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Introduction - Business Law
In this report, the importance of English legal system is highlighted. The report is divided into four different sections emphasising different aspects of business law. The first section talks about the sovereignty of the parliament, different sources of law, and the law making procedure of the UK. The second section, talks about the important laws in context of business environment. It also target the potential impacts of regulation, law, and standards on the business environment. The third section talks about the legal solutions to different business problems given in the case studies. It also analysed the given legal solution to alternate legal approach. The forth and the last section talks about the litigation and ADR methods in brief.
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LO1 Explain the basic nature of the legal system
P1 Explain different sources of law and laws that organisations must comply with.
- a) Discus the meaning of this statement and the various sources of UK Laws
In the U.K., State opening of the Parliament takes place every year which is an event which is organised in the Parliament of the nation. In such events, speech is delivered by the Monarch i.e. the Queen of the U.K. This speech is called “Queen’s Speech”. In this speech, the operations and the functions of the Government and the Parliaments are included for the coming session. This speech is usually delivered in the month of October or November, every year.
Parliament is Sovereign: As per the constitution of U.K’s legal system, Parliament is considered as the main authority which is responsible for making or rescinding the laws. However, such rules and policies cannot be made which cannot be altered by the future Parliament. Moreover, current Parliament cannot bind future Parliament in making judgments in the future times. All the laws made or formulated by the Parliament is applicable to all the organisations operating its business in the U.K. and the citizen residing in the nation. However, Parliament can exempt any class of organisation or citizen on which specified laws will not be applicable. It is the general principle in the legal system that the judgment of the Parliament cannot be challenged (Singer, 2018).
It is essential that for regulating the illegal or unlawful activities in the economy or community of the nation, laws must be effective and must cover beery legal aspect. In order to make sure that the laws or the rules on which the U.K.’s legal system operates and serves justice are effective, the authority, while formulating the laws, takes into consideration different sources (Hart And Green, 2012).
Common Law: This is one of the main sources for deriving the laws. It is well established that this legal system is dependent on the common law, similarly which are also adopted by the legal system of other nation as well. Common law are the laws which are followed for a long period of time, however, various amendments are made in these laws with the passing time. Change in the laws resulted in changes in the decisions or the judgments passed by the bodies authorised to deal with issues related to the law.
Precedents: Another source which is referred to by the authorities while deriving the laws is Precedents. This means the judgment passed or decision made or verdict issued by the bodies in this legal system, i.e. the court from time. There are some of the cases which establish the benchmark for the legal system and such cases are recorded and published in a report which is known as “Law Report”. These reports are the published from time to time and include the cases of high significance. These reports are always issued which different cases by which the new and updated legal practices are also learned by the legal practitioner.
Acts by Parliament: As mentioned above that the Parliament is sovereign which means that it is an authority which cannot be challenged. Being the legislature of the nation, it is responsible for making new laws and removing the old ones. All the citizens of the nation and the organisation having its place of work in the nations are under an obligation to comply with these laws. However, such decisions or laws cannot be made by the current Parliament which cannot be altered by future Parliament.
European Law: Another source for the derivation of the law in the U.K. is laws of the European Union. In the year of 1972, the United Kingdom became the part of European Union and since then the European law has been the part of this legal system. If any law is not consistent which this law, then it will not be approved and if the case of a dispute between the two laws, European law will succeed.
There are other sources of laws as well which are the decisions made or judgments passed by different courts providing the services of law. These are the courts which deal with the issues between the parties and provide a solution by complying with different laws. These courts are:
International Court: These are the court the establishment of which is the outcome or result of the treaties or arrangement amongst different nations. When an issue attracts the laws of different nations, then it is dealt by this court and the operations of this court are overseen by international organisations, United Nations is one of the examples of these organisations.
European Court: All the issues which fall under the provisions of European laws are death by this court. The applicability and compliance with the European Laws are also monitored by this court.
Personnel involved in the legal system: As personnel is the important part of every system, therefore this legal system also includes a number of personnel some of which provides the services of law and some are responsible for making decisions based on applicable laws. These personnel are:
These are those professionals which are commonly known as Advocate or lawyers. These professional, who are specialised in the laws and have extensive knowledge of the same, are responsible for representing their client in the court. This is called “Barristers”.
Judges are those professionals which make sure the proceedings of the court are conducted adequately. Moreover, interpretation of the law is another specialty of such professional.
Solicitors are commonly known as legal practitioners who provide legal advice to their client. Such a person can represent the client in the lower courts. Barristers can also be appointed by the solicitors in order to present the case in higher courts.
P2- Explain the role of government in law-making and how statutory and common law is applied in the justice courts.
