Commercial news vlog - May 2021

Commercial news vlog - May 2021

 

 

COVID Update

 

The Government has extended some of the provisions in the Corporate Insolvency and Governance Act 2020 (‘CIGA’). As you may recall CIGA introduced special measures during the pandemic. The extensions include the suspension of wrongful trading laws until 30th June to protect directors that continue to trade a company through the pandemic with uncertainty as to whether their company may be able to avoid insolvency in the future. The prohibition on termination clauses is also extended until 30 June.

See Practice Note: Corporate Insolvency and Governance Act 2020—temporary changes to the wrongful trading regime

See News Analysis : Corporate Insolvency and Governance Act 2020—further extension of temporary measures

Automatic extensions to most Companies House filing dates however came to an end on the 5th April.

See Practice Note: Coronavirus (COVID–19)—impact on company filing and administrative procedures

The Home Office has updated its guidance on the right to work check confirming that temporary measures that allowed for the remote checking of work status will end on the 16th May.

See: Home Office publishes updated guidance for right to work checks amid coronavirus (COVID–19)

See News Analysis: Considering the impact of changes to right to work checks

See Practice Notes: Right to work checks: how to conduct the check and Right to work checks: when and why

As businesses are now returning or planning the return to the work-place, ACAS has issued new guidance, primarily about consulting with staff.

See Practice Notes : Coronavirus (COVID-19)—safe working in an office environment and Coronavirus (COVID-19)—managing the workplace 

 

Corporate & Commercial

 

Limiting liability in business contracts

A recently published Northern Irish decision1 has ruled that a supplier that supplied a defective adhesive to a kitchen component business was not able to enforce its terms that limited its liability to the price of the goods it had supplied. The Court ruled that the terms did not meet the requirement of reasonableness under the Unfair Contract Terms Act.  This decision seems to conflict with an earlier Court of Appeal2 case which allowed a supplier to limit its liability in a similar way, however there were some differences particularly that the supplier in that case had alerted its customer to the availability of insurance to cover such losses and offered to provide the insurance.

See Practice Notes: Exclusion and limitation of liability and Product liability and product recall insurance

See Checklist: Drafting and negotiating a limitation of liability clause—checklist

 

Restoring trust in audit and corporate governance

The government, has issued a white paper Restoring trust in audit and corporate governance, which seeks to progress the recommendations made by three prior reviews (Kingman Review, Brydon Review and CMA market study). The reforms aim to modernise the UK’s audit and corporate governance regime applicable to the UK's largest companies and thereby restore confidence in the way that these companies are run and scrutinised. The wide-ranging and detailed proposals include the creation of a new corporate auditing profession and a new regulatory body, the Audit, Reporting and Governance Authority (ARGA) to replace the Financial Reporting Council (FRC). From a corporate governance perspective, the reforms also propose to strengthen the internal controls framework and to require companies to produce a resilience statement.  The consultation is open until 8 July.

See News: Restoring trust in audit and corporate governance, Resetting the scope and purpose of audit regulation—ARGA and a new corporate auditing profession and Internal controls and corporate resilience—analysing the government’s latest proposals

See Practice Note: Audit legislation and consultations tracker

 

New green model clauses and model laws published.

The Chancery Lane Project (TCLP) has published 21 new model clauses designed to combat climate change. The new additions include model clauses for use in corporate transactions, supply agreements and construction procurement. The model clauses can be found on TCLP’s website.

See: New green model clauses and model laws published by TCLP

 

Data security

 

Cyber breach survey

The Government has published its 2021 cyber breach survey showing potentially the highest ever risk level

The report did find that cyber security is a high priority for Boards and more businesses are taking out cyber insurance, however there were concerning gaps such as:

  • fewer businesses reported deploying security monitoring tools or having up to date malware protection;
  • most businesses do not have policies for home working or using personal devices for work;
  • only a third have a virtual private network (VPN), eg for remote working;
  • there are several areas where organisations of all sizes could potentially take more action, including around supply chain risk management, and staff awareness and training
  • only a minority have reviewed risks posed by suppliers; and
  • 32% of large businesses are using laptops with unsupported versions of Windows.

