Understand Your Rights. Solve Your Legal Problems
Although this has largely been true of the global response to the COVID-19 pandemic so far, there is a growing current of discussion which seeks to imagine and map out the post-virus world. It now seems inevitable that the pandemic, the government, business and consumer response, and the economic consequences, will give rise to myriad legal disputes and debates in the UK and around the world. In this article, we suggest several ways in which the short and long term legal landscape of England and Wales will be impacted by the pandemic.
Force majeure and frustration
For this reason, parties may have more success invoking ‘force majeure’ as an excuse for failed contractual performance related to the pandemic.
The coronavirus pandemic is clearly going to affect the performance of many contracts across numerous sectors, industries and geographies. In some cases, counterparties may claim that the contract has been frustrated. The principle of frustration in English law applies when an unforeseen event renders the performance of a contract physically impossible or illegal, or transforms the obligation to perform into something radically different. If a contract has been frustrated, it is automatically discharged and the parties are released from any future obligations, and thus would not have to pay damages for non-performance. However, if the parties have made express provision in a contract for a particular event (for example, if they have allowed for it in a force majeure clause), the relevant contract will not be frustrated. Moreover, the principle does not apply when the performance of a contract has merely been rendered more difficult or inconvenient by the unforeseen event. By way of example, in Canary Wharf v European Medicines Agency [2019] EWHC 335 (Ch), the Court resisted the defendant’s attempt to widen the doctrine of frustration in a way that would release them from their obligations under a UK lease once the UK left the European Union.
In short, the pandemic and the resulting shockwaves in the global economy will drastically change the dynamic between lenders and borrowers.
For this reason, parties may have more success invoking ‘force majeure’ as an excuse for failed contractual performance related to the pandemic. Although force majeure has no automatic application in English law, a force majeure clause of some kind is included in most commercial English law contracts. Such a clause typically suspends or extinguishes a party’s obligation to perform the contract in specific, often so-called ‘emergency’ circumstances. Because the concept has no legal meaning outside this which is drafted in the contract, much will turn on the specific drafting of the clause. The range of circumstances in which the specific clause applies will be of particular importance, and in some cases, it will be unclear whether the pandemic is covered – for instance, we anticipate at least some litigation over whether the pandemic can be characterised as an ‘act of God’. More broadly, unless there is effective government action which clarifies the issue (such as the issuance by the Chinese Government of ‘force majeure’ certificates, or the legislation in Singapore which prescribes temporary relief from the inability to perform obligations arising under certain types of contracts), we expect to see force majeure cases preoccupying English courts for some time.
In order to benefit fully from any potential leniency though, borrowers facing faltering cashflows and potential covenant breaches should consider making proactive approaches to lenders, rather than waiting until an event of default has occurred or is inevitable.
Borrower-lender relations
With COVID-19 impacting both demand and supply, many businesses are inevitably going to suffer disruption to their cashflows leading to an increased demand for short-term credit and, for those already borrowing, to a greater likelihood of defaulting on debt or covenants. For many borrowers, this will outweigh the advantage of cheap financing options encouraged by the Bank of England’s emergency package to lower borrowing costs and improve the availability of finance. In short, the pandemic and the resulting shockwaves in the global economy will drastically change the dynamic between lenders and borrowers.
Part of that dynamic is the legal issues that could arise. First, there may be situations where lenders have not made finance available despite the government support for such. Some lenders may have been slow to adjust their usual policies and procedures, resulting in an inappropriate denial of credit, or may simply have been overwhelmed, in circumstances where delay could be very damaging to the would-be borrower. Second, in the context of existing lending, borrowers may have a remedy in damages in a variety of situations where a lender has acted wrongfully. These include: (i) where a lender has used a wrongfully called event of default as grounds not to make further funds available in breach of contract; (ii) where a lender has enforced against security after wrongfully calling an event of default; (iii) where an enforcing lender has not obtained the best price reasonably obtainable for the secured asset (this being particularly contentious in a global economic slowdown); and (iv) where an enforcing lender acting through representatives on the company’s board breaches its duties as a ‘shadow director’.
As such, claims in negligence and fraud both tend to increase in frequency during economic slowdowns – see the collapse of the Madoff fund empire in the wake of the global financial crisis in 2008.
In this context, relevant guidance has been given by the UK’s Prudential Regulation Authority in a Dear CEO letter to lenders, urging them to exercise caution when responding to potential breaches of lending covenants arising from the pandemic. In order to benefit fully from any potential leniency though, borrowers facing faltering cashflows and potential covenant breaches should consider making proactive approaches to lenders, rather than waiting until an event of default has occurred or is inevitable.
Offshore and fund litigation
Many investment funds operate through vehicles incorporated offshore, and as such, claims against or involving them will often most appropriately be dealt with in those offshore jurisdictions. Such claims become more common in economic slowdowns, as investors losing money due to precipitous falls in portfolio value seek remedies for their losses. In addition, greater scrutiny of the way in which funds have been managed, either through investor pressure or insolvency procedures, often uncovers negligence and/or fraud that might otherwise have gone undiscovered. For example, an issue that sometimes arises is that of ‘style drift’ –where fund managers have lost sight of or deliberately breached their stated investment strategy, and invested in asset classes or jurisdictions which do not conform with the agreed risk profile, which is particularly damaging in circumstances where markets are plummeting in value and increasingly illiquid.