The process of making the law holds an essential place in the U.K.s legal system. It also involves various authorities which makes sure that effective laws are formulated. Identification of area which seeks control of the law is done by the Government of the nation. In this regards, a draft bill is prepared by the Government. After its preparations, such draft is submitted to the Parliament.
The process of making the law involves various steps which involve both the houses of the Parliament. All the draft bills of the laws are reviewed by both the houses in order to ensure the effectiveness of the law and to ensure that it covers all legal aspects. The steps of this process are as follows:
A simple reading of the draft bill is done by the Parliament which is termed as First reading.
Second reading follows the first reading, in which the draft bill of the act is properly reviewed by the House of Commons. All the members of this House are invited for providing their views so that effective changes if required, can be made. If required, a committee is constituted to further review the draft bill and report back the changes to the House. After such a report, again discussions are made in the House.
This is followed by the third reading which is the final reading of the draft bill by the House of Commons.
Then the draft bill is submitted to the House of Lords which also makes a review and if any amendments are required to be made, then such amendments are reported back to the House of Commons.
After all discussions and amendments in the bill, it is to be approved by the U.K.’s Monarch as per the provisions of Royal Assent Act, 1967 and notification in the official Gazette must also be made.
Common and Statutory Law Applicability
As this legal system is based on the common law, however, the importance of statutory laws cannot be denied. Codification of the laws or rules is provided by the statutory laws whereas the interpretation of the laws as per the facts of the case is done by the common law. It can be said that both the laws complement each other. Moreover, common laws are responsible for amending the statutory laws as per the current issues and practices.
M1-Evaluate the effectiveness of the legal system in terms of recent reforms and developments.
For maintaining the effectiveness of law and the legal system, it is necessary that the changes or reforms are made in the legal framework. These reforms took place in the last fifteen years, there were certain changes in the institutions and other bodies are made. Certain institutions like Ministry of Justice was established which replaced the Department of the Current Affairs, the establishment of the Supreme Court which overtook the functions of House of Lords. Due to technological upgradation, digitalisation has also been implemented in the legal system of the U.K. as virtual courts are set up and the proceedings in such courts are done with the help of internet. Legal practitioners also have the option to update the system with the documents related to the respective case.
LO2 Illustrate the potential impact of the law on a business.
P3 Using specific examples illustrate how company, employment and contract law has a potential impact upon business.
JPM publishing case study: The private limited company is started by three friends. To have more funds from public they changed it to public limited. Now, they require following some company rules for the compliances. This task suggested the laws and rules to this company.
Roles and duties of directors in JPM publishing: Directors are liable to equally manage the profits and losses. They are responsible for maintain the health and safety of their employees. They should ensure that their rights cannot be infringed.
Equal opportunities regulation Act, 2010: This act will protect the employees of JPM publishing from discrimination in workplace. This act, promotes the equality and justice at workplace. This act has got that power that it has replaced many acts. It prohibits any discrimination done on caste, age, gender, color or other things (Hughes, et. al., 2015).
Directors Responsibility: The directors of JPM will ensures that the there will be no practices of discrimination in their workplace. They also ensure that this regulation will protect the rights and obligations of employees (Andrews, 2012).
Health and Safety Regulation Act, 1974: This act facilitates in the protection of the health and safety at workplace. This act provided the JPM publishing to use that technology and machines that would protect the health and safety of employees. The employers protect the employees which include the casual workers, visitors and local people (Bibby, 2017).
Directors Responsibility: The directors Jane, Penny and Marie will see that there must be proper formulation of health and safety measures for their employees. The employers must protect the safety of employees.
General data protection regulations: It is a type of regulation in EU law. This regulation helps to protect the data of the JPM publishing. The provisions will protect the personal data of the company. The GDPR has replaced the outdated data which was formed in 1995. It sets the guidelines for protection of data.
Directors Responsibility: The directors must ensure that the confidential and personal data of the company must be protected by this regulation. They must give the guidelines to protect their personal information.
M2 Differentiate and analyse the potential impacts of regulations, legislation and standards.
Regulations: They are defined as the delegated legislations. They are formulated by the regularized authorities. They are enforced by regulatory agency.
Standards: They refer to as the base for making some judgments. It is an authority’s principle that usually used for some guidance. They are established norms (Kirton and Trebilcock, 2017).
Legislations: They are the statutory laws enacted by governing bodies of the parliament. They help in enacting the laws.
Potential impacts on JPM publishing: They will provide JPM publishing to do compliance according to these three. It helps it follow and adhere to the government policies. It also helps the company to go more legal.
D1 Provide a coherent and critical evaluation of the legal system and law, with evidence drawn from a range of different relevant examples to support judgements.
