Business Law: Understanding Legal Systems and Solutions

This report delves into the intricacies of the English legal system, exploring its sources, the role of government in law-making, and the impact of legislation on businesses. It examines specific examples of company, employment, and contract law, analyzing their potential impact on businesses like JPM Publishing. The report further explores legal solutions to business problems, including winding up procedures and breach of contract scenarios, providing a critical evaluation of the effectiveness of both traditional court processes and alternative dispute resolution methods.

Business Law
1

Contents
Introduction........................................................................................................................4
Section 1 – Nature of legal systems and legislations impacting businesses....................5
LO1 Explain the basic nature of the legal system.........................................................5
P1 Discus the meaning of the statement ‘Parliament is sovereign’ and the various
sources of UK Laws....................................................................................................5
P2 Explain the role of government in law-making and how statutory and common
law is applied in the justice courts..............................................................................6
M1 Explain the effectiveness of legal system in terms of recent reforms and
development...............................................................................................................7
LO2 Illustrate the potential impact of the law on a business.........................................8
P3 Using specific examples illustrate how company, employment and contract law
has a potential impact upon business........................................................................8
M2 Differentiate and analyse the potential impacts of regulations, legislation and
standards..................................................................................................................10
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.
..................................................................................................................................11
Section 2 – Legal solutions to business problems..........................................................12
LO3 Suggest appropriate legal solutions to business problems.................................12
P4 Suggest appropriate legal solutions for a range of business problems..............12
P5 Provide justifications for the use of appropriate legal solutions..........................13
M3 Assess the positive and negative impacts of legal solutions to business
problems...................................................................................................................14
L04 Recommend appropriate legal solutions based upon alternative legal advice
provided........................................................................................................................15
2

P6 Recommend solutions based on a country’s legal system and /or a different
framework.................................................................................................................16
M4 Compare and contrast the effectiveness of these solutions..............................17
D2 Critically review and evaluate the use of appropriate legal solutions in
alternative advice......................................................................................................18
Conclusion.......................................................................................................................19
References.......................................................................................................................20
3

Introduction
Sources of law are the origins of law which enables governance of any territory by its
state. The sources of law may also be interpreted as the seat of power from which
validity of law is derived. This report is highlighting the sources from which English law
is created and further it is evaluating the role of government in law making. It has been
observed that the companies and other organizations must comply its legal obligations.
Therefore, in this report, the laws applicable on business have also been discussed.
The applicable laws have been discussed through different case scenarios and
application of laws in those scenarios.
4

Section 1 – Nature of legal systems and legislations impacting businesses
LO1 Explain the basic nature of the legal system.
P1 Discus the meaning of the statement ‘Parliament is sovereign’ and the various
sources of UK Laws.
‘Parliament is sovereign’,
The meaning of this statement can be explained in light of following facts:
The term ‘Sovereign’ means a supreme ruler. The sovereignty of Parliament is a
principle of constitution of UK. It confines on the Parliament a supreme power and
authority to create or end laws. The sovereignty of Parliament entails three principle
aspects. These are:
 Parliament has supreme power to make or enact laws on any subject.
 Parliament shall not be bound by any predecessor or bind any successor.
 The court or any other person is not authorised to question the validity of law
(Law Teacher, 2013).
Sources of Law
The major sources of UK laws are discussed below:
 Legislation: It is the primary source of UK law. Legislations are the Act enacted
by Parliament. Parliament has the supreme authority to enact laws. These are
also called statutes.
 Precedents: The term ‘Precedents’ mean ‘what went before, let it stand.’
Precedents are a source of UK law and are also known as common law. The
judges for purposes of interpretation, consistency and fairness enact these laws
and these laws must be considered and complied with by junior courts in
deciding matters of similar nature in which such law was enacted (Arden, 2016).
 Customs: Customs are not formally written as laws but are considered as laws if
they are being practiced for a time immemorial. These customs become laws for
persons or group of persons when it is recognized as usage from a long time
such as easement.
5

