NVQ5 Workshop

Law in Business

Anne Copley, Solicitor, Head of LegalNicola Langley, SolicitorJanuary 2013

•Legal Framework (AC) 11 – 11.15

•Courts and Tribunals (NL) 11.15 – 11.30

•Sources of Law (AC)11.30-11.45

Break

•Commercial Law: Contracts and their pitfalls (NL) 12 – 1.30

Lunch

•Employment Law: Unfair Dismissal and Discrimination (AC) 2-4

“I would rather have fifty thousand rifles than five million votes”

The Rule of Law

Pat Finucane

Rosemary Nelson

Chris Huhne

N’dragheta

Diplock Courts

Mariana Ivelashvili

Rupert Murdoch

46 Turkish Lawyers

Berlusconi

2 Main Types

Criminal Law

Civil Law

Criminal Law

• Burden of Proof – Beyond Reasonable doubt• Penalties• Criminal activities• Investigators and Prosecutors• Deciders, Interpreters and Sentencers• Representatives

Civil Law• Burden of Proof – Balance of Probability• Penalties•“Contentious” and “Non-contentious”• Civil Law activities• Deciders, Interpreters and Remediers• Representatives

Courts and TribunalsNicola Langley

Aims and Purpose of the Justice System

• “The legal system must uphold fairness in society: both in business and for individuals. “

(source – Ministry of Justice)• Courts and Tribunals provide framework of

enforcement that enables commercial activity, protection of property rights, and preservation of individual citizens’ rights and freedoms

Role of Lawyers

• System is Adversarial (other jurisdictions have Inquisitorial systems of justice)

• Solicitors’ and Barristers’ job is to put forward their client’s case

• Lawyers stand between the state and the individual

• Lawyers also have duties to the Court, the public and each other

The Structure of the Courts

Why is it so complicated?

• Developed over 1000 years• Queen’s Bench and Chancery• Different courts for different types of case• All criminal cases start in the Magistrates –

serious cases will be sent to Crown Court• Civil cases mostly start in County Court –

except very high value cases which start in the High Court

Tribunals

• There are a number of Tribunals dealing with a range of matters including:

• Immigration• Tax• Health and Social Care• Employment – in addition Employment has

Employment Appeals Tribunal

Jurisdiction

• The Courts structure covers only England and Wales – except the Supreme Court which also covers Scotland and Northern Ireland

• The Tribunals system covers England, Wales and in some cases Northern Ireland and Scotland

Sources of LawAnne Copley

Sources of Law

Custom

Equity

Statute

Europe

Common Law

Sources of Law: Statute

Made by ParliamentInterpreted by Judges

Distress Act Working Time Regulations 1998Unfair Contract Terms Act 1999

Green PapersWhite PapersBillsActsStatutory Instruments

1267

Sources of Law: Europe

Working Time DirectiveHealth and Safety at Work DirectiveEquality Directive

Treaty of Rome 1957Establishment of a “Common Market”

Total control over some areas (eg Food Safety)No control over others (eg Criminal)

Sources of Law: Europe (2)

Straight cucumbers and other Euromythshttp://blogs.ec.europa.eu/ECintheUK/euromyths-a-z-index/

European Regulation – binding legislation: Parma Ham; Cornish Pasty

European Directive : a “goal” that EC States must achieveWorking Time Directive

Translated into UK law byWorking Time Regulations

Sources of Law: Common Law

Donoghue v Stephenson 1932

The Practical Approach

Justice for All!!!

vs “Taking a commercial view”

Evidence: Documents; WitnessesLitigation Risk: Certainty; Early ReceiptReputational RiskAlternative Dispute Resolution

Commercial Law:Contracts and their pitfalls

Nicola Langley

What is a Contract?

• “An agreement between two or more legal entities, which the law recognises and enforces”

• Not all agreements will be recognised and enforced by the Courts. Contracts will have these characteristics:

Offer Acceptance Consideration Intention to create Legal Relations

How are Contracts formed?

• A Contract is formed when the parties have reached an agreement

• Offer – proposal or promise, with the intention of being contractually bound if accepted

• Acceptance – final expression of assent by word or conduct

• Consideration – something valuable - can be a benefit or detriment

Contract Terms

• Can be verbal• Can be written• Can be both

Express terms – agreed between the partiesImplied terms – added by common law or

statute

Representations

• Statement made by one party before the contract is formed – usually a statement of fact

• Can become a term of the contract – if the court decides that the parties intended it to be

• To avoid this uncertainty – use “whole contract clause”

Misrepresentations

• A false statement of fact by one party that induces the other party to enter into a contract

• Can be innocent, negligent (careless), or fraudulent (deliberate)

• The party that has been induced to enter the contract can claim rescission of the contract and damages

Standard Terms

• Common in Commercial contracts – the supply of goods and services to consumers and businesses

• In business to business supply agreements can lead to the “battle of the forms”

X offers to sell to Y subject to his standard terms of sale

Y responds with Purchase Order with his standard terms of purchase

Why use Standard Terms?