The effect of the legal system of the United Kingdom is well established. The expectation of the citizen of the United Kingdom is high with the legal system i.e. it must provide the fair and just decisions. It is well known that there are various rights which are available with the citizens of the above-mentioned nation and the legal system such nation provides safeguard to against the infringement of the rights provided under the laws (Arden, 2016). The impact of the legal system also controls and regulates the illicit activities but its effects are dissolved due to the involvement of the police and the correctional system. The dilution of the authority of the legal system is the only drawback of this legal system otherwise it provides protection to the citizens, communities, organisations, etc.
LO3 Suggest appropriate legal solutions to business problems.
P4 Suggest appropriate legal solutions for a range of business problems e.g. termination of contract, rescue from insolvency and liquidation.
Case 1: Champion ltd and the winding up
Issue: In the case of Champion ltd, the firm is facing the severe financial problems caused by the setting up an operation unit at a new place that leads to decline in the number of customers. This financial crises lead to increase in the outstanding loan over the organisation. The company has no other way to pay its debt. The creditors are now looking toward going to the court to file a winding up petition.
Legal Procedure: As the company is registered under theCompany Act 2006, it has to follow the regulations given in the act. The provisions of winding up is given in theInsolvency Act 1986 which say that if the outstanding amount of debt exceed the limit of £750, the creditors can file for the winding up (Paterson, 2015). A company has three different options to enter into a process of liquidation. These processes are explained below:
- Creditors Voluntary Liquidation: CVL is a process that allows the directors of insolvent company to shut it down. In this method, the directors have the power to nominate the liquidator of their own choices. The chosen liquidator try to make distributions of the assets to creditors. The directors in this would try to reduce the loss to creditors.
- Member Voluntary Liquidation: This process is usually opted when the company is solvent. It happens when any outside party buys the business’s assets and the members or board of directors or stakeholders do not want to use the organisation further. In this case, the company’s assets are distributed among the members. Creditors are not a part of MVL process because the company is solvent instead of insolvent and is still in the condition to pay the creditors.
- Compulsory Liquidation: In this method, a company is brought into the process of liquidation through the judicial body (Paterson, 2015). The court appoints a liquidator unlike the CVL. The compulsory liquidation is usually started when the creditors file a winding up petition in the court. This case usually arise when the company is unable to repay the creditors’ money. This is the ultimate mechanism to resolve a dispute. The petition is presented before the judge in the court along with enough evidence to prove that an organisation is not capable of paying its debt. If it is proved in the court, then the judge will grand the winding up rights to the creditors and the director will lose the control of the organisation.
- Analysis: According to the legal advisors, the financial conditions of the Champion ltd are not stable. Therefore, if the creditors take the case into the court in order to seek the winding up notice for the company, there are 90% chances that court would grant it. If this happens, the things for Champion Ltd would become upside down. Its bank account would be seized along with other assets. Therefore, to avoid losing the company’s control, the organisation should look for other alternatives, such as Creditor’s Voluntarily Liquidation.
Case 2: Mr Anderson and Amber Ltd.
Issue: In the given case, Mr Anderson who worked at Amber Ltd at the post of CFO resigned suddenly without giving any prior notice. The organisation and Mr Anderson had a contract of employment that says that he has to give 12 months prior notice before leaving the organisation.
Legal Procedure: In the given case, Mr Anderson broke the contract in order to join the rival Beta ltd as CEO without serving the 12 month notice period. The Employment Act 2006 gives the right to Amber ltd to file for the prohibitory injunction in the court to stop him to join the Beta Ltd.
- Analysis: The most effective solution to this kind of situation is to carry out communication and resolve the issue on the round table instead of going to the court directly. Negotiation is fast and cost-effective method.
P5 Provide justifications for the use of appropriate legal solutions.
The debts of the Champion Ltd are large as compared to the revenue generated. Financial advisers suggest that in such cases, the company’ directors should take steps in order to convince the creditors for calling a Creditors Voluntarily Liquidation process rather than going to the court and filing for winding up. The latter case is time consuming and costly. Sometimes the process may take decades to resolve. In such conditions, getting a right verdict may not be possible. The opportunity cost for the creditors is high. The similar situation takes place in the case of Mann v Goldstein  1 WLR 1091. The issue got resolved by CLV. This helped the organisation to repay its debt in effective way. Therefore, for the Champion Ltd, nothing can be as effective as the CVL method.
The Employment Act 2006 safeguards the interest of both employer and employee against any misconduct from either party. In the given case study, Mr Anderson held a significant position at Amber Ltd. His sudden resignation had caused a significant loss to the organisation as its functioning got disturbed. Since the contract of employment was signed between the two parties, no party can breach the contract (Andrews, 2012). If any party does so, then it would be liable to penalty. Amber Ltd can directly proceed to the court to seek prohibitory injunction notice against Mr Anderson. This would stop him from joining other organisation as it occurred in the case of Provident Financial Group v Hayward  ICR 16. In this case, the court granted the injunction against Mr Hayward that stopped him from joining the rival company. The best way for Mr Anderson is to find a way out of this mess by setting up negotiation process (Moore, 2014).