As such, policyholders may be forced to rely on such broader heads of cover (for instance, cover for losses arising from a public health emergency) as are available under their policy, rather than relying on a cover for losses arising from a government order for closure of premises.
As such, claims in negligence and fraud both tend to increase in frequency during economic slowdowns – see the collapse of the Madoff fund empire in the wake of the global financial crisis in 2008. Fund investors would thus be well advised to push for greater clarity and transparency, and fund managers likewise to consider greater levels of communication and dialogue than in better times to try to get ahead of these issues.
Insurance cases
Already, disputes between insurers and insureds are making the news on a regular basis. Business interruption insurance, in particular, has garnered a lot of coverage, with whole sectors shut down by the UK Government’s stay-at-home rules. However, major insurers and their representative bodies have taken a consistent line that, in most cases, business interruption policies will not respond to losses caused by (i) the pandemic; or (ii) the Government’s response to the pandemic.
In times when each party in a dispute has been seriously impacted by the pandemic, and neither party can be blamed for its effects, many of our traditional common law remedies may no longer be appropriate.
In the face of proliferating threats of group legal actions, the UK Financial Conduct Authority has now announced that it will shortly be bringing court action designed to resolve promptly a selected number of key issues causing uncertainty in the insurance sphere. These are issues that could redirect the path of insurance law, such as the meaning of “physical damage to premises” in insurance policies, and the proper approach to causation in the face of cataclysmic events.
The latter issue was considered in Orient-Express Hotels Ltd v Assicurazioni Generalis SA [2010] EWHC 1186 (Comm). In that case, a policyholder was unable to recover losses resulting from damage caused by Hurricane Katrina on the basis that the claimant’s losses were caused not by the property damage, but by the wider economic shutdown resulting from the hurricane. In the current case, insurers may argue that even without the UK Government’s order specifically to close down restaurants and bars (and other businesses), these businesses would have sustained losses due to (i) regulations preventing people from leaving their homes, (ii) guidance exhorting people to stay at home, and/or (iii) people staying at home because of their fears about the virus. As such, policyholders may be forced to rely on such broader heads of cover (for instance, cover for losses arising from a public health emergency) as are available under their policy, rather than relying on a cover for losses arising from a government order for closure of premises.
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Transformational change
Developments in English law and in the UK court system tend to come about by gradual innovation, rather than wholescale transformation. The nature of a common law system is that incremental change is more likely than legal revolution. However, some legal professionals have begun to ask whether the COVID-19 pandemic could be utilised to transform our legal system and the access to justice which it provides (or on occasion, does not provide). Remote hearings, for instance, have the potential to decrease reliance on court buildings which often struggle to keep pace with modern technology and eradicate time spent travelling for everyone involved. Long-term advocates of online courts have been (at least partly) vindicated by the willingness of the legal profession to find alternative solutions for hearings in the time of COVID-19.
However, adaptations of procedure during the pandemic could go further still, to fundamentally change the norms of English litigation. The role and design of many aspects of litigation, including disclosure and witness evidence, for example, was extremely topical even before the pandemic. The current requirement to hold most hearings remotely, and an increasing backlog in English courts as many hearings are inescapably delayed, may add further impetus to the drive to reduce the prominence of (and some would argue overuse and over-emphasis on) disclosure during proceedings and witness evidence at trial.
We would also agree with the BIICL that rules on the implication of contract terms and the debate as to long-term relational contracts may well gain a heightened relevance in ‘Coronavirus Law’. In this way, some of the most enduring principles of English law could now be transformed.
Even more fundamentally, this could lead to a reappraisal of English law generally. In times when each party in a dispute has been seriously impacted by the pandemic, and neither party can be blamed for its effects, many of our traditional common law remedies may no longer be appropriate. As suggested by the British Institute of International and Comparative Law (the “BIICL”) in a concept note on the effect of the pandemic on commercial contracts, it may be that lesser-used legal remedies are now called into service. Equitable remedies, in particular, may soften the ‘winner-takes-all’ nature of English litigation; one question being whether the relations of parties to a contract can be equitably readjusted by the Court so that one will not be unintentionally enriched at the expense of the other because of the pandemic. We would also agree with the BIICL that rules on the implication of contract terms and the debate as to long-term relational contracts may well gain a heightened relevance in ‘Coronavirus Law’. In this way, some of the most enduring principles of English law could now be transformed.
Concluding thoughts
It is rapidly becoming clear that the effects of this pandemic on society will persist for years or even decades into the future. It seems certain to shape English case law, and English dispute resolution procedure, as the most prominent events of our history—among them the development of the European Union, the Second World War, the invention of the printing press—have before it. In times like these, the most effective legal routes may not be those that have been tried and tested, but ones to come, and as such, successful law firms will be those that can perceive change and development and adapt accordingly.
