Business Law: Understanding Legal Systems and Solutions

This comprehensive guide explores the fundamental principles of business law in the United Kingdom, examining the nature of legal systems, legislation impacting businesses, and practical legal solutions to common business problems. The report delves into the sources of law, the role of government in law-making, and the application of statutory and common law in justice courts. It analyzes the impact of key legislation, including the Companies Act 2006, the Finance Act 2017, the Health and Safety at Work Act 1974, and the Equality Act 2010, on business operations. Furthermore, the report provides practical legal solutions for business problems such as contract termination, insolvency, and liquidation, using real-world case studies to illustrate the application of legal principles. The report also explores the benefits and drawbacks of alternative dispute resolution (ADR) methods, such as mediation and arbitration, as a means of resolving business disputes.

Business law
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Contents
Introduction........................................................................................................................3
Section 1– Nature of legal systems and legislation impacting businesses.......................4
LO1 Explain the basic nature of the legal system.............................................................4
P1 Explain different sources of law and laws that organizations must comply with......4
P2 Explain the role of government in law-making and how statutory and common law
is applied in the justice courts........................................................................................7
M1 Evaluate the effectiveness of the legal system in terms of recent reforms and
developments.................................................................................................................9
LO2 Illustrate the potential impact of the law on a business...........................................10
P3 Using specific examples illustrate how a company, employment, and contract law
has a potential impact on business..............................................................................10
M2 Differentiate and analyze the potential impacts of regulations, legislation, and
standards......................................................................................................................12
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 judgments...13
Section 2- Legal solutions to business problems............................................................14
LO3 Suggest appropriate legal solutions to business problems.....................................14
P4 Suggest appropriate legal solutions for a range of business problems e.g.
termination of a contract, rescue from insolvency and liquidation...............................14
P5 Provide justifications for the use of appropriate legal solutions.............................17
M3 Assess the positive and negative impacts of legal solutions to business problems.
......................................................................................................................................18
LO4 Recommend appropriate legal solutions based upon alternative legal advice
provided...........................................................................................................................20
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P6 Recommend legal solutions based upon a different country’s legal system and/or a
different legal framework..............................................................................................20
M4 Compare and contrast the effectiveness of these recommendations....................22
D2 critically review and evaluate the use of appropriate legal solutions in comparison
with alternative legal advice.........................................................................................23
Conclusion.......................................................................................................................24
References.......................................................................................................................25
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Introduction
This assignment of business law describes the various provisions and law which are
regulated and followed by business organization of the United Kingdom. The laws are
very helpful for functioning and operating the business by employers and too aware of
such laws to the employees. In this report, the detailed description is given about the
sources of law and laws applied by the business organizations. The role of government
in the law making and how the provisions of common law and statutory law are
applicable on the justice courts are discussed. The developments and reforms made by
the government in legislation and its importance for the business organizations are very
effective. Further, certain laws are applicable to the Champion ltd and Amber ltd to
solve the disputes which are raised in the business organization. The insolvency laws
and Employment regulations are followed to solve the issues and recommendation is
provided to the employer to make the payment and sort out the liabilities. Apart from
that, the regulations of Alternative Dispute Resolution process are described and
companies may adopt this method to solve the dispute.
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Section 1– Nature of legal systems and legislation impacting businesses
LO1 Explain the basic nature of the legal system
P1 Explain different sources of law and laws that organizations must comply with
The sovereignty is parliament is the best element of the UK constitution, it was
developed in the period of Mary and William who said that parliament is sovereign. It is
the essential part of the UK constitution. In the words of Dicey, there are three basic
principles describe the sovereignty of parliament is a follows:
 It is the supreme law developing authority and enacts the statues and law on a
particular subject matter.
 No, any parliament is bound by the predecessor and any successor
 No authority or body involving a court of law can question on the law validity.
The sovereignty is divided into two authorities like legal and political sovereignty; the
constitution is the code of statutes which influences the allocations of functions, powers,
responsibilities of government officials and regulatory authorities which shows the
relationship with each other (Partington, 2016).