 European Union (EU): UK is a member of European Union and therefore the
laws of EU are applicable on UK. EU laws supersede UK’s domestic laws and in
case of any conflict between the applicability, EU laws shall be made applicable.
 European Convention on Human Rights (ECHR): UK became a signatory of
ECHR in 1951. This gave a right to citizens of UK of petition for exercise of their
rights to European Court of Human Rights under ECHR (Manthorpe, and
Moriarty, 2014). ECHR therefore became a part of UK domestic laws as it
defines freedom of citizens and their fundamental rights. Therefore, The Human
Rights Act, 1998 is applicable in UK.
Role of Barristers, Solicitors and Judges
Solicitors: They work in private practice with others and are generally the first place to
go for starting a legal proceeding and for legal advice. They are also employed in
commercial businesses and government departments and are represented by Law
Society.
Barrister: They do not deal with public directly in general but represent their client at
court taking advice from solicitors. They are represented by Bar Council.
Judges: These are the people who have practised as solicitors or barristers previously
and are appointed by the Crown on suggestion of Lord Chancellor for County Court.
Laws Applicable on Organizations
There are various laws applicable on an organization such as Companies Act, 2006,
Health and Safety at work etc Act, 1974, Finance Act and many more (Marmot,
2012). All the organizations must comply the provisions of these Act to avoid any legal
consequences.
6

P2 Explain the role of government in law-making and how statutory and common
law is applied in the justice courts.
Role of Government in Law-making
Government plays a significant role in law-making through House of Lords and House
of Commons, two houses of Parliament. For enactment of law, a bill is required to be
presented in House of Commons which must be approved by both houses. Several
stages are followed under this process. These include First Reading, where title of bill
is introduced, then Second Reading, where the contents of bill are debated and
members vole on bill. The third stage is Committee Stage where a detailed
examination of bill is conducted in House of Commons and amendments are made if
required. Then comes the fourth stage, Third Reading. In this stage, debate is carried
on amendments made and voting is done on final bill for its acceptance and rejection.
The bill if accepted then forwarded to House of Lords for approval. If any amendments
are made, then it is sent again to House of Commons for approval. When bill is
approved by both the Houses of Parliament, it is presented for Royal Accent. This is
the final stage where on receiving Royal Accent, the bill becomes an Act of Parliament
(Arden, 2016).
Application of laws in Justice Courts
Statutory Laws: The judges in a court of laws hears the parties to dispute and
establishes their legal rights and duties as established by statutory laws for cases of
such nature. The courts use such statutory laws to decide the matter and charge
penalties, awarding compensation or giving specific performance rights (Cole, 2017).
Common Laws: Whenever the interpretation of statutory law is not clear, the judges
decides the case by considering decisions or rules established in cases of similar nature
by other courts superior courts. These established rules are common laws which are
used by junior courts for decision making.
7

M1 Explain the effectiveness of legal system in terms of recent reforms and
development.
Recently, English Legal System and UK laws have been substantially changed for the
effective implementation. An effective legal system is important for promotion of law
rules and for benefit of its followers. The recent reforms in UK laws include increase in
minimum wages of workers, ban on booster seats for small children in cars, ban on
shops for openly displaying cigarettes for sale, ban on microbeads and many more
(Edmunds, 2018). These changes and development in laws have made them more
effective and familiar with changing times and trends. The aim of laws is to protect
people and organizations. For achieving this objective, the laws must be continuously
reformed.
8

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 can become a public limited company by following provisions of
Companies Act, 2006. There are responsibilities specified for directors under this Act.
Following are the responsibilities of directors which must be fulfilled by directors:
The other laws applicable on JPM Publishing are as follows:
 Health and Safety Regulations
Under UK laws, all the employers are required to follow the procedures given
under Health and Safety at Work Act, 1974 to ensure safety and good health of
their employees at workplace. This Act lays wide-ranging responsibilities on
employers for protecting the welfare, health and safety of their employees
including casual workers, visitors, temps, clients, etc. at workplace. It is he
primary legislation for health care of employees in UK (Manthorpe, and Moriarty,
2014). JPM Publishing must follow and comply applicable procedures to
provide protection to employees and develop feeling of safety among employees
and other people.
9
Financial
Maintain accounting
records giving true and
fair picture of
company's financial
position.
Submit corporate tax
return in Form CT600 to
HMRC for payment of
any due tax liabilities.
Directors must ensure
solvent trading in best
interest of company and
stakeholders.
Legal
Complete and file
confirmation Statement
annually
Maintain and produce a
register of Persons with
Significant Control
(PSC).
In case of change of
company address, notify
Companies House.
Notify changes in
Company's directors
and shareholders in
Company House.
Others
Avoid conflict of interest
Promote success of
company
Exercise reasonable
care and due diligence.
Act within the powers
authorized under
Company's Charter.