Written by: Jumana Rahman and Charlotte Ritchie, Cohen & Gresser LLP
Dorsey & Whitney LLP confirmed on Tuesday that it intends to lay off a “limited number” of attorneys and other staff in its US and international offices in order to address the financial impact of the COVID-19 pandemic on the firm.
Other members of staff will have their pay reduced by between 10% and 20%, though the firm clarified that those earning less than $150,000 per year will be unaffected by these cuts. Its summer associate programme will also be shortened from ten weeks to seven.
In a statement, Dorsey & Whitney managing partner Bill Stoeri said: “After intense deliberation, we made these hard decisions so that we will continue to be a strong, efficient law firm”, adding, “There is an emotional toll that goes along with these measures and these times”.
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Also on Tuesday, Philadelphia's largest workers' compensation firm Pond Lehocky Giordano announced that it will lay off 76 of its employees effective at the beginning of June, approximately a quarter of its staff. It did not state which of its 44 attorneys and 250 staff members would be let go.
“We can confirm the layoffs are related to the pandemic, but otherwise, out of respect for the privacy of our clients and staff, we don’t think it’s appropriate to discuss the layoffs further,” the firm said in its statement.
On 10 April 2020, the Pennsylvania Bar Association issued one of the first written advisories on the ethical obligations for lawyers working remotely. The primary focus of the opinion is on maintaining the confidentiality of client information and communications with clients. While the normal office environment is carefully set-up to keep confidential documents and information secure, attorneys are now working from home offices that are not as carefully set-up, and often not intended as the sole location for their practice. There are perils with the internet as well as communicating by phone in ad hoc locations.
Some of the key bullet points identified in the Order are that attorneys and staff must take reasonable precautions to assure that:
The Opinion elaborates on these points in further detail.
The primary focus of the opinion is on maintaining the confidentiality of client information and communications with clients.
Another helpful article was issued by the Massachusetts Board of Bar Overseers (BBO). Its ethics advisory takes the form of Frequently Asked Questions. The BBO article also focuses first on the duty to “take reasonable steps to maintain client confidentiality.” This includes: setting up a separate work area in your home; conducting conversations so that they cannot be overheard or intercepted; and maintaining internet security by using secure connections and avoiding public or shared Wi-Fi connections.
The BBO writes that lawyers have an obligation to “maintain competence in technology” and that “a lack of technology” is not an excuse for an attorney to stop working on their cases. This gives rise to a conundrum for the attorney who lacks the necessary technological resources or competence to properly work from home. The BBO essentially opines that the attorney either needs to secure the technology and competence or “consider referring matters to other lawyers.” The BBO article goes on to address questions such as closing offices, client expectations, and getting sick. It is worth taking a moment to read.
Last, many of the pitfalls of ordinary practice are heightened when an attorney’s usual practice is disrupted. For example, with absent face-to-face contact, it is harder than ever to detect scammers employing spoofed email addresses to misdirect the disbursement of escrowed funds, particularly in residential real estate closings. Attorneys need to take extra care to ensure that confirm disbursement instructions are authentic by phone or video conferencing. Another classic pitfall is the tracking of deadlines. Attorneys separated from their office calendaring systems must take steps to track critical dates such as statute of limitations deadlines, or contractual deadlines.
Attorneys need to take extra care to ensure that confirm disbursement instructions are authentic by phone or video conferencing.
In conclusion, working from home in 2020 is very different than working from home in the past, when many attorneys worked remotely on an intermittent basis. In 2020, attorneys were given little advance notice before relocating their practice to their homes, have been required to work remotely on a continuous basis, and have been cut-off from their offices. It is worth taking a moment to carefully consider the ethical obligations and pitfalls arising from this sudden and continuous displacement.
Edward S. Cheng is a partner at Boston-based law firm, Sherin and Lodgen. He has over two decades of litigation experience, specializing in complex commercial disputes, professional malpractice cases, insurance coverage disputes, and real estate litigation. He also represents attorneys in disciplinary proceedings before the Massachusetts Board of Bar Overseers and has lectured and written on the subject of legal ethics.
Following a request in April for the Bank of England to transfer over $1 billion of Venezuelan gold reserves that it is retaining, the central bank of Venezuela has now launched a legal challenge against BoE.
Venezuela has said that it intends to sell part of its gold reserves and have the proceeds transferred to the United Nations, who can then oversee its use in funding the country’s healthcare system as it battles the COVID-19 pandemic.
Venezuela’s economy has collapsed during the term of president Nicholas Maduro, which has prompted over 4.6 million people to flee the country by UN estimates.
Several nations, including the US and UK, do not recognise Maduro’s leadership, and Venezuela’s economy has been further damaged since US sanctions were placed on the country.
As a result of these sanctions and Maduro’s unrecognition by the UK government, BoE has delayed the transfer of Venezuelan gold since 2018.