Sources of law:
Generally, sources of law are distributed into two parts:
Primary sources: It is the original and authoritative statements of law, the various kinds
of the sources are European law, case laws by courts, legislation and European law
developed by the Parliament.
Secondary Sources: The sources are law Journals, Encyclopaedias, parliamentary
and non-parliamentary textbooks and documents etc.
European law is developed in four manners like case laws, European laws, Legislation
and human rights. It is evaluated that Parliament has the supreme power for making the
laws and statues. The laws are described as follows:
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Case laws: The decision of a court is mentioned in the publications which are known as
law reports. It is the fundamental and basic sources of law. The development of the law
depends on the reliable reports of law that includes the facts, issues, decision and
principles and concepts of judgments were developed.
European law: The laws are developed with the European Union justice court. It is
regulated by the parliament of the country (Summers, 2013)
Human rights law: As per the European community Act 1972 it is the British law. The
human rights law is the domestic and regional law to coordinate the convention of
Europe and human rights.
Legislation: It is passed by the parliament of the country. It coordinates and codifies
the laws. Consolidations bring various statutes in one law without laying down any
changes for example Insolvency Act 1986.
International Court: It is the significant judicial organ of the United Nations that settles
the disputes between states and provides advisory opinion to agencies and authorities.
It consists the panel of 15 judge’s appointed by the Security Council and General
Assembly.
Laws compiled by the business organization:
 Companies Act 2006: This is the basic source of UK company law that codifies
the various existing principles of common law like director duties, provisions for
public and private companies.
 Finance Act 2017: It refers to the legislation of fiscal budgets developed by the
UK parliament that involves several provisions related to taxes, exemptions,
duties, and reliefs in once a year (Summers, 2013)
 Health and safety at work etc. Act 1974: It is the Act enacted by the United
Kingdom Parliament that describes the primary structure and authority for the
regulations, encouragement, and enforcement at employment level health,
welfare, and safety in the country.
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Role of Barristers; Solicitors; Judges: Barristers are Lawyer they work in higher
level of court and act as advocates in legal hearings. Barristers have special
knowledge of the statues and also provide legal advice. Solicitor’s works for the
large organisations, commercial and non-commercial firms, corporations and banks.
They advise to clients and draft documents also. The person who presides over the
court proceedings whether alone or with number of judges and also hears the
evidences and witnesses provided by the barristers are known as Judges.
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P2 Explain the role of government in law-making and how statutory and common
law is applied in the justice courts
Law-making is the policies of the government of the country that proposed the
legislation for a respective society and to act as the statutory duty. Law-making is
parliament process which has certain stages before the completion of law. There are
several kinds of bills are called Private bills, Public Bills and Private members bills. The
second stage of law making process is the white stage. The law making stages are as
follows:
First reading: The bill is read in House of Commons for the first time. This is the
notification and initiation of the respected bill.
Second reading: The member’s debate is made over on the proposed bill.
Committee stage: In this stage, the bill is completely scrutinized by a group of experts
of the House of Commons where changes and amendments are to be made.
Report Stage: In this stage, changes are voted on and debated on, and the voting is
made by members.
Third reading: The bill is again proposed to the House of Commons. Members vote
and debate over on to allow or decline the legislation to stay in actual form. After the law
has been decided, the bill transfers to the House of Lords for scrutiny.
Royal assent: To make the Act from the law there is a requirement of Royal assent.
The decision of Queen is compulsory and her consent to make the law.
Common law and statutory law: The law which is raised from the decisions made
under judicial and appellate court is called as common law or case laws. The law
applied in justice court because common law refers by the judges to take the decision
from past decision. Statutory law is described as a system of law and principles,
accessible in written form and present by legislative authority to preside over the
citizens of country. So it is analysed that, legislation of parliament is the statutory law
that is the basic primary structure of the legal system depends on the statutes. The
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judges of the courts applied this law in regulating the community or society for the future
cases.