Meanwhile, a recent BBC report has highlighted a lesser-known, but potentially devastating cyber-threat for medium to larger businesses - a hack into their computer firmware.

See News: DCMS publishes annual Cyber Security Breaches Survey for 2021

See Practice Notes: Cybercrime—issues, threats and vulnerabilities and Cybercrime who's who

See Precedent: A-Z of cyberthreats—for staff 

 

Make reasonable enquiries before using confidential information.

The Court of Appeal4 has ruled that companies that recruit staff from competitors bringing customers lists or other confidential information will be bound by a duty of confidentiality if it was reasonable for them to have made enquiries as to the confidential nature of the information, but they failed to do so.

See News Analysis: Are confidential information protections still fit for purpose? (Travel Counsellors Ltd v Trailfinders Ltd)

See Practice Note: Trade secrets and confidential information—protection and enforcement 

 

Advertising & Marketing

 

Colin and Cuthbert wars

The story of Marks and Spencer’s ‘Colin the Caterpillar’ cake and whether Aldi’s ‘Cuthbert the Caterpillar’ cake has infringed its trade marks has grabbed the headlines in the mainstream and legal media.  Marks and Spencer will need to show that their trade marks have a distinctive character, but as other supermarkets are known to also produce similar cakes, we think this will be an uphill task.  Other brands have tried and failed to stop Aldi selling similar products.

See News Analysis: No slice of the (caterpillar) cake for Aldi, says M&S—but does the but does the claim have legs?

See Practice Notes: Trade mark infringement and Remedies for trade mark infringement 

 

ASA sends warning on social media marketing.

A recent study by the UK Advertising Standard’s Authority (ASA) has found that the majority of social media influencers and the associated brands are continuing to breach consumer and advertising laws by not disclosing that they are marketing advertisements. The ASA has provided guidance.

See Practice Notes: Identifying advertising, Advertising law and regulation, Influencer agreements—key issues

 

Employment

 

Equal pay claim

The Supreme Court has ruled5 that 35,000 claimants, predominantly female employees working in retail, can use male employee counterparts working in distribution centres as comparators for the purposes of an equal pay claim.  This is a huge step in this claim, but there is still a long way to go. The claims will now proceed to determine whether the work done by the claimants is in fact of equal value to that of their comparators.

See: Equal pay: Supreme Court guidance on ‘common terms’ where comparator is at different establishment (Asda Stores v Brierley and others)

 

Changes to the post-employment notice pay.

New rules were implemented in April requiring employers to calculate Post Employment Notice Pay in a specific way. The changes are to fix some unintended consequences from reforms made in 2018.  Further information can be found on the Government website.

See Practice Note: Taxation of payments in lieu of notice (PILONs) and post-employment notice pay (PENP) in particular the section entitled Post-employment notice pay (PENP)

 

The importance of regular equal opportunities training

A recent Employment Appeal Tribunal (EAT) decision6 has sent a reminder to employers of the importance of keeping equal opportunities training up to date.

Under the Equality Act, an employer can be liable for discriminatory actions of their employees. Employers can defend such claims if they can show that they have taken ‘all reasonable steps’ to prevent the employee from the discriminatory act.

The employer in this case claimed it had taken all reasonable steps – it had an equality and diversity policy in place, and it had provided training, but the tribunal rejected its defence stating it was clear that the training was ‘stale’ and the employer should have implemented refresher training.

See News Analysis: Employer’s defence failed where equality training was stale and required refreshing (Allay (UK) Ltd v Gehlen)

See Practice Notes: Liability of employers and employees under the Equality Act 2010 and   Employment events which give rise to prohibited conduct claims  

 

Employment Appeals Tribunal starts to diffuse the holiday pay time bomb.

You may recall the King v Sash Windows7 case that we have previously reported.  In that case a salesperson challenged his employment status – successfully arguing he was a worker and not self employed and therefore entitled to holiday pay he should have received in his 13 years of service.  The EAT has however now ruled in the Smith v Pimlico Plumbers case8 that there is a distinction between compensation for the unpaid holidays willingly taken and compensation for holiday that a person has been deterred from taking or been refused. If the holiday has been willingly taken but not paid then the claimant must comply with strict time limits (three months).  In Mr Smith’s case he had not been deterred from taking holiday and was therefore out of time for almost all of his claims for holiday pay.