Sarosh Zaiwalla, a London-based lawyer representing Venezuela’s central bank, said that “The foot-dragging by the Bank of England is critically hampering Venezuela and the UN’s efforts to combat Covid-19 in the country”, adding “With lives on the line, now is not the time to attempt to score political points”.
As of publication, the Venezuelan government has officially registered 618 cases of COVID-19 and 10 deaths, but health workers in the country have warned that its medical system could be overrun should the outbreak spread further.
Right now, people’s lives are completely up in the air. This axiom equally applies to the practice of law – including you. Think of that great old pearl of wisdom: People plan. God laughs. Welcome to the new normal. What is known today will evaporate tomorrow. It will begin again.
Do those words still apply during this unprecedented time? Thinking back to a few months ago, attorneys would have never imagined that familiar courtroom arguments would soon be done through computer screens and that crucial cases would be put on hold until further notice.
The world has forever changed and law firms around the world have taken the steps to ensure business continuity and peace of mind for their clients and themselves. So, what are some of the ways that law firms can cope with the effects of the pandemic? Matthew P Barach , founder and Principal of Barach Family Law Group, LLC and author of the published American Bar Association book, “The Family Law Guide to Appellate Practice.” , offers his thoughts to Lawyer Monthly on how attorneys can both cope and grow in changing times.
By now, most of us are accustomed to only speaking with colleagues and clients virtually. You may even have scheduled weekly virtual meetings to maintain your professional relationships and ensure they remain strong (and if not, you should!).
However, since you’re no longer running back and forth between courts, be sure to not overschedule or overcompensate for the void in your time. The thought of not having enough work may seem unimaginable. Avoid the immediate reaction to over-schedule client calls and virtual meetings. It is important to recognize these are strange times and you will have both good and bad days – accept it and stay mentally healthy by providing balance to your time.
Avoid the immediate reaction to over-schedule client calls and virtual meetings.
One day, COVID-19 will be a distant memory and we’ll joke with our grandchildren about the time we were quarantined in our homes for two months. However, who’s to say that another pandemic won’t one day arise or a natural disaster won’t force us to stay home for a while?
While being equipped for the present is important, being prepared for the long haul is just as crucial. Have a set plan in place for the upcoming months and take this extra time to plan for every possible scenario as a result of this crisis. What can you take away from this experience and how can you utilise that to better prepare yourself and your business? Encourage your employees to think outside the box as well and ask questions such as:
These are the types of questions that should be contemplated before going back to business-as-usual.
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Something that many lawyers tend to put on the back burner is marketing themselves. Clients are putting legal matters on hold for now – however, that will quickly change once life returns to normal. Use this newfound downtime as an opportunity to market yourself so that once the pandemic subsides, you are positioned as the go-to lawyer.
Divorce lawyers, in particular, are expecting an increase of couples rushing to the courthouse as the COVID-19 pandemic eases. The theory goes that hostile spouses trapped in quarantine together are counting the days until the ban is up so they can seek a new life commencing with a divorce filing!
As potential clients look to begin their cases, they’ll be researching attorneys who are well-informed on the latest policies. Take this opportunity to update your bio on your firm website, publish a blog post, contribute an article to your favorite legal news source, or even make new connections through LinkedIn. Most of these opportunities are free and only take a few minutes of your time, making now the perfect time to explore them.
It’s important to accept that the answers that you have to today’s problems may not be the same solutions you have in a week. Flexibility is key – your 30-day plan may need to be adjusted to a weekly, daily or hourly plan.
Be proactive and honest with your employees and clients, and let them know that although you may not have the answers, you will navigate the solutions to the best of your ability while staying up-to-date on the evolving COVID-19 laws and regulations.
Flexibility is key – your 30-day plan may need to be adjusted to a weekly, daily or hourly plan.
As attorneys, our job is to lead. To lead your associate colleagues, your clients, and your legal community. We lend a hand when it is needed, we find solutions to pesky problems, we lead progress, we charge forward in the face of adversity, we make our voices heard.
Embrace the change as a law firm and take it as a learning opportunity.
Those clients will return from their shelter in place, and while their spirits may be worn and weary, they will need you now more than ever – and us attorneys will be there waiting with open arms.
On Monday, the US Court of Appeals for the Federal Circuit announced that in-person arguments would be suspended “until further notice”.
This new policy replaces the Federal Circuit’s former process, held since March, where it determined each month whether or not oral arguments could safely be held in person.
In a statement on the move, Chief Circuit Judge Sharon Prost said that it was made “in the interest of providing greater predictability” for attorneys, who until now have been forced to await the Federal Circuit’s monthly announcements.
“Counsel appearing in cases before this court are currently subject to various approaches to, and timeframes for, community recovery and reopening, which may impact their ability to travel for argument,” Prost said in a statement.
In an effort to minimise the risks posed by public gatherings during the COVID-19 pandemic, the Federal Circuit has been holding arguments remotely since March, either virtually or by telephone. Prior to the decision on Monday, the court announced that virtual arguments would continue through both May and June.