 Equal Opportunities Regulations
In UK, Equality Act, 2010 is the law which must be complied with by JPM
Publishing as this law provides for equal opportunities to all the employees and
further states that the employees of aby organization shall not be discriminated
on any basis such as marital status, sex, disability, caste, etc. Such
discrimination at workplace will impose legal obligations and penalties on
employers (Cole, 2017). Therefore, all employees must be treated equally.
 General Data Protection Regulation (GDPR)
The Data Protection Act, 1998 in UK has been superseded by General Data
Protection Regulation (GDPR) issued by European Union (EU). These are the
regulations issued for protection of data of employees and general public. These
regulation gives a right to the people about how their data shall be collected and
utilized (Edmunds, 2018). JPM Publishing is also required to follow these
regulations as it is a company in UK and UK is a member of EU.
10

M2 Differentiate and analyse the potential impacts of regulations, legislation and
standards.
Legislation: These are the laws enacted by Parliament and must be compulsorily
complied with by people and organizations.
Regulations: These are the process or procedures to be followed for enforcement and
monitoring of law and other documents that contains details of any written rule.
Standards: Standards are the defined features, rules or guidelines for a product or
service related to its appearance, design, marking, labelling and many more. These are
also the rules set for emissions and other procedures relating to use of harmful
chemicals or gases (Arden, 2016).
11

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 courts must implement their decisions in an efficient and fair manner. Such
effective implementation results in protection of rights of people against infringement of
regulations and laws by government parties or other people. There has been seen a
major setback in English Judicial System in form of number of pending cases in court.
Since this number is high, the efficiency of courts is sometimes compromised
(Edmunds, 2018). Apart from this, English Legal System has always been effective in
providing protection to citizens, organizations and society.
12

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
Case 1
Issue: Champion Ltd. is a company operating in London which is facing huge financial
crisis and has inadequate funds for paying due debts. The creditors of company are
threatening to apply to court for winding up of company. The company wants to know
power of creditors for winding up petition.
Relevant Law: The provisions of Companies Act, 2006 and Insolvency, Act 1986 are
applicable in given case scenario. Based on these laws, if a company owes £750 or
more to creditors, then the creditor may apply to court for winding up petition after a
statutory demand is made from company by giving 21 days-notice to company for
payment of debts. The winding up of company can be compulsory winding up or
voluntary winding up (Morrison, and Anderson, 2015). Under compulsory winding up,
the company is wound up by order of court and in voluntary winding up, the company is
wound up voluntarily by directors and its stakeholders.
Application of Law: The creditor cannot apply to the court for winding up without
serving 21 days statutory notice to company for payment of debts. When the notice is
served by creditors, the company may enter into an agreement with creditors for
payment of debts or for voluntary winding up of company.
Conclusion: Therefore, Champion Ltd. is recommended to pay off its debts within 21
days of service of notice or enter into Company Voluntary Agreement (CVA) or
Creditors Voluntary Liquidation (CVL) Agreement with creditors for voluntary
winding up. The creditors have the power to apply for winding petition to the court as a
result of which company shall be compulsorily wound up.
13

Case 2
Issue: Mr. Anderson is CFO of Amber Ltd. who has given a notice for resignation to
the company. The notice required by the employment contract is twelve months.
However, Mr. Anderson has served a lesser period notice. The company wants to know
the possibilities of getting an injunction against Mr. Anderson.
Relevant Law: The provisions of Contracts (Applicable Law) Act, 1990 and
Employment Rights Act, 1990 are applicable in this case scenario. As per these laws,
if an employee has been employed for more than one month but less than two years,
the notice of termination shall not be less than one week. If an employee has been
employed for two years or more but less than twelve years, the notice of termination
shall not be less than one week notice for each year of employment and if an employee
has been employed for more than twelve years, notice of termination shall not be less
than twelve weeks (Taylor, and Emir, 2015). The employer and employee, both shall in
case of termination of contract of employment shall serve notice according to these
laws.
Application of Law: Since both the parties to contract i.e. employer and employee
have right to notice as per contract of employment, Mr. Anderson, here has committed a
breach of contract and therefore can be prosecuted for such breach.
Conclusion: Amber Ltd. can file a suit against Mr. Anderson in court of law for breach
of contract and the court may grant an injunction against him. The company may also
consider resolving the matter with Mr. Anderson through Alternate Dispute Resolution
(ADR) methods outside court.
14