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M1 Evaluate the effectiveness of the legal system in terms of recent reforms and
developments
From the last years, there are various reforms and development takes place in the
country for the development and growth of a business organization and its
effectiveness. The reforms in the form of Information technology Act, Cyber security Act,
Environment Protection Act, Equality Act 2010 etc. are considered. The society nature
is very dynamic it is changing as per the time changes and requirement of law
(Founded, 2016). The objective of Equality Act prohibits the discrimination and
harassment from employment place and treats the people in an equal manner with due
respect. The Cyber security Act is regulated to protect the personal and professional
information more confidential from any unauthorized third-party access. The law of
Environment Protection is regulated to make the rules and laws for the business
organization and industries about how many hazardous substances are spread in the
environment. On the other hand, the information technology also protects the data and
information stored in the computer system from the hacking and another kind of fraud
activities (Faúndez, 2016).
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LO2 Illustrate the potential impact of the law on a business
P3 Using specific examples illustrate how a company, employment, and contract
law has a potential impact on business.
Responsibilities of Directors under Companies Act 2006:
 As per Section 170 of the said Act Directors are responsible to act within powers
 As per section 172 provides that directors are liable to promote the growth and
success of company
 As per section 173 states that directors have duty to exercise independent
judgment.
 Section 174 provides that directors have duty to exercise reasonable skill, care
and diligence.
 Section 175 states that directors have duty to avoid conflicts of interest
1. Health and safety regulations: As per the provision of health and safety at Work
Act 1974, states that it is the duty and responsibility of every owner to protect the
safety, health, and welfare of every employee working at employment in the
organization. It is also the duty of the employee to protect himself from any dangerous
activity and others too which is affected by the omission at workplace due to the
employer with his negligence or not. The employees of the organisation must cooperate
and coordinate to an employer in terms of the safety, welfare and health activities
(Brauer, 2016). In the above case, the employers of the JPM publishing are liable to
protect the safety and health of employees who are working in organisation. Due to the
expansion of company structure the liabilities increased more towards the employees. It
is essential for the company to protect the employees because they are considered as
assets so it improves the development and growth of company as a Public limited.
2. Equal opportunity Regulations: According to the rules and Regulations of Equality
Act 2010 states that certain actions are prohibited like discrimination at employment, in
an education system, training level, in terms of the age, disability, gender, marriage and
civil partnership, believe race, maternity, sex etc. Staff members, employees, and
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students are treated equally in all respect and protected in all areas of training
relationship, employment, education, appraisal, recruitment, promotion, performance
assessment, dismissal and post-termination etc. (Cole, 2017). Discrimination has
several kinds such as direct and indirect discrimination, victimization, perception
discrimination, positive action, and harassment etc. It is evaluated by the provision of
Equality Act 2010 that JPM publishing is responsible to treat all employees equally
whether of any caste, races, religion, sex etc. In all activities and functions of the
organization, employees are treated equally for the development and growth of an
organization. It is necessary for the company to comply with the rules and regulations to
achieve the success in the competitive market.
3. General Data Protection Regulations: The regulations are developed under the
European law for the personal privacy and to maintain the documents and information
confidential IN European Union and European Economic Area. The objective of the
regulation is to give control and security to citizens and residents of the personal
information and data and also to make the international business easier. It is analysed
that from all regulations that, all personal and professional data and information of the
directors and company must be protected from any unauthorized third-party access. It is
the responsibility of JPM publishing to protection and security of all information of
company from any fraudulent access by following the data protection regulations
(Wilson, et. al., 2014).
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M2 Differentiate and analyze the potential impacts of regulations, legislation, and
standards
The legislation, regulations, and standards of the Equality act 2010, health and Safety
Act, 1974 and General data protection regulations provided by the European Union and
European community. According to the above Acts and legislation, the regulations are
prescribed that employer of the business organization is responsible for the safety,
health, and welfare of the employees at employment level. The employer is also liable
to prohibit the activities which create the discrimination and harassment in the
organization and provide training to treat equally all employees with coordination and
support. The health and safety is the duty of employer towards the employees while
working in the organization and to protect them from dangerous activities. The data and
information of all directors, employees, company etc. are protected from any
unauthorized access and to make the information confidential (Labournet, 2015).