The US Patent and Trademark Office also committed to holding remote hearings as early as March, and the US Supreme Court more recently broke with long-held tradition by holding oral arguments by telephone, which were then streamed live.
On the other hand, insurance companies believe they have limited exposure to COVID-19 claims. Which side is correct? Should insurance firms gear themselves up for a legal fight, whilst law firms become familiar with the poor drafting and exclusion ambiguity of their policies?
However, an incoming battle over COVID-19 related claims needn’t be the reality. To learn from this, insurance companies need to change their approach; embracing consistency, transparency and a data-driven methodology to wording that paints an accurate picture of risk and exposure for both sides - both the insurers and insureds. Akber Datoo, CEO at D2 Legal Technology, explains how this can be achieved.
From the moment COVID-19 was recognised as a pandemic by the World Health Organisation on 11 March 2020, the global economy took a devastating hit, which has continued spiralling downwards ever since. Despite some knowledge gained from previous viral outbreaks which had already caused tens of billions of dollars in losses, businesses still acknowledged that they would face many months of disruption, with the final value of financial losses unable to be predicted due to the new scale of magnitude of the disease.
COVID-19 is unprecedented and its impacts are still being felt almost two months on; there is still no ‘end’ in sight. With the UK predicted to face a fiscal deficit of £200 billion next year - and that’s not taking into account the rest of the world - it will be essential for government support to be very tightly focused and managed.
To learn from this, insurance companies need to change their approach; embracing consistency, transparency and a data-driven methodology to wording that paints an accurate picture of risk and exposure for both sides - both the insurers and insureds.
Businesses have now been left in a state of flux, with no ability to plan ahead. Many have no guarantee that their insurance policies will cover at least some of their lost revenue from the outbreak, although many remain hopeful. Despite this, the insurance industry is confidently claiming minimal exposure to their current underwriting practices and saying “it’s force majeure – not a matter for insurance”. What does this mean for the future of many businesses? Will we see more alliances between organisations in the same industry formed to enforce their policies?
Businesses across all industries are in the same position; there is a large group of dentists, for example, that have worked with the British Dental Association, who are urgently examining insurance policies affecting the practices of their members. The BDA Board Chair Mick Armstrong said that: “Many dentists who took out policies to guard against the unexpected have been left with no support during this pandemic”.
Many businesses have been surprised to discover that even those policies offering pandemic cover are typically limited to a pre-defined list of diseases. One of the issues is that although COVID-19 is not specifically mentioned as a possible ‘infection’ disruption, at the time when the policy was written, it obviously would not have been able to foresee the virus “COVID-19” to be able to include it in a list of covered diseases.
Similar issues impact business interruption insurance and the ‘insured peril’ definition within each policy. Cover for compulsory closure in some policies is dependent upon physical damage. Was the closure enforced due to the transmission of a notifiable disease by the authorities or prudence? Was the business owner following a definitive government policy or protecting its employees? Does COVID-19 fall under the scope of the notifiable disease definition (which is unlikely)? Does the policy cover supply chain disruptions – and, if so, how far down that supply chain will the disruption be covered?
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For the most part, insurers have held the line that most cases will not be covered. This has been recognised more broadly, with a Tory MP calling for Downing Street action after his constituents complained insurers were not paying out on pandemic-related claims.
Above all of this, there is a disturbing lack of consistency in wording and exclusions, making it very difficult to assess coverage in respect of potential claims - but despite this, the first wave of litigation has already started.
The widespread disruption and impacts of COVID-19 means that for businesses, multiple policies will be under the spotlight to help offset damages and risks. Yet, with the full extent of the damage yet to be determined, no business can have complete confidence in their policies. Unless an insurer has correctly embraced well- structured and well-designed model wording libraries and document generation tools, each policy has different exclusions and subtle changes in wording. This is an issue that should be striking fear not amongst the insureds, but the insurance industry itself.
There are also serious risks associated with financial lines and the operating procedures of senior management teams in banking and insurance during these unprecedented times. In the face of reduced staff numbers, supply chain difficulties and market volatility, there are a number of risks that need to be considered - from regulatory compliance to employee protection and continuation of business services. Questions must be asked: have funds been properly valued? Are problematic funds being divested at the right time? There are also very serious concerns regarding silent cyber, with criminals exploiting COVID-19 fear and uncertainty. The right contingency plans - many of which will be linked to the insurance policy - must be followed; if not, the potential for a very long legal dispute is extremely high.
In the face of reduced staff numbers, supply chain difficulties and market volatility, there are a number of risks that need to be considered - from regulatory compliance to employee protection and continuation of business services.
The situation is this: insurance companies have played Russian roulette with policy wording – and many are going to have to face the consequences of that. There is so much money at stake that firms will be pushing for a legal resolution to coverage disputes and lawyers will be looking for ambiguity and subtle distinctions in the policies to challenge in court. Furthermore, given the impact of COVID-19 on society, it is likely that the courts will construe these ambiguities in favour not of insurers, but of policyholders.