P5 Provide justifications for the use of appropriate legal solutions.
Case 1
If Champion Ltd. enters into an agreement with creditors for voluntary winding up, then
the directors of company are free from the responsibilities of company as the
management of company moves in hands of liquidator. When the company becomes
insolvent, the winding up of company can help in payment of debts through sale of
assets and therefore the debts of company can be paid off (Edmunds, 2018). It is a
rescue option as it can mitigate the legal and financial impacts of failure of company.
Therefore, voluntary liquidation is a legally correct, seamless and cost-effective method.
Case 2
Amber Ltd., in given case scenario is suggested to file a suit against Mr. Anderson in
court of law for grant of injunction against him. In a recently decided case of Air Traffic
and Navigation Services Company v Esterhuizen (668/2013) [2014], it was held that
the employer must serve a notice of resignation according to the contract of
employment. If proper notice is not served or notice is served before the period of
employment ends as per contract, then the employee shall be liable for breach of
contract (Coetzer, N., 2015). Therefore, in given case, Mr. Anderson has committed a
breach of contract and the company may sue him for injunction against him.
15

M3 Assess the positive and negative impacts of legal solutions to business
problems.
Positive Impacts
Case 1:
Champion Ltd., in given case scenario is suggested to enter into an agreement with
creditors for voluntary winding up. Through this agreement, the directors of company
can prove their efficiency in decision making and the company shall be saved from
complicated court procedure. The company shall also be able to save money and time
from court proceedings and the directors of company shall be able to exercise better
control on winding up proceeding and can appoint a liquidator of their choice (Morrison,
and Anderson, 2015).
Case 2:
Amber Ltd., in given case scenario is suggested to file a suit against Mr. Anderson for
breach of contract. Through such case, the company may be able to claim
compensation from Mr. Anderson for breach of contract (Taylor, and Emir, 2015). The
company may also be able to get an injunction against its Mr. Anderson and can claim
specific performance.
Negative Impacts
Case 1:
The voluntary winding up procedure shall result in termination of operations of company
with immediate effect and therefore, the life of all people associated with company shall
be affected. The assets of the company shall not remain with company as they will be
sold for payment of debts to creditors (Williams, 2012). The process of voluntary
liquidation requires the company to arrange meetings of creditors and liquidator which
may be an expense for company.
Case 2:
16

Mr. Anderson is in possession of highly qualified information about the company as he
was a senior expert of company. The company may have to face legal consequences
and penalties if any such information is leaked by Mr. Anderson.
17

L04 Recommend appropriate legal solutions based upon alternative legal advice
provided.
P6 Recommend solutions based on a country’s legal system and /or a different
framework
Amber Ltd. is recommended to resolve its dispute through Alternate Dispute Resolution
(ADR) method. Arbitration, mediation, conciliation and negotiation are four methods
under ADR through which dispute can be resolved (Gill, et.al., 2014). These methods
are discussed as under:
Arbitration: It is a method where the matter is resolved by an arbitrator appointed with
consent of both parties. The main aim of arbitrator is to listen to both parties and pass a
decision which may or may not be binding on both parties.
Conciliation: It is a method where a conciliator is appointed whose main aim is to
suggest alternate options available to parties for resolution of dispute and he helps the
parties to arrive at a settlement.
Mediation: It is a method where a mediator is appointed whose main aim is effective
communication between parties when the parties are not on speaking terms. He helps
the parties to arrive at a settlement through communications (Leshchinskiy, 2018).
Negotiation: It is a method where a negotiator is appointed who shall help the parties in
negotiating with each other in relation to the matter of dispute and ultimately arrive at a
negotiated settlement.
All these methods of ADR are cost and time effective for dispute resolution and the
matter remains confidential.
18

M4 Compare and contrast the effectiveness of these solutions.
Amber Ltd. may resolve the matter through traditional court process or Alternate Dispute
Resolution (ADR) method. Both these methods have been compared under:
Basis Litigation ADR Methods
Authority Dispute is resolved by
judges in court of law.
Dispute is resolved by
arbitrator, conciliator,
mediator and negotiator.
Time and cost High time and cost are
utilized.
Comparatively less cost
and time utilized (Rowley,
2013).
Privacy The matter does not
remain confidential.
The matter here remains
confidential.
Binding The decision is always
binding.
The decision or
settlements may or may
not be binding.
19