See News Analysis : Holiday taken but unpaid cannot be carried forward for holiday pay claim

 

New employer guidance – providing financial support to employees.

The Financial Conduct Authority (‘FCA’) and the Pensions Regulator have produced an updated guide for employers and trustees warning of the need to be cautious when providing financial guidance to See Practice Notes: Advising on DB to DC transfers and The financial promotion regime—essentials

 

Workers gain new health and safety protection.

Amendments to the Employment Rights Act 1996 are intended to come into force on 31 May 2021 and provide workers with the same protection as employees to not be subjected to a detriment if they leave their workplace (or refuse to return to their workplace) because they reasonably believe they are in serious or imminent danger.

See: Employment Rights Act 1996 (Protection from Detriment in Health and Safety Cases) (Amendment) Order 2021

See Practice Note: Health and safety—protection from detriment and dismissal 

 

Consumer

 

Limiting liability in consumer contracts

The High Court has ruled3 that BetFred was liable to pay out a customer’s £1.7 million winnings on a bet allegedly caused by a software defect, despite Betfred’s claim that its consumer terms excluded liability for such defects.

The Court ruled that the exclusion clauses:

  • did not adequately describe the type of software defect that was applicable;
  • had not been sufficiently brought to the attention of the customer; and
  • did not meet the Consumer Rights Act fairness and transparency requirements.

See News Analysis: Exclusion clauses in online consumer contracts (Green v Betfred)

See Practice Notes: Consumer standard terms and conditions—incorporation, Exclusion and limitation of liability—business-to-consumer and Consumer Rights Act 2015—summary 

 

Bribery & Corruption

 

UK Government launches modern slavery statement registry.

The Government has launched a new modern slavery statement registry for large businesses required to publish a slavery and human trafficking statement.

For now, the Government-run registry is voluntary, but in the future, it will be mandatory although the timing on that obligation is not yet clear.

See: Home Office launches modern slavery statement registry

See Practice Note: The duty to produce a slavery and human trafficking statement and Modern slavery and human trafficking 

Cases, laws, decisions referred to in this Bulletin.

1 B A Kitchen Components Ltd v Jowat (UK) Ltd [2021] NIQB 3
2 Goodlife Foods Limited v Hall Fire Protection Limited [2018] EWCA Civ 1371
3 Green v Petfre (Gibraltar) Ltd (t/a Betfred) [2021] EWHC 842 (QB) 7 Apr 2021
4 Travel Counsellors Ltd v Trailfinders Ltd [2021] EWCA Civ 38
5 Asda Stores Ltd (Appellant) v Brierley and others (Respondents) [2021] UKSC 10
6 Allay (UK) Ltd v Gehlen UKEAT/0031/20/AT
7 The Sash Window Workshop Ltd v King A2/2014/4294, ECJ C-214/16
8 Mr G Smith v Pimlico Plumbers Limited UKEAT/0211/19/DA

 

Disclaimer:

Nothing in this Bulletin, or on the associated website, is legal advice. We have taken all reasonable care in the preparation of this Bulletin, but neither we nor the individual authors accept liability for any loss or damage (other than for liability that cannot be excluded at law).


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About the author:

Louisa leads marketing for the in-house legal community at LexisNexis. She joined the dedicated in-house team at LexisNexis four years ago and has a passion for driving and facilitating initiatives which are customer-focused at their heart. Her vision is to support in-house counsel succeed in their fast-evolving role based on deep insight, data analysis and best practice gathered across the in-house community.

Prior to her in-house focused role, Louisa led the marketing for the bar and mid-market private practice sectors as well as product marketing lead for LexisPSL - LexisNexis' cloud based, practical guidance and legal research software solution.

She brings 20 years' marketing experience both client and agency side, specialising in B2B marketing in the Legal, TMT (Telco, Media and Technology) and Financial Services industries. In both South Africa, Europe and the UK.

Louisa is also an active member on the LexisNexis Gender Equality Matters (GEM) steering committee and is involved with the Families at LexisNexis Group which brings together, supports and lobbies for change those with an interest in balancing the challenges of work and family.