This pandemic will painfully demonstrate the poor internal management of wording and risks both in primary and reinsurance policies. Despite many questions being raised over the next few years with regards to insureds' understanding of what they were ordering and the fitness of the insurance being purchased, the extent to which the insurance industry was remiss in helping insureds obtain such an understanding will also come into the spotlight.
Will COVID-19 be a once in a lifetime event? Unlikely. More likely is that the pandemic will continue to impact the world for years to come, with new pandemics possibly following suit. There are certainly lessons to be learned. The insurance industry must recognise that both insurers and insureds need clarity and transparency with regards to the level of exposure covered in the policies.
This battle between insurers and insureds should never happen again. Clause taxonomies and model wording libraries ensure consistency and must be adopted. Furthermore, data-driven contracts enable rapid identification of exclusions and their financial implication, which the industry has learned is essential. With the correct approach, insurance companies can deliver the much-needed transparency to their customers and ensure history does not repeat itself.
Alison Pye has over ten years experience delivering effective recruitment strategies for Patient Claim Line, the medical negligence brand owned and operated by leading UK law firm Fletchers Solicitors. Alison is passionate about sourcing hard to find candidates and believes that a strong digital recruitment strategy is crucial for successfully building teams, especially in today’s current climate. Here, Alison shares how enforced remote working needn’t hinder firms’ recruitment drives and how adapting to the current situation through digital innovation will ensure firms fare better in the future.
Whilst many firms have invested in technologies that have helped staff to adapt to remote working quickly, there are some areas of business that are difficult to syndicate digitally, such as recruitment. Translating your company ethos online through your written marketing materials can be tricky, and it can be even trickier to assess a candidate's potential when you’re meeting them through a screen. However, with experts suggesting that working from home may be the new norm in the future for many of us, companies need to get over the hurdle of digital recruitment and virtual team management if they are to continue to attract talent. Here’s how.
1. Adopt the right digital tool to reflect your business
More and more companies are accelerating the use of technology and digital recruitment to compete for top talent, and this is certainly true during the current lockdown. But sometimes recruitment teams can get sidetracked by flashy tech and forget to put the real purpose of the tool at the forefront of their decision; the candidate.
Firstly, it’s important to remember that you are dealing with people, so having the correct technology to communicate with your candidates on their level, is essential.
But, whilst it may be trendy to use Zoom, we need to remember that some candidates may prefer WhatsApp, Facebook Messenger or traditional texts to communicate. Whilst some businesses may be reluctant to adopt instant messaging tools due to their typically casual usage, these tools are widely recognised as being perfect for replicating how people normally speak and so can help to bridge the gap between video calls and email. So it is important to ensure you have the right tools. Often a variety of tools that have different advantages are better than sticking to just one.
Sometimes recruitment teams can get sidetracked by flashy tech and forget to put the real purpose of the tool at the forefront of their decision; the candidate.
Always remember, whilst AI and technology is an amazing thing, it’s the person and their abilities you are hiring.
2. Be transparent and proactive in order to establish relationships
These are challenging times for all of us. But for new starters, working from home whilst joining a new team can be incredibly daunting.
This is a situation we have never had to deal with before, so, don’t be afraid to tell the candidate that it’s all new to us, too. Taking the time to explain how you are adapting business processes to the ‘new normal’ goes a long way.
Make sure candidates know that they will still have a great onboarding process, even during digital recruitment. And ensure you follow up on this process; remote new starters may need help with structuring their day and facilitating introductions, and are perhaps likely to require a more conscious effort to induct them into the business than a candidate who is coming to work at your physical office space.
It is useful to provide a rounded account of the business, even during digital communications. Tell candidates about the teams, give them a virtual tour of the office, tell them about the local places that they will be able to visit once we are all together again.
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It is also important to acknowledge that new starters and employees in general are likely to need additional tech support time to help them to adjust to using new digital tools whilst working from home. According to a report by Hays Talent Solutions, 1 in 5 workers feel that technological change is happening too fast, with over a third stating there needs to be more training. So, additional time to train staff members on new IT systems should be factored into your onboarding process, as well as staff training updates.
Something that has worked really well for Fletchers Solicitors is having someone from the Recruitment Team have an informal chat with the candidate before progressing to the interview stage. This way you can deal with any initial fears/questions and save on valuable time.
From the initial engagement, the candidate should feel like your company will be a great place to work, and be looking for the dotted line.
3. Ensure your company values are effectively translated into digital communications
If you are lucky enough to work for a company that lives and breathes its values, then reflecting these in your digital recruitment campaigns shouldn’t be too much of a problem.
During interviews, explain the company’s values to each candidate, and advise how these values relate to the role they have applied for. At Fletchers Solicitors, there is an ethos of ‘We are all in this together’ and this really has shone through during this time.
Speak to candidates about the management structure too, and give examples of how senior leaders demonstrate the company values, even in everyday life.
If you are lucky enough to work for a company that lives and breathes its values, then reflecting these in your digital recruitment campaigns shouldn’t be too much of a problem.
You may even have videos that you can share with the candidate that better illustrate the values and ethos of the business, the origins of those values and any aspirational visions for the future of the business.