• To define the parties’ contractual rights, duties and liabilities

• To limit or exclude certain liabilities• To exclude terms that would otherwise be

implied by common law or statute• To override the other party’s standard terms• To avoid uncertainty

Other documents in the contract process

• Quotes and EstimatesMight be Offers

• Purchase OrdersMight be Acceptance of Offer to sell, might be

Offer to buy

Procurement and Tendering

• Invitation to submit a TenderWill usually be “invitation to treat”• Response to Invitation to TenderWill usually be an Offer to supply• Acceptance of the ResponseWill result in a binding contract

Legislation affecting Business to Business Contracts

• Unfair Contract Terms Act 1977Exclusion or limitation of liability for breach of

contract in Standard Terms must be communicated clearly and must be reasonable

Cannot exclude liability for death or personal injury caused by negligence (or liability for fraud/fraudulent misrepresentation)

Exclusion of liability for other loss or damage must be reasonable

Legislation affecting Business to Consumer Contracts

• Sale of Goods Act 1979• Supply of Goods and Services Act 1982• Unfair Terms in Consumer Contracts

Regulations 1994 and 1999• Distance Selling Regulations• Unfair Commercial Practices Directive

Remedies for Breach of Contract

• Damages (money) Will be the remedy in almost all cases Calculated so as to put the injured party in the

position that they would have been in had the contract been performed

For example – the lost profit that might have been made

Only nominal if the injured party has suffered no loss

Direct and Indirect(Consequential) loss

• Direct loss – obviously flows from the breach of contract

• Indirect or Consequential lossMay be recoverable if not too remoteMust be loss that is such that at the time that

the contract was made – the parties would have reasonably contemplated it as not unlikely to result from the breach (from case law)

Other Remedies

• Specific Performance – an Order that the defaulting party do what he has contracted to do

• Injunction – an Order that the defaulting party refrain from doing something in breach of the contract

• Rescission (putting the parties back to the position as if the contract had not been made)

• These remedies only available when damages are inadequate

Contract ReviewTop five things to look for

• Term – when does it start, when does it end?• Notice period – can either party give notice

during the term?• Is time of the essence?• Is there a force majeure clause?• Is there a limit on either party’s liability for

breach of contract/are types of loss excluded?

Types of Legal Entity

• Individuals (Sole Traders)• Partnerships• Limited Liability Partnerships (LLP)• Limited Liability Companies (Ltd)

Know your customer!

E-Commerce

• The Electronic Commerce (EC Directive) Regulations 2002

• The Consumer Protection Distance Selling Regulations 2000

• The Companies Act 2006• Copyright Designs and Patents Act 1988

Digital Marketing

• Promotion of goods and services by text messaging is subject to the E-Commerce (EC Directive) Regulations 2002

• Privacy and Electronic Communications (EC Directive) Regulations 2003

• Marketing by email or text must identify that it is a commercial communication and who is sending

• Unsolicited emails (spam) – individuals must be told they can opt-out in every communication they receive.

Employment Law:Unfair Dismissal and Discrimination

Anne Copley

Employment Law - HistoryIndustrial Training Act created Industrial (now Employment) Tribunals 1964

Further Acts in 1971, 1974, 1978 thenEmployment Rights Act 1996

Equal Pay Act Sex Discrimination Act

19701975

Employment Law

HR Onlinehttp://www.britishprint.com/page.asp?node=27&sec=_HR_Online_Guidance_and_Model_Documents

ReasonablenessProcedureCounting to Ten

Employment Law (2)

2 year qualifying period5 Fair GroundsDon’t rush to JudgmentFollow ProcedureDecision to be “within reasonable range of responses”

Unfair Dismissal

Employment Rights Act 1996

Employment Law (3)

Unfair Dismissal (2)

5 fair groundsConductCapabilityRedundancyStatutory illegalitySome Other Substantial Reason (SOSR)

Employment Law (4)

Unfair Dismissal (3)

Don’t rush to JudgmentCount to Ten

Employment Law (5)

Unfair Dismissal (4)Follow Procedure

• Investigate• Inform• Consult• Listen• Deliberate• Decide• Appeal

Employment Law (6)Discrimination definitionsDiscriminationLess favourable treatment for a reason relating to an individual’s protected characteristic

HarassmentUnwanted conduct relating to a protected characteristic which has the purpose or effect of violating an individual’s dignity or creating an intimidating, hostile, degrading, humiliating or offensive environment

Employment Law (7)

9 Protected CharacteristicsNo qualifying period“Less favourable treatment” : meaning?HarassmentDirect and Indirect

Discrimination (2)

Equality Act 2010

Employment Law (8)Discrimination (3)

Defences

“Occupational Requirement”

“Proportionate means of achieving a legitimate aim”

Employment Law (9)Discrimination (4)

The Drawing of Inferences

PoliciesAuditsDemographics

Tribunal Stats 2011-12Claim Number Outcome Compensation

Unfair Dismissal 46,300 66% Settled or withdrawn8% won at Tribunal10% lost at Tribunal

Max £173,408Median £4,560Av £9,133

Sex 10,800 63% Settled or withdrawn2% won at Tribunal4% lost at Tribunal

Max £89,700Median £6,746Av £9,940

Race 4,800 66% Settled or withdrawn3% won at Tribunal17% lost at Tribunal

Max £4,445,023Median £5,256Av £102,259

Disability 7,700 76% Settled or withdrawn3% won at Tribunal11% lost at Tribunal

Max £390,871Median £8,928Av £22,183

Age 3,700 74% Settled or withdrawn1% won at Tribunal8% lost at Tribunal

Max £144,100Median £6,065Av £19,327

Employment Law (11)

WitnessesDocuments

Evidence