M3 Assess the positive and negative impacts of legal solutions to business problems.
Case 1: Resolving the issue of financial crisis by Creditors Voluntary Liquidation.
Positive impact: The firm’s control remains with the directors. It is time and cost-effective solution and protects the information of the business from going public.
Negative Impact: Liquidation may affect the brand image and credibility of the organisation.
Case 2: Amber Ltd. vs. Mr Anderson
Positive Impact: It is cost saving and time effective method. It keeps the warmth of the relationship unharmed. The issues between the parties can be made confidential.
Negative Impact: The decision-maker can be biased and he/she can favour a particular party. In case any party challenge the decision of ADR method in the court, the method becomes costly and time-consuming.
LO4 Recommend appropriate legal solutions based upon alternative legal advice provided
P6 Recommend legal solutions based upon a different country’s legal system and/or a different legal framework.
The alternative method suitable for resolving the disputes of the Amber Ltd. is ADR method. This method will provide the company to resolve the matter much faster and saves the cost too.
ADR method: It is an alternative method for solving disputes. The disputes are settled outside the court room. The types of ADR methods are arbitration, conciliation, mediation and negotiation. A third party is involved to settles the disputes between the two parties. Thus, this alternative method will help the Amber Ltd, in settling the disputes through ADR. This method is economical and saves cost. It is a type of informal process.
Benefits of the ADR method:
No court rooms
The disputes are settled outside court rooms, it is different from litigation.
Time saving and economical
The resolution solves the matter in a week or month, unlike the courts.
Involves arbitrators and mediators
In involves third party as mediators and arbitrators to solve the disputes. The settles the disputes faster.
Quickly resolves the case
Unlike the court proceedings, this method are quickly resolves the matter within a month or week.
The no court proceedings or no court dates makes the method more flexible.
Types of ADR methods:
Arbitration: The disputes are decided by one or more persons, the person here defined as arbitrational tribunal or the arbitrator; at last the judgment is given as arbitration award. The dispute is resolved outside the court room.
Conciliation: The disputed parties take the aid of the conciliator, he is the third party who meets the disputing party separately and tries to resolves the matter.
Mediation: Basically, a third party is involved to resolve the dispute. He acts as a mediator; they assist the parties to negotiate the matter. (Moore, 2014).
Negotiation: It is a kind of discussion which resolves the matter of disputing parties. Both the parties try to console the other party to agree to a point.
Thus, this method will help the Amber Ltd, to resolve its matter with Anderson in less time; it also helps him to focus on reappointment of some other candidate.
M4: Compare and contrast the effectiveness of the recommendations.
The Amber Ltd. has chosen the ADR method over the court proceedings, as this method is really flexible, economical and time saving. It solves the dispute without the court room.
It is not flexible method
It is flexible and easy method.
Time consuming and costly
Economical and time saving method
It involves court proceedings and court dates
The matter is resolved outside the court room. (Singer, 2018).
It involves judges, advocates.
It involves the third party as mediator, arbitrator and conciliators.
Thus, the ADR solution will be best suitable to the Amber Ltd. hence it should go with it.
D2: Critically review and evaluate the use of appropriate legal solutions in alternative advice.
The Amber Ltd and the Champions Ltd has used the litigation and ADR method to resolve their case.
Appropriate Legal Solutions: (Voluntary winding up)
Positive impacts: They will provide the Champions Ltd. to have better control of affairs through the court interruption. Court advice will provide better functioning.
Negative impact: This method is time taking and costly
Alternative method: (ADR) (Singer, 2018).
Positive impact; It facilitates the Amber and Champions Ltd too speedily over their disputes with no involvement of court.
Negative impact: This method didn’t fulfill the responsibility of court which afterwards can give side effects.
Thus, both the methods are good, but ADR method is profitable for the Amber and Champions Ltd. due to its more benefits.
Laws are important for the smooth functioning of the business world. They help in discarding any kind of discrepancies and disputes affecting the business operations. This report discussed the importance of English legal system is highlighted. The first section talked about the sovereignty of the parliament, different sources of law, and the law making procedure of the UK. The second section, elaborated the important laws in context of business environment. It also focused on the potential impacts of regulation, law, and standards on the business environment. The third section explained the legal solutions to different business problems given in the case studies. It also analysed the given legal solution to alternate legal approach. The forth and the last section briefed the litigation and ADR.
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