Ultimately, ensure that you ask questions during the interview process that may have some relation to the values and ethos of the company.
Always make sure that the candidate is aware of what will be expected from them and how they will be required to demonstrate that same ethos.
4. Look beyond CVs
As well as the most obvious qualifications, at Patient Claim Line we look at experience and also whether we think the candidate would be a good fit for our company and embrace our values and culture. Especially in today’s unusual working environment, candidates that can demonstrate independence, the ability to adapt to new digital technologies and infrastructures and strong communication skills are particularly attractive.
Sometimes it’s not all about the CV – it’s about the person behind it.
Especially now at the time of the COVID-19 pandemic, many businesses have had to close their doors indefinitely at the outbreak of the virus. That has resulted in diminished profits, loss of income, and countless layoffs.
Borders are closed and there are limitations on which items can go in and out of the country. Supply chains are broken, vendors cannot collect their pay, and businesses cannot afford to pay off their debts.
So if you haven’t protected your business assets by now, it’s high time you did so. We had a talk with Bobby Gill, a successful entrepreneur who owns a Private Wealth Strategy firm in London, UK. He is someone who helps clients get a better grip on wealth management and wealth protection.
Let’s take a look at what he has to say, and see some of the best asset protection strategies to help you and your business stay afloat.
According to Bobby Gill, your first line of defense for asset protection is a strong insurance plan. As a business owner, there are several insurance types you should have:
Business insurance is a broad term that can include liability insurance, property insurance, business interruption insurance, and more. It’s mostly designed to protect your business property and provide liability coverage in case of a lawsuit. It’s a must to have adequate business insurance regardless of the size of your business.
Business Automobile Policy (BAP) will cover business vehicles and provide additional liability coverage. The premium is significantly higher than most would expect, but it’s worth it in case of a lawsuit.
Most importantly, your business needs umbrella insurance. It provides coverage for everything that your other insurance policies have left out. It’s crucial if you want to avoid creditors seizing your assets and garnishing your wages when your remaining policies cannot cover settlements.
One major mistake that many business owners make is tying their business and personal assets in one big bundle. This makes all of your assets extremely vulnerable, and you risk losing everything in one fell swoop.
It’s crucial to make a distinction between your business and personal assets, and not just in a philosophical sense. Put it all on paper. The best way to do this is by creating a business entity.
Your options are:
It’s crucial to make a distinction between your business and personal assets, and not just in a philosophical sense.
As their name would suggest, Limited Partnerships will help you limit your liability. You’ll be liable only for the investments you’ve made in the business, nothing more. Limited partnerships have their pros and cons, but they are one of the options for protecting business assets.
Corporations are mainly for protecting your personal assets in case of a business lawsuit. Your business assets will still be vulnerable, but at least you won’t risk losing everything you own.
Limited Liability Companies (LLCs) generally provide the best asset protection. They don’t have as many restrictions on ownership as S corporations, and they offer similar liability protection as C corporations.
According to Bobby, regardless of COVID-19, the economy, or politics, having an asset protection trust is the best thing you can do for your business and future cash flow. With a well-thought-out asset protection trust, creditors won’t be able to touch your assets. Not to mention that any judgments or lawsuits will have little to no effect on your assets.
It’s important to note, however, that asset protection trusts are very complicated. You’ll need to consult your financial and wealth management advisors, as well as experienced attorneys.
With this in mind, you should know that there are two main types of asset protection trusts:
As you can easily conclude, a revocable trust can easily be changed or altered. As the settlor, you can retain full control over the trust’s assets and change the trust terms at will. Revocable trusts come with numerous benefits, but don’t offer full asset protection. In case of a lawsuit, you could still be forced to pay out of the trust assets to settle the creditor’s claim.
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According to Bobby Gill, an irrevocable trust is much better for protecting your business assets. You cannot change the terms of an irrevocable trust, and you don’t have full control over the trust assets. It’s the trustee who gets control over those assets. Since the assets are in the trustee’s name, if a lawsuit against you is filed by a creditor, those assets won’t be taken into account for settlement.
Irrevocable trusts can be divided into two unique categories: domestic and foreign. Let’s take a closer look at both.
Most popular in the United States, Domestic Asset Protection Trust can be an excellent way to protect your business assets. Their only drawback is that the protection offered isn’t bulletproof as all assets are still under the domestic legal system. That could make the assets vulnerable in case of a lawsuit or claim filed by the creditor.
A much safer solution is creating a Foreign Asset Protection Trust. As the name would imply, your business assets would legally fall under foreign jurisdiction. That will keep them well protected against seizures in case of a lawsuit or claim.
However, foreign asset protection trust is exposed to political and economic risks of the chosen jurisdiction. It’s crucial to be careful and weigh all your options when creating a Foreign Asset Protection Trust.
As a business owner, what will serve you the most in these trying times is your established goodwill. The coronavirus lockdown and related business closures are affecting everyone – your customers, your vendors, your landlords.
