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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