As I look over an empty Russell Square Gardens (an odd view for a Friday lunchtime), cup of tea (as ever) in hand I find myself reflecting on how conversations with colleagues, clients, friends and family alike have been saturated with disaster planning for the inevitable period of populace disruption.
The optimist in me hopes that in two years, people will be saying about this time “I was there the Night the West End Closed” or “Do you remember those penguins that took over that Zoo”, but the realist in me knows too well that the COVID-19 pandemic will have far wider reaching repercussions for people than merely anecdotes, not only for the terrible loss of life arising as a consequence but also for the economic turmoil left for those who survive.
The reality of this new world order was thrust upon me when attending the theatre on Monday only to find the West End had closed during my commute. I now hear that distance concerts are being put in place to ensure funding still makes it to those deprived of the ability to perform. Similarly, Guinness have set up a fund for public house workers, and the Government are seemingly attempting to plug as many holes in the economy as they can (with on-going cries for further action) not only with support funds but in other ways such as loosening rules in relation to Pubs and restaurants operating as takeaways.
Whilst these proposals are laudable, unfortunately they are highly reactive (although this is not a time for hindsight, that comes when considering measures to avoid history repeating itself), and sadly many businesses may not survive long enough to reap any benefit. So, the question arises: what steps can be taken now to best shelter your business through the on-coming storm?
The three main considerations (amongst others) which a business will likely have are:
1. Their Staff,
2. Their Cash-flow; and
3. Their Contractual Obligations.
Businesses will need to be considering first and foremost how to protect their staff from undue risk of exposure to COVID-19, such as provisions for remote working (there is probably a roaring trade in standalone monitors right now).
Remote working however creates its own subset of problems such as data protection and GDPR obligations, and communications infrastructure internally and with clients. And more problems still when a business is not designed to operate remotely.
If a company is finding It difficult to generate revenue to pay their staff or other creditors, because it cannot function in the current climate, it may not be a giant step before they find themselves in a position of insolvency.
Whilst some companies will be desperately reviewing their contracts to see how they can protect their business and attempt to circumvent obligations, others will be speaking frankly with their staff and contracting third-parties as to the cash-flow situation and attempting to find a way to navigate a route whereby all parties remain solvent.
On this note, I find it perverse how often long-standing business relationships quickly descend into litigation over the most dubious delay and / or infraction, suffocating with animosity the potential for any on-going business relationship after the initial unrest has settled.
No doubt many of you will be considering insurance policies, force majeure clauses, likely damages for breaches (by you or the other contracting party) however, I do question how many have thought simply to pick up the phone and have a (without prejudice) conversation with the other side?
Too many times a party will immediately leap to pursue expensive litigation as a point of principle, leading to the ultimate liquidation of a defendant and nothing to show but the trophy of a very expensive bit of paper.
What can you do?
Whilst we are all being advised to stay away from public places and avoid physical social interaction, arguably one of the worst things a business can do right now is to ‘bury’ their proverbial head.
The first step is to identify the areas of concern for your business, and then plot a course of action taking into account the variables (success / failure) at each stage. For this you may want to speak to a professional (lawyer, accountant etc.) to understand what your options are, and the potential ramifications of each course of action.
When it comes to company restructuring, which many will be considering, there are often potential options for life-rafting companies, or at least not letting them burn with losses on all sides for all parties; there may also be similar options for individuals in the event they are sole traders.
The uncertainty and unrest which we all now face together, coupled with the with social distancing measures, means that people can quickly feel isolated from those they would normally rely on for advice – for those of you beginning to feel like this, please remember there are many services out there to provide support for personal wellbeing.
And, with all this in mind, to you and yours I wish you luck, and good business and physical health during these troublesome times.
For me, well I will carry on as normal (albeit potentially without the view of my silent park) doing my best to protect my clients’ interests and keeping my fingers crossed that they do not start rationing teabags!
Charles Jamieson is an experienced Legal Executive in this firm’s dispute resolution department handling Commercial, Property and Chancery Disputes. Charles works alongside Andrew Kavanagh (Company Commercial), Karen Bright & Lee Stafford (Dispute Resolution), Senal Patel (Commercial Property) and Rhian Radia (Employment) in providing a full spectrum service to businesses seeking advice.
Email email@example.com or telephone 020 7631 4141 for more information.