If you’ve established goodwill with them, make sure to maintain it. Don’t be negligent, fraudulent, or try to fool anyone. If your reputation is ruined at this time, it will have great repercussions for you and your business.
Regardless of the pandemic and lockdown, protecting your business assets is always important. Be smart and develop the best strategies for success. That is the only way to come out on top after COVID-19 has been dealt with. For more advice on wealth management and wealth protection, you can utilise wealth strategy advisors.
The government has had to react at speed to combat the coronavirus pandemic. With the Prime Minister slightly easing restrictions after eight weeks of lockdown, the government is turning to technology to help return the country back to normality. Aman Johal, lawyer and director of Your Lawyers, discusses the concerns surrounding the UK government's new contact tracing app.
Contact tracing was initially used to try and stem the rise in coronavirus cases within the UK, but after the rate of infection continued to rise, its focus moved to keeping the NHS afloat. Now that the initial peak of the virus appears to have passed, the government has looked to re-introduce contact tracing for the whole country.
The Health Secretary, Matt Hancock, announced at the start of May that a new contact tracing app would be used to help monitor and control coronavirus cases around the country. This app would initially be tested in the Isle of Wight and, if successful, later rolled out across the UK.
This has brought about concerns around how the app is storing data, to what extent users with the app will have their privacy curtailed, and how secure the software is. Each of these concerns has its own unique challenges to overcome and, if not successfully managed, the government could find itself with huge legal issues.
Now that the initial peak of the virus appears to have passed, the government has looked to re-introduce contact tracing for the whole country.
What do people consent to and how does the app work?
Presently, the government is not forcing anyone to download the contact tracing app; it is hoping that, through advertising and collective effort, the British public will be persuaded to download and use it. The app works by using a phone’s Bluetooth signal to send alerts and trace the steps of an individual who may have come into contact with someone with coronavirus symptoms or who has tested positive. The government will ask all users to input the first three characters of their postcode on the app so they can understand roughly where people live and understand the spread of the virus.
There are concerns around how the data will be stored and for how long it will be used. Apple and Google have been pushing for decentralised systems, while the government has decided to go with a central database system. The NHS can use this centralised system to learn about people’s behaviour, including who they have been close to and the time certain events have occurred. The argument from the government is that this system will help in making more straightforward and quick decisions, with an anonymised data set used and AI and machine learning implemented to obtain valuable insights.
One of the main concerns comes around how long the NHS keeps the data as there is currently no time limit. The NHS could, in principle, keep it forever and use it on future research projects years after the coronavirus pandemic has receded. Even though consent is requested, some people may not consider or fully understand their rights and the extent to which their data may be stored and used in the future.
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The primary issue around consent comes down to whether a user downloads the app and signs up or not. Even if the government did move to compulsory download measures, it would likely need to rely on Public Health/Public Interest justification. As long as data gathering is kept to a minimum and is secure, the public health crisis could be used as justification to try to force the population to have this app on their phone.
Protecting the data from cybercriminals
Unfortunately, with all data being digitally obtained, there will be malicious threat actors who want to abuse the system and gain access to sensitive data. The government needs to be clear and transparent around how it will maintain a secure network that will not be compromised by an outside source. Ian Levy, technical director of the National Cyber Security Centre, has said there are a number of ways the app’s system could be undermined. The clear indication is that the app will store data that is incredibly personal and sensitive - a gold mine for cybercriminals.
The government has responded to data protection concerns by announcing plans to appoint an ethics board to ‘improve oversight’. It has also yet to rule out a clause agreeing to delete all collected data once normality resumes. The vital task is to prevent the centralised database from being compromised as the government could find itself having to pay a monumental data breach fine as well as the cost of litigation. Taking a recent example that shows how easy it is for information to be exposed, Virgin Media experienced a data breach involving the personal details of 900,000 people due to an incorrectly configured database. With customers potentially eligible for up to an estimated £5,000 in compensation each, this entirely avoidable incident could cost Virgin Media a total pay-out of £4.5bn. The government is expecting and hoping that well over 900,000 users will download the contact tracing app, which may open the door to a considerably larger financial cost if it were to experience a similarly catastrophic data breach.
The vital task is to prevent the centralised database from being compromised as the government could find itself having to pay a monumental data breach fine as well as the cost of litigation.
Hopefully, important lessons have been learned in the wake of serious government and public sector breaches, such as the NHS Digital configuration breach; the Conservative Party app breach that arose from a lack of security protocols; and the 2017 WannaCry incident where weak systems were targeted and compromised.
The successful rollout of the NHS contact tracing app could be key to ending the UK lockdown and ushering in a return to normal life. There are legitimate concerns around the app’s usage and how the data it collects is stored. Even though the government has created this at remarkable speed, it must be wary that much of the public needs and deserves assurance in terms of the app’s security first and foremost. Questions must be answered before the app is rolled out across the UK. The concern remains that we could have a large uptake of the app and see information stolen from the centralised database, which could leave the government with a substantial bill at a time of economic uncertainty, whilst also stemming progress in combatting coronavirus and worsening the anxieties of the public whose data could be exposed.