D2 Critically review and evaluate the use of appropriate legal solutions in
alternative advice.
The alternate legal advice given to Amber Ltd. is to resolve the dispute with Mr.
Anderson through Alternate Dispute Resolution (ADR) method. The resolution of
dispute through ADR can resolve the dispute outside court and the relations with Mr.
Anderson can last for long. If Mr. Anderson is taken to the court, he may disclose
material information of the company which may cause the company to suffer major
losses. Dispute is usually resolved through ADR where the parties to dispute are willing
to have a long-lasting relationship and wants to keep the matter confidential (Gill, et.al.,
2014). Therefore, Amber Ltd. must resolve the matter through ADR instead of Court
process.
20

Conclusion
With the study of this report, it can be concluded that Human Rights and EU Laws have
considerable influence on law making but laws enacted by Parliament remains the most
important source of law. The businesses must also comply the laws applicable on them
as it can promote and help the organization in providing better working environment for
employees leading to higher production and better retention of employees. Compliance
of laws also helps an organization in building and maintaining better public relations.
The companies must hire a compliance expert for assistance in better compliance
practices and procedures.
21

References
 Anderson, H., 2016. An Introduction to Corporate Insolvency Law. The Plymouth
Law & Criminal Justice Review. Vol. 8. Pp. 20-47.
 Arden, L. J., 2016. The Judicial System of England and Wales: A Visitor’s Guide.
Judicial Office.
 Coetzer, N., 2015. Terminating a fixed-term contract prematurely may lead to an
award of damages. [Online]. HR Pulse. Available at:
http://www.hrpulse.co.za/editors-pick/232472-terminating-a-fixed-term-contract-
prematurely-may-lead-to-an-award-of-damages [Accessed on 30 June 2016].
 Cole, 2017. Education, Equality and Human Rights: Issues of Gender, ‘Race',
Sexuality, Disability and Social Class. Routledge.
 Edmunds, S.A., 2018. Importance of Compliance in Business. [Online]. Chron.
Available at: http://smallbusiness.chron.com/importance-compliance-business-
71173.html [Accessed on 30 June 2018].
 Gill, C., Williams, J., Brennan, C. and Hirst, C., 2014. Models of Alternative
Dispute Resolution (ADR): A report for the Legal Ombudsman. Queen Margaret
University.
 Kanani, A., 2015. Notice periods: 10 employers’ questions on UK law. [Online].
Personnel Today. Available at: https://www.personneltoday.com/hr/notice-
periods-uk-law-top-10-questions-from-hr-professionals/ [Accessed on 30 June
2018].
 Law Teacher, 2013. Parliamentary Sovereignty / Supremacy. [online]. Available
from:
https://www.lawteacher.net/free-law-essays/english-legal-system/parliamentary-
sovereignty-of-the-uk-constitution.php?vref=1 [Accessed 29 June 2018].
 Leshchinskiy, P., 2018. What is Alternative Dispute Resolution (ADR)? [Online].
Legal Match. Available at: https://www.legalmatch.com/law-library/article/types-
of-alternative-dispute-resolution-adr.html [Accessed on 20 June 2018].
 Manthorpe, J. and Moriarty, J., 2014. Examining day centre provision for older
people in the UK using the Equality Act 2010: findings of a scoping review.
Health & social care in the community, 22(4), pp.352-360.
22

 Marmot, M., Allen, J., Bell, R., Bloomer, E. and Goldblatt, P., 2012. WHO
European review of social determinants of health and the health divide. The
Lancet, 380(9846), pp.1011-1029
 Morrison, D. and Anderson, C., 2015. Is corporate rescue a realistic ideal?
Business as usual in Australia and the United Kingdom. Nottingham Insolvency
and Business Law e-Journal, 2015(3), pp.417-435.
 Reuters, T., 2018. Contract Law. [Online]. Westlaw.UK. Available at:
https://legalresearch.westlaw.co.uk/practice-areas/contract-law/ [Accessed on 26
June 2018].
 Rowley, N., 2013. Dispute Resolution in England & Wales. Mackrell Turner
Garrett.
 Taylor, S. and Emir, A., 2015. Employment law: an introduction. Oxford
University Press, USA.
 Williams, R., 2012. Enlightened shareholder value in UK company law. UNSW
Law Journal, Vol, 35(1).
23