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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 judgments
The legal system of the United Kingdom is sometimes very flexible and very
complicated for the business organizations and its functions. The law and statues are
depended on the legislation made by the parliament, the crown, the judiciary. The
decisions of Supreme Court are binding on all other lower level courts of the hierarchy
system. The precedent cases and landmarks cases provide the judgments on new
cases also as per the common law, but it is incurred with several advantages and
disadvantages with flexibilities and nuisances. The repetition of similar issues and poor
rulings are faced on judgments on new cases when fewer options are available to solve
the case (Kim, et. al., 2014).
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Section 2- Legal solutions to business problems
LO3 Suggest appropriate legal solutions to business problems
P4 Suggest appropriate legal solutions for a range of business problems e.g.
termination of a contract, rescue from insolvency and liquidation
Case 1
Champion Ltd is established in London was given payment in cash to shift from its site
in North London to develop the new stadium for a premier league club. The company
was not able to pay out the liabilities and debts to creditors and banks. The creditors
are threatened to Champion ltd and they apply for winding up to the court. The company
has to know about the rights and liabilities of creditors to apply for liquidation.
According to the rules of Insolvency Act 1986, a company which owes £750 and more
to any person and is not able to pay off the debts and liabilities, then the creditor can
five a demand notice to the said company for receiving the money within a particular
time period from the notice served. After receiving the notice company enter into the
agreement for making the payments to creditors to pay out the debts and liabilities.
When a company not entered into the agreement within 21 days or not paid the amount
to creditors then they have right to apply for compulsory winding up to the court.
There is an option of voluntary winding up in which directors of the Champion ltd
conduct a meeting of creditors and shareholders and decide to wind up the company
and its operations. The liquidator is appointed to conduct the process of winding up
where there is no role and permission of court (Thompson, 2016).
So it is recommended that company either enters into the contract and pay out the
liabilities and debts to the creditors when notice is served to company. The creditor’s
voluntary liquidation and company voluntary agreement is such contracts in which
company may enter. So it the method either takes by the court under compulsory
winding up. The second option is available to the Champion ltd is when the liabilities
go to the court for receiving the payment then a company may defend by saying that no
such liabilities and debts due to creditors. The company has to decide an option after
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the notice is served to as early as possible made by the creditors. Alternative dispute
resolution is also the other option which may consider by the Champion Ltd
Case 2
Issue: Mr. Anderson was the Chief financial officer of Amber Ltd, and as per the
contract 12 months has to be served to company before terminating the contract due to
access of confidential information by him. Mr. Anderson proposed the offer of Beta by
not giving the 12-month notice to Amber ltd. The resignation letter was made by the
Anderson to the company before the 12 months period. The company intends to take
the injunction against Mr. Anderson for doing such act.
Law: According to the provisions of Employment Rights Act, 1996 provides the
conditions which are applicable to employees and employer of the business
organization. As per the rule and statutes, it is compulsory to put the notice by the
person who is going to terminate from the organization and terminate the contract of
employment. If an employee is appointed for more than a month’s but less than 2 years,
then notice shall be made before a week. If the employee is appointed for more than 2
years and less than 12 years, then notice must be given for more than a week. When
the employee is appointed for more than a period of 12 years then termination notice
must be served for 12 weeks. The conditions of an employment contract are to be
complied with for the termination and serving notice period. In case, when any person
does not follow the terms and conditions of contract then it will be treated as a breach of
employment contract. In the above case, the notice period of 12 months was decided
(Wessing, 2016).
Law to facts: According to the provisions of the Employment Rights Act 1996 and
other related provisions of the said act, it is analyzed that Mr. Anderson has to serve the
notice before 12 months to the company when he intends to terminate from the
employment. Mr. Anderson did not follow the provision of contract then he is liable to
not continue with the contract and company has right to take an injunction from the
court against him. Amber ltd can also adopt the method of Alternative dispute resolution
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instead of following the old process of solving the issue of employment (Wilson, et. al.,
2014).
