislation whilst it is possible to vary conditions, albeit potentially leading to wider issues, it is not possible to extend the life of a planning permission meaning that lawful implementation is essential to avoid the loss of that permission.

If a planning permission is lost, amongst other things it may not be granted again or may not be granted on similar terms. In the circumstances, it is advisable to seek advice given the specific facts of the case to minimise the risk of a planning permission not being lawfully implemented and expiring.

The European Commission has reintroduced its “comfort letter” system for cooperation in relation to shortage of supply. This allows cooperating businesses to check what the Commission’s view of their proposals are before implementing them.

In the UK context the SMA has introduced an exemption for suppliers of healthcare services to the NHS. This allows:

• Sharing information about capacity
• Coordination of staff deployment
• Joint purchasing of goods, services and facilities
• Sharing or lending of facilities
• Division of activities, including agreeing whether to expand or reduce the volume or type of services provided by suppliers

In relation to whether the CMA will investigate cooperation, it has indicated:

• The CMA will use its discretion as to the prioritisation of its enforcement action to permit some agreements/collaboration which would otherwise potentially give rise to enforcement action (including potentially attracting fines of up to 10% of group worldwide turnover)
• The CMA will use its existing power to exempt certain agreements under the Competition Act 1998 where these are in the public interest