What will be the impact of the proposals on suppliers?
The change in the law has the potential to place much greater financial risks on suppliers, making it more difficult to exit a contract with a customer of doubtful solvency. This will place increased emphasis on appropriate financial due diligence and credit checking before entering into supply contracts.
In addition to the obvious issues around financial risk, suppliers will also need to think carefully about how their contracts are drafted. For example, any form of right that is drafted so as to be triggered on customer insolvency will clearly be problematic. These could include:
- Retention of Title provisions, which are commonly drafted so that the right to enter premises and retake possession of the goods is triggered on insolvency;
- Provisions for brand protection, which seek to control how goods are dealt with on termination of the contract.
This is potentially a very significant development for many businesses. We would strongly recommend specialist advice be obtained so that:
- businesses understand the potential increased risks faced; and
- where possible, contracts are updated so that appropriate protections are maintained.
Related FAQs
Many planning permissions contain a condition restricting the hours within which a developer can carry out construction work or are subject to an approved construction management plan setting out the permitted construction hours.
The Business and Planning Act 2020 entered the statute books on 22 July 2020. Section 16 of the Act incorporates a new S.74B into the Town and Country Planning Act 1990. The effect is that any condition/approved document which limits construction hours on a site could be amended through an application to the local planning authority. The application to the local planning authority must set out the date on which the proposed extension to construction hours shall cease (such date being no later than 1 April 2021, after which the original conditions over construction hours will resume). The local planning authority must determine the application within 14 days (beginning with the day after the application was submitted) otherwise there is deemed approval.
New guidance has been published alongside the Act and is available here
Read more about thisAny hearings attended in person will need to be approved by the judge hearing the matter, if necessary, in consultation with the regional lead COP judge. Such requests are highly unlikely to be granted during COVID-19 unless there is a genuine urgency. However, it is deemed to be appropriate matters are likely to be adjourned on the basis that a remote hearing is not possible and a hearing in person is not safe or possible.
Read more about thisParties still need to comply with the various Protocols that apply and will be expected to exchange information in the usual way. Court proceedings can be issued electronically.
Read more about thisConduct risk assessments! Your RA must cover every foreseeable risk arising from a return to the workplace, including the impact of reduced staff levels and any operational/administrative changes necessary to ensure social distancing.
Appropriate steps should be taken to manage and mitigate identified risks. Where this is not possible, businesses need to decide whether certain activities are necessary for the business to operate or if they can be temporarily put on hold.
Keep a close eye on the comprehensive Government guidance: https://www.gov.uk/guidance/working-safely-during-coronavirus-covid-19
In particular focus on social distancing and workplace health measures. This guidance will evolve over time and you will need to be sure that your organisation is sticking to it AND reviewing and updating its risk assessment.
Read more about thisOn Tuesday 23rd June, partner Emma Digby was in conversation with Steve Hamstead and Mark Smith from AON along with Ward Hadaway commercial lawyer Nathan Bilton in a webinar titled Can trade credit insurance help to keep the supply chain moving?
The insurance market is under untold pressure as a result of the pandemic, and in such times there is a risk that insurers will cancel or reduce credit lines, particularly in certain high risk sectors such as retail. However the Government has stepped in to effectively underwrite the existing trade credit insurance agreements, and to keep trade supplies moving. Will this be enough?
In this webinar, we discussed:
- the Government backed scheme and how it will operate
- the prospects of obtaining insurance going forward, and whether it will become too cost prohibitive
- could the new legislation put your business at risk and jeopardise your insurance cover if you cannot cancel a contract when you are not getting paid for your goods or services
- the Brexit effect, and how this will affect the insurance market
- protecting your business with proper risk assessment processes and paperwork