Conclusion: It is concluded from the provision of employment rights act that when an
employee breaches the terms and conditions of employment contract then a company
has right to file a suit against such person.
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P5 Provide justifications for the use of appropriate legal solutions
Case 1
It is recommended to the Champion ltd that company must enter into the agreement of
company creditors voluntary and company voluntary liquidation process with creditors
and other liabilities after serving the demand notice. After entering into the agreement,
the time and money of the company will be saved either wasting the time on court and
its long proceedings. It is also analysed that directors and officers of the company are
performing their rights and duties with diligence and care and the nature and behaviour
of the company directors are very well. As per both process of liquidation, the voluntary
liquidation process is the best approach in which directors of the company has control
and influence on the functions of a company. So it is better for the Champion ltd to go
through the voluntary liquidation process (Thompson, 2016).
Case 2
It is recommended to Amber ltd to file a suit against Mr Anderson due to a breach of
employment contract by not serving the notice before 12 months and resign the
company. Amber ltd is liable to make an injunction against Mr. Anderson. As per the
case of Nationwide Airlines Ltd v Roedinger, he is the employees of a said company
and provided one month notice to company for resignation and there is a requirement to
serve the notice of 3 months as per the contract of employment. Due to this action
company suffered certain losses from the resignation. It is concluded by a court that
company has right to file a suit against Mr. Anderson and takes a specific performance.
So in the above case, Amber ltd has right to sue on Mr. Anderson for grant of injunction
(Wessing, 2016).
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M3 Assess the positive and negative impacts of legal solutions to business
problems.
Case 1
Positive impact: The positive impact of entering into the creditor’s voluntary
agreement by the Champion ltd that it saves the time and money of company
operations and functions. The opinion of managers and directors are also considered by
the liquidator. This is the fair deals for company assets and the easy process instead of
entering into the court proceedings. A complete scrutiny of the accounts and records is
to be maintained with this process. The balance money is also used to develop a new
business after the proceeds of sale (Johns, 2017).
Negative impact: The negative impact of the voluntary liquidation process is it is a very
elaborative investigation of the company and if any fraud is searched out, the company
and its directors is liable of penalty. The higher fees are paid to the liquidator as per the
size of business and transactions and the number of assets. There is no chance to
recover the market value and brand image of the company which was list during the
liquidation process (Johns, 2017).
Case 2
Positive Impacts: It is recommended to the Amber ltd to file a suit against Mr.
Anderson and made a suit for making injunction. The decision is good for future
reference also to follow the employment terms and conditions before doing the
termination. The company is also liable to claim or loss and damages due to the
termination without serving the notice on time. The company is flexible to not pay the
salary and remuneration to Mr. Anderson.
Negative Impacts: the negative impact of the legal proceedings is Amber ltd have to
prove the 12 months’ notice period validity to the court and harms to an employee.
When a company is not able to prove the intention and validity then legal consequences
may arise. Mr. Anderson can disclose the information of the company to outsiders and
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competitors when any negative action wills take place against him, this is also very risky
(Rowley, 2013).
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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.
Amber ltd intends to initiate the legal proceedings against the CFO of the company Mr.
Anderson for the breach of employment contract. A company can adopt the method of
alternative dispute resolution for solving the matter between Anderson and company.
Alternative disputes resolution is the process for solving the disputes without any
legal proceedings such as mediation, arbitration, negotiation etc. The process of ADR is
very cheaper and high expeditious than litigation. This process is used nowadays to
solve the matter under labour disputes, personal injury and divorce claims etc.
Types of ADR:
Mediation: The process where a mediator the independent third party support the
people in solving the matter to identify the issues, determine alternatives, develop
options and try to solve the issue. The mediator not gives opinion or advice about the
matter and not plays any role in solving the mediation (Gill, et. al., 2014).
Arbitration: The procedure where parties give evidence and arguments to the third
party as an arbitrator who determines the result. The process is beneficial for high
technical where there is a requirement of high confidentiality. This is voluntary it is not
necessarily the order of court without the part of contract.
Conciliation: The process of ADR, Where the conciliator supports people to solve the
matter by identifies the issues and available options and tries to reach the final result. A
conciliator has professional expertise in dispute to solve the matter and provide
guidance and advice to parties. A conciliator cannot give a decision and make a
judgment to the dispute (Gill, et. al., 2014).
Benefits of ADR:
 It is less expensive and very faster
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 People has the flexibility or present their views and opinions
 It is very informal
 It is very responsive and flexible to the needs of people engaged.
 The nature of the process is very confidential
It is recommended from the above methods of Alternative dispute resolution process
and all have different features. The circumstances of the company are not to waste
more time on solving this matter in litigation so Amber ltd and MR Anderson adopted the
Arbitration which is the best process that is less expensive and time-saving as compare
to the litigation proceedings of court. The decision announced by the arbitrator is final
and it is binding on all parties of the contract (Perrin, 2014)
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M4 Compare and contrast the effectiveness of these recommendations.
Mr Anderson and Amber ltd can solve the disputes by the traditional process of litigation
and other Alternative dispute resolution. As the given scenario company starts
proceedings against Mr Anderson for breaching the employment contract. Under the
process of litigation, the company have to apply the court for solving the matter and the
final decision have to be provided by the judicial authorities. The decision given by the
court is binding on all the parties. The alternative dispute process is also the good
option for solve the issue which is easy and less expensive than litigation (Mackusick,
2017). There are several methods under ADR such as mediation, conciliation,
negotiation and arbitration in which third party is appointed to help and solve the matter.
A final decision is taken by the help of these parties; the decision is binding or may not
to the parties. The court proceedings take high amount and more time to solve the
matter instead of the process of ADRs, which gives fast response. The information is
kept secret with the ADRs but not by the courts so the matters remain secret when the
case is solved by the ADR methods. In case of litigation proceedings the personal
relations of the parties may also affects and no longer lasting due to information is not
kept with secrecy (Perrin, 2014)
So it is concluded that both the procedures are effective and solve the matter according
to their procedure. The parties can choose any of the method on the basis of time and
cost, suitability, flexibility, desired outcomes etc. The best method to solve the dispute is
Arbitration under Alternative dispute resolution process.
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D2 critically review and evaluate the use of appropriate legal solutions in
comparison with alternative legal advice
Case 1
In this case, Champion ltd is not able to pay out the liabilities to its creditors so they
threatened the company of liquidation. Company consider the process of voluntary
winding up with creditors by making the contract and avoid the court procedures. When
creditors and company not wants to enter into the agreement then they can go for
Alternative dispute resolution process to solve the matter. In this method the expert
advice is helpful to reach a final decision to solve the dispute in easy manner
(Anderson, 2016).
Case 2
In this case Amber ltd has right to file a suit on Mr Anderson for breach of employment
contract. The company has option to solve the matter by the procedure of alternative
dispute resolution. The company is able to reach the decision very fast and within fewer
amounts as compare to the litigation proceedings. The dispute can be solved in any
manner with the help of mediation, arbitration, conciliation etc. (Leshchinskiy, 2018)
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Conclusion
It is concluded from the whole report of business laws that companies and employers of
the business organisations are able to understand and learn the principles and
standards of business laws and its application. Business law includes all the provisions
of employment Act, health and safety Act, general data protection regulations etc. for
the better functioning of business operations. The provisions of winding up and
insolvency are also compiled in the employment and contract law of the business
organisations. It is analysed that employer of the company is responsible and liable
towards the protection and safety of employees who are working the business
organisation. The alternative dispute resolution process is the other option to solve
the disputes by adopting the legal remedies and hear the opinion of parties to solve the
matter in effective manner. Arbitration is the best method of the alternative dispute
resolution which is adopted by parties in solving the matter. The process is very easy
and less time taken compare to the court proceedings.
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References
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